‘Smarter product, smarter delivery’
British Ceramic Tile managing director Tony Taylor reveals why it is focusing more on independent retail showrooms with its dedicated kitchen tile collection and hints at expanding into other areas of the home
Q: Can you tell us the thinking behind the launch of your new dedicated kitchen tile collection for independent retailers?
A: Tiles have applications from the front doorstep to the patio to the downstairs living space. We clearly want to play in every one of those areas, and we’ve got a pretty comprehensive range that does that. We felt that there are benefits in focusing right down into detailed areas of our offer base.
Kitchens are a particularly high user of ceramic products. We thought, therefore, that we should feature that area of the house specifically, tailor the marketing, point-of-sale, product content, the storytelling, all around the kitchen. And we may well do this in other areas of the house.
Q: Have you seen much interest from independent retailers?
A: Yes, we have. It’s relatively new for us. It’s been great, we’ve got a terrific buy-in because it’s about focusing the story, talking specifically to kitchen retailers. We may well do something similar elsewhere.
Q: Is that something you are discussing at the moment?
A: I’d like to say at this stage, there’s more to come. But if you feel that you’ve got your bases covered in terms of products across the generic base, how do you get greater concentration and focus? Well, you focus right in. You bring your intentions in tight and concentrate on a particular sector. Hence growing the relationship we have with kitchen retailers.
Q: Have you seen greater competition from online-only retailers?
A: Yes, I think online sales are something in every part of the market that everyone is experiencing. We’re all spending more money online than we did five or seven years ago. And there are a number of online retailers in the tile sector – mostly these guys seem to be discounters. And there are some very competent businesses in the online players.
There are online players that are doing a good job. They tend to be price-driven, but don’t tend to be very high on service. And these are some of the attributes on which BCT bases its businesses.
Q: Any plans to increase your online presence?
A: We’ve no huge plans to change the way we do things at the moment.
We use social media more than we’ve ever done before, we use our online presence to get our message out, reach consumers and engage with them. Using online techniques to engage with consumers is a very big part of our proposition.
Q: How has the UK market fared?
A: There was some nervousness going into the Brexit vote, and there were some jitters almost immediately afterwards. We looked at consumer confidence and it dipped quite dramatically immediately after the vote – but literally, within a week or two, it was starting to come back up. There is a slight nervousness and apprehension. But the biggest thing we’ve got to worry about in this industry is fear itself, and talking ourselves into a recessionary mind set.
The statistics we use to measure consumer confidence, shows that it has bounced back almost fully.
Q: How much do you export and how is the exchange rate affecting this?
A: A little over 80% of our manufacturing volumes are manufactured in the UK and we buy the rest in. So, the imported products are obviously having some challenges around the dollar and the euro exchange rates. But essentially, being a British manufacturer with predominantly British costs is helping our economic model.
Q: Where do you buy the 20% or less that is sourced outside the UK?
A: The Far East and Europe. It tends to be products that we can’t make in the UK cost-effectively. Our UK manufacturing does have some input cost increases. Transport costs have gone up a little bit, some of our imported glazes, obviously, are based in dollar or euro purchases, so they’ll be affected by the exchange rates.
Around 80% of the tiles sold in the UK are imported. So, the vast majority of our competitors in the UK are facing much more significant input, price pressures and costs than we are.
Q: Do you anticipate any price increases because of this?
A: Yes, we are having to. We don’t like doing it, of course, but we are needing to have those conversations with our customers, because frankly, if we don’t run a proper economic model business, then we can’t afford to continue investing in great products and great services.
Q: What’s next for BCT in 2017?
A: It will be more of the same. Innovative product, very consumer-focused, talked about well, delivered properly – that’s it. Smarter product, smarter delivery.