Dixons and Carphone Warehouse merge

16/05/2014

Dixons has struck a deal to make Carphone Warehouse part of its group joining the UK electrical retailers high street roster that includes PC World and Currys.

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The retail group has agreed a merger worth £3.8bn to bring the phone retailer into its fold, creating a new company called Dixons Carphone.

The store will continue to sell traditional products associated with each brand there will be a focus on capturing demand for mobile connectivity with electrical products in the home - the so-called 'Internet of Things'.

The group sees the mobile phone as a ‘remote control for the household’.

A sign of things to come?

Will Stewart, Chair of Communications Policy Panel, Institution of Engineering and Technology (IET) said: “The Dixons and Carphone Warehouse merger announced today is indicative of the way technology retailing is moving. Historically retailers have focused on one ‘transport technology’ such as wireline phone or internet services. But as technologies have converged, and the trend towards products being available on many platforms in compatible ways has continued, we have started to see technology retailers offering a wider, more service-based proposition. For example, companies like BT have extended their traditional offering to include TV and video.

“Now with the Internet of Things on the horizon, a growing number of devices will be connected to the internet and be able to identify themselves to other devices, so it seems logical for the retailers who sell the devices, and those that connect them, to join forces.

“Today’s merger is really just the start. Over time, the Internet of Things will include smart meters, homes and even cities – all with better connectivity, coverage and service. Carphone Warehouse and Dixons together will be well placed to serve this market. And we can expect other retailers to follow suit.”

‘Adapt or die’

Paul Heywood, director of EMEA, Dyn, added: “This deal means that Dixons and Carphone Warehouse are now directly responsible for one another’s customer service. As a result, Internet performance and speed will be key for the two retailers. In this 24/7 connected world, consumers have come to expect a joined up shopping experience, regardless of device - and in this case, whether customers bought from Dixons or Carphone Warehouse previously they will demand a fantastic, consistent experience.

“In retail the phrase ‘adapt or die’ remains relevant and I think this aptly applies to the partnership being created here. The merger will provide profitable gains for the businesses, but only if the retailers work together to ensure that the customer experience does not suffer as a result of these two brands merging. With the right technology they can control the customer experience, maximise market size, reduce operating costs and time to market.”

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