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David Richards

Why Storage World Is A Not A Very Smart Business

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COMMENT: What is it about Australia and the lack of service by retailers? In the US and the UK retailers go out of their way to build databases of customers and in some cases they even issue them with barcodes or cards so that regular customers get priority service.

Even corner store dry cleaners in the USA use CRM systems to gather intelligence on their customers. But in Australia the attitude of retailers is totally the opposite.


For example last month I walked in Storage World at Northbridge in NSW where during the past few years my wife and I have spend litterally thousands buying storage gear for temporary accommodation while we built a new house. We also purchased wardrobe rack systems for the new house as well as things like tie and belt racks as well as kitchen and laundry storage gear.

 

 

 

This is not some corner store mum and dad store. This is a chain of stores run nationally across Australia with the Northbridge store being owned by the Company that also franchises the Storage World brand. 


So when I walked in there some four weeks ago to buy some more clothing racks similar to ones that I had already purchased I discovered that they were out of stock and this is when I realised that this was a Company that had a major problem when it came to customer service.


After inquiring as to whether they could order stock in for me I was told “yes” not a problem and after giving the assistant both my name and that of my wife I was told it would only take a couple of days.


Four weeks later and after numerous calls to the shop I still don’t have the goods but I do have a poor customer experience.

 On two occasions I was told it would only be a few days but on my fifth call some three weeks later I actually asked them to repeat the telephone number of either my wife or myself.

 

After an 8 minute wait during which time I ended up talking to two assistants a Storage World employee came back and said “What was your name I don’t seem to have a record of the order”.


Now if this was a Company that took customer service seriously they would by now have both my wife and I on a database.
They should have also offered to phone other stores in their group to see if they had the items in stock.


They should have also, after telling me that it would be in stock within days phoned me after a week to tell me that they were still waiting for the goods to arrive.


But they didn’t because the pimple faced youth on the floor that served me and who just happens to be the critical interface between the customer and the business did not care. He failed to go to a master database and enter any customer details.


All he wanted to do was move onto his next customer finish his shift and get paid. He made no attempt to deliver a good customer service experience and I blame management for this.


Storage World is not alone when it comes to delivering poor customer service in Australia. Harvey Norman and the likes of Dick Smith make no attempt to build extensive CRM databases so that they can offer their regular customers exclusive services and viewings.


Organisations that do understand customer service are the likes of automotive Companies who while taking an order build an extensive database which they later market to in an effort to stay in touch with their most valuable asset a customer who has the ability to spend money.


They send out magazines that constantly remind the customer about the performance of the brand. They invite customers and their friends and partners to cocktail parties and special viewings of new products.

 

I also wonder how many interior or kitchen designers are on the Storage World database, because every day these trades are recommending storage options to customers.


I for one have never received a marketing brochure from Storage World despite going to their store for more than 10 years but guess what I still get a regular brochure from a store in South Coast Plaza in the USA where I have on several occasions purchased goods.


So what is the difference? One understands the value of customer service and the other doesn’t give stuff.

So what is customer service all about? See our recommendations and those of the NSW department of business. 

EXCLUSIVE:How A The Good Guys, Steinhoff Deal Could Seriously Hurt Harvey Norman

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If Gerry Harvey believes that a combined JB Hi Fi and The Good Guys, is a threat to his business, then he might want to think twice, because lurking in the background is a Company that could create a lot of grief for the mass retailer.

Steinhoff International is a multibillion dollar South African Company that is still in the hunt for The Good Guys, the big difference is that their target is well and truly Harvey Norman.

According to ChannelNews sources Steinhoff who is capitalised at $31Billion dollar and is the owner of several leading European Furniture operations is exploring the concept of combining, The Good Guys appliance business with a brand new furniture/appliance business that could also see Freedom Furniture a Company they already own in Australia, rolled into a combined operation that takes on Harvey Norman directly. 

This is a Company that currently sells at the top end of the furniture business in Europe via their Conforama retail chain in France and at the value end similar to their Freedom Furniture operation in Australia. 

Steinhoff management believe that Harvey Norman who is making more money from furniture than electrical goods and appliances, because of the high margin that furniture and bedding returns.

Their research indicates that Harvey Norman is a target that can “easily” be attacked because of their franchise model and their management structure and the fact that Steinhoff can manufacture premium and budget furniture and bedding, cheaper than Harvey Norman can source furniture or bedding for the Australian and Irish markets. 

According to former Harvey Norman management furniture and bedding is a “massive” profit earner for the mass retailer.

“The profit margin in bedding is over 100%. They said staff are able to buy bedding at staff rates that are half the retail price.

