The Supply Chain
Updated: Jun 30, 2022
An interesting article below published by the KBB magazine about kitchen supply issues. Bathrooms are also affected, but fortunately at present only by a few weeks on some specific items as they are not so complex in supply and contain much less in electrical appliances. The article highlights the challenges us retailers endure to ensure customer satisfaction and expectations. In addition, the problem is also compounded by ever increasing retail prices and therefore holding prices quoted for any more than 30 days cannot always be achieved as we did before.
Are supply shortages hurting customer relationships?
Retailers are losing out on jobs due to supply shortages and long lead times, which are damaging customer relationships.
KBB magazine polled their expert group of retailers, the kbbreview100, to find out if product delays are damaging customer relationships. The majority report that customers are already aware of the delays and so understanding there might be long lead times.
However, some retailers told kbbreview that being upfront about, for example, a 16-week wait for a kitchen, has made some customers decide to not go ahead with a project. Letting a customer know at the point of enquiry can manage a customer’s expectations, but Stewart Woodruff, owner of MBK Design studio in Maidstone, has found that his realistic lead times have lost him jobs.
Woodruff said: “Customer relations can be damaged, although if you are up front it’s not an issue, however if you are a kitchen-only showroom you have to quote 16 weeks for delivery to allow for the appliances to arrive, not everyone wants to wait that long. Luckily, most customers are understanding, but we are losing customers as we have to advise the lead times on first contact with them, so if they don’t come as a result of that bad news and potential loss of revenue.”
Customers are aware of delays in the KBB industry thanks to stories in the media and are often prepared for a long lead time. Derek Miller, director at Scope Bathrooms in Glasgow, said that customers are prepared and will go ahead with purchases despite delays. He said: “Customer relationships are under pressure, but clients are experiencing similar problems on many purchases. Consumers understand that shortages are everywhere and that there is no benefit in switching.”
On the other hand, Peter Cross, managing director or Ream Interiors in Gillingham, says that his clients are not so understanding. He told kbbreview: “Client relationships are really hard work at the moment as they do not understand why they are waiting and why we cannot give them a date.”
Ciaran Leyne, director of Trilogy Designs in London, said clients are understanding, but there is only so long they will wait without appliances. He explained: “Consumers are more understanding than before then pandemic. That said, there is only so long you can leave a client without a working fridge, washing machine, oven etc. We are supplying a product that is essential for people to live their day-to-day lives normally. Very often clients are midway through a build or extension project when they come to us, so waiting 12 to 16 weeks to ensure all their appliances are in stock is not an option.”
The delays have been affecting cash flow for many retailers. Keith Wilson, owner of Perth Kitchen Centre, is often paying for products the company does not need for weeks in order to keep customers happy. He said: “It is affecting cash flow as we are now having to take in goods that we don’t need for weeks and having to pay under their terms before we can get payments from clients. It is restricting, as we will not get balance payments from customers until we have supplied them in full. This gets watered down the longer they have to wait.
“Consumers are fairly understanding with regard to delays, but I believe transparency at the start is key. Manage their expectations, make them aware of delays with the products selected, and be prepared to offer alternative solutions.”
Angela Bower at Bower Willis Designs in Shipston-on-Stour is managing the situation with good communication and cash flow. “We try to manage expectations. Most clients understand. We order well in advance then have to hold it in stock, which is not good for us Plus, you also have outstanding final balances, because you are still waiting for an appliance.”
Some retailers are having to turn to wholesalers in order to get appliances that are out of stock for retailers. Emily Hyde, design director at Sanctuary Kitchens and Bathrooms in Shepperton, said: “This is so painful we are currently considering letting clients purchase their own appliances with local wholesalers. We spend so much time on appliances, selling the features and benefits, and even more time currently sourcing from poor stocks, for so little margin and support. We are debating if our time would be better spent focusing on the furniture, stone and fitting sales at much higher margin.”
The Bathroom Design Studio in Harrogate is facing a multitude of problems but is managing the situation by holding stock, thanks to good cash flow. Jane Ive, design director, explained: “Thankfully we have good customer relations and keep them very – sometimes, too – informed. We wouldn’t plan to hold stock in reserve as we are paying for goods well in advance of being able to bill the customer. We’ve got good cash flow but I’m sure others aren’t in such a strong position.”
“The other knock-on effect is the impact on our storage capacity. We don’t have a huge warehouse and have always planned well to make sure the goods arrive in plenty of time for the start of a job, but not excessively. With jobs having to move when we’ve been let down on availability of some of the items, we have invariably taken delivery of a bulky vanity unit or heavy shower tray from European suppliers who won’t deliver directly to the customer. This is causing the showroom to have to act as overflow warehouse, which is not the impression we want to give to customers.”
Delivery dates being changed can affect customer relationships, cause warehouse problems and stock issues, as Andrew Warnes, owner of COD Kitchens and Appliances in Altrincham, has found. He said: “Customers are generally understanding, after all this problem isn’t just in our industry and is very well covered in the press, so it doesn’t come as a huge shock to them. What does cause issues is when we are promised a delivery date and that gets delayed.
“I do find that we have to order client goods earlier than we normally would, then we can end up in a situation where the goods arrive earlier than required by the client. This causes warehousing issues and cash flow. I do try to buy stock in on the regular lines, but this also isn’t easy as some suppliers limit what we can take.”