Still curious about whether AI can help me to be more efficient or even replace me one day, I asked Google Gemini to do part of my job:
“Please evaluate the business model and strategy of Dunelm in the style of Richard Beddard.”
TLDR? Gemini’s answer is pasted at the end of this note. Just before that I conclude that far from making me more efficient, AI is making more work for me :-)
I chose Dunelm, a retailer of furniture and homewares in the UK, because I haven’t written much about it in the past but I have researched it. I know something about the company, but Google won’t just be regurgitating an old article.
The answer it gave was more lighthearted and fact free than I expected, although I used to write articles in a jaunty q&a style and Gemini also provided more sober drafts.
Gemini’s answer captures the essence of my thoughts on Dunelm, although it missed out the long-termist family owned ethos, and tendency to vertically integrate. These are important to me too.
This is just one query though. Were I to follow up with queries on each of the lines of enquiry and fact check everything, would that be as good and quicker than extracting the information from annual reports myself?
Not yet. For example I cannot accept glib assertions like “Hmm, cash flow... debt levels... return on capital... all looking rather healthy” even though it’s pretty easy to establish that the latest numbers are good.
I need to know how they have varied over many years, which I know because I have extracted the data, adjusted it, tabulated it and charted it (the numbers don’t vary much).
Google says that to give a proper “Beddardesque” response it needs me to give it the data, but that’s the time consuming bit!
In a sense, Gemini’s last sentence shows it is aware that it cannot (yet?) be a facsimile of Richard Beddard: “And, of course, he'd scrutinize the financials with a keen eye, always searching for those hidden gems of insight.”
It’s not just the financials. It’s the risk reports, my impressions of whether the company’s claims about its products and service stack up in real life, and so on.
Still, I feel these experiments are going to run and run, which leads me to the observation that far from making me more efficient, AI is making more work for me!
Here’s Gemini, channeling me…
“Ah, Dunelm. A fascinating business, isn't it? Let's don our Richard Beddard hats and have a good rummage around their model and strategy.
What Beddard might say about Dunelm:
Dominant Position, But Room to Grow: "Dunelm's carved out a comfy spot for itself in the homewares market. Market leader, you say? 7.7% share? Hmm, respectable. But this is a fragmented market, plenty of plump cushions left to grab. Scope for expansion? Indeed. Think geographically, think product lines..."
The "Total Retail System" - Omnichannel Done Right: "Now, this 'total retail system' they talk about - this is key. Stores AND online, working in harmony. Click & collect, home delivery, in-store inspiration... it's a well-oiled machine. Keeps customers happy, keeps the tills ringing. Crucially, it allows Dunelm to gather valuable data on customer preferences."
Value Proposition - The Sweet Spot: " 'Quality, choice, and value'. The holy trinity of retail, eh? Dunelm's not chasing the ultra-premium crowd, nor are they a bargain basement. They're aiming for that sweet spot - affordable style for the masses. Sensible, very sensible."
Own Brand Power: "A strong own brand presence gives Dunelm pricing power and control over its destiny. Less reliance on fickle suppliers, more room for margin expansion. But... they need to keep those own brands fresh and desirable. Complacency is the enemy of innovation."
Financial Health - A Solid Foundation: "Let's crack open the books, shall we? (Pulls out magnifying glass and a well-thumbed copy of Dunelm's annual report). Hmm, cash flow... debt levels... return on capital... all looking rather healthy. A well-managed ship, this one. But, as always, the devil's in the detail. Let's delve deeper..."
Beddard's Likely Lines of Inquiry:
Online Growth Trajectory: "How's that online channel performing? Growth rates? Profitability? Can it keep pace with the shifting sands of consumer behavior?"
Competition: "Who are the real challengers nipping at Dunelm's heels? Online pure-plays? The supermarkets? Ikea? How's Dunelm differentiating itself?"
Supply Chain Resilience: "Any vulnerabilities in the supply chain? Over-reliance on particular suppliers or regions? What about those pesky shipping costs?"
Sustainability: "Everyone's talking about sustainability these days. What's Dunelm's approach? Greenwashing or genuine commitment? Investors will want to know."
Long-Term Vision: "Where's Dunelm heading in the next 5, 10 years? Any bold plans for expansion? New markets? New product categories? Or are they content with steady-as-she-goes?"
In Conclusion:
Dunelm, in Beddard's eyes, would likely be seen as a fundamentally sound business with a strong track record. However, he'd be quick to point out that no business is without its challenges. He'd emphasize the importance of continued innovation, vigilance against competitors, and a clear long-term vision. And, of course, he'd scrutinize the financials with a keen eye, always searching for those hidden gems of insight.”