Don’t sell out for higher profits

The MD of Ripples, Paul Crow looks at how UK buyers have little or no brand awareness – great news for retailers looking to buy cheap and maximise profits. But he believes we should play the long game, sell quality and educate people as to why they should buy into it.

I was in John Lewis recently, looking at their range of bread makers as my mid-life (slow) transformation towards healthier eating takes a bigger and tighter grip on me.

I must admit I didn’t know where to start with regard to features, prices, sizes and options, let alone who makes them. Like you, I chose John Lewis because it was an important purchase and I didn’t really want to make assumptions.

I like John Lewis because I know they only sell good stuff and they haven’t ever really let me down to date. I’m slightly biased, to be fair. We had the former retail managing director visit our Ripples Franchise Annual Conference and he spoke passionately and effortlessly about how he helped his partners ensure that the customer gets the right product and the right experience.

What was most interesting is that they didn’t involve the sales team in the buying decisions because, he said, it didn’t matter. “Our job was to sell what we had on offer and their job was to buy what they believed our customers wanted to buy.” Their focus therefore was on product training and investing in merchandising and true partnerships with suppliers that helped them develop their business. It all sounded obvious, of course, but not always consistent with the suppliers whose goods left our own stores.

This got me thinking about brands in the industry and what it all really means. While everyone has them, and everyone talks about them, it seems that ‘brands’ are being sold less and less. The preference, and in cases a wholesale change of direction, is to promote unbranded goods in order to mark up the items high and even after discount make a good gross profit. Understandable, although I am not sure what the customer really gets delivered into their house.

Ignorance

I don’t know the Victoria Plum business very well, but I know it turns over lots of money. It has huge brand presence and should have after all the money it spends on advertising. But is it good value? Really? I’m sure they’ll say yes. My suspicion though is that consumers neither know where to buy or what to buy and therefore are choosing these products purely out of ignorance.

Paul Crow

Paul Crow

So do we beat them or join them? I guess it depends on what you want your customer to have in their bathroom, and ultimately what type of business you want to be. My own philosophy is that it’s easy to find a product that could make you good profit from a sale, but it’s better to find a product and suppliers that can help you increase the sale value. And, just as importantly, one that represents good value for money. It has to be a great product functionally first and foremost and the purpose of it must not ever be compromised for design’s sake. But obviously, it must look great, too.

I think it’s fair to say the bathroom industry really does have multiple manufacturers who get this spot on and we should all be grateful for the overwhelming product choice. But the next most significant consideration is the company itself and how good they are at helping you grow your sales. That’s where the list gets significantly shorter.

In my view, it is these two major factors that truly determine the success of the product – at least in Ripples. Only companies that get this right can truly help us sell the more luxurious, and therefore higher-value, end of the product range. Don’t get me wrong, I’ve seen some good retailers create some great names for themselves because of their service and expertise, and on a recent trip to Italy with Hansgrohe, I was surrounded by some. I think Ripples has done a good job of that, too, and I’ll confess you won’t find manufacturers’ names on our quotes or on vinyl splattered around our windows.

But if we are all to make an investment in our future, everyone needs to resist the temptation to buy cheap and sell high and instead play the long game and work on educating the consumer on what they should buy, because they really actually want it.

That starts with the manufacturer employing a marketing strategy that focuses on consumer lifestyle media and not trade press. It starts with the literature that is offering a toilet or shower valve for £500 being as good as the brochure that is used to sell a Mont Blanc pen for £400, and it ends with instructions and support literature that the installer can acknowledges is respecting his profession as much as ours.

If good quality brands are being dropped at the expense of high mark-up, lower-quality goods, whose sole purpose is to provide higher margins to the dealer, then we are selling ourselves out. Ask any dealer who is doing this why and they will tell you why I am naive and perhaps even overly sentimental. Fair point. Then go and ask them what they have in their own bathroom. Let’s be honest, that’s the point isn’t it? Why do we want them for ourselves, recommend them to a friend, and yet en masse go the unbranded or non-OEM route?

Something serious is wrong and it’s brushing the real issues under the carpet.

The real issue

So here goes…. The real issue is that the customer hasn’t heard of anyone. Sure, there are a few exceptions, and we know who they are, but on the whole nobody knows what to buy. For a sales force, that’s great news, because they can sell what’s in front of them, but for the manufacturer of the branded goods that’s bad news. Marketing departments are going to have to work a lot harder and they are going to have to focus more on the consumer than they do on their trade partner.

It’s great that Ripples receives so many thousands and thousands of web visitors every single month, but it is wrong that it is more than some international brands’ own UK consumer sites. It’s wrong that, as a retailer, we are securing more PR for manufactured products than they are for themselves, and it’s wrong that the brochures we are given to hand out resemble mini Argos catalogues. And who’s doing all the advertising in consumer media? Let’s be frank, it’s rarely manufacturers creating a demand for their product, is it?

Ultimately, we must stop and ask ourselves why so many ‘manufacturers’ are investing thousands at KBB and in trade advertising, looking for new accounts, while others are investing fortunes on ensuring their current customers get better service, better training and, yes, better products. It’s these guys that have a marketing department that includes closing accounts in their strategy and it’s these guys who will have the last laugh in the end.

Feel free to write in and tell me why I am wrong and I’ll respect your views, as I know you work hard to put your own bread on the table. But mine was home baked in my Panasonic bread maker and I guarantee, once you’ve tasted it, you’ll wish you had one too.

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