Manufacturers took a lot of flack when they opened distribution channels like big box stores and sold to online retailers. As a businessman, who could blame them? To grow sales you need new ways of delivering your products to more customers.
That’s why the announcement by Hunter Douglas Window Fashions Monday was such a bombshell. In an email President & CEO Marv Hopkins said in part, “We have made the decision to cease sales of all Hunter Douglas brand products through the large and growing Internet sales channel, effective June 1, 2010. By discontinuing Internet sales, Hunter Douglas will lose significant sales volume in the near term. We are confident, however, that this policy will best serve our goal of preserving and enhancing our brand image and reputation and will also lead to far greater sales through our Aligned Dealer network over the long term.”
This is a game changer. All we’ve been hearing about lately is the growth of online shopping and by extension shopping via mobile. With this move Hunter Douglas has said, ‘Even if it hurts sales, we’ll control our brand, our standards and customer satisfaction.’ They have embraced the expertise of their extensive dealer network and in particular their top-tier Gallery dealers who have invested tens of thousands of dollars in fixtures where you can see all of their products in actual windows, sales training, e-learning and product knowledge. This is their reward.
Hunter Douglas sold nearly $2.3 billion in 2009, this isn’t some little company with a few employees.
Online shopping is frequently only about price, not fit or service. Hunter Douglas’ independent bricks and mortar dealers were the ones performing the hard work of explaining to the customer what their options were and then being rewarded fixing possible mistakes when the customer ordered online. They have expanded their dealer tools and web presence to drive business to their bricks and mortar dealers.
To help you see the impact of such a decision, look at this like Starbucks eliminating all of their licensing agreements with places like United airlines or various supermarkets so you could only find Starbucks in their coffeehouses that used water filtration, the best brewing equipment and had extensive training. They wouldn’t let others undermine their quality name. You can learn more about their strategy from these quotes from Hunter Douglas VP of Merchandising Joe Jankoski.
Online isn’t the begin all and end all, it still only represents about 9% of total retail dollars. Bricks and mortar stores aren’t going away and here is a company willing to stake their future to the dealers who made them successful. Other manufacturers need to look at this because their brands can be commoditized as they are reduced to price and the brand cannot manage that online.
Maybe there’s a lesson for your bricks and mortar stores as well. Instead of chasing the fickle coupon clipping, Internet scouring cheapskates who often cause more problems then they attract, focus on your core customers. Reward them with the integrity of your brand providing an exceptional experience and hold them tight so they know their number one priority is them – not some faceless keystroke.
Take a look at January’s price for Sarah Palin’s Going Rogue. List price was $28, Amazon had it for $9.98. That’s probably $5 below what the average small bookstore would pay for it exclusive of shipping.
