WOW - Woolworths Group

qldfrog said:

I have to agree, any battery a bit unusual, no more transistor/resistor/capacitor, they are like a cheap harvey norman or retravision store
Can not for the hell of me understand what the management thought..doomed to failure indeed yet there is a niche market there that jaycar took

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Direct competitors to part or all of Dick Smith Electronics' business as it is today:

Harvey Norman, Myer, David Jones, K-Mart, Big W, Target, Retravision, JB Hi-Fi, Good Guys, every mobile phone retailer including Telstra and the other big companies, every computer shop from small one man operators to the large companies, every overseas equivalent of these retailers who ships internationally, numerous sellers on Ebay.

Direct competitors to Dick Smith Electronics as it was 20 years ago:

None as such. Jaycar was then a small operation and not a national chain. The only other significant national operator was Tandy, which did sell some actual electronics but was focused primarily on selling its own house brand consumer items (particularly audio systems, kids toys, landline phones, computers etc - all under their own house brands). DSE then was what Jaycar is now, and Tandy was half way in between. Both used to produce annual catalogues, with DSE's filled largely with technical data and components whilst Tandy's was filled with assorted gadgets, hi-fi systems and the like. Tandy used to literally give away batteries once a month in order to get people into their stores.

Then came the big changes. DSE went head to head with other retailers and left the actual electronic components business to Jaycar. Meanwhile Tandy disappeared altogether, having been gobbled up by Woolworths and merged into DSE.

Why anyone would want to relinquish a virtual monopoly on a small but adequate niche market in order to go head to head with so many big name retailers I just don't know. Jaycar seems to have filled the gap quite well however.

Dick Smith is the same as Radio Shack in the US. There was a time when hobby electronics was big (I remember having a CB radio when I was in year 7, then I discovered girls!). Technology more or less killed off hobby electronics; why build what you can buy for cheaper. Radio Shack now survives on selling phone contracts, DSE will probably too, eventually.

On the positive side, the DSE website is actually very good (pricewise and layout). They must have huge overheads because of the large store network but they still compare well with online only retailers. As a stand alone business with the right owner they could probably have a very successful online business with maybe a few showroom stores (not the 390 they have now).

Woolworths is due to report on 1 March 2012. It will be interesting to see how they are fairing in comparison with Wesfarmers. It will also be interesting to see how the share price performs in the next few weeks.

In the past there has been a share price rally in anticipation of the results (in the lead up to the release) only to see the price slapped down after the release (when the results failed to meet analyst expectations), followed by another rally in the lead up to going exdiv, followed by another dive on the day before it went exdiv.



Try trading the volitility, too fickle to consider buying and holding imo.

Thanks i'll look to short it if it has rallied in anticipation.

My wife and I had a very poor experience with Big W on the weekend, which I hope does not reflect on the management of WOW, but if it does, management needs to be changed ASAP, otherwise the company will be easily overtaken by WES and other competitors in the future.

My wife purchased a Kindle for me for my birthday. Unfortunately, the Kindle stopped working after a couple of weeks, so we decided to return it to the place of purchase for an exchange or a refund. We put the Kindle back in its original packaging and made sure we brought the receipt with us.

Imagine how surprised we were when Big W initially refused to take back the Kindle and refund our money, saying that it was Amazon's problem and Big W was not an agent for Amazon. They also claimed that my wife would have been told this when she purchased the Kindle. My wife, an honest and truthful person (we must set an example for our children) adamantly denied that she was told this, and there was no written notice anywhere in the store, including where the Kindles are displayed, advising potential customers that Big W would refuse a refund and that customers would need to deal with Amazon.

Now, I hope that Big W's lawyers have advised their client that this contravenes the Competition and Consumer Act and is misleading and deceptive conduct.

We did eventually obtain a refund out of Big W, but only because we complained to the store manager. We acquired a replacement Kindle (better model, as well) directly from Amazon at a cheaper price than offered by Big W and Dick Smith.

As a shareholder I'm disgusted that you were provided with a refund.

McCoy Pauley said:

My wife and I had a very poor experience with Big W on the weekend, which I hope does not reflect on the management of WOW, but if it does, management needs to be changed ASAP, otherwise the company will be easily overtaken by WES and other competitors in the future.

