Deian Hopkin shadows Dixons boss John Clare and benefits from a little knowledge transfer
November 18, 2004 John Clare, chief executive of Dixons, sounds a warning on the prospects for Christmas and says he is prepared for "an aggressive trading environment".
November 19, 2004 Sir Howard Newby warns some universities could go bankrupt "if they don't position themselves correctly in the marketplace".
December 15, 2004, 9.30am: Dixons, Churchill Square, Brighton
It's countdown to the university retail wars, so I want to find out what it's like in a real marketplace. I am shadowing John Clare, the boss of the Dixons group, on a tour of inspection. Gathering in the cold outside the Brighton store, it's a bit like an Ofsted visit: everyone on best behaviour, everything in pristine condition, the chief inspector slowly working his way through his task list, examining displays, quizzing staff, inspecting storerooms, testing the merchandise. A gadget on show doesn't work - not good.
Clare, who cut his retailing teeth selling Mars bars to canny shopkeepers, succeeded the legendary Stanley Kalms as chief executive of Dixons in 1994. From Charlie Kalms' small Southend photographic shop in 1937, the business has grown into a Europewide group with 1,400 stores.
Clare visits about 250 stores each autumn and winter. Forewarned, the managers spruce up the stores, which is one object of the exercise.
As an academic, I wonder, is it time to step up those faculty visits?
10am: Dixons, Churchill Square, Brighton Clare is making his first purchase of the day. He wants a camera but someone has to sell him one first. Keen questioning follows about the model, its features, the price. An assistant is convincing, the sale is completed. John pays with his own credit card - no special favours here.
I wonder how well our course inquiries office will handle requests for detailed information? And what's the competition offering? High-ticket scholarships? Bursaries for all? Cashback is already guaranteed. Who'll be offering air miles?
Nowadays, Dixons stores are run not by salesmen but profit-and-loss managers able to adjust prices to local circumstances, responding to what customer surveys and other information tell them. Sometimes, prices change hourly. What will universities do when the going gets tough? Discounts at clearing? Late changes to the prospectus?
10.15am: The Link, London Road, Brighton
The Link is the group's most recent development in the UK, specialising in mobile communications, a tough market with cut-throat competition. Phone contracts are confusing, the market is awash with all sorts of gizmos.
Clare likes the display but wants more stock out on the shelves.
How should we stock our own shelves? How will we explain to students what's on offer in an increasingly complex market and ensure they get what they want?
11am: Currys, Old Shoreham Road, Brighton
Acquiring the Currys chain in 1984 added 613 stores and transformed Dixons'
position in the high street. The main competitors are French-owned Comet and the differently structured Argos, which lists its stock in a catalogue, nothing on display. Isn't the real problem here that a customer can try out the fridge or cooker in Currys and then buy it across the road in the competition? (a bit like our summer schools and widening-participation tasters). Currys tries to meet the challenge with a buy-and-go policy.
A further education principal recently warned that this might happen in higher education after 2006, sampling before buying. The trick will be to keep the customer in the shop.
11.20am: PC World, Old Shoreham Road, Brighton
Twelve years ago, Dixons bought VTA, a small computer chain with four outlets trading as PC World Superstores; today, PC World is the fastest-growing part of the group with 138 stores generating £1.3 billion in revenues. Once little more than large warehouses selling computer kit, today the first thing you see is an advice centre, and the customer can try out computers before buying. Meanwhile, business-to-business services are booming.
Where do universities stand on B2B now that the Higher
Education Innovation Fund and Knowledge Transfer Partnership are in full swing? Do we offer what business really wants? Is the price right?
12.15am: Currys, Trojan Way, Croydon
This is a flagship store and there is some reassuring news from the front.
Like-for-like, sales in the stores are up 20 per cent on last year. Clare is impressed. The problem for retailers such as Dixons is that weekends are often frenetic, but weekdays are quite slack, the opposite of what happens in universities. The really busy time, when the profits are made, occurs around Christmas, while for universities such as mine it's during the summer that clearing piles on the pressure.
Clare likes the TV displays, carefully angled so that the customer can see everything at a glance. He is less taken by a label on a package that points out that the model you get may not be the model on display.
I reflect, nice prospectus but will the course match up? And will top-up fees make students look more carefully at the label?
1.15pm: Sandwich lunch, staff room, Currys, Croydon
One wall is covered with the career details of store staff. Personal development is a priority and Dixons has developed an in-house academy; progressing through the programmes brings higher rewards and greater responsibility. The group also sponsors three university chairs in enterprise and ethics - at Edinburgh, London School of Economics and the London Business School.
2pm: PC World, Trojan Way, Croydon
Another flagship store with innovations such as an Apple centre, reflecting the enormous popularity of iPods and the G series. On the way out of the shop, a customer gives an unsolicited compliment and the staff beam. The boss is pleased. After all, three things count for a retailer - footfall, conversion and repeat business.
It's the same for universities: the number of applicants, conversion into admissions and satisfied students returning for more courses.
4.15pm: Dixons, Croydon Centre
The boss questions the empty shelving in the front window and the message it gives. But he is still buying and the staff are still managing to sell him something.
5pm: The Link, Croydon centre
Customers often get hooked on a particular item without knowing why; subliminal advertising messages perhaps. One challenge is to sell an alternative item, especially if you're out of stock. But this is difficult and time-consuming, just like giving advice to a university applicant who is fixed on something that is not available.
7.30pm: Dinner, Marriot Tudor Park Hotel and Country Club, Maidstone, Kent
The touring group has been joined by the rest of the regional team. Some face inspection tomorrow and want to know how it all went. The bar is full of talk, but more of football than footfall. Life, after all, isn't all retail.
Dessert cleared, Clare is on his feet. Feedback from the Ofsted inspector. Praise for the staff, excellent presentations, sharp selling.
The verdict? Three out of ten. Is 30 per cent a good pass? In a world of raised expectations and increased competition, Clare says, that is a good result with headroom for improvement. It's a rallying cry.
Clare is still going strong at 10.30pm when I have to slip away.
According to Dixons' chairman Sir John Collins, "the fiercely competitive nature of our markets will intensify" and the ultimate objective is "to outperform our competitors in all our markets and provide our customers with the optimum shopping experience". Remove the word "shopping" and it sounds familiar: push up the league tables, compete for research contracts, keep students satisfied.
There are lessons to be learnt about the customer experience, about presentation, clarity of information and staff development. But universities are not just retailers. They are also producers.
A degree is not a TV set and the process of learning is as important as the final result. However, money does come into it. Apart from buying a house, paying for a university degree will be the most expensive item for most people. That alone will make them think carefully about what they are getting. We will need to sharpen up our act.
Deian Hopkin is vice-chancellor of London South Bank University.