Showroom retailers must abandon ‘myths’ about online dealers and accept the ‘new reality’ of doing business to survive. That’s the view of James Hickman, the CEO of one of the biggest online bathroom retailers, Plumbworld.
Speaking on the latest episode of The kbbreview Podcast, Hickman says he sympathises with showroom retailers’ negative view of online as it is “a significant threat to their traditional way of doing business”.
But many of the widely held opinions, he says, aren’t based in fact.
“I do think there’s a lot of myths that they cling to which they need to let go of,” he said. “One of the biggest ones is that customers do their initial research in the showroom and then just leave and buy it online at a cheaper price.
“The reality of it is that just isn’t the case.”
Hickman said Plumbworld surveyed 10,000 customers who had bought branded bathroom products through the site and found that 96% had never set foot in a physical retailer before making the online purchase.
“In addition to that,” he said. “About 55 to 60% of our business comes from house brands that we import directly from factories across the world and those products are not available to view in any showroom anywhere,” he said. “So this idea that people need to see the product in the showroom before they buy just isn’t true.”
Hickman founded Plumbworld in 1999 as one of the first online bathroom retailers in the UK. In 2007, he sold it to the Grafton Group, but remained as CEO and in 2018 took it back in a management buyout. Since then, he has grown turnover by 83% and aims to hit £100 million by 2023. Margins have also grown, from under 20% to over 25%, something Hickman says also dispels the idea that online is “a race to the bottom and all about price”.
However, in the wide-ranging exclusive podcast interview, Hickman said that showrooms need to change what they do to differentiate themselves rather than trying to compete directly with online on price.
“What really upsets me is seeing so many traditional showrooms going bust because they’ve refused to face up to the fact that things have changed,” he said. “Because there isn’t really any need for that to happen.
“The future for showrooms is not in trying to compete with online retailers with branded box product. There are certain things that showrooms can do that online retailers can’t touch, like offering a design service and managing the installation. The showroom of the future is going to be much more heavily geared around high value-added services rather than trying to compete in moving mass-market, mid-range product.
“But they do need to adjust the business model, which I accept can be difficult.”
Listen to the full interview with James Hickman on The kbbreview Podcast using the player below or by searching ‘kbbreview’ in a podcast app such as Apple Podcasts.