Comet Crashes to Earth
Another major electrical store crashes into ruin in the recession.
What could they have done better?
The Comet Experience
Date: 5th, November, 2012
Last week the Comet chain of stores were put into Administration due to financial failure at the hands of their current management and venture capital owners.
The combination of new online market competitors and the deepening recession holding down people’s spending savaged the company’s chances of survival.
For the last few weeks I’ve been planning a visit to my local Comet to get a repair for one of my broken down electrical goods. I would have chosen Comet because of their long substantial high street presence and reputation. Most people are more likely to trust a company that’s been around for decades than a new, small or remote company you have little contact with.
This is why I believe ambitious stores should not abandon the high street in favour of purely out-of-town or online services. A reasonable local presences has far more chance of attracting customers and passing trade than any remote locality. But how can a company earn an income from the high street when there is so much more competition?
In business terms is called your unique selling point and perhaps Comet lacked the kind of USP needed in the current market climate.
Online competition has little of the high street overhead. They don’t have to pay high rents on large stores, maintain a large sales staff and keep an attractive retail appearance, all overheads that a warehouse in the middle of an industrial estate doesn’t need to maintain. If this was the sole deciding factor in sales then all such stores should move out of town tomorrow, but there are benefits for keeping a local presence if you can find a way to earn an income from it.
Comet distinguished itself for me by offering a repair service, but they never really promoted it.
Imagine your typical electrical store, or think about this when you’re next passing one – where are they kind of high street displays we used to see in past generations? Today a large store will slap its logo and name all over the front in the vain corporate belief that the “brand” alone will sell all the goods within. Rubbish. The more you tell the passing customer about the goods and services you offer inside the more chance of enticing that passing trade to step through your doors. You need exciting, memorable displays to whet the appetite.
Nowadays most stores try to distinguish themselves with exclusive or own-brand goods. Consider, for one example, the way Amazon, the online store, flog their “Kindle” e-reader, hooking pep le into buying their downloadable books. (I won’t discuss the reports of the poor quality of early Kindle models.)
As a technology design innovator I’m always looking at ways to innovate or design new products or improvements in existing ones. Did Comet employ anyone to do the same for their product lines? Having a series of own-brand products is one way to distinguish the stores from the rest of the market and something else to fill your window displays.
High Street V. Online
Online competition cannot be ignored and a high quality web site is a superb way to interact with distant clients and promote your high street services, such as a repair service. One of the best online services in the world is Amazon for the quality of interaction and breadth of product range.
One element of Amazon is their use of service for other sellers, it is more than just an online shop, it is an agency for others to offer a broader range of products through their system. A high street electrical goods supplier could easily offer it’s own “agency” service, to add thousands of other electrical and related goods and services through its online and high street presence.
Price will always be a distinguishing feature, but even here there are advantages for a high street store – if you treat it as a loss leader to capture customer for other sales and services.
Every online store sells with added postage and packaging. Comparable prices for a high street store can match margins with the online service. So you pay added costs for either postage and packaging and wait three days, or pop to your local store and pick it up now at the same final price.
Of course such a “match margin” won’t show a high profit, the kind demanded by vulture investment companies, but that is where your other services and unique own brand goods come into play.
With the right investment and planning Comet could easily be revitalised, but it will take the kind of commitment and vision not seen in our get-rich-quick culture for a long time.
Reviving the stores and integrating them with a new improved web site to enhance the customer experience are vital.
Consider your local electrical good store, how much space inside is empty in broad aisles, in attractive displays? I suspect a lot more thought is needed to create a new modern, exciting experience and increase the volume of stock and range of goods available per square foot – “Pile ’em high and sell ’em cheap” (but not as “technical” as a chain like Maplin).
Adding unique goods and services, working with innovators, designers and other specialists to become a single point of contact for everything electrical, in goods, services, parts and more. (Did you know that in their entire range of laptop computers at my local store there isn’t a single convertible laptablet PC on display?)
Enhancing the outward display, show the high street everything wonderful to attract them through the door, and match it with a comparable online presence.
We’re in a recession so sales of new goods aren’t the only issue. I’ve highlighted repair services as another option, now include finance options, hire purchase and other finance arrangements to allow people to spread the cost. (I’m currently working on a banking and finance initiative to provide such options in the future once I’ve raised my seed funding.)
And finally, don’t forget to ADVERTISE YOUR BUSINESS. When was the last time we saw a really good advertising campaign to get people through the, creaky, doors of Comet?
There are plenty of ideas around, these are just a few I’ve thought up in the last 72 hours. A professional management with an open mind, vision and the right backing could turn Comet around.
Or maybe one day I’ll launch my own little Comet.
Keys: Comet in Administration, Comet bankrupt, rescue plan for Comet stores.