“A top end mattress that is selling for $6,000 is available to staff for $2,890” they said.

“There are similar margins in furniture” they added.
 
What Harvey Norman refuse to do is break out the revenues or profit margins for furniture or electrical when they report their quarterly results.
 
Recently the French furniture group Conforama which is owned by Steinhoff International threw in the towel in its quest to buy European white-goods retailer Darty a group that is very similar to The Good Guys. 

This has left them in a position to refocus on a potential acquisition of The Good Guys in Australia.

One person involved described the battle between Steinhoff and Fnac who is listed in London but operates stores in France and was the final winner in the fight for control of Darcy as “an epic battle”, this could be a sign that JB Hi Fi could be in for a fight to get control of The Good Guys. 

Sources have said that Steinhoff management has also been talking to Woolworth about their Masters properties, as they are currently exploring the concept of launching large warehouse type stores that will sell a combination of appliances and furniture, a move that analysts claim could also impact Harvey Norman.
One analysts suggested that It’s Gerry Harvey who should be offering his business to Steinhoff International and not The Good Guys.

According to sources at The Good Guys the Muir family have told interested parties that there is “no way” that they will sell the retail group to Harvey Norman due to previous run ins by Gerry Harvey with Ian Muir the founder of The Good Guys.

Steinhoff was founded in 1964 in the UK, Steinhoff owns the high street brands Cargo, Harveys Furniture, Bensons for Beds and Sleepmaster. 

In 2011, Steinhoff bought Conforama, Europe’s second largest retailer of home furnishings, with over 200 stores in France, Spain, Switzerland, Portugal, Luxembourg, Italy and Croatia.

Steinhoff’s South African brands include HiFi Corp, Pennypinchers, Timbercity, Pep, Ackermans, Shoe City, Incredible Connection, and Unitrans.

Prior to announcing their interest in The Good Guys, the mass CE retailer who has approximately 3% of the appliance market currently was aiming for 75 JB Hi Fi HOME stores by the end of financial year 2017.

At the close of market on Friday night JB Hi-Fi’s shares were trading for $23.87, giving them a market capitalisation of $2.4 billion. Meanwhile, the company has achieved EBITDA just shy of $250 million in the 12 months to 31 December 2015, putting them on an EBITDA multiple of around 9.3x.

Assuming that The Good Guys was worth roughly the same EBITDA multiple, that could mean JB Hi-Fi would need to pay close to $1 billion for the business.
On the other hand Steinhoff who after backing out of a $1.6B deal to buy Darcy are now in a position to go after The Good Guys. 

Retail Up 2% And That’s Official

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Retail sales over the Xmas New Year period were 2% higher than last year, claims the Retail Traders Association proving that the Federal Government handouts did makes their way into the economy they say.

Retail sales over the Xmas New Year period were 2% higher than last year claims the Retail Traders Association proving that the Federal Government handouts did makes it’s way into the economy they say. 

The Association’s executive director, Richard Evans, says the Federal Government’s cash handouts, and the falls in petrol prices and interest rates have helped buoy the retail market.

And he says he is expecting the handouts to continue to flow through to cash registers.

“It’s too much to expect that people went out immediately and spent it, they may have used it on their credit cards or to reduce debt, but they’ll soon realise that they’re cashed up and they’ll start re-entering the market place,” he said.

Mr Evans also says retailers have been slashing prices to get rid of stock but he says prices are unlikely to remain low with the slump in the Australian dollar.

“Expect less range on the shelves over the winter months and probably a little bit more extra in price,” he said.

“What we have to understand though, this is a normal cycle… a bit more severe than normal though of course, but we’re expecting growth to come back into the retail market in April-May this year and with strong growth in the September quarter.”

Dick Smith Store Revenues Slump, Creditors Meeting Delayed

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Administrators to the failed Dick Smith Chain have moved to delay the next creditors meeting until August 2.

A none binding information memorandum relating to the sale of Dick Smith assets, was released earlier this week, offers have to be in by January 27. 

The receivers claim that have attracted more than 30 expressions of interest to buy some or all of Dick Smith’s assets.

However, ChannelNews has also been told that of the offers already received several are “extremely low ball” offers of less than $25M.

Earlier today  recievers Fewrrier Hodgson said that Dick Smith will close its network of outlets in David Jones department stores as the company’s receivers try to find a buyer for the failed retailer. 


 Ferrier Hodgson said that the 27 concession stores located in David Jones stores (known as David Jones Electronics Powered by Dick Smith) would be closed.


