Online retail: If you can’t beat them, join them

I am writing in response to the article by Nathan Helms, MD of Arte Form brassware [kbbreview, January, pg22] on the impact of the internet on the bathroom market.

Firstly, I’d like to mention that I have known Nathan for over 20 years.He is a true gentleman and runs one of the few companies that still respects its customers and believes firmly in loyalty within the bathroom industry. Brands like Arte Form deserve more display space, as they try to make it as much of a level playing field as possible and genuinely look after their customers’ best interests.

Moving swiftly on to the bathroom industry in general – what a complete shambles it has become. The waters have never been so muddied. Online companies sell products cheaper to retail customers than distributors sell to their trade customers. A number of manufacturers reduce their retail prices and discounts and claim to be trying to help showrooms, some sell replacement showers direct to end users and German websites sell so-called ‘exclusive’ products direct to anybody in the UK.

In December, my co-director and I had a meeting with the rest of the team to discuss how best to navigate these muddied waters in 2019. Firstly, should we have an online offering? The answer was a clear‘yes’. The world is changing and multichannelwill be the only way forward for retailers.

The next question was – will we be as competitive as the big boys? The answer was a clear ‘no’.Thirty years of experience in the bathroom industry has made me only too aware of the issues that arise with bathroom products.Do I want to make a paltry margin and then have to deal with all these issues?

No thanks.

Then we turned to purchasing. While I feel for distributors, and have tried to be loyal in the past, I see this year being a challenging year with the uncertainties that surround us. It’s definitely become a dog-eat-dog world and we have decided that, in order to maximise our profits, if we can’t beat them, we’ll join them.We need to buy from the most competitive option.

Take a shower we sold recently. We gave a minimal discount to our customer and then checked the price between the distributor we normally order from and a well-known online retailer offering the most competitive deal.We were surprised that, even paying by PayPal, the online company was 15% cheaper and offered free delivery. Also, we could return the shower if we wanted – under distance selling regulations – without the usual restocking charge our distributors would impose. I smiled to think that the extra profit we’d make was probably more than the online retailer was making in total.

In short, the way to the bottom for distributors, in my opinion, is to continue to sell brands that behave in this manner.They are far better off concentrating their efforts on brands that at least try to support them and that they can make a decent margin on. The way forward for showrooms is to purchase these brands from the most competitive option and let the big online retailers run around like busy fools, while we make healthier profits.

The final part of our meeting centred around the products we should display. No longer are we bound by a minimum number of displays of ‘exclusive’ brands. We can choose how many and what to display. If they don’t like it, so what, we can buy it direct from Germany.

As a company, we need to focus more on displaying brands that support showrooms. We can buy the other products anyway through the channels mentioned above.

All in all, retailers need to stop focusing on online opposition and focus on their own businesses and how to maximise their profits. It’s going to be an interesting year. The gloves are off, so bring it on!

Paul Etheridge, director, Coastal Bathrooms, New Milton, Hampshire

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