What will the kbb retail landscape look like in the next few months? And what does it mean for suppliers and their retailers? Asks Roy Saunders, CEO at TKC…
“May you live in interesting times” the old saying goes…
Not half! I thought I’d seen most things but my current favourite word, and probably the one most used over the last few months, has been ‘unprecedented’.
I don’t mind admitting that I’ve struggled at points during lockdown, like everyone has on a personal and professional basis, being isolated from family, friends and colleagues. I love the buzz of the office and the closeness of our team and as we worked remotely from home it has felt like being in hibernation.
But now we are emerging and are starting to establish a ‘new norm’ in which we are all slowly adjusting to living and working with the virus. Across the kbb sector, it’s now good to see growing numbers of retailers reopening for business.
But what does the new normal look like? And is it permanent or temporary?
TKC has been operational, safely and remotely, during the lockdown and having conversations with customers throughout this time has been very instructive in shaping our selling, service and support to them on an individual basis as the market wakes up – the quality of these experiences is going to be a defining factor in business going forward.
I’ve coined the phrase ‘blended selling’ (or if I haven’t, I’m taking credit for it!) to describe what we’re doing. Recognising the different needs and attitudes of our retailers, we are fully geared up to offering a mix of face-to-face and online sales appointments. We’ve embraced Zoom and Microsoft Teams to such great effect that talking on the phone like we used to may even become outmoded. It is safe, productive, time efficient and personable (even the blokes chat about needing their hair done).
The pandemic has accelerated the adoption of new technology, working practices and behavioural change by five years, according to the CBI, and I can see this way of communicating, selling and supporting customers becoming permanent. We’ve been seeing virtual tours of showrooms, confirming displays and opening accounts with retailers with ease and efficiency all by video call.
Another oft quoted phrase during covid-19 has been ‘in this together’ and that has been our approach with customers. We’ve launched a wave of initiatives from a marketing toolkit with pre-designed and sized adverts to a finance partnership allowing retailers to compete with the nationals and stimulate business. Our new online ordering platform couldn’t have been any better timed for the huge shift to home and flexible working. And while this is giving customers a valuable online experience, the team in the office is also geared up to handling hundreds of calls a day now.
It’s good to see some of the buying groups doing similar support initiatives but I feel in general there’s too many businesses in our sector, and beyond, focusing solely on themselves. Drive cost out, batten down the hatches and ride out the storm. Yes, wish your customers ‘good luck’ but suppliers need to help customers still be customers in six months’ time.
I’m seeing and hearing retailers’ discontent with basic things like suppliers not answering their phones or offering any support on payment, so they shouldn’t be surprised to see business fall away and allegiances shift.
The furlough scheme will potentially save our economy but it also poses difficult questions for every business owner. Do you bring staff back when demand is there or is it the staff that generate demand? The reality is probably a bit of both and it feels like an efficiency tightrope to me, but suppliers could fall off and get badly hurt.
And how’s the market now? Kitchens that consumers had committed to before lockdown aren’t, in general, being cancelled – which is great news. It’s too early to say whether lockdown has generated the sort of pent-up demand we all hope for but I do believe that consumers will switch spend away from holidays to home improvements. What retailers are telling us is that leads are now more valuable and qualified because consumers have skipped browsing and gone straight to buying. They are making enquiries or visiting the retailer premises with real purpose.
This of course leads to the importance of product lead times and availability. Feedback we’ve had in spades is that retailers and installers are eager to catch up and less interested, at least in the short term, in brands with long lead times, all of which makes total commercial sense to me. Would you really want to wait several weeks for delivery of your new kitchen after you’ve sat about for the last three months? I’m sure this will level out in time but it does present some short term challenges for particular suppliers.
We increased stockholding by £1m prior to lockdown – more due to increased demand than anything else – but it proved to be a well-timed and wise decision. We nurture close supplier relationships and these are paying mutual dividends as both of us react quickly to changes in demand. Forecasts are analysed weekly rather than monthly and we’re probably engaging with key suppliers more often than our families at the moment. A lot of our product is supplied directly from Italy and we know how difficult covid-19 has been there.
Our performance in June is at a level that not even an eternal optimist like me would have predicted. Perhaps we’re reaping what we we’ve sown, perhaps it’s luck but whatever it is I’ll certainly take it. When I look at it rationally, it’s probably a mix of taking market share and suspended demand from past months but it’s a result we’re hugely encouraged by.
In short, my view is that suppliers must support their customers better than ever because this is an unprecedented situation that is a going to take time to work through. Put yourself in their place and think like them or better still ask them. What do they need to get through this and how you can you help them? I’m convinced those that do will come out stronger on the other side.