With news of Australia’s oldest electronics retail chain Dick Smith going into receivership, Roy Morgan Research takes a look at how the major players in this competitive sector have been tracking over the last five years and finds that the writing has been on the wall for some time.
In the 12 months to September 2015, 1,121,000 Australians aged 14+ shopped at Dick Smiths in any four weeks, with 82% of them reporting that they were satisfied with their retail experience. Both of these figures are down since September 2011, when some 1,511,000 shoppers passed through the check-outs in an average four weeks, with an 83% satisfaction rating.
There is no doubt that the electronics retail sector has become increasingly competitive, amid the rising popularity of online shopping and wavering consumer confidence — and Dick Smith isn’t the only retailer to lose shoppers over the last few years. Betta Home Living, Harvey Norman and Retravision have also seen their customer numbers fall (though it should be noted that Betta still managed to increase its satisfaction rating from 83% to 93% during this time).
Customer satisfaction: how Dick Smith compares to the competition
Source: Roy Morgan Single Source (Australia), October 2014 – September 2015 (n=15,668).
In such a challenging retail environment, a store’s ability to satisfy its customers is crucial to its survival. Dick Smith’s customer satisfaction rating has been lower than any of the other five electronics retailers measured by Roy Morgan Research for more than a year, after peaking at 85% during the 12 months to September 2012 (which put it in fourth position ahead of Betta Home Living and Harvey Norman).
Another factor that has changed the face of the Australian consumer electronics market is former music-retailer JB Hi-Fi’s entrance into the field. As of September 2015, some 2,906,000 customers were shopping at the store in an average four-week period, with a customer satisfaction rating of 91%.
Michele Levine, CEO, Roy Morgan Research, says:
“Dick Smith’s current situation is attracting a flurry of media analysis, with experts critiquing everything from its outdated stock and recent expansion to unrealistic investor expectations. While our data cannot shed any light on the company’s business practices, their consequences can certainly be seen in Dick Smith’s below-average customer satisfaction rating and shrinking customer base.
“Obviously, online shopping has changed the way Australians shop, with electronics being one of the fastest-growing online markets. While Dick Smith does have e-commerce platform, this attracts a negligible proportion of its total customers.
“As mentioned above, Dick Smith is not the only electronics retailer to lose customers over the last few years; nor is its slipping customer satisfaction rating unique. Many businesses operating in this field could learn a lesson or two from Dick Smith’s downfall, starting with the importance of always ensuring the customer is happy. Offering the right stock at the right price, providing service that’s second to none: anything that boosts customer satisfaction is always going to be good for business…”
Roy Morgan Research
Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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