How did business relationships hold up during COVID?
In this issue we talk about manufacturer/dealer relationships and how they’ve changed because of the pandemic. This kind of story makes me nervous because the chances that we make someone mad are high, and I don’t like people being mad at me. But I feel we have to talk about this as an industry. Can you be exclusive to one manufacturer going forward? We’ve seen the manufacturers work hard over the last 10 years to fill in their lines with all the price points a dealer could need, undoubtedly hoping their brand is the only one on a floor with no cross-aisle competition. That model worked really, really well for some manufacturers and dealers.
And then a pandemic led to global supply-chain stress and the closure of manufacturing facilities worldwide. We’ve talked ad nauseum about that, as well as the demand and lead times that followed.
I have talked to few retailers who stuck with a single brand in 2020. Even if a dealer has a great relationship with their manufacturer and were happy with the volume of hot tubs received, it wasn’t enough. “If I could have had an infinite number of hot tubs, I would have sold them” is what every retailer I spoke to has said, almost verbatim. In many cases, even the most loyal brand ambassadors had to go elsewhere to find more hot tubs.
And let’s be honest: No one is going to go on the record saying they are dissatisfied with a current supplier. That doesn’t serve their interests. No one will speak openly about subpar treatment in the midst of chaos, but I’ve talked to retailers who feel that way, and I know you have too. There’s mistrust, jealousy and hurt feelings over how some circumstances were handled.
Ultimately, what will the fallout be? Some retailers will move to manufacturers they believe will serve them better. Others, despite being happy with their main supplier overall, will always keep a secondary line on their floor, just in case. Still others will carry on as before — business as usual. Until lead times get back to normal, we’re not going to know the full extent of how manufacturer/dealer relationships were either strengthened or harmed throughout this crazy time. A lot of these decisions will come down to the basic principles you use to run your business and how comfortable you are with perceived risk. There is going to be a lot we can learn and take from running businesses through the pandemic, but it probably isn’t time to start abandoning fundamentals, or suppliers, that got you here.
P.S. I’d like to personally wish Mike Dunn a happy retirement. You can read about his life in the industry on page 34, but he’s also been a great cheerleader of SpaRetailer and I have always appreciated his perspective and occasional guidance as I have helmed the brand.