Blazing a trail in electronics

It is the pioneer of out-of-town retailing, it was the first electricals retailer to sell online and it invented the sector’s showroom trading model. Comet has an impressive track record of claims to fame.

When George Hollingbery began his two-man business in 1933 charging batteries for the residents of Hull, who would have thought it would become the out-of-town retailing giant that it is today? To set the scene in 1933, Neville Chamberlain was Prime Minister, people were flocking to cinemas to watch King Kong and Bing Crosby was playing on people’s new wirelesses. So how did the retailer evolve from its humble beginnings into a multichannel business for the consumer age? A business that, between its home delivery teams and service engineers, claims it visits close to one in every 10 homes in the UK.

As with any retailer, keeping ahead of the times is integral to success. After five years of running his battery-charging business, Hollingbery saw a gap in the market as demand for wireless sets soared. He bought some of his own and started renting them out, at which point he changed the company name to Comet Radio Rentals.

Perhaps its most revolutionary move came in 1968, when it became the first UK retailer to launch an out-of-town superstore. Richard Hyman, strategy adviser to Deloitte’s consumer business practice, says: “They would buy old, disused buildings where the rents were lower and the car parking was plentiful. It was a totally different business model and it gave Comet a significant first-mover advantage.”

The warehouse-style, discount store sold only radios and TVs and all product was kept packed away in boxes. One employees’ suggestion to display the goods resulted in the creation of the first showroom-style model of electricals retailing. Then managing director Michael Hollingbery – the founder’s son – dismissed the idea initially because once unpacked they would have to be discounted. However, once persuaded, sales increased by 200 per cent in one week.

It was the 1984 takeover by Kingfisher that signalled one of Comet’s most dramatic developments to date. Until that point, Comet had a seemingly unshakeable reputation as a discount retailer – so much so that some key manufacturers such as Sony and Hitachi refused to supply it. The stores were also in secondary, and rather dreary, locations.

Former Kingfisher chief executive Sir Geoff Mulcahy says that back in 1984, the appeal of Comet was largely that it fitted perfectly with Kingfisher’s brand portfolio, which at the time was B&Q, Woolworths and Superdrug – all specialist retailers selling to customers who focused heavily on price.

“We set about enhancing the product range and we also enhanced the store portfolio by building bigger and better stores in different types of locations,” says Mulcahy. Kingfisher also invested in launching a home delivery system and a central distribution system.

League of its own

The transition of the business led retail consultancy Verdict to claim it was the best retailer of electrical goods in Britain in 1987. Verdict founder Hyman says: “There is no doubt that it was the pioneer of electricals retailing. It was revolutionary in terms of where it traded from and the size of its stores and this allowed it to develop great autonomy.” It also published a tabloid-style publication with price offers. “It was rough and ready, but no one else was doing that and it signifies the fact that it was leading a lot of the thinking,” adds Hyman.

In 1999, it became the first mainstream electricals retailer to sell products online – something Mulcahy says was a challenge because “it was a market we didn’t know much about”. Since then, the online and subsequent multichannel offer has moved on apace. In fact, Planet Retail non-food analyst Greg Hodge says Comet’s multichannel strategy has been among its most notable achievements. “The comparison between price and store is very good – there is a seamless transition between stores and online,” he explains.

There have been other big developments in the past 10 years too. In 2003, the year that it demerged from Kingfisher as part of Kesa Electricals, it rebranded. This involved an overhaul of its logo, TV ad campaigns, staff uniform and staff training. It also scrapped commission-based pay in 2006. Most would agree that the electricals sector has not always had the best reputation for customer service and Comet managing director Hugh Harvey believes the changes it has made have been crucial to the brand’s development. “Customers today have a very different experience shopping here than at any other electricals retailer. That’s down to how we display our goods and the ability – owing to our specialist credentials – to serve customers in the broadest, fullest sense,” he says.

The launch last year of its support service Comet on Call and of the retailer’s two-storey format in 2004, reflect how electricals consumers’ requirements have changed. With Comet on Call, customers can benefit from telephone support, home visits or remote computer access to solve technology dilemmas. The two-storey format reflects the fact that customers now want more of an in-store experience. “It gives space to allow customers to navigate product and it allows us to demonstrate it,” explains Harvey.

