NEWS | Round-up


VIEWPOINT


Is diversification helpful in a challenging economy?


Richard Hibbert, KBSA national chair, explores product and service diversification as a way of combating a challenging economy, highlighting the elements retailers must consider before jumping in


WITH A challenging year ahead it may be tempting for retailers to consider diversifying into other KBB markets to balance out any shortfall in income. Expanding a portfolio can pay dividends, but it does


require planning and is not always the best solution, especially if it is a knee-jerk reaction to a situation rather than a planned rollout. There is also a lot of logic in adding similar product categories, one of the main benefits being that, as a specialist in one interiors field, you already have a database of customers to sell to. Adding a new offering will some level, so maybe it


require investment at is a strategy that is best


deployed when there is profit in the business to invest. It can be risky taking on new products, without the proper preparation and there is also the danger that efforts could be diverted away from the core business. A plan to consider these key questions is always a


good place to start. A typical plan should cover: What products will work best? How will you display and store them? Do you need extra space? What will be your target market? It could be tricky to sell luxury bathrooms to your customers if your kitchens are more mid-market. How will you market the new offering? What will the financial return be? Will you need more staff to sell, design and install?


Careful planning and seeking professional advice to help consider the pros and cons is likely to prove worthwhile


It may be prudent to start small and build slowly. As a kitchen retailer, for example, it may be possible to sell bedrooms. It can be an easier addition as they are similar to kitchens without the complication of working with water and electrics. Bedrooms have a quicker


turnaround of projects and profit and the option of multiple rooms in one property. Adding bathrooms is a very different proposition as the installation of a bathroom can be much more complex than a kitchen. Having a good installation team that understands the issues is essential. Other options can be considered, maybe adding a contract or trade side to a consumer-only business. Commercial contracts work differently from domestic, so it would certainly pay to take some advice from others who are already established in this market. Contracts and payment terms may well not fit with your current business model. Opening a trade counter poses fewer risks and if space is available this a great way to generate additional income with minimal investment. Whichever route a retailer considers, careful planning and seeking professional advice to help consider the pros and cons is likely to prove worthwhile, and could save money.


8


Worst year ever for online retail sales


DECEMBER ONLINE sales growth was the lowest since Covid-stricken March, bringing to an end what was the worst year ever for online retail. That was the shocking finding of IMRG Capgemini’s latest Online Retail Index, which tracks completed transactions online across 200 retailers, which were worth some £24 billion in 2022. Growth overall for 2022 came in at -10.5%. Growth from Black Friday turned out to be flat, while


delivery disruptions impacted sales in the week of December 18, with sales down 4.7%, and the market was unable to build on the -22.4% decline for the same period the year before. IMRG Capgemini said that the effects of inflation and other economic factors drove up the average basket value online from £121 in 2021 to £134 in 2022. This meant that conversion rates were at times 20% lower in 2022 than the previous year. IMRG strategy and insight director Andy Mulcahy said: “Retail is a confidence game. If people feel they are comfortable with their finances and have some disposable income to play with every month, then retailers tend to see that reflected in general patterns of demand. Mid-2022, we revised our forecast range, making a decline of -10% the lowest estimate in our modelling, which is where 2023 came in. So, it really has been a poor year. “The bright spot, however, is that traffic to retail sites has continued to grow even after the huge surges from the pandemic, so once the general economic malaise eases, retailers should be in a good place to benefit from the fact that people still like browsing and shopping for products. The issue is that many are expecting another tough year in 2023, with the first half, in particular, unlikely to provide much respite.”


BC Designs celebrates its ‘most successful’ year in 2022


BC DESIGNS has revealed that it saw turnover increase by 20% in 2022 making it the most successful 12 months in its 22-year history. According to a statement, BC Designs –


which is part of the Roxor group – said its strategic move into sanitaryware and bathroom furniture was one of the catalysts of its growth in sales last year as it helped it meet demand from retailers for “design-led, quality products for the mid-to-high end market”.


The statement also went on to explain that “a significant proportion” of the company’s profits from 2022 have been reinvested in the business as part of its growth strategy and in a bid to strengthen the company’s offering in 2023. This, it said, included increasing factory output and investing in storage facilities to shorten product lead times for its retail network. Reflecting on the brand’s performance Darren Allison, managing director BC Designs said: “2022 saw the end of the Covid-19 pandemic, but the start of the Ukraine war, huge hikes in both energy and raw material costs and the start of a cost-of-living crisis. There is no denying that it has been another challenging year, but through our continued investment in areas such as our products, technology and ordering systems and our brand and marketing, we’ve had another very successful year.”


Bathroom manufacturer BC Designs has revealed that it saw turnover increase by 20% last year, making 2022 the most successful in its 22-year history. According to a statement, BC Designs –


which is part of the Roxor group – said its strategic move into sanitaryware and bathroom furniture was one of the catalysts of its growth in sales last year as it helped it meet demand retailers for “design-led, quality products for the mid-to-high end market”.


· February 2023


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