Mike White, Ewe/Intuo’s UK sales agent, has his say on the paying for displays debate and suggests that the rise of preowned kitchen websites is a key development…
Although Toby Griffin’s examination of the perennial ‘free’ displays debate was well researched and nuanced, it strikes me that he missed a prominent elephant in the showroom – the rise of the preowned kitchen websites.
His suggestion that the balance of power between the retailer and the supplier has fundamentally shifted toward the retailer is all the truer when the used kitchen sites are taken into consideration.
Unless a showroom is stuck in a 1990s small, L-shape time-warp, has selected a quality brand with healthy display discounts and ensured designs replicate a room, each with a dishwasher, then an end-of-life sale via the preowned sites should return a healthy profit or the ability to fund a replacement.
Selling via an online agent won’t suit everyone, but they have in essence, boosted retained value and enabled desirable displays to become stronger assets for longer and, at least in part, alleviate the boom-and-bust cycle of existing showroom refits.
Griffin plays mahout to other industry elephants, including whether or not you actually need displays and retailers answered that with a resounding yes. Without the touchy-feely element, your man in a van will struggle to demonstrate venting hobs, make tea from a tap, charge a phone through stone and keep Champagne cool in a worktop-mounted gizmo.
If, like us, you claim your products to be of superior quality, you have to offer proof and that, despite my best digital efforts, is difficult without the physical laying on of hands.
Trading relationships
As a supplier, I’m not privy to all deals available to retailers, but ‘free’ has always been an element in combining the various strands in creating a showroom. As Griffin alludes to, training, samples, brochures and factory trips have (mostly) always been free and should continue as supplier commitments. Other elements such as stone materials, lighting and décor, are also often gratis.
That said, at the outset of negotiations, one side insisting on ‘free as a starting point’ or the other demanding a percentage coverage of space or removal of competitor brands, is hardly conducive to building an equal trading relationship capable of enduring the natural highs and lows of a fashion industry.
The concept of renting expensive showroom space to suppliers can surely only work if the ‘landlord’ grants a share of profits to the ‘tenant’ or if one is in possession of a genuine destination address. Besides, such an awkward arrangement is likely to have similar benefit to prices and consumers as slotting fees and fixed price contracts have been to the tomato aisle.
My own albeit limited experience of negotiating ‘free’ is that recipients are rarely, if ever, willing to enter into legally binding future turnover agreements with penalties and assignation of asset ownership, which isn’t a single asset at all if the owners of the furniture, appliances, tops etc are all different.
Griffin reminds us that there is no such thing as a free lunch or, for that matter, a truly ‘free’ display, as expectations are usually implied obligations. Irrespective of what deal transpires, the supplier takes a thumping loss each time, which is not an attempt to solicit sympathy as it’s our way of investing in the success of both the retailer’s business and securing future sales opportunities. It would be nice though to have that fact recognised now and again.
At the end of Griffin’s piece, I perceive the balance of opinion leans to a professional happy medium of additional discounts from the supplier and the opportunity for the retailer to have her or his investment refunded via retrospective rebate against turnover. All parties can then concentrate on what they should be doing to maximise return on what, in the end, is a joint investment in a joint venture.
Griffin’s article also contains a salient comment from Emma Reed of Kitchens by Emma Reed in Swansea, “[A] manufacturer offered to finish my whole showroom free if I stayed solus. I had to remind them I was building my brand, not theirs”. I don’t think I could agree more.
There are brands upon whose shoulders retailers can ride, but I believe our industry is better off with individuals prepared to shun the herd and take on products outside their comfort zone with easily demonstrable differences in quality.
Not least because that’s the sector I serve but as something different from the increasingly homogenised identikit showroom on the edge of town.