It has also introduced “living rooms” into about a dozen stores. “It’s about bringing the real noise and shudder of watching a film in a cinema into someone’s home,” says Harvey. “Don’t underestimate the fashion element in electricals retailing. In another five years, the likelihood is we’ll be doing 3D, experiential TV.”

From strength to strength

So how does the overall business compare today with the one that was taken over by Kingfisher? Mulcahy says it is undoubtedly very different – and far better. “In terms of customer perception, market research would say it has a better range and service than Currys, whereas Currys at that stage was number one,” he says. And, most crucially, “it’s much more profitable”.

Give it another 10 years or so and Comet will no doubt look totally different again. And, given the nature of its product, so it should. Harvey says: “We’re not just thinking about the ranges in six months’ time. We’re as interested in talking to manufacturers about technology that’s two years out so we can design stores and get resources into our business to ensure we’re ready for that.”

However, the imminent UK debut – and subsequent aggressive expansion – of Best Buy will present a challenge. Hodge says: “The UK electricals market is in for a massive shake-up, given the broad selection of choice and the specialist knowledge that Best Buy has.” When shoppers go into one of its stores in the US to buy a Mac computer, for example, Best Buy’s specialist Apple advisers will be able to comment on whether a certain model really is suited to their needs. Will retailers such as Comet be able to compete?

Harvey is confident that the pace of change will continue to be rapid and substantial. And it will need to be – this is a tough market with a high level of product innovation. He says: “The danger with the electricals sector is you’re selling the same product from the same manufacturers, so you have to differentiate yourself beyond your product selection.”

Mulcahy adds: “It has always been a challenging market and it will continue to be so. You have to continually improve efficiency. Any retail business that stands still effectively goes backwards.”

While many retailers with any sort of a heritage like to play on it, Harvey says this approach does not tend to work in electricals. Its shoppers are not, frankly, particularly interested in the past – they are interested in the latest developments and future technology.

So while many may assume Comet started life in the 1970s or 1980s, it is worth bearing in mind that over the past 75 years it has endured as many recessions as it has good times. The business has proved its ability to adapt and survive and it has earned its reputation as a pioneer in many areas of retail. Roll on the 100th.

75 years of Comet

1933: George Hollingbery founded Comet Battery Stores – a two-man business that charged batteries for wireless sets and delivered them to customers for weekly use.

1938: As demand for wireless sets soared, it changed its focus to radio rentals, becoming Comet Radio Services.

1939: The business by now had 2,500 accounts and a small fleet of vans. It undertook minimal operations during the Second World War and resumed renting and retailing radio sets when the war ended.

1968: Its first out-of-town superstore opened in Hull – a discount warehouse selling radios and TVs.

1970: After capitalising on the popularity of washing machines in the late 1960s, the business floated and expanded its product range.

1984: Comet was taken over by Kingfisher, widening its UK presence.

1998: A call centre was opened in Hull to manage customer liaison

1999: Online retail launched

2003: Demerger from the Kingfisher group as part of Kesa

2004: Two-storey store format launched

2005: Underwent complete rebranding, involving a new TV ad campaign, logo and staff uniforms. It also introduced its e-learning programme for colleagues

2006: Commission-based pay was axed

2007: Technical service Comet on Call was launched. 2008: Comet now has more than 10,000 employees and 250 stores in the UK.

What shoppers want

Comet’s best-sellers since the opening of its first store

Pre-1960: Wireless radios

1960s: Cathode Ray Tube (CRT) colour TVs

1971-72: Automatic washing machines

1973-74: Teasmaids

1975-76: Upright vacuum cleaners

1977-78: Microwave ovens

1979-80: Sony Walkmans

1981-82: VCR recorders/VHS

1983-84: Sony Discmans

1985-86: Cordless phones

1987-88: Cordless kettles

1989-90: Game Boys

1991-92: PCs

1993-94: Minidiscs

1995-96: Printers

1997-98: Home scanners

1989-2000: MP3 players

2001-02: LCD TVs

2003-04: Plasma TVs

2004-05: Digital cameras

2006-07: iPods

2008: LCD TVs

And beyond: The Future Laboratory forecasts that home robotics will be one of the most exciting developments; autonomous devices will perform tasks without human control