What’s wrong with wanting a good margin?

Paul Mead, managing director of Michael R Peters in Bedford, looks at whether retailers should forget Black Friday and simply concentrate on selling the services and products on which they can make a decent margin?

As we start the New Year, what can we learn by looking back on Black Friday? The media certainly seems to have reported mixed fortunes. Milton Keynes opened early and appeared deserted. Currys held a Black Tag sale that lasted for 10 days. Richer Sounds had Black is Back and online sales reports were impressive.

Speaking to many independent dealers, footfall seemed slightly up, but no massive changes to a normal trading day. Personally, we had a right old conundrum. I was all for blacking the windows on Thursday night through ’til Monday night. But we decided that we would have an in-store presence, but not go to town promoting the fact.

Why? The previous weekend was one of our best of 2015. Most of our customers are 55 plus and, quite frankly, are not influenced by Black Friday. When they want to purchase something, they do. We felt that it might be detrimental to our reputation and invite the wrong calibre of customer in-store.

Paul Mead
Paul Mead

Our local BHS decided to pull in Blaupunkt televisions to sell for Black Friday and, needless to say, there were no staff available able to tell you anything about the products. Sainsbury’s had a spread inside the door with TVs, soundbars and Now TV boxes. After waiting 13 minutes to speak to the electrical department staff (young teenage lad), my questions remained unanswered, so I continued on in my quest for a chicken tikka.

I say let’s forget Black Friday. I really do not understand. Is there something wrong with wanting to make a sensible margin? Who started the downward trend to the lowest possible price? Was it members of our own club – followed by the nationals, who can never knowingly be undersold? Or was it because they were overstocked and wanted to pick on selected models to use as loss-leaders?

All I know is that these discount operators are having an impact on many trusted local independent retailers who may appear to be overpriced and never again visited by the local community.

Thinking back to the weeks running up to Christmas, it was a bloodbath. It would have been cheaper for me to buy several leading manufacturers’ high-profile products from my competitors than direct from the manufacturers. This is very damaging and if it continues, there will be fewer independents remaining in business to sell high-end products.

So what is the answer and how can independents remain positive and move forward in 2016? If I had a magic wand, believe me, I would have waved it many years ago. I know I bleat on about the Blomberg range, but those of us that support it are all enjoying the benefits and the margins and it’s just a no-brainer.

Do you offer a wall-mount service to your customers? Do you offer your own built-in installation service? Both of these services have bolstered our profits over the past few years and really are something you should consider.

Over the past 12 months, we have carried out more home surveys than ever before. Making the effort to visit a customer’s house, and investing time listening to their plans for their extension or new build, has proved a winner. The results are usually very impressive and it is amazing how these satisfied customers recommend and promote you to their friends, helping your business to flourish.

I am positive about the future and believe that you only get out what you put in. Do you attend your local Euronics meetings? Manufacturer training? Retra meetings? Trade shows? Enter industry awards? If the answer is no, I might I suggest that you do. How are you going to find out what is happening in the industry if you don’t talk to like-minded dealers?

Make a New Year’s resolution and attend your local meetings…