As it celebrates three years in business.
How has the first half of 2016 been for your business?
We are delighted with the first half of 2016, recording consistent growth in sales and profitability over the same period last year. We have ramped up our marketing activity, signed on new members, enlisted new suppliers, and as a consequence we are seeing a really positive upward trend in our business. Having just celebrated our third birthday, the Leading Appliances brand is becoming more established and recognized and as a result, customer awareness and loyalty is reflected in our sales results. It must be said, however, that as a majority of our members are in regional townships, they are subject to the nuances of their local regions, and are affected by issues such as drought, factory and mining closures and youth unemployment. A lot of our members face ongoing and challenging circumstances in their local communities, but they are resilient and remain stoic, positive and proactive.
What are your predictions for the second half of the year?
Whilst the retail sector remains challenging, there are some green shoots in the general economy, and consumer confidence is starting to consolidate. Our economy has grown at 3% in the past 12 months, and the Consumer Sentiment Index has consistently been above 100, where optimists outnumber pessimists, since November. The demise of Masters and Dick Smith doesn’t help consumer market perceptions, but I am very bullish about the second half of 2016, and expect our growth trend to continue. We are launching a national TV advertising campaign in June, we have the Olympics in August, and there will be other opportunities throughout the second half of the year to drive business in the lead up to Christmas.
What opportunities do you see for the electrical retailing industry?
The Leading Appliances business dictum is ‘Real Service, Real People’ and we are clearly focused on the level and quality of customer service we provide our customers. I believe the greatest opportunity for our industry is a renewed focus on improved levels of customer service to overcome the debilitating ‘price down’ mentality that pervades our industry. Stepping away from price discounting for no tangible reason and a return to quality, professional, friendly and knowledgeable customer service is a glaring opportunity for the industry. Those suppliers who invest in staff training will benefit most from this, as an educated, informed sales person will sell the features, benefits and virtues of their products, not just the price.
What threats are currently present in the industry?
The race to the bottom in search of market share has led to ongoing price and profit pressures for all retailers. This is a huge threat to the industry, because as profits decrease pressure comes to bear on all stakeholders. This transcends across to ecommerce, and the fact that many retailers have forgotten that the main reason consumers shop online is not price, but convenience. The focus must move away from not who can be the cheapest, but who can provide the best service and most professional and satisfying shopping experience for the consumer. We have the advantage of being an exciting technology-driven sector, which engages consumers, so we need to focus on the product, the features, the new technologies resulting from the Internet of Things (IoT), and stop driving prices down.
What is your favourite product for 2016 so far?
Laundry products are a major component of our business, and we have seen a directional focus from the major brands on a ‘bigger is better’ product adaptation in recent times. Washing machines are now available with a huge 10kg capacity, and the new Simpson 10kg top load washing machine (SWT1042A) is a personal favourite.