Before taking over the 138-year-old family business, Mark Bissell received an Ivy League education and made his mark on Wall Street with Chase Manhattan. His tenure as Bissell’s chairman and CEO has seen the famous brand overtake Hoover to be number one in the United States. Mark Bissell spoke with Appliance Retailer editor Patrick Avenell from his office in Grand Rapids, Michigan.
What trends have you observed in the global floorcare market?
The trends that we are seeing are around convenience, ease of use and cordless technology. A lot of this is focused on hard floors. Wall-to-wall carpeting is big in Western countries, including Australia, but not in the developing world.
The rise of the internet is changing the industry. A lot of the big players in the online space are doing big numbers very quickly. Traditional retail is still important but I think online growth has surprised us in terms of how much business is being done as quickly as it has been done on the internet.
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What percentage of Bissell’s sales is being transacted online?
I wouldn’t want to be that specific — I don’t know that I could because it varies so much by country —but it is definitely growing in all the countries we are in. A lot of that can be with our retail partners and their websites.
You have Amazon, which is just a pure player, but when I look our traditional retailers, they for the most part all have websites and all of those businesses are growing. Probably the largest online business here in the United States would be pushing just over 10 per cent in our category.
So if I look at a retailer’s sales — 10 per cent of that would be done online — it is still a small number but growing much quicker than the core retail business would be.
Is this online growth putting downward pressure on prices and margins?
There are some real channel management issues here but everybody needs to make a margin, including the online sites.
Where I think we’ve all gotten a little sideways is when a website is a platform for other retailers to sell off some product. You then get some strange prices that aren’t really reflective of the day-to-day prices, but someone’s liquidating 10 units or 100 units or 1,000 units and the pricing can get skewed around that, if you have retailers promoting that they will match any price.
If you have a vac shop in Brooklyn, New York that is liquidating 20 units do you really want them to be the price leader for everyone else? There are ways to contain it but it is an issue that I think everyone is aware of.
Bissell is number one in America — what do you need to do to get to number one in Australia?
We have started with a great business in Australia around deep cleaning, we then expanded into hard floor and our new vac and steam that is coming to market is going to be a great item.
We had a couple of good steam launches recently with Power Fresh and with AirRam, but we’ve been a smaller player in the core business of vacuums.
For us to be a significant market share player in Australia we have got to get into vacuums in a bigger way. We have some plans to do that but it is not just about numbers. We have worked our way to the number one position here in the US, and while we always want to grow, we want to make sure we are growing strategically and in a way that is sustainable.
Australia is a fantastic market for us and we have had some good growth but we are still small from a market share standpoint because of that vacuum business.
Handheld and portable vacuums are very popular right now — what are your plans in that space?
We are launching a very nice looking and high performing stick vac which has a removal hand-vac portion. We have a unit now that has done very well but this is a much more eloquent execution, and that is going to come out later this year, in the third or fourth quarter. We think that is going to be a good item for us globally.
Bissell was recently involved in legal action brought by Dyson over false advertising claims — what happened there?
We were able to resolve that issue and I can’t really go into it because we have non-disclosure agreements but we were able to mutually resolve the dispute to both parties’ satisfaction.
Floorcare is very competitive in Australia — is it similar in the US?
Yes, it is very competitive, both from an intellectual property standpoint and, if you look at the amount of advertising money that is spent for the size of our industry, it is very high compared to any other I know of. It’s a very competitive landscape.
What does the future hold for Bissell?
Global growth is really important. Our goal is to continue to grow in all of the key markets that we are in. I think developing markets offer a lot of opportunity but you are talking about changing habits — it’s going to be a slower build — but I am confident that we are going to continue to grow in these international markets because we have a value proposition that is going to be very powerful to the consumer.