My wife purchased a Kindle for me for my birthday. Unfortunately, the Kindle stopped working after a couple of weeks, so we decided to return it to the place of purchase for an exchange or a refund. We put the Kindle back in its original packaging and made sure we brought the receipt with us.

Imagine how surprised we were when Big W initially refused to take back the Kindle and refund our money, saying that it was Amazon's problem and Big W was not an agent for Amazon. They also claimed that my wife would have been told this when she purchased the Kindle. My wife, an honest and truthful person (we must set an example for our children) adamantly denied that she was told this, and there was no written notice anywhere in the store, including where the Kindles are displayed, advising potential customers that Big W would refuse a refund and that customers would need to deal with Amazon.

Now, I hope that Big W's lawyers have advised their client that this contravenes the Competition and Consumer Act and is misleading and deceptive conduct.

We did eventually obtain a refund out of Big W, but only because we complained to the store manager. We acquired a replacement Kindle (better model, as well) directly from Amazon at a cheaper price than offered by Big W and Dick Smith.

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It is not Big W's fault, they are just following orders from the manufacturer,

Alot of manufacturers only allow on the spot replacement for items that are "DOB" meaning "dead out of box".

if the item works but becomes defective at a later date during the warranty period they often want you to return the item to them for inspection before replacement.

As a retailer I have been bitten by this before.

A customer brought in an item worth about $400, about 8 months after they have bought it from me, they made a bit of a seen when I said they have to take it to the manufacturer service centre which was about 10kms away, So gave them a new one and I took it there myself, 7 days later I was told that the fault was caused by the user and no warranty claim would be given, So I lost out.

Remember for faulty goods there are 3 options,

Refund
replacement or
repair

and the Retailer gets to choose which one he wants to do, not the customer.

Only in the case of the good being not as described, wrongly supplied or DOB does the customer have the right to an automatic refund.

You ALWAYS have to argue to get a fair outcome these days regardless or product, retailer or manufacturer.

I bought a new laptop and within one month it was constantly freezing and crashing when operating on the battery (not on the power cord).

I contacted customer service of the manufacturer and went through the usual stupid questions. Is the battery plugged in? yes, if you hit the power button what happens? etc etc etc

They said I would have to send it in and they would look at it. The process would take 6 weeks and if it was found that I had damaged it I would pay the cost. I use my lap top for business so this definately was not an option.

I hung up and phoned back, obviously getting another person, got angry and demanded a refund. They sent me a slip to fill out, I took it down to JB HiFi (where it was originally purchased) to get a replacement. They didnt have the same one in stock so discounted a newer model to price match.

Problem solved.

If Big W are the importer then they are the manufacturer. They are not legally allowed to pass the buck to a foreign entity. AFAIK, Amazon don't have an Australian operation.

David Jones are still the winners in this area. I remember my Dad buying a pen at DJ's (Mont Blanc iirc), anyway the pen broke and the ink ruined his shirt (which was not a cheap shirt). He went into DJ's, they replaced the pen and then asked how much the shirt cost and gave him cash for that amount. No quibbling over wanting to see reciepts for shirts etc. That's customer service.

McCoy Pauley said:

We acquired a replacement Kindle (better model, as well) directly from Amazon at a cheaper price than offered by Big W and Dick Smith.

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Whats amazon.com's warranty procedure.

If you bought a faulty product from amazon directly are you able to get a replacement or refund on the spot as you expected from BigW.

Tysonboss1 said:

Whats amazon.com's warranty procedure.

If you bought a faulty product from amazon directly are you able to get a replacement or refund on the spot as you expected from BigW.

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Amazon.com's warrant procedure is not relevant. The goods were purchased in Australia so are protected by Australian consumer law. The importer of the Kindle into Australia is considered the manufacturer of the product.

poverty said:

As a shareholder I'm disgusted that you were provided with a refund.

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Heheh.

McLovin is correct, Big W as the importer is treated by the Australian Consumer Law as the manufacturer for the purpose of warranties and conditions in relation to the sale of goods to consumers.

