The life and death of WOW Sight & Sound – 7 lessons

“So they’re just shutting it down?” a marketing expert colleague asked me the other day.

The answer was in the affirmative. They are, indeed, just shutting it down. With the loss of the jobs, locations, branding and all trade.

For those outside Queensland who don’t know WOW Sight and Sound, they were a competitor to JB Hi-Fi, similar in retail proposition and with 15 stores across Australia and over 500 staff. Their financial records indicated that they lost $8 million in 2011 and $17 million in 2010.

The life and death of WOW Sight and Sound is a stark lesson to all business owners. A stark lesson in what not to do when running a retail store. There is much background to the collapse, a decent chunk of it unrelated to the core business, as well as a lot of economic woes and shifts in business patterns. But inside all of that, there are some key lessons.

1. You never asked me for anything

I shopped at WOW a fair bit. A bought DVDs and Blu-Rays there. I bought three Mac computers and an Xbox. I bought a set of scales. I bought a battery charger. And never once did WOW ask me for my details. An email address, my postcode – some way of tempting me back in store. What about a newsletter? Ask me to join your Facebook page? Oh no. You don’t have one.

2. You had interest free credit

…and you never told me. I had to find out through GE Creditline. I’d have bought more and I’d have bought bigger if I’d known before. Why didn’t you tell me? JB Hi-Fi told me. I appreciate you didn’t want to get into the Harvey Norman cycle of having a permanent interest free option as the sole driver for foot traffic, but there’s a way of presenting that without sounding desperate.

3. You built a hotel

If you’ve learnt nothing from any marketing expert at Apple – whose products you stocked quite well actually – is that there’s no need to diversify for the sake of amusing yourself. Especially when the hotel you build has something like 100 plasma screens in it and gives even normal people a fit looking at them. And wasn’t overly successful too. One of WOW Sight and Sound’s main problems was their attachment, via one of the previous owners, to a struggling building arm, that when it went under, owed them $20 million. Property and DVDs? Bad mix.

4. Your floor space was covered with products people weren’t buying

We watched Blockbuster and HMV go out of business. Yet you still gave over massive space to DVDs and CDs. Only three months ago did it appear that the powers that be realised this wasn’t a good plan, and I saw some of the stores finally catch on to the digital world and start reallocating space. Probably a bit too late by then.

5. You sponsored the Broncos

That had very, very little bearing on whether I shopped with you. Sure the Broncos rocked up to your stores now and again, but did this drive sales? Did you analyse whether having the logo on their shirtsleeve actually put more bodies through the doors? I doubt it. Brand awareness, yes, but with such an inclusive retail proposition, why spend on a more subjective sporting code?

Hindsight is the only exact science but maybe the money could have been better spent on consumer engagement and education?

6. You were online

…but the one time I visited your website… actually, I can’t remember. That’s not good. If I didn’t go back, it can’t have been any good. And what was with the URL? I appreciate you couldn’t get but talk about make it harder for people to find you. Or remember you.

7. Location, location, location

You were a destination venue, for what was fast becoming a commodity product. Bad idea. JB saw some sense and moved into high foot traffic areas. Maybe you should have done the same?


Despite the doom and gloom rubbish that spouts from Gerry Harvey and the Australian Retailers Association on a weekly basis about the state of Australian retail, this channel for consumer goods is not dead. Far from it. I would suggest a re-birth is about to occur. Or an evolution. Or actually, a revolution. We’re on the cusp of it right now. Consumers still want to pick things off shelves but what we’ve seen is how that action has evolved by the internet, home shopping, the mobile phone and growth of video. Retailers shouldn’t be running around, screaming about the sky falling down; they should be working out how they can be part of this revolution and benefit. Walk into Harvey Norman this week and ask for a discount, and you’ll get it. Walk into an Apple store and do the same thing, and see how far that gets you. You’ll still walk out with a product from both, but one company will have made significantly more profit than the other.

In any revolution there are casualties. WOW Sight and Sound, Ed Hardy and Colorado Group are a couple. And many people will tell you, there will be more.

But there are ways and means of fighting back. Retail experience, price points, education, payment plans – these are things online simply cannot and will not offer, and things the consumer is willing to pay for and engage with. If back in 2008, post-GFC, a marketing expert and someone at WOW Sight And Sound had taken a long, hard look at their business and corrected the seven points above, would they have called in the administrators? Even if WOW Sight and Sound had just managed the first point, and they’d continued to engage me, perhaps that would have helped?

You evolve, or you die, and never has this been truer for the retailers in Australia. WOW Sight and Sound learnt the hard way.

