Choosing Your Firm's Future: .com or
by: Stephen Vlachos, CKD, CBD
How do we weather the elements? Is there a plan in place? Should we open an umbrella or should we head for higher ground? Yes, it's definitely decision time.
One of my favorite parts about participating in the Business Owners' Symposiums and K&BDN- and NKBA-sponsored Managing For Profit seminars is that we get to ask the group of attendees where they think our industry is heading. Their opinions about the future are always varied. One of the most common beliefs, however, is that there will always be a place for the small, traditional dealer, as long as that dealer offers great design and great service.
This common prognostication may, in fact, be true. But I doubt it.
I think we should use our advantage of being able to look at what has happened in other industries. Take drugstores, for instance. A few years ago, almost every neighborhood had a corner pharmacy. I can just picture a group of pharmacists sitting around at a seminar six or seven years ago, telling each other that there would always be place for their businesses, as long as they offered great customer service. As we know now, they were kidding themselves, probably just telling each other what they wanted to hear.
Is our industry doing the same thing? Looking further at pharmacists, I'll bet that six or seven years ago, they perceived the threat to their livelihood to be superstores like Rite-Aid or Walgreens. But who, in fact, became the world's leading drugstore? WalMart! They probably had no idea that WalMart was even entering the pharmacy business. Even more amazing, as soon as WalMart made it to the top of the heap, its pharmaceutical sales started getting clobbered. Who could beat up WalMart? Drugstore .com.
The whole .com thing is just incredible. Only a few years ago, local bookstores were faced with the emergence of superstores like Borders and Barnes & Noble. Not unlike many kitchen dealers and druggists, I am sure that a goodly number of booksellers decided that if they just offered great service, they would do just fine.
Could they possibly have imagined that the bigger threat would be Amazon.com? Probably not. How long did it take Amazon.com to become the world's largest bookstore? Two years!
Up until then, we all would have considered the book selling business to be a mature industry. Yet it was completely revolutionized in only 24 months. Even more stunning, when Amazon.com decided to go into the music business, how long did it take for it to become the world's largest music store? Seven days! That's right, seven days from nowhere to the top.
How does that apply to those of us in the kitchen and bath industry? Let's assume that you're a kitchen dealership that offers absolutely great service. Your showroom is beautiful. Your staff is exceptionally well trained. Your customers love you.
But let's say that a previous, satisfied customer has a leaky faucet. The customer knows that it has to be replaced. Both the husband and wife work all day. When are they going to be able to visit your wonderful showroom? Their evenings are filled with preparing dinner and helping kids with homework. Can they live with the faucet until they're finally able to coordinate their schedule with your showroom hours? Maybe. Do they have any other option? Absolutely!
In a matter of minutes, they can visit faucet.com. They can shop while you're home in bed. The selection is huge. The pricing is good. The faucet can arrive on their doorstep within 48 hours. Do these customers still love you? Sure they do. Will they think of you first when they next need to go shopping? Hint: no.
You may think ,"This doesn't apply to me. We're in the design business. No one can design for a customer over the Internet." Don't think so? Well, think again. Every day, thousands of people communicate via e-mail. They make travel reservations on the 'Net. They pay bills online. They can certainly, then, transmit kitchen and bath measurements this way.
They also are familiar with sending and receiving colored pictures and images. This new, sophisticated consumer knows all about filling out online survey forms. It's really not much different from filling out the survey form with you in your showroom. To do it with you, however, they need to make an appointment. Doing it on-line can be done at their convenience.
Plans can be transmitted online. Drawings reviewed. Real time conversations can replace in-person meetings. Designer and client can both review plans at the same time in cyberspace. Quality color images can be sent via computer showing up-close door style edge treatments. Colors transmitted via the Internet are real enough to give clients a feel for what they would like.
Final construction authorization could be obtained by
overnighting a door or wood color sample for customer approval. Is
this being done today? You better believe it! Is this the future?
Only five years ago, most kitchen and bath dealers felt that you couldn't even provide consumers with custom plans done on a computer. For some reason, many of us felt that plans had to be hand drawn. Now, sophisticated consumers may wonder what's wrong with you if you're not using a CAD system. In fact, many customers are trying out at-home CAD programs before they even come into our showrooms. Wouldn't it be a natural extension for these techno savvy folks to want increased online shopping opportunities, as well? I think it's a no brainer.
No matter what I say, some of you are convinced that being "wired" is not an important part of your future. Consider, then, the expansion of the Home Expo chain of stores. There are over 200 of these stores planned for opening over the next few years. Furthermore, they're not alone. There are several other well-heeled groups forming that plan on going after the same market as Home Expo.
Whose clients are these big guys hoping to capture? Yours! Whose employees will they be looking to hire? Yours! Which manufacturers will they be seeking exclusive arrangements from? Yours! These guys look at us Mom & Pop businesses as a food group they want to eat us for lunch.
Is this a doomsday column? It doesn't have to be. I just want to make the point that profound industry changes are upon us. Our most serious competition may come from online vendors, or it could come from the various groups of heavyweights that plan on launching kitchen and bath superstores. No matter which way you see it, it's important to accept that it's going to happen. Otherwise, your biggest competitor will be the one you face in the mirror every morning. Either way, though, the greatest impact on our business will no longer come from the competitor across town. Its what's out on the horizon that matters most.
I am reminded of the famous fable where the town learns that there is a leak in the dike. Some folks ran for the hills. Others decided to do nothing and ignore the news. I'm sure there were folks who chose to simply put on their boots, thinking it might get a little damp. Eventually, one young man went and stuck his finger in the dike and stopped the leak. Very courageous but very short term!
As a Mom & Pop style kitchen and bath dealer, I swear I can hear the drip, drip, dripping of the leak in the dike. If you close your eyes and concentrate I'll bet you can hear it, too. Now what do you do? It's decision time.