The Big Shift in Market share
I was trying to fall asleep the other night reading one of my blogs (which typically works), and the one thought that just kept circling back around was, “without strong leadership in an organization, none of this matters.” More on this subject later. A lot more.
Quick story: This week on the local news, they had a story about a hardware store in Alexandria, VA that has been around for more than 50 years. The owner is retiring and ready to sell it, but it didn’t sound like there were many, if any, buyers lined up. The store is called “Executive Lock and Key”. The newscaster began to reminisce about these types of neighborhood stores and how sad it was to see them go. I certainly don’t like to see someone put their life into a business only to see it fade away without reaping any return at the end. Unfortunately, I think that is going to happen more often than we want over the next 5 years.
It’s the natural progression of a huge, antiquated and extremely fragmented industry. Why do companies go out of business, you ask? It starts because customers stop buying from them. Plain and simple. Unless you want an ending like Executive Lock and Key had, I suggest that you put serious thoughts into planning for the future. This may not have been as important in the past but it’s going to be absolutely critical for the future.
Revamping your business is not on an overnight schedule, it’s a step-by-step process. Changing from being the Flintstone’s to the Jetson’s is going to involve some time and energy. For those who are planning on getting out of the industry and selling their business in the next 5 years, I have news for you; If you are the glue that holds your company together, what’s going to be the value once you’re removed from the equation?
For estimation purposes, let’s say that just the Kitchen & Bath part of the industry is at 60 billion. Here is a rough guess on how I think it breaks out:
Now don’t go blowing a gasket because you think something is off a point or two. Fragmented industries have a real flare for muddling the numbers and leaving guesstimates as your only choice.
So, let’s not skip over the crux. Multi-retail locations are on the rise and that trend is not going to slow down any time soon. Why? One word…opportunity. They look at the competition and say, “we can do better”. Nobody, and I mean nobody moves to opening or acquiring more stores because there is a “slight” chance they can win, but overconfidence may also be the downfall of these larger entities. If they don’t stay quick and nimble, they too can lag behind the eight ball.
Just a note on the multi-retail front, Wren Kitchens is not slowing down. They have 110 showrooms in the UK and about 12 already in the US with a lot more coming. Eyes open everyone!
Now I know a lot of Dealers are thinking their personalized service will win the day with consumers. I agree with that statement. Customer service is a great foundation to build your business on. So let me ask this question and be honest with yourself when you answer it. How many customer service training classes do your people attend during a year? These can also include internal classes you set up. So, what do you think? Is 12 a good guess? (Like once a month) or once every 2 months? I could keep going but I think we already know the answer to that question. A lot fewer if ever!
Why? It’s not that you wouldn’t want to have more but there are two challenges that the owner is faced with. Time and Resources. Everybody is always busy running around and pulling something together and it gets pushed off because urgent always wins over important. I’m guilty of this myself.
Access to resources will be paramount for independent dealers. Training, marketing, recruiting etc. In one word, outsource. Even with multi-location retailers it’s hard to have all these resources internally, much less for a single location dealer. All of this is going to become very important in the coming years. Advances in technology are going to change the way we do business with customers from the first on-line interaction all the way to the customer after-care program. (You have one, right? 😊)
So, let’s just cut to the chase on why market share is going to shift in a big way. It’s pretty much the same reason it always does. (Not product in this case. Service will lead most of the way) Consumers will migrate their buying habits based on the following:
- Customer Experience – From convenience, touch points, design, project performance, communication etc. All wrapped up in a pretty package with a bow on top!
- Value – Do they feel like the service and product they are receiving is good value for the money they are spending?
- Trust and Loyalty to the brand. – Have you been able to create armies of raving fans? Are customers singing your praises from the rooftops? If you want to experience a lot of growth, I think the “one and done” approach ain’t going to kick it!
Well, the midnight oil is running low and so am I. There is a bit more on the subject that will need to be explored in Blog VII, part 2. Until then, start thinking about where you or your business wants to be in 5 years.
It’s a new world, become a student!
Let’s do this! thad