To keep the wheels turning

In Features On
- Updated

Surviving the current recession will require not only considerable business acumen and a good understanding of the market and the customer but also a robustly positive attitude, argued the speakers at the annual retra conference. Anna Ryland reports.

The theme of the 51st annual retra conference ‘Making it happen’ was indicative of the market imperatives which the electrical independent faces at the moment. Times are tougher than ever and independent retailers will have to demonstrate considerable skills and stamina to get through the next twelve months. Yet, “The British consumer has an insatiable desire for new technology. It’s also in the interest of the industry to maintain the independent channel with its heart and its skills,” said Steve Norman, retra president.

The tough market

The market facts are sobering. Nigel Catlow, business group director, CE at GfK, reminded the conference audience that the consumer confidence index is currently at an all time low level (-28%), and 14 points lower than in February 2010. Yet, the beginning of the replacement cycle helped to stabilise the domestic appliances market which in 2010 registered a marginal growth of 0.9%, while the value of consumer electronics declined by 7.3% in the same period. Good news came from the small appliances sector which grew by 10% due to product innovation. Growth opportunities are also in HD products which posted 85% increase and flat panel TV over 43in that grew by 39%.

The independent electrical retail market is contracting; from 5,571 stores in 1990 it was reduced to 2,999 in 2010.

Nevertheless there are a number of real market opportunities for the independent, pointed out Nigel Catlow. Among them are freestanding dishwashers with a price tag over £500, freestanding washers (in the £600+ price range), induction hobs and built-in ovens. In the television category, growth will come from the LED panels, Freeview HD, connected TV and 3DTV.

David Watkins, head of consumer electronics at market analysts FutureSource has confirmed that in the declining TV market, 3D and connected TV will drive replacements, with 3DTV predicted to grow at 80% by 2015 and connected TV at 41%. This will in turn stimulate additional sales of Blu-ray, home cinema products and gaming hardware. FutureSource predicts a simultaneous sales explosion of handheld connected devices, such as tablets, smartphones and e-readers. He also suggested that fast expanding gadget ownership offers accessory-related sales opportunities, such as 3D glasses, wi-fi dongles, headphones and cases.

The glance at the market from the perspective of the City was delivered by David Buik, investment banker and analyst in BGC Partnership, who confirmed that the recessionary pressures will not ease up until the end of 2011. He suggested, however, that the redeployment of public sector staff into the private sector will help retail which, in his belief, is key to the economic recovery. “Just hang there – you’re going to make it,” he encouraged the audience.

Digital and eco opportunities

Ford Ennals, CEO of Digital Radio UK, with the help of his colleagues Jane Oster and Lawrence Harrison, encouraged retailers to start turning their attention to the digital radio switchover. Although its date isn’t yet set, it offers the opportunity for 100 million radio replacements as 64% of customers in the UK still don’t have a digital radio. The government has requested radio manufacturers to install DAB radios in cars from 2013 and this issue is one of the fundamental factors, together with coverage, contents and communications for increasing penetration of digital radio in the UK.

Digital radio coverage is growing fast. The BBC is planning to construct 40 new transmitters by the end of 2012. Also the spate of new digital radio stations is proof that broadcasters treat digital radio as a serious business opportunity.

Richard Lindsay-Davies, director general of Digital TV Group, independent industry association for UK digital television providing support service for 60mln digital receiver sales, spoke about the popularity of digital television growing on the back of digital switchover. Yet, digital television presents the industry with a number of challenges, such as customer confusion about HD services, fast changing product and lifecycle and increased globalisation which may mean that certain standards agreed in the UK will not be applicable in the future.

The rapidly growing popularity of connected TV presents the industry with another set of opportunities. Susie Buckridge, head of commercial business planning at YouView, providing a seamless translation of catch up TV into a ‘normal’ TV format, argued that internet television gives retailers a chance to demonstrate their knowledge in service-based and installation propositions, such as YouView, and create incremental revenue from powerline adapters, upgraded HDMI cables, routers and second boxes.

The economic pressures together with growing costs of natural resources are channelling consumers’ interest in the direction of energy and water efficient appliances, stressed Douglas Herbison, chief executive of Amdea. The implementation of the new Energy Labelling Regulations and the Ecodesing Directive will in itself lead to wider acceptance of eco appliances but this will soon be followed by the introduction of ‘smart technology’. The government-endorsed ‘smart meters’ will allow consumers to monitor energy consumption of their appliances and adjust it according to the variable tariffs. “Future appliances will have to be designed not just for delayed operation but to respond to the varying energy levels.”

In this context becoming a ‘green retailer’ has to be seen as a market opportunity, suggested Mr Herbison.

Against all odds

There were two motivational speakers at the conference; one leading by example and another sharing useful management tips on how to survive the downturn.

The energy and enthusiasm of the ebullient Steve Scoggins, sales director of Stellison, an Essex-based independent with seven stores, left no doubt in anyone’s mind why his business is successful. Stellison owns every of his store sites freehold. It offers its customers a one-stop shop in terms of sales, service and installation and runs demonstration and cooking days in his stores. Steve chooses and sells the brands according to the level of support offered. His prices include service but the customer is made aware what he is paying for. He gains and keeps his customers by offering exceptional service: “We offer delivery and installation no matter how hard it is”. The company’s destination store in Chelmsford has a number of specialist centres, including Miele Centre, Rangemaster Design Centre, Stoves Range Cooker Centre, Neff AAR, Sony Centre and Samsung Shop in Shop. Looking to the future Steve stated: “We intend to expand our service department and increase the commercial offering and domestic servicing. Green products – it’s where we will make our money.”

Steve Clarke, business entrepreneur and author of How to thrive not just survive, illustrated how important the ‘can do’ attitude is in business. He argued that the ability to adapt to changing market realities and to identify new opportunities (including those offered by new media) will be key in the coming months.

Next annual retra conference will take place on 17 and 18 April 2012 in Hilton Hotel in Newcastle.


Explored by the industry panel

Q: What are the greatest challenges for electrical manufactures?

Sony’s Chris Bowen: Consumer confidence. This is also an obstacle for increasing the share of consumer discretionary spend on CE (currently standing at only 3%). Commoditisation of CE prod
ucts; the average CE purchase is £128.

Miele’s Simon Grathan: Maintaining the investment plan. An easy option would be to chase the sales volume. However it would compromise the brand and its integrity.

Samsung’s Andy Griffiths: Rebuilding customer confidence and reengaging customers with ‘hot’ products. To continue innovating. To find retailers who can deliver fast changing technology message.

Q: How will electrical retail landscape look in five years time?

GfK’s Nigel Catlow: There will be fewer retailers on the high street as supermarkets and the internet grow further. There will be a greater gap between the services provided by added value retailers and the generalist ones.

Shaunn Barrett, Baretts Digital World: There will be less retailers and they will have to find their niches. They will have to adopt to become multi-channel retailers.

You may also read!

Haier Smart Home awarded Sustainable Markets Initiative 2023 Terra Carta Seal

The Sustainable Markets Initiative today announced that Haier Smart Home, the number one company globally in major home appliances,


Major conference on electrical safety tackles full lifecycle of products

The clear focus of the 2023 Electrical Product Safety Conference was the importance of the whole product lifecycle –


Electrical Safety First featured in major royal book on shaping the UK’s future leadership

Electrical Safety First said it is delighted to be part of a select group of businesses and charities featured


Mobile Sliding Menu

©2021 Innovative Electrical Retailing. Datateam Business Media Limited. All rights reserved.
Registered in England No: 1771113. VAT No: 834 8567 90.
Registered Office: 15a London Road, Maidstone, Kent ME16 8LY