Connectedness: Just His Cup of Tea

When it comes to high-tech connectedness, Sebastian James’s home has everything you can think of: smart television, smart refrigerator, smart thermostat, smart security system, and even—what will they think of next?—a smart kettle.

Sebastian (London, 1991-1993) is group chief executive of Dixons Carphone, one of Europe's largest electrical and telecommunications retail and services companies.     

Dixons Carphone is the result of a 2014 £3.8 billion merger between Dixons Retail, owner of 500 Currys and PC World stores; and Carphone Warehouse, a mobile phone retailer with 2,000 stores across Europe—a merger aimed at exploiting the soaring number of devices connected to the Internet. Banking on the “Internet of Things” to be a clear consumer force in the near future, Dixons Carphone plans, as Sebastian puts it, will be “the retailer that sells the lot.”

“Very soon, practically every gadget in the home—including kettles—will be controlled by a smartphone. We need to make sure we’re selling those smartphones, those gadgets, and, critically, the means to connect them all,” he explains. (To learn how Sebastian is helping put connectedness to use in education, see the sidebar "Connectedness in UK Schools.") 

Sebastian—the son of an English Lord—studied at Eton alongside some of the most influential people in British politics and remains friends with some of them. He readily concedes that, given his background, his career path—from consultant, to entrepreneur, to “shopkeeper”—has been, in his words, “properly weird.”

“That said, consulting and, specifically, BCG was the best place I could have hoped to launch this uncharted journey. No other job gives a young person just out of college such breadth of experience and the chance to closely examine businesses that are in a state of flux.” 

And after consulting?                                                                                                                          

“For many years, I believed that I was, by nature, an entrepreneur, one of that admirable breed of people who create things out of nothing,” he explains.

No one can say he didn’t try. After BCG, Sebastian spent 12 years starting, or buying and working to grow, small businesses, until he realized that “entrepreneurship was not my cup of tea.”

“I gradually discovered that what I enjoy most is working within large, established, complicated companies. My abilities lie in being able to bring a sense of clarity, in seeing through clouds of complexity to the three or four things that matter—something that you are well-trained to do at BCG. In fact, I believe consultants make rather good CEOs.”

As somebody who describes himself as pathologically keen on change, and who enjoys working with businesses that are going through a major transition, his 2008 move to Dixons was a good one.

“The company was in disarray. I took to the job with the mind-set of a consultant on a case team. BCG had instilled in me a rigorous and intellectual approach to solving business problems. At the same time, it taught me that, while I’ll never have every piece of information I want, I must make the most of the data and analysis at my disposal before coming to a conclusion. I love that balance. It’s typical of the pragmatic, intellectual approach taken at BCG.”

An approach that allowed the BCGer in him, he says, to take stock of the situation at Dixons, roll up his sleeves, and set about “bashing things back into shape.”  

However, with consulting now well behind him, he is today, first and foremost, a retailer.

“What I love about retail is that you open your doors for business and, if you’ve got it right, the customers will show up; if you’ve got it wrong, they won’t—and you’ll know very quickly which it’s going to be. All customers want the same thing: a good showcase for products, professional service and advice, and good prices.

“These fundamentals were true in the times of the ancient Venetian traders and they remain true today. The concept never changes.”

What has changed, he says, is how today retailers must adhere to those fundamentals in an industry that’s in a state of constant flux and where the products sold change unrecognizably every few years.

“In terms of proposition, you must constantly reinvent your store,” says Sebastian. In this regard, Dixons Carphone had to recognize a few home truths. “When we’re asking you to spend the equivalent of a month’s salary on, say, a side-by-side refrigerator, you’re going to want to see it, right? After all, the most expensive thing you can do is to buy the wrong product.”

As such, he says, the overwhelming majority of people choose to visit a store to see the product demonstrated. “It’s one thing to look at a tiny picture of a product on the screen of a mobile phone, but consumers also want to kick the tires, if you will.” But here’s the rub. While not one of those consumers is prepared to pay so much as a penny for this privilege, Dixons Carphone must price its in-store goods on par with online competitors—or “find itself dead in the water.”

Glass-half-full type of chap that he is, Sebastian views this is a great opportunity.

“This is where we can bring into play those old-fashioned retail principles and overlay a fantastic lead-in that allows customers to do their online research before coming to us.”

Having come to understand this, the challenge was then to figure out how to make money at a price that would entice those tire-kickers to buy from Dixons Carphone.

“As a result of the merger, we feel we’re now able to respond to a genuine external consumer need for connectedness. We’ve seen so many connected technologies develop over the past decade that the notion of an unconnected device will soon be anachronistic.”

Which brings us back to Sebastian’s smart kettle.

“Ah, yes, my kettle. It’s connected to my Wi-Fi, which I can access from my smartphone. Now you might think that’s silly, but compare it to many of the connected devices—smartphones, tablets, and the myriad other gadgets—that are part of our world today. Most of those were met initially with skepticism, if not hilarity, by retail customers, yet we’d be hard-pressed to live without them.”

He adds that while the typical household in the UK currently averages nine such connected devices, the number per household is expected to rise to around a whopping 70 within the next few years.

“These things, which used to be the sole preserve of the very rich, are becoming democratized to become the preserve of everybody.

“At Dixons Carphone, our long-term goal is to build a profoundly more holistic relationship with our customers, one in which we guarantee that all those devices upon which they’ve come, or will come, to rely—and which make them happy—are always working, always connected, and always doing what they’re designed to do.”