Currys' Transition to Brand-Focused Marketing: Creating Customers for Life

Currys' Marketing Strategy and Brand Focus

Currys, a leading retailer in the UK and Ireland, has made a strategic shift from product-focused marketing to brand and services-focused marketing. This transition, led by chief executive Alex Baldock, aims to create 'customers for life' by emphasizing the long-term value the brand offers to consumers through aftercare and credit. The retailer's first brand-led campaign, 'Beyond Techspectations', focuses on highlighting the expertise of its employees and the value it provides to consumers beyond the initial purchase.

According to Baldock, this shift in strategy is delivering a consistently improving customer proposition, positioning the brand to benefit shareholders, colleagues, and customers as consumer confidence improves. The head of brand and advertising, Aisling Lancaster, emphasized the importance of brand advertising in keeping customers engaged and loyal, especially in the slow purchase cycle of the retail industry.

The peak trading update released by Currys for the 10-week period to 6 January revealed that sales of big-ticket items remained muted, while services such as its iD mobile package and 'care and repair' options experienced strong growth. The company's credit extension service also performed well, with a record credit adoption of 20.6% and 2.2 million active credit customers. These results demonstrate the success of Currys' brand-led activity in driving long-term customer engagement and value.

Impact on Customer Lifetime Value and Profitability

The transition to brand-led activity has had a significant impact on the lifetime value of customers for Currys. The company's focus on services and brand advertising has led to a notable increase in consumers using its services over longer periods, contributing to the creation of 'customers for life'.

Baldock highlighted the growth in services and attributed it to the successful marketing campaign, which has increased consumer confidence in the brand's services. Additionally, the company's long-term investment in improving customer satisfaction has allowed it to monetize customer experiences and charge more for its offerings. The focus on end-to-end profitable activities, as well as a crackdown on costs, has driven profits up, despite the challenging consumer spending environment.

Despite the depressed discretionary spending and a decline in like-for-like sales, Currys delivered robust profits for the period. The company's guidance for full-year pre-tax profit is expected to exceed consensus expectations, indicating the positive impact of its transition to brand-focused marketing on profitability.

Challenges and Future Outlook

Despite the success of its brand-focused marketing strategy, Currys faces challenges related to consumer confidence and discretionary spending. GfK's consumer confidence barometer suggests that consumers are less likely to make big purchases, impacting the retailer's like-for-like sales. However, Baldock remains optimistic about the future profitability of the brand, expecting full-year profits to surpass consensus expectations.

The company's focus on building 'customers for life' through brand-led advertising and services, as well as its emphasis on profitable activities and cost management, positions it well to navigate the challenges of the retail market. Currys' robust profits and positive outlook for full-year profitability indicate the effectiveness of its transition to brand-focused marketing in driving long-term customer engagement and value.