As JB HiFi profits soar, CEO Terry Smart tells CN why it will beat vendors direct-selling, and how its stores are a "destination" for PC lovers.
The retailer today announced HY13 net profit up 3% to $82.1m and sales rising 3.1% to $1.82 bn, with online up a staggering 40%, although accounts for just 2% of all sales.
"We have seen good growth across the board," JB Hi-FI CEO Smart said in an interview with CN.
"Accessories and PCs have been strong, however, we did see a downturn in PC sales in October due of the launch of Windows 8."
"We believe that JB Hi Fi is now a key destination for consumers buying a PC as we're able to offer range and excellent pricing."
When questioned about future growth and the emergence of vendor retail stores and the possible elimination of second hand game sales, Smart said:
"Consumers are still going to research their purchase but the one thing we can offer is choice, and a range of products.
"As part of their research, consumers are going to check the price that a vendor is selling at in their own stores, so we are confident that consumers will still come to JB Hi Fi stores because of the service, range of products we offer and prices."
Talking about the emergence of expensive branded products such as $20,000 4K TVs JB's boss said: "brands are important and always will be.
"We sell both the high end branded products and budget products, we still have to sell and demo both. What has become important is merchandising instore and we are currently expanding our brand merchandising instore across all our locations."
"A lot of products today are tied to an ecosystem where one device communicates with another. We have to bring this to life instore and demo it."
|CN recently visited JB's new store in North Sydney which has smartphones, tablets and laptops from Samsung and Apple displayed in the one counter area to show the Android and iOS ecosystems respectively at work, as well as fully kitted out audio area with headphones hooked up to audio players streaming music. |
Incidentally, JB said sales of its Now music service continues to "grow steadily" and will enable it to expand further into additional digital content categories.
"As a result, we are beefing up our internet WiFi operations instore, while still delivering excellent service and pricing," Smart added.
CN understands from Telstra sources that JB HiFi is working with the carrier to deliver fibre to as many of the JB Hi Fi stores as possible with a new IP network tipped to be operational by year end.