The industry as a whole is faced with many challenges. The first is the change in the competitive environment at every level. Major manufacturers must compete not only among themselves, but with a growing array of domestic and overseas component producers. Competition among fabricators remains intense as each vies for orders through a labyrinth of discounts, spiffs, credits, promotions and giveaways. Small independent dealers compete with mega-centers with large advertising budgets, home-based retailers, catalogs, 800 numbers, Internet companies and retail fabricators.
A wiser and more knowledgeable consumer drives the competition at all levels as the breath and depth of available products and purchase alternatives expand annually.
Good News/Bad News
Intense competition places pressures on fabricator profitability. At the same time, fabricators-who most often are small businesses-are pushed to perform functions requiring the high power management skills of a large organization in the areas of administration, production management, inventory control, finance and cash management, technology integration, marketing, sales and advertising. Fabricators, most of whom entered the business in simpler times, are pressed to perform all these functions competently within their organizations' inherent limits of time, talent, profitability and capital. This is the bad news.
The good news is the valuable and enduring assets which fabricators bring to the custom window treatments market. Each fabricator possesses a dealer network built upon its successful efforts over many years to provide quality, service and delivery. The fabricator remains the most able entity to guarantee sufficient quality to warrant a custom premium price.
Quality and service will remain in fashion as the consumer wearies of the hassles of buying products elsewhere. As the consumer grows wealthier, price will become less of an issue; as quality and elegance regain popularity, a custom selection will be demanded. As life becomes busier, service will be held in esteem. The consumer will support the dealers who can take the greatest advantage of the fabricators' strengths.
Great opportunity lies in the renovation of the traditional model of distribution. Each level has certain responsibilities that, when done well, assures not only success at its level but also the success of all participants in the chain of distribution. Fabricators must embrace the notion of partnership with suppliers and dealers.
The successful supplier provides the fabricator with well managed trade names and high quality products. Brand name management is perhaps a supplier's most important function. Good trade name management means direct advertising to the consumer and the preservation of its stature in the custom market without dilution.
The supplier must be committed to the custom business and the financial health of its participants. The supplier must provide innovative research and development of new products and masterfully manage all aspects of the introduction of new products. Suppliers can assist fabricators in those business areas where they are weak. Vertek Inc. is fortunate to have made such a partnership and knows firsthand its power.
Suppliers should expect full support from the fabricator to the dealer base. Product quality and service standards must reflect favorably on the manufacturer. In turn, the fabricator also must partner with the dealer to support old ways and find new ways to help the dealer sell more blinds to more people at a higher profit. Cheaper price is not enough. Fabricator programs must be richer in content.
In brief, renovation of the traditional business model must move from me-first to we-first. Here lies the fabricator's greatest opportunity.
Mary O'Connor is vice president of Vertek, Inc., Alsip, IL, a fabricator of Levolor Home Fashions products and its own line of custom vertical blinds, shutters and roller shades.