INTERVIEW | Nick Glynne, Better Bathrooms
We’re in a much better position to steal market share than many of our competitors who are either burdened with debt or a fixed cost base. We’re much more nimble and cash-rich
The key mantra I have in this business is not to look over your shoulder obsessively at the competition. Be aware of what they’re doing, but listen to all the clues that customers are giving you about how they want the service to be improved.
Q: Will you be offering an installation service? A: At the moment, we’ve got 40 vans – our own two- man deliveries and we’re helping to ramp that up on the back of the bathroom business. We’re looking at offering installation services with that. Whether you can ramp it up nationally, I don’t know.
Q: Should a small retail showroom resist launching a transactional website? A: You now need a huge degree of sophistication in your IT department and those skills are expensive. If you’re not careful, you’ll be paying Oxford Street rents for your web shop. You’ll be paying exorbitant costs to Google, which is your landlord, to try and traffic it. One of the significant reasons for the downfall of Better Bathrooms is that they didn’t properly get to grips with traffic. Traffic is everything in e-tail. The whole thing is linked to how your website is performing, how your pages are converting and how your pages are structured.
So not only do you need this huge cost base for traffic, but a huge cost base for your IT and your user experience. So how, as a small business, can you ever compete?
I’ve always tried to position ourselves as the national corner shop, the national independent. Our people know what they’re talking about, whether it’s bathrooms, appliances or TVs, and what we don’t want to ever become is a faceless organisation like Amazon, or a company like Argos who’ve just got a call centre and don’t really understand the products.
Q: What’s the biggest challenge in retail? A: We’ve all got one huge threat. It hasn’t happened on the core big products of baths, sinks and toilets yet, but the biggest threat is Chinese manufacturers coming direct into the UK. If you look at electronics, you’ve got an extraordinary 5.5 million parcels a week coming out of China directly to UK consumers. Most of the resellers on Amazon and eBay are now Chinese retailers. They’re either sending products straight out of China or they’ve got products in a UK warehouse. So they’ve shrunk the supply chain costs – there’s no wholesale importer, distributor or
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as good as the major brands now. In fact, a lot of brands rebadge Chinese products now. They’re no longer manufacturing all their products in Germany or wherever.
retailer in between them and the consumer. The independent generally has a lot more to fear from Amazon and eBay fronting Chinese resellers than it has from big independents like ourselves.
Q: How much impact will this have on the bathroom sector? A: At the moment, it’s small items – taps and accessories. But soon the train service from China is going to shrink delivery to two weeks. You can go on Amazon and order a bath and they’ll ship it out of China on a train and it’ll be in Europe in two weeks. They’re cutting all that cost away. There’s no labour or storage cost or funding anyone’s profit in between.
The second threat is what I think of as suicidal players that disrupt the market without making a profit. If you look at AO in our space or Wayfair in the furniture space, they disrupt the market because they’re offering something that others can’t match. This is not too dissimilar to the situation with independents. They very often get upset about online retailers, but almost all their competitors that have focused on online have gone bust in the past 15 years. It’s not easy being in this space; you’re almost as vulnerable as an independent sandwiched between Amazon, AO and Wayfair.
Q: What’s the quality of Chinese products like these days? A: If you’ve got your own quality control and you’re inspecting, you can make sure the attention to detail is there. I’d say around 80% of electronics are
Q: Is it fair that a homeowner can buy products online cheaper than an independent can buy them from a distributor? A: It’s market forces, so the independent needs to get out of entry price products [EPP] or demonstrate that they’re offering service above price. Customers looking for EPP don’t appreciate the whole value offering and that’s where an independent can offer much more. My advice would be to let EPP go and concentrate on the bits where customers can appreciate that value.
Q: Can a high-street store still make money selling appliances? A: There are a few independent e-tailers, like Marks Electrical, who have done quite well, but for the majority it’s a bit of a bloodbath.
Q: What’s your advice for showrooms who complain that customers waste their time then buy online? A: Make sure your closing techniques are hard and you’re finding ways to close a deal that aren’t about price, whether it’s an extra year’s warranty or free delivery or playing on people’s doubts around the internet. You’ve got to be aggressive. The sad thing is nowadays business is no longer a gentleman’s game. Unless you’re ruthlessly going for financial profit you can’t survive.
Q: Any high-street retailers who impress you? A: I always ask where the value is in what they’re offering. Experiential retailing? If you go to buy a bathroom, you go and look at bathrooms – it doesn’t matter what the lighting is like. It’s just a load of bull***t. It’s just shareholder, boardroom mission statements. The demand isn’t there. The demand is there for great products at a value price with value-added services around it. It’s all about old-fashioned retailing, but done in a slightly different way than face-to-face.
kbbr kbbreview · September 2019
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