Ultra Finishing chief executive Dave Cullen has claimed that the industry is still confused when it comes to managing online pricing and what it can and can’t do.
Speaking exclusively to kbbreview, Cullen (pictured) cautioned that suppliers and retailers should take any warnings from the Competitions and Markets Authority (CMA) seriously.
“If retailers don’t take it seriously, then they’ve only got themselves to blame if it turns into something,” he said.
“Our industry has still got issues. The CMA has certainly not stopped looking at us. Be really careful about what you’re doing and who you’re doing it with.”
He went on to say that the online argument is never going to go away and that retailers need to stop trying to beat online competitors on price alone.
“If a retailer’s only way is to try to compete on price, then they’ll lose,” he explained. “The retailer has got a lot more in their armoury that they don’t bring out when they are talking to customers.”
According to the latest research conducted by marketing agency Propaganda on behalf of Ultra, 25% to 30% of consumers begin their research online but then make a trip to the showroom.
“Online is very successful in single items and lower volumes, but not hugely successful in a full bathroom,” Cullen argued. “The web is also driving people into your showrooms. I hear people say to me, ‘well a customer has been online and they’ve seen the same item there, so how can I compete?’ You don’t need to compete, because they’ve seen it online and haven’t been confident enough to buy it, so they’ve come in to see you.
“What you’ve got is premises, so they can touch and feel it, you probably offer installation services, you probably deliver it, they can walk back in and see you if they’ve got a problem with it. It’s not faceless.”
He suggested that retailers need to outmanoeuvre their opponents and make the most of any consumer that walks into their showroom by adding value to the experience and explaining why they should pay that little bit extra for the products and service that they provide.
“You’re not going to win on price,” he added. “Wherever you are in the world, somebody will always be able to sell it cheaper than you. The fact that they’ve physically walked into your showroom is half your battle over. It’s just making sure that your staff are trained well enough to explain what they’re buying from a retailer – a package.
“The retailer is there for the people that want a proper job doing, that actually want all of that service and a one-stop shop. If they’re coming along and saying that they can get it cheaper online, then they’ve not seen the value in you.”
For the full interview see the October issue of kbbreview