Shining Light on the Industry
Clemens: This may be a cop-out answer, but labor and installation have been extremely profitable for us this year. In the past, our delivery drivers performed basic installs like range or laundry hookups, but were not equipped or trained for more involved installations like custom A/V systems or high-end, built-in kitchen appliances. So we would subcontract these services to a small network of companies that we trusted to perform quality work and provide excellent service.
Overall, we were pleased with their work, but wanted to have control over the process and final touch-points with the customer. We worked out deals with our best sub-contractors to bring them in as full-time employees, and as a result, have increased profits while vastly improving our level of service.
Our installation process is more efficient and unified, as customers can now schedule all services in one place rather than working with multiple companies to complete a sale. Now, whether it’s a standard delivery and hookup or a more complicated installation, the technicians come in Grand trucks, or in vans wearing Grand uniforms.
Plus, anyone in this business knows there will always be issues of some sort. But taking these services in-house has allowed us to eliminate all finger-pointing when a problem occurs, and instead focus on quickly and effectively solving the problem for the customer.
Dealerscope: Overall, what can manufacturers do to help you improve sales, profits and foot traffic that they haven’t done yet?
Oates: I’d like to see more differentiated product at a price that is not that significantly higher. They know which retailers can sell better product, and they should put the types of products in those places that actually encourage the proper presentation and proper pricing that goes along with the value the product offers. They have a UMRP price, if you will, because they know what goes on with those retailers who are not in the business of selling electronics. but rather of selling stock. And those dealers drive that top line, and analysts, in their infinite wisdom, look at that top line rather than the bottom line.
That is the way it’s been. If the vendor community is going to be growth-oriented, then they’ve got to have some product they can make money on. And those retailers who can demonstrate that they do inform the consumer of a product’s value should be rewarded for doing that. In many cases, we’re finding some encouraging signs that they’re recognizing that some of us understand that it’s good to make a profit.
If it takes diversification to make a profit, we’ll do that, but the danger is when the big boxes get into those categories, because they’ll destroy those too, thinking that the price is what drives their share. There is some truth to that, but when the consumer realizes that that lower price is all that they get, no one wins.
America, clearly, is overstored, and the vendor community has no discipline when it comes to who gets to sell their products; everybody gets to sell them. I’m OK with that, too; let the best retailers win because that’s the free market enterprise system at its best. But when the playing field is incredibly un-level, I have a problem with that.