BSH has confirmed that it is planning to launch a direct-to-consumer offer for large appliances in the near future.
In an exclusive interview with BSH UK CEO Gunjan Srivastava (pictured) at kbb Birmingham, he confirmed that a direct sale operation was at a planning stage – a move that may concern many of the company’s kitchen retail specialists.
But, he insisted, the business-to-consumer (B2C) model would help its retailers in the long run by improving BSH’s understanding of how consumers buy their products.
“Direct to consumer is something that is a global strategic priority for us,” he said. “It’s in our vision and we have looked closely at that in the last year to 18 months.
“But, for us, direct to consumer is not about us going out there and competing with retailers, the idea is to be closer to the consumer and understand the entire journey as much as possible.
“And by doing that we’ll also be able to really help the larger part of the business which is business-to-business-to-consumer. So it’s a complementary approach.”
The move comes during a difficult period for the wider appliance sector as it grapples with continuing supply chain pressures that have strained many brands’ relationships with their independent dealers.
Srivastava said that the planning was in a very early stage and, as such, it’s not yet known which brands and products will or won’t be included.
“We don’t know right now,” he said. “It’s in an initial thinking-through phase. Once we have more clarity of what our step-by-step plan is going to be we will start talking to retailers and other stakeholders. But, as I say, it’s a complementary approach and we’ll obviously take our retailers along. We will understand what issues they may or may not have and communicate regularly what we are or aren’t going to do.”
One concern many existing retailers may have is that their margin may be squeezed if consumers can buy product more cheaply directly. Srivastava, however, insists that this is not the intention.
“This complementary approach means that it’s not a competing approach,” he said. “That’s probably what retailers are afraid of or think might happen depending on what might have happened in the past with other brands. But that’s not going to be our strategy.
“The idea is not to maximise turnover through this, the idea is to get an understanding of the consumer. It’s not something to rush or hurry, we will do it quite gradually and learn at every step.
“And initially I’m talking to a few retailers and explaining to them at this early stage that this is something that might be coming and, yes, they’re apprehensive. “
That apprehension is eased, he said, when retailers are told that this approach will lead to the better understanding of consumers and more benefits for showroom retailers in marketing, planning, or product training.
“Our going business-to-consumer does not mean any reduction or rethink in what we do in the business-to-business-to-consumer area. Most consumers want to shop in a multi-brand environment, and they’ll continue to do that, but some of them might want to shop in an exclusive environment and that’s what this will provide to them.
“For us it completes our understanding of the journey of the consumer, which otherwise for us is a bit limited. Now, as soon as we sell our products to the retailer we lose track of them but by doing this we get to understand the journey better, and therefore across all of our touch points we can then provide better solutions.”
• See the full interview with Gunjan Srivastava in the April issue of kbbreview.