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Special Report

Outlook 2000

Advice from business leaders on where the industry is headed.

 

We asked some of the leading window coverings suppliers and manufacturers what impact technology, and especially Internet use, will likely have on the industry in 2000 and beyond. Their responses, as well as advice on staying profitable and competitive, follow. Business Tool of the Future Jim Mathews Vice President Corporate Marketing Hunter Douglas Window Fashions The Internet will have the most profound impact of any invention developed in our lifetime, and its far-reaching effects will be felt for hundreds of years to come. It will change the way individuals, organizations and societies communicate, seek information, exchange goods and services and live. While most of the talk today about the Internet is related to dot.coms, IPOs and business-to-consumer e-commerce, we believe the business-to-business e-business aspect of the Internet will have the most significant impact on our industry. There is no doubt that a certain segment of consumers will purchase custom window coverings, particularly blinds and shades, over the Internet and will install those products themselves. At the same time, we believe that a majority of customers will continue to seek value-added services such as decorating advice, shop-at-home consultation and professional measuring and installation and will look to us to recommend dealers who excel in providing those customer services. We expect to announce an e-commerce strategy in 2000 that will involve many of our current customers. For several years, Hunter Douglas has been investing behind the scenes in a hardware and software infrastructure that will provide the platform for us to communicate more effectively and efficiently with all of our distribution channel partners and to provide proprietary solutions that will allow for seamless business transactions 24 hours a day, seven days a week. Our Dealer Sales System (DSS) and the award-winning Window Fashion Designer CD-ROMs are the first byproducts of this effort, and there are many more under development. Please keep in mind, though, that while the Internet will change the way we do business, all successful participants in our industry in the years to come will have to offer and provide value-added services to survive as the consumer will have the upper hand from an information point of view. If we could make one suggestion to dealers, it would be to accept and embrace this change, purchase a computer if you don't already have one, and begin to learn to use the Internet for the great tool it is and can become. Take Advantage of the Opportunity Scott Fawcett Senior Vice President, Sales & Marketing Springs Window Fashions In the year 2000, more than 327 million people around the world will have Internet access, which means enormous opportunity for our industry. Our challenge is how to take advantage of these opportunities. With the Internet, dealers and designers will have the opportunity to communicate online with manufacturers directly, quickly and efficiently to confirm product specifications, availability, prices, shipping dates, etc., making their jobs easier. They can go online at any time of day or night. With the simple input of a password, they will have all the information they need at their fingertips. Dealers and designers also are building their own Web sites as a showcase for their customers . . . regardless of the size of their businesses, an effective Web site makes them look bigger and more professional. Research shows that online shoppers gravitate to recognized and trusted brand names, so it is important that dealers and designers promote a national brand, while at the same time communicate the unique services and benefits they can offer. Customers will search a variety of sites to find information about product features and pricing, but in most cases, will ultimately need personal assistance in determining the correct product, color and sizes. With each exposure to the Internet, our customers will gain more comfort, making the decision for our industry to operate online easier, more convenient and, ultimately, more profitable. Technology's Impact Already Felt Alan Katz Western U.S. Sales/Service Representative LTL International To answer the question about how important the Internet will be to the window coverings industry, first let's consider the following. According to the U.S. Department of Commerce: • Traffic on the Internet doubles every 100 days. • Business use is growing fastest, but 62 million Americans are now using the Internet. • Business-to-business purchases could reach $300 billion by 2002. • President Clinton recently touted electronic commerce as an engine for economic growth. • Analysts predict within 10 years Internet-based transactions will account for up to 10 percent of the world's consumer sales. Based on this type of information, it's certainly safe to say the Internet will have a significant impact on the window coverings industry in 2000 and beyond. More specifically, let's consider how the Internet presently serves our industry. It aids in providing information for each of the various distribution levels in our industry. It serves as an effective medium for the end-use customer to access information on new treatments and decorating trends and to locate local retail dealers. Retailers can use the Net to target advertising and marketing more effectively, find new distributors and acquire new product information and specifications. Finally, manufacturers are able to quickly and widely disseminate information about themselves and their products and acquire new customer leads via the Net.

