BrainTrust Query: Bombshell – Major Brand Shutting Blinds to Online Sales

Discussion
Mar 30, 2010
Bob Phibbs

Commentary by Bob Phibbs, The Retail Doctor

Through a special arrangement, presented here for discussion is a summary
of a current article from the Retail Doc blog.

Manufacturers took a lot of flack when they opened distribution channels like
big box stores and sold to online retailers. As a business person, who could blame
them? To grow sales you need new ways of delivering your products to more customers.
That’s why Monday’s announcement by Hunter Douglas Window Fashions was
such a bombshell.

In a statement, the company said that effective June 1, 2010,
Hunter Douglas brand window coverings will no longer be sold through the internet
sales channel in the U.S. or Canada.

“We believe the American consumer is best served by purchasing from well-trained
and fully merchandised dealers who understand and appreciate our custom products
and consistently provide professional service and full support to their customers,
to assure thoroughly satisfying experiences with Hunter Douglas brand products,” said
Marv Hopkins, Hunter Douglas president and CEO, in the release. “By discontinuing
internet sales, we will lose some business in the near term. We are confident,
however, that this policy will further our goal of preserving and enhancing
the image, value and reputation of the Hunter Douglas brand and will also lead
to greater sales through our aligned dealer network over the longer term.”

This is a game changer. Hunter Douglas had sales of nearly $2.3 billion in
2009. This isn’t some little company with a few employees. And all we’ve been
hearing about lately is the growth of online shopping and, by extension, shopping
via mobile.

Online shopping is frequently only about price, not fit or service.
Hunter Douglas’ independent brick 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
brick and mortar dealers.

To help you see the impact of such a decision, imagine if Starbucks
eliminated all of their licensing agreements, such as those with United Airlines
and various supermarkets, so you could only find Starbucks in their coffeehouses
that used water filtration, the best brewing equipment and had extensive training.

Online isn’t the begin-all and end-all, it still only represents about
nine percent of total retail dollars. Brick and mortar stores aren’t going
away and here is a company willing to stake their future on the dealers who
made them successful. Other manufacturers need to look at this. Their
brands are subject to being commoditized as prices are reduced, something the
brand cannot manage online.

Discussion Questions: What do you think of Hunter Douglas’ decision
to forego internet selling in the U.S and Canada? What should guide a brand’s
decision on whether or not to sell on an e-commerce site or the internet at all?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

18 Comments on "BrainTrust Query: Bombshell – Major Brand Shutting Blinds to Online Sales"


Sort by:   newest | oldest | most voted
Paula Rosenblum
Guest
11 years 1 month ago

On the surface, this decision borders on lunacy. Sure, Hunter Douglas is a good brand, but let’s face it, it’s not that hard to make a set of blinds. And it’s not clear from the announcement whether or not a consumer can buy them through catalogs. And what about parts? Will those be available online? If not, I see an aftermarket opportunity.

I don’t think it’s a game changer, particularly. I think it’s an attempt by a strong brand to prevent brand erosion through price competition. And I think it will fail.

Cathy Hotka
Guest
11 years 1 month ago

The rationale for this move makes sense, but doesn’t Hunter Douglas shut the door on online orders from happy customers who want additional blinds after making a first purchase? It will be interesting to see what others think about online sales of other products that require specific measurements, like bras and jeans…

Max Goldberg
Guest
11 years 1 month ago

Some products sell well online, others don’t. Hunter Douglas’ decision to eliminate online sales should not have much impact on their bottom line — nor should their decision have much impact on consumers, as long as the company uses the web to convey extensive information about its products.

Does selling on the web commoditize a brand? That depends on the quality of the brand and the customer service behind it. Brands can build fantastic reputations and followings on the web, just as they can in other retail channels.

Hunter Douglas’ decision is not big news. It’s simply how one company prefers to sell its products; products that may not have been a good fit for the internet in the first place.

