GDHA managing director, range cooking, Chris Honer looks at how the upturn in consumer spending has not benefited everyone and what manufacturers can do to help retailers compete against the online onslaught
For the first time in almost a decade, consumers have a positive attitude towards spending money, driven by improved employment prospects, a buoyant housing market and the prospect of the implementation of the National Living Wage.
However, the memory of the recession remains fresh and has definitely changed consumer shopping. We are seeing consumers plan spending on big-ticket items, such as range cookers, months in advance, shop around on the internet for the best deals, and chase promotional discounts from retailer to retailer.
This obsession with discounts has caused significant price deflation, so we’ve had to work hard to ensure we develop quality products at prices that ensure our retailers can make a margin and remain competitive.
While it is great that consumers are spending again, online shopping and social media has transformed shopping for white goods into a 24/7 activity, with the consumer firmly in the driving seat. As a result, manufacturers and retailers are under increasing pressure to deliver a seamless, joined-up consumer experience.
The appliance market remains very dependent on trends in fashion, design and technology. For example, the smart home has quickly gone from concept to affordable reality, so the pressure is on manufacturers to keep abreast of these changes and deliver at the same pace.
But the growth in consumer spending has not benefited all. Not all retailers were created equal and the consumer is spoilt for choice, as they can purchase appliances from a multitude of outlets. While discounters and online retailers have increased their profit margins, some physical retailers have found themselves out in the cold. With competition intensifying between physical and online retailers, showrooms and specialists will increasingly find themselves under pressure to adapt their business models to retain customers and embrace multichannel retailing, or at least investigate additional sales channels relevant to their customer base.
For bricks-and-mortar retailers, service will also be the key to winning the battle. Offering product expertise, enhanced warranties and product exclusives, will be the key to securing sales in the face of online discounters. I also believe that, in many ways, independents are better positioned to sell premium products, such as high-end range cookers.
The fact is that the way people shop has changed forever. Consumers have constant connectivity at their fingertips, and it is the ability to react to that change that will determine the sector’s future. I’m not saying that all retail should move online, but I do think off-line retailers need to embrace the differing devices consumers use on a daily basis. Basic changes, such as having a clear map and directions on your website and a mobile number with click-to-call functionality, could make all the difference.
Overall, an ever-growing retail base has to be good for all parties, especially the consumer. I believe that a multiple route to market increases customer service within the retailers and therefore improves the overall consumer experience in purchasing one of our products. The future of the sector is secure, it’s the suppliers that need to make sure that their quality is good and their customer service is better than the rest, as ultimately the consumer decides where they want to spend their money.
I believe we should embrace a growing retail environment as long as it adds value to your overall brand proposition. Technology is your friend. Mobile, video and social media can all help bring a product to life.
Retailers have to embrace and adopt new ways of attracting the customer into their premises. Once they have the consumer on-site, they then need to ensure they capture the order. Products have to be displayed and marketed well within the retail space and, most importantly, the sales people need to be product experts.
To support our customer base, we will need to develop further ‘protected product’ – exclusives for retailers. We already offer a number of ranges across our Belling, Stoves, New World and Lec brands, and relaunched the Valor brand exclusively for Euronics members. We hope to add to these product collections over the coming 12 months.
It’s a win-win situation with a wealth of choice, higher-quality products, improved service and more competitive pricing. I also believe that customers will look at other things when trying to distinguish between products, such as seeking out trusted brands, higher energy efficiency and the reassurance of quality customer care.