Tuesday, November 14, 2006

Chapter 7 Why Retailers Turn A Deaf Ear

Our dedicated customers always ask us why we don’t have The Fitz Like A Glove™ Ironing Board Cover in every retail store in Australia. It’s almost like a failing on our part.

I used to want to hang my head in shame, but no more. Our quality is far too superior to appeal to most retailers. That’s not bragging, it’s unfortunately a fact of life. Major retailers think everyone wants to buy cheap. I call it the Wal-Mart/Big W/K Mart syndrome.

Sometimes we want cheap. But many times, we want quality. And we often yearn for something different. Don’t we?

When you shop in large Australian stores, do you ever wonder why there’s a sameness in product from store to store? It doesn’t matter what store you visit, everything looks the same. There’s little difference between David Jones, Myer, Coles, Woolworths, Big W, K Mart and Target.

Just about everyone complains that it’s very difficult to find something unusual. Do you?

I always wondered about this sameness. Until we ventured into the retail environment.

Major stores don’t buy product with their customers’ satisfaction in mind.

They buy product to make the most amount of money they can in the shortest time span. If enough of us don’t buy something within a proscribed period, they delete it and replace it with something else. No matter how good it might be.

Their buying criteria is very strict.

Let’s start with David Jones. A store I personally like and have made a number of large white goods purchases because they stand by their customer if you have a problem. I’ve been a cardholder there since 1970 and have never been let down by their customer service.

In the mid 90’s, our customers kept asking us why The Fitz Like A Glove™ Ironing Board Cover wasn’t in David Jones. They associate the quality of our cover with the quality sold by David Jones.

So I rang DJ’s. On the plus side, their buyer politely took my phone call. And explained to me that she knows who we are. Also knows people come to their stores asking for The Fitz Like A Glove™ Ironing Board Cover.

But they won’t stock it because we don’t go through a distributor. They have a policy of never buying one product only from a supplier.

Why? It’s an accounting issue. The Accounts Department doesn’t want to have too many invoices to pay at the end of the month. They prefer buying many items from one distributor. Even though this adds to the cost of any product. After all, the distributor wants their share as well.

We don’t have enough profit margin in our cover to add the distributor, David Jones and us into the profit share. You’d pay close to $75 for the cover if we did. Would you? I don’t think so.

So a door is closed.

And many small, innovative businesses that make superlative products within Australia find themselves cut off from the major stores for the same reason.

Stores like Peters of Kensington, Lincraft, Myer, all the chain stores, share a common policy. They don’t pay ‘freight’. They expect the manufacturer (us) to absorb the cost of getting their product to the stores. Many also pay their suppliers’ invoices in 60 days, a period most small businesses with limited or no overdraft, find difficult to manage.

It wasn’t so long ago that retailers paid cash for their goods before, or on, delivery. Before the behemoth stores like Woolworths and Coles began to dominate the retail industry and insisted all purchases be on account. It was a time when a manufacturer could make a decent profit and keep their manufacturing within Australia.

How long ago? Would you believe up until about 15 years ago?

When the Roth family owned Lincraft, the up market fabric and haberdashery chain, we had our cover in 30 of their 60 stores. It was a huge seller in Melbourne, Canberra, Sydney and Perth. When Philip Roth visited the stores, he expected to see The Fitz Like A Glove™ Ironing Board Cover on the shelves. He loved the cover because it was innovative and Australian made. And the family paid their suppliers religiously every 30 days.

When the Roth family sold their stores, the new buyer had a different perspective. Lincraft moved from a family owned, know your supplier and customer philosophy, to a discount store philosophy.

We received a letter curtly telling us the name of the new owner and his terms of trade. They were:- no price increases, no freight to be charged, and payment of our invoices every 90 days. The letter lacked empathy and interest in who we were and what we made.

We asked ourselves if this is how they’ll also treat customers. And decided, yes it was. So we withdrew our product immediately. And over time, Lincraft has become a shadow of its former self.

There’s a saying that if you swim with sharks, expect to be eaten. And large retailers are eating up Australian suppliers at a dangerous rate. If suppliers were animals, they’d now be on the endangered species list.

Many suppliers are told to compete with prices from third world countries, or be deleted from the retailers’ list. Which is why Made In Any Third World Country is the label most commonly seen on the bottom of, or sewn into, the goods you buy.

With this philosophy also comes a lack of customer care, customer service and knowledge about what they sell.

We have no department stores in my nearest regional centre, Bathurst NSW. All we have is K Mart and Big W. Plus a specialist appliance store, RetraVision, which has an enviable, helpful approach towards customer service and product knowledge. They are simply the best in product knowledge and customer care.

When my food processor did its last spin in the bowl, I went looking for a new one. Unfortunately, RetraVision doesn’t sell food processors. Big W and K Mart both do, albeit a limited range.

Big W has the largest range. When I managed to track down a shop assistant (an achievement in itself) for advice, I was stunned by her answer. "We receive no training and know nothing about any of these appliances. All we do is sell them. You’re supposed to know what you’re buying".

It’s this remote, no care and no responsibility, attitude that prompted our decision to stay out of the retail network.

And another.

As our customer, we’d be offended to discover a retailer told you they know nothing about our cover. To direct you to the packaging to find out whatever you might need to know that will help you make a decision, isn’t how we want you to be treated.

And yet another. We’re not prepared to be ordered to run our business to please anyone other than you.

Oh, and one more. We won’t cut corners to provide an ever-cheaper price and an ever-diminishing product quality.

Yes, there’s one more. We love helping you.

Let’s see. That makes us unacceptable to all large retailers!

Which is good. Because if we don’t swim with sharks, we can’t be eaten!

Developing a market and a customer following away from the retail sector is a hard road to travel. It requires constant energy and almost Sherlock Holmes type investigation to find you.

There’s no market segment called ‘ironer’ that we can tap into easily. Our customers are mums and dads, celebrities, professional men and women and hobbyist quilters and sewers dedicated to their craft. Plus schools, laundries, dressmakers, fashion and bridal gown designers. You come from all walks of life and all over the world.

You’re sometimes as hard to find as a needle in a haystack.

So why do we choose this path?

This is so old fashioned, but it’s true. Because we think pleasing you, one on one, is so much more rewarding.

We like the warm, fuzzy relationship we have with you. We really like seeing the family tree grow with your referrals and your word of mouth. We like your positive emails, your phone calls, your suggestions for new products and your friendship. Most of all, we just really like you!

Establishing our business like this is similar to travelling down the yellow brick road with Dorothy and her friends to find the Wizard Of Oz. Always interesting, often delightful, full of obstacles and the eternal hope for the happy ending where you love your Fitz Like A Glove™ Ironing Board Cover!

We have 75,000 covers in use around the world, and growing daily. All made with love and care in rural Australia by men and women who have a disability.

This is our reward. We have 75,000 customers who no longer buy their ironing board covers from major retailers.

To learn more about The Fitz Like A Glove™ Ironing Board Cover, visit our website at www.interfaceaustralia.com.

And there are more stories to come!

It’s 4AM and America is calling.
Wow! This is a small world!!

It’s always a pleasure to hear from you. Share your stories and comments with me.

Take care,


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1 comment:

Anonymous said...

just love your posting about the major retailers! how true!!!