Two Types of Highways Impacting Industries in a Similar Way
Well, we are back in the saddle after a week off laying on Coogee Beach in Australia. Today I am headed up to Sydney to visit the famous Opera House and walk around the Harbor a bit. Soon enough, my Aussie brothers will show up and I’ll be asking questions like “How you going” or stating it’s “My shout Mate” but not yet. (When I dream about getting away, I like to go big!)
Time for the business at hand. In our last blog, we discussed whether the industry is ripe for disruption. It’s not of course, we just need to teach the horses to run faster… 😊
Well of course it is and typically there are a combination of things that cause it and not just one particular thing. Like Blockbusters vs. streaming or horse and buggy vs the automobile. These wars for domination were over before the first shot was fired.
The disruption in our Industry will likely be one of accelerating attrition. The many (like 35,000 Dealers) will start downsizing quickly to the few (10,000 Dealers). And if you’re in the mindset of “It ain’t going to happen”, let’s look somewhere else. The great thing about looking at outside industries is that they can tell you possible outcomes of your own if you take the time to learn from them.
The restaurant business is a good example. If you look across the landscape these days, it’s peppered with chain restaurants up and down the boulevard. Well guess what? It wasn’t always like that. What changed it? If you guessed Interstate Highways, you would have been spot on! Back in the 50’s, the U.S. really started the process of adding more of those paved connections to other areas of the country. This is what drove people to travel more, which lead to them eating out more. Before this happened, most restaurants were owned by independent Mom & Pop/Family businesses.
Sound familiar? Today, about 45% of restaurants are considered part of a chain. That’s why you don’t see the number of Dealers going from 35,000 to 3,500 or less. That type of model was the way the local hardware stores went. Massive competitors started showing up, like Lowes, Home Depot, Ace Hardware etc. and the game changed more dramatically by shifting a majority of the market share to a few companies and only leaving a smattering of local hardware stores to fend for themselves. The reason it won’t go down that way in our industry is due to the complexities of the business and the personal attention customers need. It’s not like selling hammers and we should thank our lucky stars that it’s not!
The Highway that will impact our industry is the on-line experience. You may think that consumers are already getting that, but you haven’ t seen nuthin yet! This digital interstate has no speed limit and we’re used to driving at 65 MPH. Imagine Metaverse showrooms with personal avatars to help with selections and designs. If you look at the current processes that make up the customer’s journey, is there room for improvement? (That was a rhetorical question 😊)
But to be able to offer and keep that type of cutting-edge technology, you need resources, money, and people. The type that a Kitchen and Bath Dealer selling a couple million dollars a year probably can’t afford. So here are some options that they Independent Dealer might be looking at:
- Go solo or go home…the latter is probably more likely.
- Build your business through acquisition and organic growth.
- Plan on selling your business when the people in #2 come knocking.
- Join a franchise.
- Stay solo for now but join a Buying Group that is focused on the future. Then decide if you want to buy or sell.
Okay, I am well past my bedtime and my deadline. We have about 3 more blogs to tighten up any loose ends on this whole industry disruption idea, so until then…. thad
- Stop working and look around.
- Get curious about stuff.
- Be bold and become a decisive leader!
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