Opinion: The Yanks are coming

Raising the bar

Setting aside the fact that their stores’ reputations for customer service are probably not what DSGi would hope, the bar for retail experience is about to be raised considerably by Best Buy.

People who have shopped at Best Buy in the states have compared the experience more to a very large John Lewis electrical department than to PC World and John Lewis consistently gets top marks for customer service in consumer surveys.

Here’s an image of the inside of a Best Buy

Even Circuit City, which has struggled in competition with Best Buy, seems to provide a pretty decent in-store experience.

So where does this leave DSGi? On one side, the internet and Tesco mean that it can’t hope to compete on price alone, on the other side, the arrival of the American retailers puts even more pressure on its retail proposition.

Funnily enough, it current chief executive, John Browett, was poached from Tesco, where he was operations development director and before that CEO of Tesco.com. He will be announcing his plan to deal with this situation on Thursday and it had better set new standards for cunning.

Of course, there is one other alternative for DSGi – sell itself. Apparently Best Buy chief exec Brad Anderson hasn’t ruled out such a move and it would have the double benefit of removing a pan-European competitor and giving it decent a chunk of real estate, which it might find hard to acquire otherwise.

In October 2006 the share price was 220p, while it got close to 400p at the height of the dotcom bubble. Today it is more like 74p so it would be historically a good deal for Best Buy, which can afford it.

Whether or not the EU’s competition watchdog would allow such a move, especially so soon after the CPW deal remains to be seen, but it’s certainly an intriguing possibility and possibly a favourable alternative for shareholders of a company that is struggling to find a unique selling point.