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As news filters through of Comet’s likely plunge into administration, Twitter is full of advice for people holding gift cards – spend them now! – and speculation over when the closing down sale will begin. One thing is for sure: If Comet does go into liquidation, UK shoppers will snap up its final remains like hungry vultures.
Some would say that the writing was on the wall for the chain, even before Kesa practically gave it to private equity firm OpCapita in February, after years of falling sales and declining market share. In July, OpCapita reported that its new low-price strategy seemed to be working, but demands from suppliers for payment upfront in the run-up to Christmas look set to signal the end of the group. Comet has 240 stores to support and a lacklustre image amongst consumers in an electronics and appliance retail environment that – as Best Buy found to its cost – values price above all else.
But once the thrill of bagging the closing-down sale bargains has passed, UK consumers, and indeed all parts of the retail chain, may well miss Comet. Consumers will see choice lessen and prices climb as retail competition begins to fall away. Online-only specialists and manufacturers will find it a harder sell with 240 fewer stores in which to display physical products.
If Currys finds itself as last-man-standing in big box electronics and appliance retail, it needs to investigate new income streams, particularly since Best Buy demonstrated that improving the store experience and the quality of after sales care is not enough to make UK shoppers look beyond price. It could look at partnering up with internet retailers who would benefit from being able to offer ‘click and collect’ fulfilment, perhaps on a commission basis; similarly, its status as the last ‘showroom’ chain could be put on a more official, revenue earning basis, with manufacturers renting floor space within the stores. It could also investigate different retail models, such as Brighthouse’s pay-by-instalments format. For Comet, it looks as though time for creating a future-proof business model has just run out.