Agency: Fallon London
By Ed Owen, marketingmagazine.co.uk, Wednesday, 11 May 2011 12:01AM
Niall O'Keeffe's CV could make him the envy of the average British bloke. Moving from tobacco to beer to mobile phones, then to electricals retailer Dixons, he claims to be a brand specialist who has 'never been interested in staying in one industry'.
Yet, four years into his role as marketing director at the latter, O'Keeffe still has much to do at the 600-store and online retail group, which includes the PC World, Currys and Dixons.co.uk brands.
Entering the recession, Dixons was already looking to restructure. The group wanted a return to the £325m profits achieved in 2006 when it benefited from the boom in sales of higher-end consumer electronics. Profits fell to a low of £56m in 2009, creeping back up to £91m last year, but they are expected to dip again to £85m this year, at the bottom end of forecasts.
O'Keeffe is banking on its programme of store refits - 250 to date - and a renewed spirit in its marketing to be competitive.
The group's 15-year relationship with ad agency M&C Saatchi has this year resulted in its best work in a long time. Amusing Star Wars-themed ads declaring Currys and PC World as 'The greatest electrical store in our galaxy' followed up the multi-award-winning 'Sandals/Middle England/Piers' poster campaign, which encouraged consumers to browse at high-end shops, 'then go to dixons.co.uk and buy it'. These ideas have come from a restructured department, says O'Keeffe.
The group faces a continuing challenge as customers try to save money by searching online for the best deals. 'When I joined we had this big commercial department, but only four marketing people dedicated to PC World, for example. Now we have 70 in marketing, a research and insight team, and a database marketing team,' he says.
O'Keeffe is animated as he shows off one its flagship stores, the Currys at Staples Corner, northwest London, not only describing products' detailed technical features, but also explaining how the company has reshaped its view of the customer.
'We have changed from thinking about a customer "in store" to "in life",' he expounds. 'To simply advertise and believe customers would come to us was an outdated idea. But the business had not been investing in the brands; people were working off instincts, not hard data.'
Despite setbacks, including a 20% plunge in share price when it issued a profits warning in March, O'Keeffe remains upbeat and resolute that Dixons is on track.
Genial and fast-talking, O'Keeffe, originally from Grantham in Lincolnshire, appears friendly and familiar with staff - this branch is reputed to be a common stopping-off point to show off the more modern Dixons Retail offering.
He professes not to be a geek, but is caught off-guard when he picks up an iPad 2. Bemoaning the fact that he has only the first-generation model, he clearly lusts after the latest version. Touring the store, he shows his product knowledge as facts flow about the business, range and positioning.
'Take coffee makers - you can buy an own-brand machine for £11.99 or go up to £1889.99 for the Jura Impressa. Five years ago, premium brands like that would not have touched us with a bargepole,' he says, to show how Dixons' offering has evolved.
Scoring exclusive deals with Apple has certainly helped and proved a real coup for O'Keeffe. Last year, the group gained initial exclusivity for the original iPad, with the iPad 2 first available on a 60-day exclusive.
While Apple products attract the hype, a buzz is also created in-store around other brands. Rival tablets such as the Motorola Xoom had 30-day exclusivity, and Sony, Bose and Panasonic have all installed 'play tables'.
Older store formats, whether Dixons, Currys, or even rivals such as Comet, were indistinguishable and chaotic, says O'Keeffe. Now the scene has changed, with Dixons Retail leading the charge, he claims.
The Dixons fascia migrated online from the high street in 2006, and at Currys and PC World the gadgets have been 'freed', with demonstration models on show and customers encouraged to try them out. Entertainment equipment can also be set up to simulate home viewing or listening.
Despite this, O'Keeffe says that continued investment has enabled the group to maintain market share, despite profit falls. The percentage of people citing Currys as their main electrical retailer, for example, rose from 22% to 22.8% in the year to March, according to Datamonitor. The rest of the market had mixed fortunes, with Argos and Comet losing share, and Tesco and John Lewis remaining flat. Amazon, Asda and eBay all boosted their market shares, although combined, these three retailers account for only about half that of Currys.
O'Keeffe admits that the group would be in a dire position had it not carried out its store revamps. 'We are coming out of the situation with a fit-for-purpose estate.'
While people may cut back on expensive items, he maintains that if they do spend, they are likely to do so at Currys. There is some evidence for this: while Dixons Retail's sales dipped 2% over the Christmas period, this was better than Comet's 7.3% fall. Newcomer Best Buy, meanwhile, has just eight UK stores, but ongoing investment means these will make a loss of about £50m by year-end, according to Best Buy Europe's co-owner, Carphone Warehouse.
Although marketers are often reluctant to talk about rivals to journalists, O'Keeffe matter-of-factly claims that neither Best Buy nor Comet will come close to Dixons' performance this year. 'Draw your own conclusions - see where our competitors are,' he says. '(Ours) are destination stores, and we are proud to show them off. I take my kids in at weekends.'
A further 60 stores will be converted by Christmas and another 15 to 20 megastores opened, so revamped and new stores will account for 70% of UK turnover, he adds.
Another change is the soft-launch of the Knowhow brand, replacing the Tech Guys. This extends service to repair, after-sales care, advice and installation for all electrical products, run from a central warehouse.
Knowhow will feature in campaigns for the Dixons' brands, including the next in the Star Wars series. It was O'Keeffe who signed the deal with Lucasfilm. The idea came via a visit by Maurice Saatchi, who, says O'Keeffe, spent hours in a new-format store and was 'blown away'. 'The ads have performed incredibly well, conveying so much about the brand,' he adds.
While Dixons faces challenges from online and high-street rivals, O'Keeffe believes he has been successful in building a strong foundation for better things ahead, and seems committed to completing the journey he has started at Dixons.
1994: Marketing manager, Benson & Hedges
1994-1999: Brand director, Carlsberg
1999-2007: Director, personal and small business marketing, rising to
global brand director, Orange
2007-present: Marketing director, Dixons Retail
Family: Married with two children
Lives: St Albans
Cars: BMW 5-series; 'old' Porsche
Favourite gadget: Apple iPad
Favourite app: Sky Sports
Supports: Tottenham Hotspur
Likes: Rock music and playing squash
This article was first published on marketingmagazine.co.uk