Ruslan Kogan has bought Dick Smith’s online retail business in Australia and New Zealand, including its brand and trademarks, customer and loyalty databases, websites and domain names, for “an undisclosed amount”. This acquisition by Kogan, a disruptive change agent, deprives consumers of the instore experience, potentially reducing Dick Smith to a discount retail portal, much like Kogan itself.
In fact, it feels like the road to resurrection for Dick Smith is to become the ‘respectable’ version of the Kogan brand in Australia. Respectable that is, to suppliers who didn’t want to aggravate the Harvey Normans and JB Hi-Fis of the retail world by selling to “pile ‘em high sell ‘em cheap” online retailer, Kogan.
Kogan’s brand appeals to those excited to read a catalogue, those with enough time and incentive to hunt out bargain prices, and certainly those in the know willing to take a risk on an unknown or smaller brand. With sharply targeted digital marketing and a personalised web experience, Kogan is savvy when it comes to converting those browsers into buyers.
So what does this mean to the mass-shopper on the street? If you’re on Dick Smith’s customer lists, expect an email any day now with deals from the revived dicksmith.com.au and indeed his new parent, Kogan.com.
Not reviving the bricks and mortar will lose the mass audience Dick Smith had access to, sometimes purely through the dynamics of store placement and the people that walk past. By leaving the mass audience to JB Hi-Fi and Harvey Norman, Kogan will actually be accessing a more motivated, frequent electronics/tech shopper without the need for expensive real estate or sales staff, and concentrate his successful business model on a profitable group of shoppers.
Despite Dick Smith being a brand tarnished by bankruptcy, unfulfilled warranties and valueless gift cards, not to mention roughly 3,000 newly unemployed, it feels like Kogan has rolled the dice on a customer list that could be a great match with his modus operandi - a good bet for Kogan’s to make. Let’s wait and see…
By Katharine Milner, director of qualitative insights at The Leading Edge (an Enero Group company).