Doron Levy
Guest
Doron Levy
11 years 1 month ago
No online sales? Are they crazy? Nope. I think it’s a great move solely based on the type of product they sell. Fitting blinds is a tough job and it takes a certain skill to actually make the proper measurements. From what Bob says, it sounds like the bricks and mortar operation was an integral part of the sale as customers would come in for information and to fix mistakes (the customer probably made themselves). Aside from having a web presence, not being able to purchase online could be a big part of their brand image. “We love our customers and want to make sure that each and every one is satisfied and because of what our product is, we cannot accomplish that through online selling” could be the thought process behind this. Some things don’t work online. While some still try, groceries are a great example. Like window coverings, it’s something the customer has to touch, feel and taste to truly make the connection. Add the complicated measurement and installation procedures and now you… Read more »
Bill Emerson
Guest
Bill Emerson
11 years 1 month ago

In the specific case of Hunter Douglas, this decision makes sense. HD sells a very high quality product line with an equivalent price. Its products are more about design and “look” than about keeping the sunlight out or ensuring privacy. There is great value added in being able to see and touch the products and talk with a trained consultant about achieving a desired end result. In most cases, these are custom made and require a skilled installer. These attributes, in my opinion at least, work against an online approach.

I think any product line that has a high relative cost and an aspirational element fall into this category. It’s one of the reasons that high-end designer labels like Armani or Chanel are not big online businesses.

Is this a game changer? Absolutely not. What it signifies is that ecommerce is not a guaranteed success for every product category. Ecommerce as a distribution channel is simply maturing.

Kevin Graff
Guest
11 years 1 month ago

I’ve dealt with HD dealers who were constantly overrun with having to ‘fix’ online order problems (unfortunately usually caused by the customer). This had to prove to be a massive expense for the company and the dealers. It’s easy to understand why the company would move away from online orders. And, as someone who preaches about the importance of the staff interaction with customers I can doubly see why this makes sense.
There is a bigger picture however that a lot of other writers this morning have addressed related to maintaining an online presence. Until a solution can be found though that prevents the brand from being damaged because the customized blinds aren’t ‘made / ordered’ right, I think they’re on the right track.

Roger Selbert, Ph.D.
Guest
Roger Selbert, Ph.D.
11 years 1 month ago

At the very least, the retailer still should — I would say has to — maintain an excellent online presence to drive traffic to stores. Period.

Jonathan Marek
Guest
11 years 1 month ago

There is a lot more to online than ecommerce. Ecommerce is often expensive (if sub-scale) and is subject to massive price pressure. Shipping can be expensive (whether paid by retailer or consumer). Plus, there are some products you just want to physically go get.

The big win here will come if Hunter Douglas can take some of the resources focused on ecommerce and instead focus on other online activities, for example, online ads to drive store sales, customer service, perhaps social (with contractors?), etc.

Liz Crawford
Guest
11 years 1 month ago

I think the criteria for whether a brand should emphasize digital selling is the extent to which the shopper needs to do research. In this case, I believe shoppers are researching the category. What kinds of blinds are available? Colors and styles? What are the price ranges I could expect? Who are the major manufacturers or brands of blinds? Where should I go to buy them?

The search process should be facilitated online. The purchase may involve home visits – such as a Lumber Liquidator or CarpetOne – to ensure proper measurement and installation.

Doug Fleener
Guest
11 years 1 month ago

I think this makes a lot of sense since the retailer adds value to the purchase experience, resulting in a better product. If anything, you have to give them credit for picking a strategy and then betting on it.

Anne Bieler
Guest
Anne Bieler
11 years 1 month ago

Hunter Douglas has made the best move here. There truly is a difference in marketing “window treatments” and selling blinds online. For unfamiliar products that require custom fitting, online is a place where ordering errors can be a liability. Many things can go wrong – measuring to get the exact fit and look is not easy, especially if the shopper is not familiar with all the small details. There are many possibilities in style and color, and figuring this out from online images could be tricky.

Hunter Douglas offers a range of premium window coverings that provide a great look, often featured on home decorating shows, but require professional guidance to get it right. The margin for error for these products can be high. Meeting client expectations has to be the goal in deciding whether to market online or in other ways.

Bill Bittner
Guest
Bill Bittner
11 years 1 month ago

It is interesting that, as much as everyone talks about “customer first,” they all of a sudden realize how difficult they can be to serve. Retailers have known forever that dealing with the public is as much art as it is science. Especially when the product requires a lot of support, it only makes sense for manufacturers to rely on retailers to support the consumer.

