Manufacturers make alliances — friend or foe?
Casual Living Staff -- Casual Living, February 15, 2006
Over the last 10 years I've witnessed many trends and changes, from polished brass switching to wrought iron, white wicker switching to dark stripes, stripes to solids and back to stripes. But there is another trend that has consistently made life as a specialty retailer more difficult. Manufacturers are building major name brand recognition in smaller specialty stores, only to take them to the mass merchants.
Did I just see a Ducane in Home Depot? Vermont Castings is right next to them, but didn't Majestic have a "no mass merchant" policy? Now others are entering the fray and while it will surely increase their sales, what will it cost small retailers? The truth is, for every explanation we've heard that it's not the same product, there is a line of customers wanting to buy this grill or that patio set for ½ off the specialty store price with little explanation as to why it cost less. No stocking of parts, no service teams, no installation crews, all of which cost us and have to be billed into our margins.
Customers will seek out great grilling products, not to mention top of the line umbrellas, patio groups and accessories. They will search for outdoor fireplaces and fire pits for their outdoor entertainment. If those are not available in every mass merchant store, then they would buy from us, the specialty retailer.
Some manufacturers are moving production offshore to get their products made cheaper, to meet the lower margin demands of the big box stores, while using the same logos and brand images we've labored for years to build. What happens when these offshore products fail in 24–36 months? It leaves a mess for us, the small retailers, to clean up. It looks the same to the customer, but we know the truth — American-made products tend to hold up better over time and are much easier to deal with warranty claims and delivery schedules, not to mention special order scenarios.
It really frustrates me to see the overseas grill manufacturers show up at the HPBA show, get our opinions and ideas and take them straight to the big boxes. Why do we, specialty retailers, allow this trend to continue? I, for one, now look for manufacturers who don't sell to mass merchants. I look for American-made products where I can find them and remain loyal to manufacturers that have remained loyal to us.
We no longer install or service products sold through mass merchants. Our professional services are part of what my customers pay for. They expect it from a specialty store and they get it. I understand that the boxes are going to sell grills and patio sets, and I know I can offer an alternative for people who can see the difference, but when the name is the same, or when it falsely represents the quality of a high end manufacturer, just by using its name, well that is just wrong.
I also understand an opinion piece like this may leave me to be the "Jerry McGuire" of my industry, but I believe many retailers feel the same as I do and there is something we can do about it. You can be profitable without competing with mass merchants. You can be successful as a "specialty" retailer.
Customers, designers and retailers set the trends and the mass merchants attack us for it. The truth is, I shop at the boxes when I have to, but I'd rather buy paint from my local paint store, hammers and nails from my local hardware store, and carpet from my local carpet store.
I don't really believe these manufactures are out to pick on the small retailers. I'm just not convinced they know what damage they are causing by selling to these "super" stores. I used to look at some of our leading manufacturers as friends of the industry, but now I'm not so sure. I also wonder why, as a HPBA member, our leaders in this industry seem to have turned a blind eye to the whole thing.
How many TEC dealers even know that by 2007, Charbroil will have infra-red burners by TEC for under $799? I didn't see that fax go out to their existing dealer base. Nor did I see a letter of information from BJI letting us know that Wal-Mart was the new Winsloew dealer in town.
The folks who have staved off the big box store craze are the ones who seem to best work through warranty problems, and set new trends not just follow them. These are MY friends. These are the manufacturers who make it easier for my business to thrive. These are the manufacturers that help me to expand opportunities for my family and employees, not to mention our community.
Consumers want to buy their goods from people they trust and can service their products and needs, all while building lasting relationships.
Funny thing is, as a specialty casual retailer, that's what we provide to our customers, and we expect no less from our vendors.
Clay Dennis, Southern Hearth & Patio