Shining Light on the Industry
Clemens: Overall, I think most of the manufacturers we represent are on the right track. Strict MAP policies, including online restrictions with real penalties for non-compliance, have definitely helped profitability and leveled the playing field with regard to price. This has allowed us to make a harder customer service pitch as a reason to shop with Grand.
In addition, many of the manufacturers we represent have renewed a commitment to training and marketing resources that had eroded in years past. The manufacturers that are doing these things have seen significant increases in sales and share with us in 2012. Those that haven’t have struggled.
Lavine: Manufacturers need to keep the UPPs and the MAPs, and hold steady with them. It’s helped us a little bit. In the store, you can do what you want. When you go to a website, it sometimes says something like ‘cheaper in cart.’ It’s a joke. They show the MAP, and you go to the cart, and it’s well below, with just a couple more clicks. The customer is not stupid; they know what to do. So I need manufacturers to be strong with their MAP policies, keep the margins up, and let people sell within their markets instead of selling into other states.
I’m tired of getting quotes from outside my state, where the customers have no intention of buying, but they have that price in their mind. Then, a good salesperson has to step off that piece and sell them something else that we make more money on. As an example, a customer comes in and wants the ‘A’ washer. We normally sell it for $599. They go on a website and it’s $499. I now have to see if I can sell ‘B’ at $549, and let them know they’ll get X number of better features. My guys can do it, whereas I could have sold the other model at $599. It makes it all much more complicated, and I feel bad for the vendor. The vendor’s product is being kicked around on the sales floor, and then a good sales floor is going to move around it and sell around it to make more money, and maybe even get the customer a better value. That’s the shame.
Every vendor during the day gets kicked, and not on purpose. It’s just that the customer sees it online for $499, and now my guys have to step off it or around it. The customers have a price in their head, and some have a brand in their head, but a good sales floor can step off any brand. The days of someone standing in the middle of a showroom and demanding a brand are pretty much over. We just tell them that Percy’s is the brand. That’s the first brand; the second brand we sell is the manufacturer.