The thought that manufacturers would also compete directly with their retail facilitators always seemed a little questionable. Unless your product is truly independent of the consumer environment and does not require any customization, I don’t see how a manufacturer can provide support. Maybe if manufacturers had delivery trucks and support staff to conduct installations it would work, but that is a whole new business model.

Steve Montgomery
Guest
11 years 1 month ago
Having just purchased Hunter Douglas blinds from an authorized dealer, I can tell you that having them come to the house, discuss the options, take the measurements and then install them with a quality assurance guarantee on the blinds and the install was well worth the cost. Actually, I am not sure of the cost difference because I would not consider ordering custom fit items online. There is too much chance of an error being made. Ask anyone who has done something as simple as ordering airline tickets online. I have been in a hurry and in the process of selecting dates, times, etc. and not noticed that the airline’s web site has reset the dates to their default. There is nothing like showing up for your return flight and finding the ticket is for a date two weeks in the future. The good news is that this can be fixed fairly quickly. Now think about the impact if you order blinds that are too long or to short – there is no easy fix.… Read more »
Craig Sundstrom
Guest
11 years 1 month ago

I think HD summed up very well the type of product that can’t – or shouldn’t – be sold online: one which is complex, or requires specialized knowledge to select.

Will some consumers be put off by this? Certainly…some rightly and some wrongly, but the latter group (i.e. freeloaders who want service but don’t want to pay for it) will be someone else’s headache to deal with.

Ed Dennis
Guest
Ed Dennis
11 years 1 month ago

Manufacturers, manufacture best. They are not used to dealing with the public and may not fully understand customer service as it is usually not a part of the normal ingrained service structure within their organization. Providing customer service is very demanding and requires that an organization be committed to quick listening. This is something even the best manufacturers lack. I think that Hunter Douglas waded into water that got very deep very quickly and chose to abandon this business to others. It will cost them in the long run as what they were doing was not impossible but required more of a commitment than opening a self service web site. Selling directly to the consumer will require a commitment to customer service, especially if you aren’t the only game in town.

Ronald D. Mayes
Guest
Ronald D. Mayes
11 years 1 month ago

The piece of the puzzle not shared was customer satisfaction and cost of returns from online orders. Blinds are not consumables. If the fit, color or texture is not right you are either stuck for the duration (less than fully satisfied) or you return the product, which is costly. Your average weekend do-it-yourselfer can easily make a mistake. If you are doing an entire house and you repeat the same error for each window, that can create a huge return and scrap. I applaud HD for doing what is best for the end user, their distributors, their image and ultimately their bottom line.

Nigel Fenwick
Guest
Nigel Fenwick
11 years 1 month ago

While the desire to maintain the customer service that goes with the product makes complete sense, what I’m curious about is why they didn’t move to a hybrid online model whereby the ability to order online is provided by Hunter Douglas, with any inquiries/orders passed through to the local dealer. Coupon codes from local dealers would still allow them to offer promotions to their customers while HD would have the added benefit of providing a value-add service to their dealers rather than simply pointing online shoppers to their local dealers. Maintaining purchase history for customers in conjunction with their online site would allow customers to go online and place replacement orders as needed.

Mark Price
Guest
Mark Price
11 years 1 month ago
The answer to whether or not Hunter Douglas made a correct decision in closing down their ecommerce business should be based on the needs of their customer segments. Ultimately, the customer, not the channel, is the one that is providing the paychecks for Hunter Douglas and is the one that the company must satisfy to make a profitable business. I do not agree that all web sales are solely price-driven. After all, I do not price-shop books; I buy from Amazon because they have all my shipping and credit card info, and also make good recommendations to me. If their site was simply transaction-focused, I would price shop, though. I think that is what happened to H-D. A simple transaction site is highly prone to price shopping and will attract customers seeking the lowest price, period. But many companies in H-D’s space are creating value-added sites, with lots of good materials to help customers choose the right products and then clean links to recommended local providers of their products and services. Relationship-building DOES work online;… Read more »
wpDiscuz

Take Our Instant Poll

What’s the likelihood that many other brands will also eventually exit internet selling?

View Results

Loading ... Loading ...