Big W's response to attempt to pass the buck to Amazon is not permitted under the ACL and to then engage in a "he said/she said" about what might or might not have been said at the POS is laughable.

To top it off, I then read an article in the Weekend AFR quoting their CEO at a lunch speech saying that retailers need to stop whinging about the impact of the internet on their business model but find innovative ways to lift customer service. Not a great start, IMO.

In answer to your question, Tysonboss, I believe that Amazon refund or replace within the warranty period no questions asked, so long as you have proof of purchase. But again, as my wife purchased the product from Big W, it's only fair and reasonable to expect that Big W to refund the purchase price on a faulty product.

In relation to your first post on the issue, Tysonboss, Big W refused to refund our money or to replace the model. That's not permitted under Australian Consumer Law. I'm well aware that the retailer has the right to choose which remedy to give to the consumer, but the retailer must provide one of those remedies to the consumer.

investorpaul - JBH responded in the manner in which I would have thought Big W would respond to a customer returning a product that clearly does not work as it should.

McLovin said:

Amazon.com's warrant procedure is not relevant. The goods were purchased in Australia so are protected by Australian consumer law. The importer of the Kindle into Australia is considered the manufacturer of the product.

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What I am saying is that he was saying is glad he managed to get one online,

What I am saying is that should he be unlucky enough to get a faulty one through that channel he will have a much harder time than he did from BigW.

Thats the hidden cost of online shopping, the cheaper price you get is not a risk free saving, often when the wrong goods or faulty goods are shipped or parcels are lost you have to suffer through alot of hassel and cost to rectify the situation.

I had a customer walk out of my store over a $6 price difference with a hong kong based online retailer, As murphey would have it the customer came back in 4 weeks later with a faulty product and asked if she could exchange it at my store since I retailed the same product.

My answer was offcourse no, she would have to mail it back to hong kong. she ended up buying a new one from me and throwing the other in the trash.

The majority of customers have no idea about their rights and responsibilities regarding returning products. Mainly because consumer protection laws are vague which benefits lawyers. In the end its up to a court case to decide who was right and who is wrong.

You get people that think just because the supermarkets don't care and give a refund straight away because they are mainly selling items under $10 so it saves time and gives better customer relations, or places with 7 days no questions asked refund policies, that they are automatically entitled a refund no matter what. With their over inflated ego's they think they are automatically entitled a refund even when they make a wrong decision. Giving something simplistic as a example if you choose to buy a red shirt and come back the next day and say you want a refund because you want a blue shirt instead or you found another place selling the same shirt cheaper. The retailer has a right to refuse refund. However because most transactions are more complex and because these people have big ego's they think they are automatically entitled a refund. Obviously most shops won't care and just refund and repackage the shirt in this instance but regardless the customer with the over inflated ego is wrong.

On the other end of the spectrum you get people who are pushovers and accept anything a retailer says regarding returns. This is also incorrect because the customer service staff and managers are not lawyers and often don't have proper knowledge of the laws themselves. The laws are so vague and the situations that can arise are so complex that in truth it takes a court case to know who is right and who is wrong.

A example to outline how vague consumer protection laws are. I purchased a usb stick with 8 years warranty from a online retailer, it failed 2 years down the track. This particular retailer had a office you can pickup from. I went back to the office to request they send it for warranty for me. Note that i requested it be sent for warranty, not a refund, as obviously having used it for 2 years requesting a refund is only done by people with big ego's since its obviously unreasonable. They refused and told me to contact the manufacturer directly. I then contacted the office of fair trading, since I didn't want to deal with the overseas manufacturer directly. From my telephone conversations with fair trading it became apparent to me that the retailer MAY have the right to request I deal with the manufacturer. I was not very happy since the retailer advertised the warranty for the usb prominently on their website and still had the item listed for sale even after 2 years. In fact they actually sold the usb under 2 prices. They sold it cheaper with the normal warranty and they sold it slightly more for the same item with longer warranty. Needless to say i bought the usb with the longer warranty and that is why I wasn't happy. In the end fair trading contacted the retailer and gave me some more numbers to contact in case I needed to progress to a court case. Anyway the retailer contacted me and agreed to send the usb for warranty and I got a replacement 6 weeks later. However the retailer had the right to refuse and it potentially would need a court case for a resolution. Obviously if it went to that stage I would have not bothered and dealt with the manufacturer directly.