In a statement the receivers – James Stewart, Jim Sarantinos and Ryan Eagle – said the closure would affect 181 jobs, mostly part-time and casual.

The receivers are in the middle of an attempted sale of Dick Smith after it went into administration in early January. An information memorandum has recently gone to potential buyers.

“The receivers have been undertaking an ongoing review of the operations of the group with a view to maintaining stable operations in order to facilitate its sale as an ongoing concern,” they said in a statement.”As a result of this review, the receivers have determined that they will no longer continue to operate the 27 David Jones Electronics Powered by Dick Smith concession stores, contained within David Jones department stores.




Several Dick Smith store managers who have contacted ChannelNews said that “very few” customers are visiting Dick Smith stores and those that do are walking out with no purchases.

Recently existing stores were instructed to lift the price of Dick Smith and Move branded house products a move that some managers claim has seen a $5 cable suddenly priced at $25.

Install the receivers had targeted to generate $18M a week by keeping the stores open according to sources, however revenues have slumped to sub $8M with the real possibility emerging that stores could be closed down and existing staff retrenched. 

Dick Smith’s administrators confirmed to Fairfax Media that they intended to file a court application within the next week seeking orders to extend the period of time to convene the second meetings of creditors up to August 2.

The administrators – Joseph Hayes, Jason Preston, Jamie Harris and Matt Caddy of McGrathNicol – flagged the postponement at the first creditors meeting last week but did not indicate the length of the proposed postponement.

ChannelNews has also been told that several organisations who were initially interested in the Dick Smith New Zealand operation are now walking away from the prospect of buying the NZ stores, after it was revealed that operating costs associated with the NZ group were being picked up by the Australian operation in an effort to make the business look profitable in New Zealand. 

A spokesman for McGrathNicol said the postponement would give the administrators more time to assess numerous creditors’ claims and to stabilise Dick Smith’s operations.

Dick Smith called in McGrathNicol as voluntary administrators and a syndicate of lenders appointed Ferrier Hodgson as receivers on January 4 after lenders withdrew their support in the wake of slumping sales and rising debts.

Secured creditors, including HSBC and National Australia Bank, have staked claim to about $140 million while unsecured creditors including Macquarie Group are owed about $250 million.

Shareholders, whose shares were valued at $84 million at the time of the collapse, will only be repaid if Ferrier Hodgson can find buyers to stump up more than $400 million for Dick Smith’s assets, including its standalone chain Move and the New Zealand business.

Digital Conman Leaves Another Debt Trail As Third Business Goes Belly Up

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He’s been described as a digital smartarse and conman, Jamie Silver, the founder and managing director of the Melbourne-based Dcodr Agency has done it again, gone broke leaving behind millions of dollars’ worth of debt.

Among his clients were retailers, consumer electronic Companies as well as brands like Albi, Go Switch, Wingman Airport Shopping. 

Silver, who is already looking for “The next opportunity” has been labelled a “conman” among the digital agency world after going broke with two prior Companies.

Several Companies are now chasing silver for unpaid bills. also left in the lurch are Dcoder staff. It’s also tipped that ASIC is set to take action against Silver a move that could see him banned or stopped from being involved in Companies in Australia.  

Jamie Silver


Silver and Dcodr hit the headlines last year after a developer took over the website of its client, Goswitch, accusing him of failing to pay an outstanding invoice, his latest debts are said to total over $200,000.

Silver is already denying that he has left behind a mountain of debt or that he owes $200,000. He claims that he is still trying to collect money from clients. 

Silver also claims that he is a victim of a fraud.

Visitors to the site that was hacked were greeted with the words “Pay Up Jamie” plastered across the home page along with the message: “Jamie at DCODR didn’t pay the developer of this site and has an outstanding balance of $2975.”

The hacker also uploaded a video of Rihanna’s music video Bitch Betta Have My Money.

mUmBRELLA claims that in December 2014, Silver took a company with an almost identical name to Dcodr Agency – Dcodr Pty – into voluntary liquidation with the business owing more than $532,000 to 12 creditors.

A report into the collapse by liquidators PPB Advisory was sent to the Australian Securities and Investments Commission (ASIC) “detailing offences that may have been committed by the Company and/or its officer”.
The liquidator said it was unlikely any creditor would receive any money.

ChannelNews has been told that Silver has been door knocking several consumer electronics distributors as well as specialist Hi Fi and consumer electronics retailers trying to get new work. 

Official documents show that in September 2014, three months before PPB was called in, Silver had registered Dcodr Agency with ASIC, a business which has continued to trade.

Silver also owes money to several IT contractors.

