17 January 2010

It's tough at the middle

The latest update to the kbb News website carries two upbeat reports from companies that could not be more different.

On one hand we have the mighty Homebase with final quarter 09 results ahead of expectations thanks mainly, it says, to sales of big-ticket items such as kitchens.

And on the other hand we have a review of 2009 from Ripples - the 17-strong group of up-market bathroom showrooms where MD Paul Crow says that they too had a better than expected trading year, finishing just 12.5 percent down on the previous year.

What does this tell us? It certainly suggests that the KBB market may be starting to polarise between entry level and high end.

Forget the top; the middle is where it's getting tough! It is increasingly looking like the mid-market kitchen or bathroom offer is getting squeezed between a good looking entry level kitchen or bathroom and an obviously up-market kitchen or bathroom.

And if you have an 'ordinary' showroom that does not do justice to the mid-market products you sell, you do have a problem - and it isn't going to get any smaller.

If you are selling entry-level kitchens or bathrooms like Homebase, quality of service will probably be low down your customer's list of priorities. Their focus will be on price, or more likely, the humongous discount you are offering off of the 'list' price.

But if you are selling a product that demands a premium price, it will also demand a premium showroom and a premium level of service.

Ripples sell to 90 percent of those who book a site visit - that is a staggering closure rate!

Some of the sales will be down to the quality of the products on offer, but almost all of the products Ripples sell are also available from other showrooms and many of them will have cheap copies on sale in superstores too.

I'm prepared to bet my own weight in the Borough Market's finest chocolate brownies that many of the sales are down to the level of service Ripples offers its customers.

And the best bit of all (apart from the brownies that is), is that good service does not cost you any more than indifferent service.

1 comment:

  1. Ive decided to change my business name to Ripples. Out of perhaps 2000 bathroom showrooms in the Uk Ripples manage to be shortlisted again year after year for designer of the year catagories. I wish I was in their club....... However as a middle ground showroom with bathroom values of approx £15k we have seen an increase of over 50% in turnover 2008 - 2009. I thought it was going to be a rough ride, however it turned out quite the opposite. Qaulity products, excellent design and excellent installers provides the client a complete package and a trusted company to work with.