What most people don't realize is that customer relations is a added cost to products. The cost of taking back items that can't be resold needs to be recouped by raising the price of all products. Yes there are a lot of legitimate claims, however there are also lots of claims by bad customers with big ego's. In the end good customers subsidize bad customers.

In the end online retailers win out. They don't have to hire customer service staff reducing a large chunk of costs and they don't waste the same amount of time dealing with returns. Often the person buying online has done better research on what they are buying + return shipping costs mean that they are less likely to return items. Online retailers also don't need to waste 1/2hr or 1hr of a employees time arguing with a bad customer.

Customers are also misguided about buying online. They believe that because sales staff provide bad service they may as well have bought a item online for cheaper. Often time buying online can give bad customer service as well. It can even be more restrictive when dealing with returns. At least with a store front you can go somewhere to complain. As a example one of my friends bought a tv box from overseas, he bought it with the purpose of connecting a xbox to it. In the specifications there was vague references to connecting a xbox, however its unclear whether it would take the xbox as input or output. Well after receiving the item, it didn't do what my friend wanted it to do. So he contacted the overseas online retailer for a refund, after some back and forth, the retailer said they would refund the cost if he sent the item back. The problem is that sending the item back would incur a substantial delivery fee making it not worth it to send back. We tried to get the retailer to cover the delivery fee, no luck there. My friend made the mistake of not paying for the item through paypal, if he paid through paypal i'm sure he would have ended up with a better outcome. As it stood he now has a item that doesn't do what he wanted.

Anyway this topic is more related to customer service which means it may be better served in the other thread in this forum about customer service.

We have become sidetracked from the point of this thread.

I posted an account of my experience with Big W only as an anecdote about customer service as I think it reflects on management and, IMO, management influences the future direction of a company's share price.

I don't want to extrapolate my experience into the manner in which WOW treats its customers, but as it also appears that Dick Smith has the same policy on Kindles (we were advised this by the Big W salespeople we talked to yesterday), for me, it's a red flag about some of management's policies in dealing with customers.

I would certainly be reluctant to buy anything through WOW at the moment.

McCoy Pauley said:

I would certainly be reluctant to buy anything through WOW at the moment.

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REALLY? Not even a packet of cornflakes? Jeeze there's some weird people out there LOL! Get over yourself.

McLovin said:

That's customer service.

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DJS has always had great customer service, however, last time I went in there I couldn't find any one to serve me!
It was OK though.
I just got a pair of black pants and a white shirt off the shelf put them on and went behind the counter and took off all the security tags myself. Served a few people then walked out with my stuff.
It was a really good deal!
I can't for the life of me see why the share price has suffered so much. Perhaps people can't afford the petrol prices to get there?:dunno:

Two good articles in the Sydney Morning Herald today in regard problems Coles is having in the Hotel/Liquor sector as against how well Woolworths is going in this area. Woolworths is due to report this week. Could be good for a leg up in the runup to going exdiv.

As always do your own research.

nulla nulla said:

Two good articles in the Sydney Morning Herald today in regard problems Coles is having in the Hotel/Liquor sector as against how well Woolworths is going in this area. Woolworths is due to report this week. Could be good for a leg up in the runup to going exdiv.

As always do your own research.

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Coles and Woolworths should avail themselves of the prisoners' dilemma. They would both benefit from not competing with eachother. If they do go all out, then shareholders will see lower returns, especially those in Metcash.

poverty said:

REALLY? Not even a packet of cornflakes? Jeeze there's some weird people out there LOL! Get over yourself.

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Actually, yes. My impression is that Coles are on the whole cheaper than Woolworths. I always come out of Woolworths feeling like I've spent much more on the same basket of goods than I do out of Coles. Given that both Coles and Woolworths are in the shopping centre I prefer, and I have another Coles 5 minutes away from where I live, there's no reason for me to go to Woolworths now.

As a shareholder, I'd be asking questions about what steps WOW is taking to combat the increasing competitive pressure being exerted by a number of different factors, such as WES, online retail, etc.

Luckily I do not hold WOW shares.