Consumer electronics retailer Dick Smith Holdings Ltd (ASX: DSH) is expanding into consumer appliances, setting it up for head-to-head competition with JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Ltd (ASX: HVN).
According to Fairfax media reports, Dick Smith is aiming for 10% or more market share in the $1.7 billion small appliances market – ahead of a wave of new products that consumers can control via apps and computers.
CEO Nick Abboud has told Fairfax media, "Just after Christmas a lot of suppliers will bring in products with apps – you won't have to press buttons on those products, you'll operate them through your phone or tablet or even get them on your smart TV … as we evolve that's where electronics will end up."
Dick Smith will establish a small appliance store under the ConnectedHome brand inside Dick Smith retail stores, which will sell toasters, kettles and coffee machines. The retailer plans to install ConnectedHome into 100 stores over the next five months, and will expand its range of personal care devices such as shavers and electric toothbrushes, and introduce new products such as blenders, vacuum cleaners, irons, fans and heaters.
JB Hi-Fi successfully branched into white goods a few years ago, so there doesn't seem to be much reason why Dick Smith can't do the same thing. Yes, there will be more competition, but that will generally impact much more on the highest cost retailers, rather than those with ultra-low costs of doing business (CODB).
With a whole host of new products arriving that can be controlled wirelessly, by Bluetooth or via the internet, consumer appliance retailers may see a surge in sales – much like they did when flat screen plasma and LCD TVs arrived.
