A trend in the fireplace & BBQ industry is the infinite increase in choices (options) being offered by manufacturers. Manufacturers call this giving consumers what they want. We call this trend sku creation on steroids. The fireplace & BBQ industries are not alone (I recently purchased a couch that had 4 different shades of red as options).
In this competitive world, I appreciate the desire for manufacturers to increase their business by offering more variations of existing products in the hopes of increasing sales. However, what manufacturers are ignoring are the significant pitfalls with offering too many options:
1. Out of Stock
How can retailers or distributors stock product when hundreds of different configurations exist for a particular fireplace? This creates the dreaded back order which eventually turns into the dreaded emergency or angry consumer (or even lost sale). How do you feel as a consumer nowadays in our instantaneous society waiting for back ordered product ?
2. Manufacturing Costs
It costs more to manufacturer different options than a single sku. Manufacturers are often hesitant to drop a low volume sku as they fear losing those sales. But, if that option was eliminated, maybe manufacturing costs could be reduced hence making the product more affordable to more people.
On average, when shopping for a fireplace, a consumer needs to chose the location, fireplace, size, brick interior, front, surround, venting, and then finishing. Some manufacturers also allow for different log patterns, burner configurations, heat distribution methods and fireplace controls. If six options are available for each choice (how many finishing options are available nowadays?) – that translates into thousands of different configurations for one fireplace (recall algebra class – 6 to the power of 6 to the power of 6…..). Imagine the poor customer who is looking for 2 fireplaces for their home? Its almost like the same person who created the income tax form is deciding on the availability fireplace options….
4 – Delayed Purchase Decisions
The more options available, the more difficult it is to make a decision. We have seen consumers chose their fireplace in 10 minutes, but take 1-2 weeks (or more) to decide the best ‘front’ for the fireplace.
To swim against the manufacturing trend of trying to be all things to all people, Friendly Fires has implemented a few internal processes to simplify our business (at the chagrin of some distributors and manufacturers).
Firstly, we have reduced the number of manufacturers and distributors we do business with. This has allowed our sales team and installation crews to become more educated with specific product, allowed us to stock more and negotiate better pricing. Secondly, we only display best of breed product from Tier 1 suppliers. Tier 2 suppliers who do not manufacturer great product or support our customers need not apply – no matter how large the market is (such as the $500 Chinese BBQ category – no thanks – not for us). And lastly, we always re-evaluate our customers, so if a particular ‘exotic’ fireplace becomes more mainstream, we will display and stock up and replace a low-volume sku.
Was Henry Ford ahead of his time when he proudly pronounced: “You can have any colour you want, as long as its black?”
No one says we have to be that rigid… but what would Henry Ford have said if the consumer could have chosen between 4 different shades of black?