COMMENT AND OPINION | David Allinson


Harrison Bathrooms’ sales director discusses what retailers should be looking for from suppliers to maximise profit potential as the industry starts its bounce-back from Covid-19


Don’t LOCK DOWN your margins


T


he knock-on effects of lockdown restrictions have taken a toll on


everyone. As more rules are being put into place and many businesses begin to prepare for working under new conditions, all companies need to adapt and plan to ensure any further repercussions of Covid-19 don’t cause problems down the line.


While many people during lockdown took to renovating their homes, our industry took a bit of a blow, with up to 80% of bathroom projects being placed on hold in May alone. Our customers are currently reporting


an increase in showroom footfall and sales, but is the new optimism going to be short-lived and based purely on pent-up demand? With this in mind, how can retailers


prepare for customers’ new buying habits and behaviours shaped by lockdown? Retailers


have always been under


and help them feel safe when they visit your showroom. Another key step is for retailers to


ensure they are sourcing their products correctly, from a reputable supplier that can provide a quality product with a sensible margin to enable them to make an acceptable profit on what could potentially be fewer sales.


One place to start is looking at a supplier with a short supply chain. The market is already becoming extremely price-competitive as the economy shrinks, so following the chain right back to the manufacturer can help identify where reduced margins are coming from.


pressure to find new ways to attract customers by continually updating and refreshing showroom displays, POS, marketing collateral and stock to ensure they are appealing to the ever-evolving market. The question is whether this will be enough after Covid-19? With many people still preferring not to leave the house to make


We urge retailers to consider their suppliers carefully to ensure they are achieving a healthy profit margin that can help them compete with their local and online rivals


At Harrison Bathrooms, for example, we source directly from the manufacturer, so can offer competitive margins. As customers tread cautiously, retailers should too, and question what the true margin is that’s being made on each brand they currently trade with. If there’s competition between local and online competitors to sell a certain brand, knowing the true margin being made can help retailers to have more flexibility in pricing, ultimately improving the profitability of their business. Once this research has been


purchases, online shopping has enjoyed a substantial spike. This can be seen particularly for products that would usually require a visit to a showroom to get a true sense of how pieces would integrate into the home, such as bathroom suites. Given the new regulations, many customers may feel the best decision is to make these purchases online instead.


Competing with the online market isn’t a new concept to retailers, with a history of customers visiting showrooms to find the products they like before returning home to find the same products online at a more competitive price. But if in the long term fewer customers visit bathroom showrooms,


there can be no intervention at this stage to try to convert the sale. So what can be done? Appealing to customers to visit in-store by advertising all changes that have been made to conform to government guidelines on Covid-19 will give them a sense of ease


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completed, it might be time to look into new companies to partner with. Suppliers who source their products directly from the manufacturer can often provide the best margins, as there’s no extra steps in the supply chain adding mark-ups to products. Ultimately, the same product styles and ranges can be purchased for a lower price and healthier resale margins retained, allowing for more flexibility to negotiate with the customer, giving both the consumer a better price and the retailer great margin retention. This is a tried and tested model we work to at Harrison Bathrooms with our Scudo brand which has helped it grow rapidly and made it a trusted choice for retailers. There remains a lot of uncertainly within our market about how the future will look. We urge retailers to consider their suppliers carefully to ensure they are not only providing a quality product, but also achieving a healthy profit margin that can help them compete with their local and online rivals.


Looking behind the scenes of the supply chain and the source of


these products can be eye-opening for retailers and could help to shape a better business model when recovering from the pandemic.


· September 2020


OPINION DAVID ALLINSON


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