As retailer Dick Smith hunts for a white knight to rescue the brand, Simon Canning sees real parallels with the death of Ansett more than a decade ago.
There is something about the events that have surrounded Dick Smith over the past few months that screams Ansett.
It is a tale of a brand smashed from pillar to post, reinvented, reimagined, reinvested and finally, retired ignominiously. A historical case study already being cited as one not to repeat even before the life support has been turned off.
As news of the company going into receivership reverberated around the nation, receivers Ferrier Hodgson made sure that any consumer confidence in Dick Smith that remained was completely undermined by announcing that gift cards would not be honoured and people who had paid deposits for lay-bys would not get refunds. The social media reaction has been predictable.
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Just as Ansett went through the throes of collapse, rejuvenation, reinvestment through a new ownership strategy, a major marketing push and self-inflicted wounds before finally crashing in a heap, bringing a merciful end to the story of an Australian aviation pioneer, so too Dick Smith is a tale of many causes ending in the same result – the passing of a pioneering brand.
If a buyer can be found for Dick Smith – and that is a big if – the business will be faced with one of the more challenging marketing briefs of the year, if not the decade.
The first issue facing anyone wanting to market Dick Smith out of the mire is the current experience. In a massively competitive sector the brand is already hamstrung by the fact it has gone from having an overwhelming surplus of the wrong stock (in November) to not being able to afford to stock its shelves with the right stock (now).
Having missed the millennial shoppers with poor product choice while attracting older shoppers hunting bargains, the clearance sale late last year added an air of desperation to the brand that, while increasing foot traffic, failed to deliver the cashflow boost that would have enabled the brand to restock with the right product mix.
Administration and receivership are problematic but not insurmountable challenges to the brand. Indeed, after Woolworths had massively downsized the business before offloading it to private equity for $90 million, the brand, refreshed, appeared to have turned around. It was, it now seems, The Emperor’s New Clothes.
Since then marketing has played a vital role in getting people into the stores right when the retailer needed them. But once there, they discovered an offer far from compelling both in terms of stock and experience.
Faced with competitors such as JB Hi-Fi, often located cheek-by-jowl, the chasm between the retail experience looked even greater.
The real Dick Smith has had nothing to do with the brand for years other than to be trotted out on regular occasions by the media as it has made each transition, and this time he has slammed the money-making venture capitalists who saw the business float for half-a-billion dollars.
Smith believes the brand has a future and while it is an iconic brand, it has been battered one too many times.
The model might survive but a string of different marketing campaigns and shop models over the past several years means much of what it stood for has been watered-down, even without accounting for the loss in consumer confidence.
In just the past two years we have been treated to Clever Dick and The Techxperts, as the business moved its account in with Ideaworks and Atomic212, while the Powerhouse model developed under Woolworths is but a memory.
With the queue of creditors growing there will be nothing in the kitty for advertising.
And Dick Smith, as a man and a brand, is largely irrelevant to the the millennial market it needs to tap into.
Even the leases on its stores may not be of much use, replicated by competitors in too many places.
Ansett was a brand whose time had come – unable to market its way back to success and lacking the agility and finances to compete with new players and new ideas in the market.
In the end the experience was so tattered there was nothing.
Ansett? Dick Smith? There is something very familiar going on.
- Simon Canning is marketing and advertising editor at Mumbrella