Malcolm Scott, the KBSA corporate chair, considers some of the biggest challenges facing showrooms today – from both product and skills shortages to sustainability – and what solutions might work best to deal with these issues.
Over the last few weeks, I have been musing over some of the issues raised in a recent edition of kbbreview.
The October magazine featured lots of articles about the demise of the high street and the implications for showrooms alongside articles highlighting the growing number of supply problems faced by retailers. The ‘Save our high street’ article talked about 48 high street stores a day closing, but 21 new stores a day opening, and that 72% of retail sales are still occurring in store. So how do we make sense of all these conflicting messages?
In the issue Richard Hibbert, the retail chair of the KBSA, highlights the need to keep showrooms interesting by creating a unique experience for visitors through wi-fi-enabled products, smart lighting, augmented reality tools and interactive touch screens. This advice ties in with the message from Paul Crow (Ripples MD) who suggested we need “showrooms to be innovative, flexible, personable, authentic and perhaps more importantly, local”. Paul also highlighted the need for brand owners and manufacturers to work with retailers to achieve a consistently high-quality display base, and to invest in ensuring that the displays remain interesting to consumers and continue to add value.
This then ties in with the opinion of Shehryan Khan of Sheraton Interiors that brands and manufacturers need to add focus to supporting the independent sector during this period of persistent supply issues.
During this period where consumer demand is high and manufacturer capacity is restricted, it is vital that manufacturers act where possible to ensure the supply of higher-value, slower moving premium products that keep average order values high, is maintained. The race ‘to the bottom’ is a very slippery slide that is difficult to climb back up from. The brands that concentrate on short-term and high-volume products during these periods of component shortages will find that slots in the showrooms they have secured over many years will get taken by brands that are better able to support retailers.
The skills shortage highlighted in the previous few issues of kbbreview can only really be combatted by trying to make overall employment prospects in the kitchen channel as attractive as possible. If the overall package is right, more people will be attracted to the sector. All business owners are being forced to look at a range of elements like pensions, benefits in kind, flexible working and attractive remuneration, which some of the better employers have embraced for many years. Other sectors of the economy are in very real competition for competent employees, so we need to keep our sector interesting.
The message from Rob Cole of Sustainable Kitchens that supply issues are “definitely getting worse, with increasing costs, delays and availability issues” right across the supply chain is unfortunately probably true for the foreseeable future. The cost of transport and the lack of components will likely drive through increases early next year by as much as 10 to 15% right across the spectrum of consumer products. Without components, manufacturers cannot forward plan. Very big brands are making a series of never-ending, short-term decisions where they would in normal times be working to a long-term plan.
Shehryan Khan’s comments about customers “holding his reputation to ransom” do highlight the major supply issue, which is impacting all showrooms and is extremely hard to overcome. Consumers for the most part see the inability to supply a complete kitchen as, at least partly, a retail management issue. This can have huge implications for the retailer with payments withheld, and goodwill lost. Many leading kitchen brands have switched to weekly manual allocation of stock as it comes in to warehousing from the production line to enable them to complete partly finished kitchen projects. But these efforts are being ‘scuppered’ by component issues that are simply making it impossible to make enough stock for this manual allocation process.
Additionally, the overall lack of transport resources throughout Europe means it becomes easier to fulfil large lorry load (or container) bulk orders. Unfortunately, during such periods where supply is disrupted the multiples and the leading internet traders have sufficiently visible historic sales patterns to order full loads well in advance and stay near the front of the queue for scarce items. My employer Swift is now ordering up to three months in advance to try to reduce this problem and keep kitchen studio needs at the front of the queue.
We have survived world wars in the past and while things will be difficult for many months to come, we can as a sector work through these problems and come out of this period stronger and leaner. But it is essential that the big brands play their part.