Hearthlist Digest #273 - Wednesday, March 3, 1999 Y2K, This too will pass by "Craig Issod" <[email protected]>
(back) Subject: Y2K, This too will pass From: Craig Issod <[email protected]> Date: Wed, 3 Mar 1999 11:05:18 -0500 Y2K, This too will pass There's a lot of excitement in the hearth industry. For the first time since 1979, ALL hearth appliances are selling well. Sure, we've had short runs before, like the clamor for stoves at the beginning of the Gulf War, but this sales streak is longer lasting. The great economy has also helped the sales streak include fireplaces, gas logs and other hearth appliances. However, there is a cloud on the horizon. Jan 1, 2000 is only 10 months away - what happens afterwards? It appears that many retailers and manufacturers are so caught up in the moment that they are acting like this growth curve will go on forever. Some Manufacturers have changed their tunes (to retailers) from " Please buy some of my products" to "We'll see if we can do you a favor and supply you". Others have tightened their warranty and other customer service policies - and why not?, they will be sold out almost no matter what they do. When this sales streak stalls, the retailers and customers will still remember any poor service they received while the heat was on. The true test of any relationship is how both parties perform under pressure. Instead of doing less advertising, marketing and customer service, industry members should be reinvesting the newfound profits on buttressing up their positions in the marketplace. Only then will they be truly ready for the "post-Y2K" market. Retailers are also at risk. Too many customers and not enough salespeople can make for a bad experience. And don't forget, the specialty retailer is also getting bombarded by other market forces, such as the consolidation of manufacturers and the newest crop of "super stores" selling hearth products. Among the recent entries to the later are Hearth USA, a division of UGI (a multi-billion dollar company) which plans dozens of 24,000 sq. Ft stores in the Mid-Atlantic Region and Sears, which has already started a "great Indoors" division which features stores similar to Home Depot Expo. What's my take? The specialty retailer will reign supreme in our market for the next 10 years (minimum). As history shows, these retailers have a good memory. They know which manufacturers are consistent and treat them well. Wise manufacturers and retailers would do well by adopting the "customer first" attitude and sticking with it through good times and bad. ------------------------------------------------------ Craig Issod HearthNet at http://www.hearth.com [email protected] Everything your Hearth Desires ------------------------------------------------------ ------------------------------------------------------