John and George Digwa, the directors of Ilford-based PRC Hi Fi & Video, and winners of the Best Large Consumer Electronics Retailer title at this year’s IBA, told Anna Ryland, how they embrace change to stay at the top of the game.
Consumer electronics is one of the passions of John Digwa, whose first career choice was medicine although he also dreamed about becoming a pilot. Starting in electrical retailing in 1972 in Forest Gate, East London, he did not expect that this career choice to last this long.
John began from selling record players, Hi Fi separates and vinyl records. In the late 1970s, taking advantage of the fast growing video market, he was involved in video making. He also witnessed the advent of the first format war as Sony launched the Betamax system while JVC supported the VHS format.
As consumer electronics boomed, the second branch of PRC opened in Ilford in 1989. At present the company operates its main store in Ilford and a warehousing facility in Romford. George Digwa has been involved in the business from a very early age; helping his father during school holidays. Although football is his passion (he counts Wayne Rooney among his friends), managing PRC became his full time career in 2000.
Specialising in CE brands such as Sony, Samsung, Panasonic, LG and Toshiba for over 35 years, John decided to venture into white goods in spring this year. “Seeing the margins on CE products dramatically decline we decided to consider domestic appliances,” says George. In April 2011, PRC opened a white goods area of the store and “so far it proved to be a very successful move.” At the moment domestic appliances (PRC sells Samsung, LG, Panasonic, Bosch and Hotpoint products) constitute approximately 10-15% of the company’s sales.
PRC has 26 members of staff, including installation personnel. Some of the staff have been with the company for almost 25 years. “We treat our staff as an extended family,” explains John. “We don’t look at them as us and them. We have regular social outings; we play cricket and rugby together. We reward staff with sales bonuses, but also with training courses, gift vouchers, and tickets to sporting events.”
“However we expect them to sell what is profitable for the company, such as warranties, and add-ons.”
“Many of our customers who had been with us when since we opened the store are still with us. They have been joined by young people, some of whom who are the third generation of the original customers,“ comments John. “We are proud that we live up to their expectations – they don’t only come to us because their parents did that but we managed to convince them that we are good enough and competitive enough to meet their requirements.”
Ilford, situated between affluent West Essex (‘the footballers’ territory’) and Docklands, is a good location for an electrical retail business. “We have some very famous ‘neighbours’ such as Frank Bruno and Alan Sugar who 32 years ago used to supply us with cheap car aerials driving around in his white van,” adds John.
Staying on top
“This is the third recession I have been in and it is the worst of all of them,” reflects John. “Being able to keep the cost structure down and staying competitive” is the greatest challenge for the company at present.
“We will go out of our way to satisfy our customers; both long-standing and new ones. In this tough trading time it is difficult to get customers into the store, so it is even more important to keep them. How do we do this? By giving them excellent customer service – something they cannot expect from the multiples.”
“With new technologies, such as 3D and internet television, educating customers is key,” argues George. “It is our role to show them how to use the products and to explain that the television set is becoming a media hub. That’s why staff training is so important. We make sure that our staff attend all training courses offered by the manufacturers. In addition to this we organise weekly in-house training sessions.”
“We also offer installation and delivery – predominantly within the M25 but we make exceptions for customers who come to visit us from a long distance away.”
John and George take marketing very seriously, advertising not only locally but also nationally. They use a variety of media, including specialist publications, such as property magazines. In London, they advertise on large-format billboards, the London Underground in the local area, buses, local and national radio, and on specialist Sky TV channels. They also use direct mail extensively. “We monitor the effectiveness of these media for us very carefully and base our future strategies around this,” says George.
PRC uses its website as a marketing tool and to attract customers to the store. “Your front window can only be between 16sq ft or 32ft but your internet window is as large as you make – reaching hundreds of miles,” stresses John”.
On our website we promote the store with value-added offers, such as a free five-year guarantee or a free Blu-ray player with a 3DTV, giving customers a strong reason to come to the store,” says George.
John strongly believes that “if you want to stay in this business you have to change with the times. If you don’t catch that moving train, you will be left on the platform.
“In today’s world you have to be really good at what you’re doing to survive. At my age I work twice as hard than I worked when I was 25 because this is what business demands,” he adds.
A retail transformation
Two years ago John decided to give his store a fresh look, although the previous store refit was conducted less than ten years before. “We wished to ensure the interiors matched these good looking products on display.”
“We knew what we wanted and we’ve done the groundwork travelling extensively. We went to New York to see the Sony store in the Time Warner building, to Dubai, Singapore and Bratislava – to pick up the ideas. Then we called in store designers.”
Looking around the spacious and very elegant showroom, for which black and white marble floor tiles were sourced in Greece and glazed in Milan, it is obvious that the Digwas spared no expense or effort to achieve their goal.
“Having completed the refit we organised a launch with a bang in July 2009 (inviting Bollywood star Shilpa Shetty among others) which attracted 45 journalists and reporters. Even on the business pages of The Guardian there was a report about the company. Subsequently we were approached by a number of dealers requesting to send their staff to the PRC store to see what we have managed to achieve,” adds George.
“I have to admit I had initial doubts about the refit and the money we were about to spend. But once I saw the results I knew we have done the right thing. I believe that in business, if you are a serious player, you have to speculate to accumulate,” says John.
The industry challenges
John and George consider the practice of some authorised bricks and mortar retailers setting up websites under different names to be a big problem for the industry. These retailers conceal their identity which gives them the opportunity to discount the prices significantly. Some of them, using their status, wholesale products to unauthorised retailers who sell them online. This erodes the prices and spoils the game for both manufacturers and other dealers.
They wish for the reintroduction of RRP which would solve some of the current industry’s problems.
The next step
“We are proud to win the Award and we’ve included the Award logo and information about our win in all our advertising and the
website,” says John.
“It gives our customers reassurance that they are in the right place when they come to us. Winning also makes you want to go further and achieve even more.”
Finally John reveals that their next project “is going to be a very different proposition from what we have done so far. It will be a hard act to follow for many retailers, as it will involve a huge investment. It will be developed around turning customers’ distress purchases into something special.”