BrainTrust Query: Bombshell – Major Brand Shutting Blinds to Online Sales
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
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?
- Online Shopping Bombshell: Major Consumer Product Manufacturer Closes the
Blinds – Retail Doc
- Hunter Douglas Announces New Internet Policy – Hunter Douglas/PRNewswire