Simon Dell
BY Simon Dell ON 21 March 2012
Simon is a former full-service agency managing director that ran for seven years and delivered for clients across Australia. He now runs his own digital consultancy working with Australian businesses helping with online communication and creative strategies. Find Simon on Twitter at @IAmSimonDell, on LinkedIn at IAmSimonDell and Facebook at SwitchYourBusiness.
  • wordmistress

    Bravo! Very good points, very well said, Simon. Bricks and mortar retail exhibits an extremely complacent attitude to marketing and engagement. Furthermore, staff training should involve far more than product knowledge, being pleasant and knowing how to close a sale. Wow provided commissions and bonuses based on product sales and sales of extended warranties but there is a missing link. Imagine a retailer that would educate their staff on marketing tactics, consumer engagement and adequate follow-through … AND provide bonuses for demonstrated understanding. That I’d pay to see.

  • Travie

    Some of your points resonate across the whole retail industry at the moment, but your suggestion that WOW’s sad demise stems from not telling you about their interest free credit, an associated company building a hotel, sponsoring the Broncos and not being in a Westfield is uneducated and silly. I agree that retailers should be putting some serious resource behind clicks instead of bricks & mortar as well as improving customer experience / interaction, but it’s well documented that WOW’s woes and ultimate demise stemmed from bigger issues that did not include their marketing strategy. I think stating that this is a ‘stark lesson in what not to do when running a retail store’ is not only highly inaccurate statement but also grossly unfair to the 500 employees that spent 8 years building up the WOW brand and who ultimately had nothing to do with the businesses demise.

  • Simon Dell

    Hi Travie,

    How is it not a stark lesson? Surely calling in the administrators couldn’t be any more stark? Surely it doesn’t get starker than putting 500 people out of work??

    I never suggested it had anything to do with the staff. They didn’t get a mention in any of the 7 points.

    And if the marketing strategy was so great, how did they loose $25million in the previous two years?

    All I suggested was the following:

    Collect data, differentiate via payment options, don’t diversify beyond your original brand promise, sell what people want, don’t waste money on narrow sponsorship propositions, develop digital well and think about your location.

    I think that’s very accurate actually, for all retailers.

  • alwaysmysteryman

    I think the comments were very unfair. You gotta remember WOW existed for a while, growing to the number of stores they had, employing/providing work for over 500 people for a number of years. I think the woes of one of the partners personal property portfolio falling over during the property drop 2009 didn’t help.
    I reckon the government gotta step in and add additional taxes for individuals buying from overseas, by passing distributors, wholesalers and retailers. Freight companies that would ship items between these bodies are missing out too, not to mention mr tax man. I think the general Australian public needs to be educated about importance of supporting brick/mortar businesses. This whole saving a buck only to end up costing us all more money with putting more of us out of work, how is that good for everyone in long term?.

  • zag

    I don’t agree with many of the points.

    As a customer I’m not overly interested in a store grabbing my details so they can further bombard me with stuff that I probably don’t ever want from them.

    In QLD they had the interest free thing in their ads TV and radio maybe in the other states they didn’t bother to bring this up?

    4 I can somewhat agree with but I notice JB and harvey normans are doing the exact same thing, at harvey norman the stuff is stupidly way over priced so that when you ask for a discount it seems like they are dropping the price by heaps but really it’s probably just bringing it to the RRP+20% price point.

    Also in WOW 2-3 years before they died they had started to trait of not keeping up stock levels and also stagnating on the products like you’d go in and it was the same product you seen 2 years before and there was no new products coming in and being shown off so they was no real point to going there much as you’d see and then start to know they won’t have cutting edge new products for sale at their stores.

    JB and HN are doing the same it’s the point where they know they aren’t getting many sales so trying to save money by not spending up big but to customers that only means the business is slowly dying.

    I do see JB are trying to keep new things coming in but it might be 3 to 6 months that new stuff will be in the store.

    6 I don’t think it matters much if an Australian store is online or not, as people in Australia don’t goto local sites to get stuff as you have to always go overseas to find the stuff your after.

    The current website sale trends from david jones, myers etc all say the exact same thing a local store can have a web site but it means nothing in terms of sales.

    Much like many Australian business don’t need a website because people in this country ring up the company… not look at a website then maybe give them a ring.

    A lesson learnt from doing websites for businesses.

    The business trends here don’t work like they would in the USA (websites) or the UK (mail order catalogs)

    The market for people buying stuff has shrunk and can’t do much about that overall, if people spent a little bit of money around a lot of places it’d proabbly keep things ticking over ok but currently that isn’t happening and places are going bust.

    Also with sites like ebay and groupon etc where they are all overseas companies mainly setup for the US market but have expanded out into other markets that do have money, (main reason why many US companies now have ADs on TV here in Australia) will suck up much of the local market money, no matter what the local businesses do or would like to do.