Manufacturers Will Assist Local Dealer Base Lafayette Interior Fashions The government will have an impact on e-commerce by implementing policies on taxation and free market issues. Major manufacturers probably will not go direct over the Net to leverage their brands. However, they will assist their local dealer base and distribution network by helping them establish a localized Internet presence, not unlike the yellow pages but with the ability to display and demonstrate products and services. As the Net continues to proliferate and software improves, some small to mid-size dealers are able to advertise and display products through their own Web sites or by grouping together with other retailers in related businesses. Some service companies such as seminar- and education-oriented companies are beginning to offer online courses already. This move is obviously a great convenience for those who strive to stay on the cutting edge in their particular expertise. Ongoing Education Paramount Craig Robinson Vice President, Sales Gilmore Enterprises The Internet is revolutionizing communication. Where else can a document travel around the globe in seconds, or a document be posted for the world to see? Even FedEx is slow by comparison. Self-education is at anyone's fingertips and every company can appear as an equal on the Net. We haven't seen the full breadth of the Internet's capabilities. Still, all industries are experiencing a better-educated shopper because of it. It appears the consumer is spending less time with each retailer and is taking less time to make a decision. My hunch is that you can no longer rely on dazzling the consumer with your brilliance or baffling them with nonsense. The need for ongoing education is paramount. You have to keep your eyes and ears open to thrive. Assist, Educate Consumers Roger Woodhour President and CEO RollEase, Inc. RollEase has seen a consistent increase in use of its Web site (www.rollease.com) and gets hits from consumers and trade professionals from all over the world. Although RollEase does not sell finished treatments, we still receive a substantial number of inquiries directly from consumers. These consumers are searching the Internet to educate themselves about all of the options and features of the different brands on the market. Consumers are searching online for the highest quality products at the best value. RollEase has experienced that these educated consumers are willing to upgrade to our system because it adds value and longevity to their window coverings. In the year ahead the industry will continue to see the level of inquiries rise on window covering Web sites. This increase in traffic will translate into a larger pool of educated consumers who will, as a majority, search for specific options, upgrades, colors or brands online but will purchase through traditional retail outlets. RollEase plans to further assist and educate consumers about our systems, and we also are developing additional capabilities to help trade professionals. Such features will include online ordering of components, checking order status, downloading technical documents, instructions and more. Rise from the Ordinary Viken Ohanesian Director of Marketing US Polymers, Inc. The great equalizer has arrived. The Internet delivers information effortlessly. It levels the playing field among ordinary companies with similar offerings. Armed with information, the shopper is becoming more selective and particular when it comes to making the best value decision in line with their needs. Average window coverings dealers with average offerings equalize instantly when being sized up by a home owner on the Internet. Successful dealers will pull away from the others by creating a unique selling proposition. These dealers will focus on what core values they want to aspire to, will choose their specialization, find unique products and offer exquisite services. Those that don't will lose out to the more powerful mass merchants or franchisers. Fabricators need to embrace this same idea and support their dealers with new and innovative products that truly serve to differentiate their dealers. At U.S. Polymers we decided to do the same thing by leaving behind the image of our Resiloy vinyl shutter and focusing on our shutter's unique vinyl-clad wood construction. We launched ShutterSmart, developed powerful selling tools, brought out the true value in our product and it has had a great impact. The successful dealer of tomorrow will be a specialist and rise to be recognized amidst the great equalizer of our time, the Internet. Look in the Mirror Donald J. Watler President H.T. Barnes Co., Inc. Evaluating your suppliers and their products should be like looking in a mirror. They should be viewed as reflections of the way you want your customers to view you and your product offerings. Too many times we view our sales performance in terms of price and price alone. When your customer sees you as his source of supply, he looks to you to be there in years to come, for continuing service, problem resolution and continued business. Buying and selling low-priced products sometimes appears to be the most profitable, but if long-term consequences are taken into consideration, they may prove to be substantially more costly. Look to your supplier to give you national brands, support, recognition, lifetime warranties and continued reliable customer service. These intangibles can be passed to you customers. Those slightly less costly window treatments, hardware or accessories may, in fact, cost you additional out-of-pocket expense and, more importantly, additional repeat business. When reviewing the products you offer your clients this year, look in the mirror and see what your supplier is offering you. You may be surprised at what you see.