Remove the PR gloss, and it’s still a good deal

Remove the PR gloss, and it’s still a good deal

Is the Dixons Carphone merger really driven by the arrival of the Internet of Things (IoT)? Or is the IoT a convenient cover story - a way to put some trendy varnish on a more pragmatic commercial partnership?

I have never completely grasped the idea that mobile phones are going to be at the centre of the new digital universe, as though they were the only key to unlock the treasure house that will soon be ours. The IoT is fast becoming a reality, but do we really need a mobile phone to act as a universal remote?

And if we do, is there going to be anything so special about it that it requires a league of special shops and an army of specially trained retailers to explain it? No, when the IoT takes off it will be because it is really simple, and really accessible. A commodity, if you like.

So rather than a visionary leap, the Dixons Carphone merger looks like a tactical master stroke - an enterprising marriage of convenience, borne out of mutual advantage. The deal gives Dixons its much needed mobile play and hope of combating its retail nemesis, Amazon. Carphone, on the other hand, simultaneously disadvantages Phones 4u and makes itself much more resilient to the threat from operators squeezing out indirect sales.

Good old-fashioned cost savings are also part of the attraction, along with pooled purchasing power.

A litmus test for the new partnership is not just what they do in stores and retail parks up and down the land, it’s how much they integrate the back end and online. Can Dixons and Carphone bring together the brands and web stores to create something that is bigger than the sum of the parts? An entity large enough to be a destination store like Amazon? It will take imaginative management. For my money, that is the major asset that Carphone brings to the table. The question: is will the Dixons camp give Carphone’s bright sparks the chance to shine, or will corporate pride stand in the way?

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