Currys’ strategic expansion into services has been significantly impactful for the overall business. What began as a small side business focused on installations and repairs has grown exponentially in recent years to become a major driver of growth and competitive advantage.
Services now account for 15% of Currys’ total revenues CEO Alex Baldock told Shoptalk, as he stressed that “we’re nowhere near the ceiling”.
We look at how its offer of refinancing, refurbishing, and fast repairs is boosting Currys’ business.
1. Higher margins
Currys is prioritising services like repairs, installations, and financing as these have higher margins than typically wafer thin product sales margin alone, boosting profits while helping customers afford and enjoy technology.
With many trade-ins and repairs, he added that the retailer is tapping into the circular economy trend of reusing and reselling products.
2. Recurring revenue streams
One of the key benefits of Currys’ service expansion is the establishment of reliable recurring revenue streams through its credit offer.
With over 20% of sales now generated through its own credit product, the electricals retailer enjoys consistent income over time.
This approach not only helps customers afford products but also fosters long-term loyalty, especially amid economic uncertainties like the ongoing cost-of-living crisis leading to lower sales on big-ticket items.
3. Increased loyalty
Data shows customers who use services like financing and repairs have significantly higher loyalty and are more likely to purchase again from Currys within 12 months, says Baldock.
He notes that customers with credit accounts are 71% likely to return to the retailers, indicating a strong correlation between service utilisation and customer retention.
With a 14m repairs customer base, the chief executive notes that having this scale in repairs abd refurbishing provides the business with the opportunity to increase share of wallet and spend through loyalty programmes.
By focusing on building “functional loyalty” through various initiatives, Currys aims to cultivate enduring relationships with its customer base.
4. Competitive advantage
Currys has built a competitive advantage through its large-scale 1,500,000 sq ft repairs facility in Newark, Nottinghamshire which houses over 1000 technicians.
This rapid repair service gives Currys an edge over competitors who may take weeks to complete repairs. By minimizing customer downtime, he adds that the business earns greater customer satisfaction and loyalty – whihc he called “a big source of competitve advantage”.
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