Ronnie Davies, vice president IT Solutions at Optimal Transnational, a company specialising in outsourcing and offshore solutions, told Mumbrella his firm is owed $13,000.

“We were told by Jamie Silver back in November that he was unwell and that his wife would be taking over and that she would be paying our invoices. But we have not been paid.

Along with the collapse of Dcodr Pty, it also emerged that another of Silver’s businesses, Pixel Light, also called in liquidators with almost $550,000 owed to five creditors when it went to the wall.

Pixel Light had its roots in another of Silver’s enterprises, Clear Light Digital, a company he had jointly founded in 2005.

According to Mumbrella, Former employees have provided information to ASIC accusing Silver of phoenix activity, a practice which involves the intentional transfer of assets from an indebted company to a new company to avoid paying creditors, tax or employee entitlements.

ASIC said it was unable to confirm or deny whether it was investigating Silver.

Silver also denied he was planning to set up another agency called Airside Digital.

COMMENT: Why Has It Taken So Long For LG, Who Have A Questionable Record Themselves To Take A Pot Shot At Dyson.

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COMMENT: Yesterday in Korea, journalists were were told that the big Korean Appliance Company was suing British vacuum maker Dyson in the Australian Federal Court.

Remarkably not one Australian journalist was issued with a copy of a press release or verbally briefed on the Court case. In fact, LG Australia tried to hide the fact that the action was being taken against the British Company by not issuing a statement.

Remember we are talking about a public record case with information openly available to people who search Federal Court records. 

When LG and Samsung went head to head in the Federal Court two years ago over who had the better TV display technology both sides had both PR and legal representatives in Court. Now LG is claiming “We cannot comment about an ongoing case”.  

It took ChannelNews and SmartHouse to break the story in Australia.

What LG is claiming is that their CordZero series of premium cordless vacuum cleaners are better than the Dyson V6.

LG claim that Dyson who are known for their superior marketing and instore displays have mislead consumers by claiming that their product is superior to other manufactures vacuum cleaners including those made by LG. 

But the big question is why has it taken so long for LG to take action against Dyson. 

The LG vacuum cleaner which is the key witness for LG in the Federal Court case only went on sale at Australian retailers this month, 14 months after it was released at the IFA trade show in Berlin.

The Dyson V6 went on sale in March 2015, while the LG CordZero product has been on sale in Korean and Europe up against the Dyson V6. 
So why has LG chosen Australia to take LG action against Dyson when they could have taken action in several other Countries. LG launched the CordZero product in the UK in January 2015.

Philip Anderson LG Australia’s PR Manager is ducking for cover refusing to return calls. 

His PR Company said they were aware of the Court action but had chosen not to issue a release which I suspect was on the direct orders of Anderson. 

This is a Company who has seen both their Sales and Marketing Directors walk this year. 

This is also the same Company that has a questionable track record when it comes to product claims and cases before the Federal Court.

In 2006 LG Australia also agreed to make $3.1 million available in rebates for eligible consumers who bought five LG Electronics Australia Pty Ltd air conditioner models that did not comply with the energy efficiency values claimed on rating labels.

“LG sold more than 15,000 mislabelled air conditioners”, Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today. 

At the time LG said “LG will implement new testing procedures to ensure that the energy efficiency of its air conditioners matches the performance indicated by their stated energy efficiency star rating and, where applicable meet, ‘minimum energy performance standards'”.

Four years later they were back in Court for similar offences this time with dodgy refrigerators. 

Actions Similar to Volkswagen 
 
In 2010 four years after the air conditioning debacle,  LG Australia was forced to provide the Australian Competition and Consumer Commission with a court enforceable undertaking after concerns that LG may have breached the Trade Practices by misrepresenting the Comparative Energy Consumption (CEC) of various refrigerator models.

Over the course of 2007 and 2009, LG applied for energy label registrations for three refrigerator models, all of which included an energy saving feature which switches the refrigerator to a more energy efficient mode of operation, storage mode, when it is left for a sustained period without opening the refrigerator door.

LG did not remove or disable the storage mode during testing prior to applying for the energy label registrations. 

Back in 2005 The Australian Competition and Consumer Commission also instituted proceedings in the Federal Court, against LG Australia for alleged false and misleading warranty statements in breach of the Trade Practices Act 1974.

The ACCC alleged that LG made false representations and/or engaged in misleading or deceptive conduct in relation to statements made in online LG mobile phone user manuals concerning the existence, exclusion or effect of consumer statutory warranties, conditions, rights or remedies.

