Do suppliers need independent retailers?

Are independent retailers still relevant to suppliers and how can they work together more closely to revitalise the sector for their mutual benefit?

Sean Hannam: How important has the independent sector been to your business?
Simon Grantham:
We started trading with independents in the UK about 60 years ago. Today around 60 per cent of our business is split between what we would call freestanding independents (about 200), and around 450 built-in independents. The freestanding independents are mainly electrical retailers and the built-in are predominantly kitchen studios.

Roy Dickens: The independent base built Sony in the UK. About 10 years ago, we went through a horrible time and lost our way and now the emphasis is back to premium product. So the specialist market is growing in importance to Sony and independents are about 15 per cent of our UK business.

Mediator: Sean Hannam, editor of ERT
Mediator: Sean Hannam, editor of ERT

Owen Watters: We have a well-trodden path with the independent sector – around 20 per cent of our business is with independents. Ten years ago, that was more like 40 per cent. In the radio sector, we have about 68 per cent of the value of the market, but clearly the concern is that the value of the independent has declined considerably.

SH: Is the independent sector healthy?
SG: We’ve seen the number of independent stores decline, but our turnover increase substantially. We do much more business with fewer partners. I think it’s because those retailers have got a really good handle on how to sell premium products and manufacturers have worked out a good way to support them.

If you went from town to town and put our independents against Dixons or John Lewis – for our product, the independent outsells the multiple, without exception. Do suppliers need independents? I’d say they are probably the future.

OW: We’ve also seen the number of retailers decline significantly, but the quality of those that are left has improved enormously. There are proactive dealers that invest in their businesses and make themselves relevant to their customers, and then there are those who are not accepting that we now live in a digital age. I fear we won’t see them in 10 years’ time.

Owen Watters
Owen Watters

RD: We don’t just look at a ‘channel’, we look at each town and see who is going to serve the consumer best. Independent retailing does that in practically every town, so it’s very relevant. If we look at the Currys in each town, independents hold their own. With the Internet of Things and the challenges that creates for consumers, I think this is the time independent retailing can step forward again.

SH: How can you help retailers embrace digital?
SG:
We probably need to upgrade the quality of our salespeople and act much more like business advisers. We need them to understand the digital world and be able to put a marketing plan together with their local partners, making it much less a transactional relationship and much more of a how-do-we-build-business-together relationship. We can also help to create relevant content for local markets.

RD: Perhaps it’s about working with them to produce their own videos with their own staff. We’ve been working on helping retailers with personalised email content to send to their databases. It’s not just about a website, it’s direct communication with the customer.

Roy Dickens
Roy Dickens

OW: At the heart of any business now there needs to be a digital strategy. We’ve just launched a new website and digital marketing is at the forefront of everything we do. Independent retail needs to do the same sort of thing. Independents have to have a presence online, but they need to localise it and not just have the same content as everyone else.

SH: What do independents have to do to be more relevant to you?
SG:
Retailers need to make a clear choice about which brands to support. I’m not sure it works to sell 15 brands of washing machine. The other thing is not to be afraid to trade-up. Shop footfall is declining, but that means the value of each sale is even more important.

RD: I think the vast majority of independents are doing a really good job of trying to navigate a difficult market and there isn’t a lot more they can do to be more relevant to us.

Simon Grantham
Simon Grantham

SH: How positive are you about the future of independent retail?
SG:
I’m very positive. The larger multiple retailers want to become bigger and that means they’re nowhere near as good at being specialised, opening up a massive opportunity for retailers in the right areas. For example, one retailer has half the market in premium coffee makers and they do a rubbish job. That’s an open goal.

RD: There will always be a customer base for them. I do think the market is moving back towards independents because the connected home means consumers will want local advice and help. But I don’t know, at the moment, what that means for us and how we adapt our support.

OW: The calibre of independents has definitely risen, even though there are fewer of them. Those that are left are more proactive and understand the value of investing in their businesses.

It’s still going to be tough and the market is not where we want it right now, but there’s still business to be done and the independent is in a great position to press home its advantage.

  • Main image of the panel, from right to left: Simon Grantham, managing director of Miele GB, Roy Dickins, sales director, specialists, Sony UK and Ireland, and Owen Watters, chief executive of Roberts
  • To listen to the full discussion, please go to our website