Commercial director of Ideal Bathrooms, Danielle Lillis says manufacturers should drive product innovation and take better control of distributor

The distribution channel hasn’t had the easiest time in the bathroom industry, signalled by the demise of well-known businesses such as AWA Andes and tc bathrooms. But commercial director of Ideal Bathrooms, Danielle Lillis says: “I’m surprised there haven’t been more casualties. There are still a lot of small distributors out there and when you look at the margins being delivered – on small box items in particular – I wonder how they can survive. If there were more casualties I would think the industry would be the better for it.” Danielle Lillis believes: “It’s maybe why some distributors think the strategy is to trade directly with the consumer.”

 Against direct sales

So has Ideal Bathroom set up or considered trading to consumers online. “We wouldn’t do it!” retorts Lillis “The only internet traders we deal with have a showroom or a trade business. With regards to the internet– we’ve looked closely at what some of our competitors are doing – and we don’t agree with that strategy.” And she berates retailers who don’t pay attention to the business model of their chosen distributor. “I think retailers should be more aware of who they are purchasing from and take note if they are purchasing from a distributor who is taking business away from them by trading with the end consumer. I always envisaged that would command more loyalty with the distributors, who are being true to the customers and I don’t think that’s fully the case.”

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And she calls for manufacturers to take measures over distributors who deal direct to consumers. “More than anything they should know and it’s something they should probably be doing more to control as well.”

 Account access online

However, the one online area Ideal Bathrooms is embracing is an e-commerce site (idealbathrooms.com), due to go live in Summer. Lillis explains: “It’s purely for the trade to have access to their account /24/7 – placing their order, checking their account status and making transactions easier.” Although she openly admits: “I don’t know how well it will be utilised by our customers, considering we still have a high proportion of our orders faxed. If we can say 10% of our customers are using the website by the end of this year, it would be a good performance.” Although she quickly adds: “We have got a very high level of service in the sales office. People know the girls on the phone and have got a relationship, which is key, and we don’t envisage that will change but the fact you can place at order at the weekend or in the evening, it makes us easier to deal with. Our free phone number will continue to be used but I think it will be a great addition to the service that we offer.”

Showrooms drive sales

With the ability to soon place order /24:7, it may suggest its sales have been struggling. But, according to Ideal Bathrooms, in a flat market, the business has experienced a 4% growth. “From our perspective, we have seen good growth from retail. We’ve got a high level of showrooms that are investing and we opened a number of new Villeroy & Boch accounts. We certainly haven’t seen a downturn in the number of showrooms trading or reluctance to spend to invest to improve the showrooms because our displays numbers continue to be a record high,” says Lillis. However, she says that manufacturers must invest in new product development to support the showrooms wanting to drive business: “For me, fundamentally, manufacturers have to be driving more innovation. At ISH, there were some positive [stories] but that investment is not where it needs to be.”

 Focus on core

And she is adamant that the investment in new product development should be firmly focused on the core strengths of a manufacturers’ business. “I think you’ve got a lot of manufacturers that are trying to diversify into other areas to boost their sales, as they maybe see it as an easier win to grow a weaker category. But I think sometimes you can’t be that all-encompassing solution. You should focus on your core strengths. It’s what showrooms want to see. From a distributors’ perspective, we want to see new products that are going to bring key volume. The number of SKUs we have to carry has significantly increased and that just migrates the business.”

 Growing showering category

However the distributor has also been keen to grow its weakest performing category, which is shower enclosures.  Ideal Bathrooms has taken on the Showerlux brand and  now realigned the retail price structure of the Showerlux brand, as its route to market is now leaner. And the company has created a pricing structure with 50% terms for displaying retailers and non-displaying at 30%, to protect against sales on the internet. With the realigned price structure and retail loyalty of the brand, Lillis believes Showerlux will be able to reach £3m turnover in sales. Lillis comments: “Showerlux in its heyday was £18m but that’s probably going back 10 years. Before we took over the brand, it was around £/2m sales. An exclusive brand, like Showerlux, should be a minimum of £3million sales and certainly that’s the target. Ideal Bathrooms has already signed up 100 Showerlux displaying outlets but they are aiming for /250. Lillis continues: “Showerlux probably had 3,000 displays at one point and now we’re talking, at best 400-500. We’ll see the growth by building the visibility of the products and with Nexus [sliding door, 10mm enclosure] coming on board, later in the year, for a number of high-end showrooms.

Targeting top and entry

In fact, the Showerlux Nexus will be added to its Premium brand strategy of a collection of top-end names such as Bette, Villeroy & Boch and Grohe Spa. Designed to target high-end showrooms, this strategy has helped boost the distributor’s sales. Lillis says: “We’ve had good growth in that area. We want to open 50 new V& B accounts – we’re only halfway there – and that will deliver the extra sales.” And at the opposite end of the spectrum, it has plans to increase its own-brand sales to be 15% of the overall business. However, Lillis is keen to points out: “First and foremost we are a branded distributor and I think the commitment we show to the brands is second to none, with regards to the stock, sales support, service and marketing. But for us, [own-brand] is a key area.” She continues: “It’s to target the DIY sector and non-branded distributors. That’s where we’re looking at the pricepoint of sub £150 for a four-piece set.”

And it will be all these elements which will help the company achieve its ambitious growth plans, reaching more than £50million turnover in five years.