The Roiling, Broiling Retail Riot

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Scott WebbAt last count, we’ve got 57 comments on a letter we posted to the website entitled, “Dealers need to take a stand.”

I doubt if I need to elaborate on the substance of the letter too much; most people in the industry would have a pretty good idea.

Dealers have been through the wringer. Even the strongest and bravest, blessed with the most lucrative territories, get a sort of grim gleam in their eyes and offer up a veteran’s smile when you ask them about the last four or five years.

The recession and the housing crisis brutalized everyone who sells things that people don’t absolutely have to have, but what has really raised a groan from the brick-and-mortar retailers is the tremendous growth in Internet sales and the flip side of that same coin, the tremendous loss in dealership sales.

The twist of the knife has been lower, volume pricing offered to e-tailers, enabling them to, as the now-famous saying goes, “sell for less than the dealer’s cost” (through distribution).

There are more than 13,000 words of commentary on our website on just this letter. I won’t ask you to read them all — there are always some blowhards in the mix — but it’s worth a look. There’s some good thinking in there.

I don’t know how all this will shake out, but as a pure market capitalist, it seems like the market wants to break off aspects of the pool and spa retailer’s business and value them separately.

There’s the transactional part, the aftermarket/service/support part and the consultative/expertise part. For decades, these have all been intertwined, but the e-tailers are trying to peel away the transaction part (the juiciest and easiest).

They’re going to get some of it, whatever happens, but we’re finding that it does not break away as cleanly as some would like to think. Brick and mortar dealers can fight back in a number of ways (and they are rallying to do just that) but one is to focus on branding and defining the heretofore assumed parts of their business, so the market can get a clearer idea of what these things are really worth.

Somehow, we need to sharpen the awareness of pool and spa consumers of everything the dealership provides, and its true value.

Scott Webb

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