A panel of industry experts told delegates at the annual kbbreview Kitchen Conference 2012 that, despite pricing issues, the internet is a positive sales channel and urged retailers to use this valuable resource in order to help boost business.
Miele chief executive Simon Grantham (pictured) said: “There are obvious pricing issues, particularly affecting the appliance sector, but the internet is still a positive sales channel for everyone. Manufacturers have a responsibility to continue to innovate, both in terms of service and product, in order to support front-line retailers.
“Miele has invested time and money in creating a trading package that supports retailers and helps them combat the problems. We are in the process of putting together a new strategy, which we plan to roll out next year, which we believe will further strengthen our support package to our retailer partners.”
Norman Parker, managing director of retail chain Kutchenhaus, agreed, saying that internet pricing issues are still a huge concern for retailers. He also revealed the company’s own strategy to try to beat online discounting. “The sales of appliances are particularly difficult to manage online and are very affected by discounting. That is why we like to offer complete package prices rather than individual product prices.”
Also speaking on the panel, JJO managing director Stephen Greenhalgh assured delegates it tries to protect the brand and retailers from pricing issues.
“Discounted prices on the internet is a real problem both for retailers and manufacturers. We try to protect both the brand and our retailer partners to ensure there are no prices online but is a challenge.”
‘I’ll fight the web,’ says crusading ‘Posh Bathing’ bathroom dealer
Walmsley, owner of Posh Bathing in Bolton, claims the internet has “killed the bathroom game in the North West” and that manufacturers are failing to offer high street showrooms enough exclusivity. “I’m a crusader and it’s time to fight back against the internet,” he said.
“It’s out of control. The manufacturers say they’re doing something about it but they’re not. You can’t stop it, you’re just a number. We have four V&B dealers in Bolton and they don’t give us any exclusivity. There’s no kudos with anything these days. Those naughty boys at Durvait get in anywhere too, they’ve just opened up two miles down the road.”
A veteran of the industry, Walmsely opened his retail business in 1992. Aside from V&B and Duravit, he also displays brands like Hansgrohe, Dornbracht, Alape and Kermi but has become disillusioned by the lack of exclusivity he says some of them offer and reports a rise in profits of around 32% since the launch of his distribution arm. “I want to support European products rather than Chinese imports,” he continued.
“If I jumped on the Chinese bandwagon I’d be shut in a fortnight. My strategy is to find unusual brands that will fit nicely into the gaps not filled by the big players. So I distribute Zierath mirrors and various products from Missel and Schwab, all from Germany. Plus a selection of coloured ladder rails from Cordivari in Italy. I also have a long-standing non-committal understanding with Glass Idromassaggio.”
Walmsley believes the big German brands have “turned a blind eye to the discounting chaos they’ve created within their network of dealers” but that the heavy discounters are unable to source the products he distributes. I won’t sell to them,” he explained.
“I’ll protect the good guys of this world who look after their clients. I want 40-60 mid to top end retailers. The heavy discounters are fools, 5% profit is nothing. They’re desperate, but they’re not solving their problems. They’re killing each other.
“I don’t offer limits, I’m not financing people’s bathroom shops, but who dares wins. What’s the worst that can happen? If someone shafts me I’ll just close down, write it off and sell my properties.”
Posh Bathing (see poshbathing.co.uk)
Opinion on the above KBB article:
Gary Walmsley is a brave man and we wish him success.
It’s clear from his comments that he is passionate about his industry and his products and in trying to carve a niche and “find unusual brands that will fit nicely into the gaps not filled by the big players” he is doing his customers a great service.
It is true that even in a normal economy, never mind a struggling one, a large proportion of the consumer market does shift towards a more price sensitive focus but there are UK KBB businesses doing well even in the current climate and seeing as the internet kitchen brokers are now trying to imitate Euro brands should send signals to the manufacturers too in that they have to do more to support the high street.
Walmsley is also true in what he says about some of the German brands turning a blind eye to the discounting culture. Whilst the German kitchens from the likes of Nobila, Hacker and Schuller are only available through the authorised retailers, the same cannot be said for the majority of the appliance brands.
A possible Solution?
One thing KBB manufacturers might consider, especially in the web discount heavy appliances sector is to have a distribution process that upon release of a new product they only make it available through non online retailers. The retailers are giving up showroom space, offering advice and the like and as such, this should be recognised.
Then say after a 12-18 month exclusivity period, (and when the next model is due) the first model is then offered at to online retailers whom can discount all they want?