I’ll say it loud and say it proud. I am one of the 900,000
satisfied Dixons Freeserve internet customers who helped to give Sir
Stanley Kalms such a happy Christmas.
In fact I’ll go further: Dixons Freeserve (which for those who don’t
know does exactly what it says on the tin - ie allows free internet
access) will go down as one of the most inspired marketing ploys of this
decade - smarter even than BA’s ’World’s Biggest Offer’.
But Freeserve’s real significance is that it is a brilliant piece of
At a stroke Dixons gets to sell more kit and reinvent itself away from
being an old-fashioned high street retailer into both a media owner and
an internet shopping intermediary.
Here’s how: with 900,000 users (and climbing) Dixons is now one of the
UK’s biggest internet service providers, as big if not bigger than
rivals such as AOL or Yahoo!. Thanks to the registration process, Dixons
not only knows where its Freeserve customers live, but also a lot about
them (as a database-building exercise alone, Freeserve is probably worth
Armed with that information and that number of eyeballs it can sell
online advertising and, over time, become the conduit for virtual
third-party retailers, taking a fee for every online purchase.
As luck would have it, the Dixons news coincided this month with other
examples of brand extension by a service or leisure company, which is
probably the kind of activity which will dominate the marketing agenda
over the next few years.
Birmingham City football club announced last week a joint venture to
sell financial services. The idea, of course, is to channel fans’
loyalty to the team into mortgages, insurance and so on. But this is
based on the assuredly dubious assumptions that a) there is a common
theme between football and financial services and b) their emotional
commitment to the Birmingham City ’brand’ is sufficient to permit fans
to make the required leap of faith. I think not.
The second example is Shell’s plan to develop a chain of high street,
non-petrol convenience stores, the key phrase here being
The business logic is three-fold: first, petrol retail margins are under
huge pressure; second, Shell is a trusted brand, at least to motorists;
and third, it hopes to replicate its forecourt success.
Shell may be right to think it has sufficient brand power to pull the
move off - in theory. The reality, however, is that non-petrol retailing
is a vastly different game from retailing in a petrol environment. It’s
a bit like a Sunday footballer dreaming of playing for England - it
looks like the same game but in reality it’s another league
And that, ultimately, has to be the acid test of such activity: Dixons
succeeds because Freeserve is logical, credible, rooted in the core
activity and, above all, viable. And neither Birmingham City nor Shell
can justifiably claim they tick all the boxes.
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