How did we get here?
A panel of leading electrical retailers candidly discuss the current health of the market and what barriers are stopping many dealers developing and adapting their businesses
Sean Hannam: What’s your take on the current electrical retailing market?
Steve Scogings: It’s harder than it ever was and it’s not as much fun as it used to be. It’s tough out there – the margins are hurting us and costs are being added to our bricks-and-mortar stores.
We’re now starting to look at the online channel. Ten years ago, some manufacturers tried to steer the independent channel away from online because they didn’t want to see a bun fight on price. To some extent, that has held us back – we’re playing catch-up. One thing we’ve all got is stores with great staff in them that do a good job for the manufacturers, but we’re not promoted enough on manufacturers’ websites to get people back into the independent channel. We can give a level of service that no one else can. We need to work better [with manufacturers] as a partnership – we are seen as the least-needed channel in most cases.
With the connected home, we can switch that around – online-only players can’t do what we can do, nor can the big players be involved as much as they want to. They want that market, but it’s too diverse for them to be able to move fast to get a job done quickly.
Paul Giles: It very much depends on the retailer, but in the past five years, we’ve invested a lot of money in our business and we’ve experienced five years of growth – we are reinvesting in our business.
I can appreciate there’s doom and gloom, but there are a lot of independent retailers who are doing very well. They want to work with the manufacturers in partnerships and come up with innovative ideas to stimulate more growth in their showrooms. We’re also having to do online, as well as in-store, so there’s a lot of investment going on. If you invest in your business, then manufacturers respect that.
Jason Digwa: Retailing at the moment is certainly challenging, but Black Friday and the Christmas period were buoyant – we were up year on year.
It’s about an individual retailer investing in their own stores, looking at ways to engage customers when they come in and looking to offer the right experiences.
It’s down to individual dealers to take the lead and try to create a point of difference. Unfortunately, Brexit has caused price increases across brown and white goods – we’re starting to see that effect now. Hopefully the new product launches will buck that trend.
SH: What kind of support would you like manufacturers to offer you?
PG: It’s a partnership – manufacturers do a lot for us – but we just need to re-evaluate that model and see if there’s anything cleverer that we can do in-store and online.
When people come in a store, they want an experience – they don’t want to just see a row of TVs or washing machines – it’s all about exciting the customer, so they buy things. We can do that with a store. You can make a good online shop, but it’s never going to be the same experience as a store.
We all need online – we don’t want people going to someone else’s store before they come to ours. If people do their research in our online store, they’re far more likely to shop with us.
There are issues with getting data from suppliers that’s in an easy format for our websites – we haven’t got hundreds of people running them and we haven’t got all the tech.
We need help to try to make our websites proactive and look good.
SS: I totally agree – the manufacturers do need to give us more help with our websites. It’s an expensive job. We’re going online more and more. I have nine retail sites – my 10th store is online and it will have as much spent on it as any of my retail sites. The website needs to be very modern and good-looking. It also needs to provide the sort of content that the bigger online players have had for some time.
JD: We used to be very big online, but in the past three to four years, that platform has become very competitive. In terms of our business, we’ve focused more on using the internet to steer people into our store. Manufacturers are looking for independents to have retail theatre and to provide an experience for people to come in and see the products.
SH: How do you compete with the bigger players? How do you need to adapt your businesses?
JD: We face stiff competition from the likes of Currys, John Lewis and AO.
In white goods, some manufacturers need to look at their platform and the way in which they go to market – there are still many top-end products that are on AO and other internet retailers. We all invest heavily in our stores and we should be rewarded for that.
PG: We’re still making a reasonable margin on white goods, but the brown goods margin is shrinking so much that a lot of retailers like us are going to seriously look at brown goods exposure in our shops. Do we really want to give over that space for a single-digit margin? I might as well put something in it that’s going to make a margin.
- Main image of the panel, right to left: Jason Digwa, director of RGB, Paul Giles, managing director of Gerald Giles and Snellings, and Steve Scogings, managing director of Stellisons
- To listen to the full discussion, please go to our website