DSG ploughs £50m into IT support service

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DSG International, the retailer formerly known as Dixons, is launching a technical support helpline at a cost of £50m as it hopes to capture a slice of the digital support services market which it believes is worth £1bn in the UK.

The service, dubbed “The TechGuys”, has been designed to offer support for “technology-dependent” UK homes.

DSG is ploughing the money into the project in the UK which over the next five years will see the opening of 200 service centres along with service points at 150 PC Worlds and a number of concessions. The service will also be supported by call centres and a “spare parts vault”.

DSG said it was expecting to create about 2,000 jobs setting up the service.

John Clare, chief executive, said on Monday: “Technology is the circuitry of modern day life and has become as important a utility as water, electricity and gas. Domestic technical support rapidly will become as commonplace, if not more so, as visits from plumbers and electricians.”

The move comes against a backdrop of fierce competition in the sector. DSG is set to face a fresh challenge this year from Tesco, which is set to push further into electronic goods as supermarkets shift their attention to non-food sales. Meanwhile, it emerged over the weekend that M&S is also expanding its electrical goods offering.

Alastair Lockhart, senior retail analyst with Verdict Research, the retail consultancy, said: “This is a good way for DSG to differentiate itself from price-led competitors such as Tesco and I think it highlights the importance of service in electricals.” Mr Lockhart added that it was a natural follow-on to PC clinics the company has been running at PC World. “There is also set to be a lot more convergence, for example in home entertainment and VoIP (voice-over-internet protocol) and so they are anticipating demand where they see a market developing.”

The company said that research commissioned by DSG showed that eight out of 10 UK adults routinely needed help with everyday technology tasks. It believes that the market for digital support could double in size to £2bn within five years.

DSG has been struggling to shore up margins in the face of fierce competition and price deflation and in June it revealed a fall in earnings of 10 per cent as its core UK operations continued to lag behind the group’s growing international business.

Shares in DSG were flat by lunch time at 209p.

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