The rise and fall of Dick Smith Electronics - DSE in trouble, Store Closures, Woolworths
Breadboard constuction, crystal sets, electronic project kits, amateur and CB radio - all the epitome of an almost cult-following known as electronics hobbyists - was once what DSE stores were all about. So how did DSE come to be the way it is today?
In the beginning
In the late '60s, Dick Smith, an enterprising electronics hobbyist, founded a chain of self-serve electronics parts stores, catering specifically for the electronics hobbyist and experimenter. It was modelled on U.S. electronics stores, where a large range of electronics parts were available for browsing and purchase.
The 'Fun Way into Electronics' brand was born, catapulting hobbyist electronics into almost every hosehold. Many of today's 'real' electronics technicians and radio amateurs started out by building and learning from the Fun Way projects.
in 1980, 60% of the business was sold to Woolworths. From then onwards, with Smith no longer the main stakeholder, Woolies would start to systematically steer the business in a differerent direction. In 1982, Smith sold the remainder of the DSE to Woolies. This would be the beginning of the end.
The downfall
The "Golden Age" of hobbyist electronics come to an end towards the end of the '90s, when the DSE stores accelerated the move towards consumer (non-technical) electronics.
But such a move was ill-fated. By moving away from 'hardcore' electronics, DSE lost much of their hobbyist and professional customers to the likes of Jaycar and Altronics. It was once possible to walk into a DSE store to buy a soldering iron or a handful of LEDs off the shelf; sadly those days have long gone, in favour of big-screen TVs and consumer appliances. Jaycar even took advantage of this situation, adopting the slogan "Better. More Technical". Some Jarcar stores even purchased existing DSE shops, notably the DSE in Springvale, VIC, on the corner of Springvale Rd and Dandenong Rd.
The changes were noticed towards the early 2000s, when DSE opened their 'PowerHouse' megastores, in an attempt to combine hobbyist and consumer electronics into the one store. With many smaller DSE stores still around, it did not make economic sense to also stock hardcore electronic parts alongside consumer gear. So eventually, the electronic parts section of the PowerHouse stores shrank, giving way to CDs and DVDs, mobile phones, laptops and even microwave ovens.
The shrinking hobbyist electronics parts section was not just confined to the PowerHouses. The disease also spread to other traditional DSE stores, where TVs, radios, laptop computers and other entertainment devices started displacing electronic parts and tools. It was not uncommon in 2005 to visit a DSE store and ask the salesperson for a resistor or capacitor, only to be met with blank looks because they had no idea. DSE's heritage was now deeply part of history.
Bad competitor analysis?
DSE's decision (and ultimately their owner, Woolworths) to move completely to consumer electronics did not take into account the other retailers who were already well established in the same business, at a cheaper price. In the late 2000s, DSE was in direct competition with the likes of JB Hi-Fi and Harvey Norman. And it could not possibly compete - JB and Harvey already had many years of consumer electronics retail experience, along with the long established recognition. Meanwhile, DSE was still busy trying to promote itself as a leading consumer electronics retailer, all whilst at the same time trying to shake off the old image of its 'Fun way into electronics' paradigm.
31 Jan 2012 - Woolworths have announced they will close down 100 unprofitable DSE stores over the next two years. It says employees will be reallocated to other areas in the Woolworths Group.