BenQ To Enter Oz Phone Market

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BenQ is set to enter the Australian mobile phone market with both the BenQ and Siemens brands.Fast growing technology group BenQ who recently aquired the Siemens mobile phone business is set to launch a major assault on the Australian phone market. The product range will include both BenQ and Siemens branded phones. To implement this move the company has hired four former executives of the Siemens they include, Christian Nyman who takes on the role of General Manager of BenQs Australian phone business. Ann-Maree Butler joins us as National Sales Manager and will play an integral role in developing relationships with Carriers, Distributors and Resellers.
Chris Stellmach has been hired as National Channel Manager for Telstra. Chris will be responsible for BenQ’s partnership with Telstra.
Adrian Cook has been appointed Customer Care Manager and will be responsible for the development and expansion of BenQs Mobile Phone service and after
sales support.

BenQ Displaces LG In OZ Monitor Market

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BenQ has displaced LG to capture the #1 spot in the Australia PC monitor market according to IDG.

 The top 5 brands in the second quarter were BenQ with  18.5% LG Electronics with 16.0%, Samsung with 14.5%, Philips with 12.8% and Acer with  10.8%. 27.4% is allocated to others. More than 750,000 units were shipped. One of the big deals in the period was 10,000 monitors for the Australian Department of Defence. This deal was won by BenQ.

IDC claim that he seasonal spike in desktop PC shipments, aided largely by a surge in demand from the government and education sectors, contributed to the robust growth. However, the continued price aggression exhibited by vendors remained a critical factor for the surge in PC monitor shipments.

Mercie Clement, IDC Analyst for PC Hardware said “It is notable that vendors in the local market continued to pursue extremely aggressive pricing strategies, despite slight price increases on panels, specifically the 17 inch LCD. Vendors wanting to remain competitive had to absorb these price hikes, even selling below cost in some instances. Assuming that panel prices continue to experience slight increases over the next few months, it will be interesting to keep an eye out for which vendors are able to sustain their current pricing strategies and how market shares stand to be gained or eroded,” said

In 2Q 2005 the original equipment manufacturer (OEM) market (PC vendor), accounted for 51% of the total PC monitor shipments, growing 62% sequentially from the previous quarter. The strong performance was more pronounced as several PC vendors saw the chronic shortages on LCDs come back into alignment this quarter, enabling them to fulfil pent-up demand. PC vendors are now more tactical providing better pricing schemes for PC monitors with desktops and are offering more compelling deals to their channel partners.

“The 2Q 2005 market saw some major changes in branded vendor rankings. BenQ achieved the top position with 18.5% share, 4 percentage points up from last quarter. LG Electronics fell to the second place, with 16.0% share of units shipped, while Samsung finished the quarter with 14.5% share. Philips climbed to the fourth spot, accounting for 12.8% share, as it benefited from the seasonal surge in demand from the corporate, government and education sectors. Rounding out the top five was Acer with 10.8% share,” Ms. Clement added.

Call For Legal Action After Harvey Norman Refuses To Deliver Advertised Discounts To Hundreds Of Consumers

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They love spruiking so called “Massive Discount Sales”, but when consumers responded recently to a Harvey Norman offer, the big retailer took their money and then refused to give them the cheap price the goods were advertised for.

Now consumers are being urged to sue the big retailer with one litigant claiming that Harvey Norman actions are “unlawful”. 

Customers who believed they picked up dirt-cheap furniture deals in a Harvey Norman online sale say extra payments due to be deducted from their accounts have shot up.

The debacle surrounding the launch of Harvey Norman’s “New Zealand’s Biggest Retail Sale” intensified when the company confirmed it would not honour the deals.

Hundreds of super-cheap online deals on pricey furniture products were taken up between midnight and 8am by consumers. 

The near-330 people who took up the deals were later advised by email that the prices were the result of a “genuine error”.

“All sales made during this period cannot be honoured,” Harvey Norman wrote. “Our website terms and conditions state that we may accept or reject any offer to purchase made by you and that we have the right to correct any errors.”

Now Litigant Graham McCready is calling on customers affected by a botched Harvey Norman sale to file a private prosecution against the company.

Customers have been offered a refund and $100 voucher, but Mr McCready insists the company must honour the original deal.

“We take the position that that’s basically getting into the area of theft and fraud, it’s totally unlawful,” says Mr McCready.

He says customers who have been charged more than the advertised price should contact their bank and file a fraud complaint against Harvey Norman on the grounds that the transaction is in dispute and no goods have been delivered.


“The private prosecutor is prepared to act for customers in these circumstances to file a private prosecution against the CEO of Harvey Norman under the New Zealand Crimes Act.”