Woolworths has started cranking up their BIG W brand in the consumer electronics and IT market in an effort to take on JB Hi Fi and the struggling Harvey Norman group. They also plan to expand their small appliances offerings.
The mass discount retailer who also competes up against the Woolworths owned Dick Smith is already the second biggest seller of Apple iPads, iPods and Apple TV products with the Company also grabbing share in the TV market, especially in the 32″ and 40″ market with brands such as Sanyo, their house brand AWA, LG and Samsung.
Outside of Apple’s own stores JB Hi Fi is the #1 Apple reseller.
Last week BIG W was credited with being the cheapest seller of the new iPad with the mass retailer offering the device at up to $40 less than Apple store prices, they were also cheaper than sister Company Dick Smith.
While Woolworths does not disclose the sales break down of their categories ChannelNews understands that consumer electronics and IT is one of the Companies best performing categories.
During a recent analyst briefing Woolworths CEO Grant O’Brien said that steps were taken to improve BIG W’s value perception with sharper entry price points and clearer messaging which in the consumer electronics market could put pressure on retailers who sell small item consumer electronics and IT products.
Recently the Company appointment Saatchi & Saatchi as their marketing agency for the Big W brand.
The Company has also moved to expand their online presence with the Company moving to offer one hour deals on consumer electronics and small appliances. Big W has also moved to make it easier for consumers to shop at their online store with new smartphone and tablet apps.
O Brien admits that more work has to be done to reinforce BIG W’s value perception after the discount chain reported that sales were down 1.3% during the first half of this financial year despite the Company opening 4 new stores.
The Company said that they plan to launch 35 new Big W stores in the next 5 years they have also said that they plan to expand their consumer electronics and IT offerings after announcing that they plan to close more than 100 Dick Smith stores.
Woolworths said that rapidly falling prices and rampant competition have made it increasingly difficult to operate both a Big W chain and a Dick Smith chain when both store groups often sell the same products.
O’Brien said that the Dick Smith chain no longer matched the company’s strategic focus on large-format stores such as Big W.
Shortly after the Dick Smith sale was announced JB Hi-Fi chief executive Terry Smart who is set to come under pressure from Big W, as Woolworths shifts more of the consumer electronics and IT business through the discount retailer said the company should be a beneficiary as there was the ”opportunity with Dick Smith stores closing for them to pick up some of those sales”.
O Brien disagrees claiming that Bi W is in an “excellent” position to pick up any business that Dick Smith may lose.