Ecommerce

30/7/2020

High Street Retail Still Has Its Place Post Covid | Interview With UK MD of Quooker

Today we're joined by UK managing director Stephen Johnson of Quooker. Thanks for joining us today. It'd be great if you could start off by giving us a bit of a background on the business and also your role within the group as well.


Stephen

Yes, I am the manager director for Quooker we're the inventors of the world's first and only 200 degree boiling tap. I joined the company in 2006 and I was tasked with building the brand in the UK, Ireland and the channel islands.


It was basically a start-up situation. It was me, myself and I tasked with building the concept of boiling water from a tap in the UK.


That's where the journey began. Today, we are a company with over 60 employees. We have over 200,000 UK installations. You may have seen us on high-profile TV shows like MasterChef, Bake-Off, Saturday Kitchen. We've got over 5,000 dealers actively displaying and promoting the products across the UK and Ireland. 


In terms of myself, I'm driven, self-motivated, organised, and use truly unique management skills to drive the business.


And the business is being built on an unparalleled service. We adopt a unique marketing approach and we have a very very keen eye on customer service.


We want to ensure a world-class and best-in-class in everything we do and those methods enable us to grow the business in terms of turnover and profit over the last 15 years.


Harry

Brilliant. And how does the UK compare to the rest of the territories in terms of sales?


Stephen

Yeah, so in terms of the company, the company was established in the early 70s by the family that still own the business today and they pioneered the concept of boiling water on tap. So they launched that in the Netherlands in 1970 and it took them about 25 years to commercialise it and it was eventually launched in 1993 as a commercial product.


It's an unbelievable product. It captures people's imagination. It's pretty simple in concept. It's boiling water on tap. People love it and in terms of the UK's the second largest of the Quooker

Family, The Netherlands remains the largest part of the company, but they've been trading for over 25 years. As a business now, we supply over a couple of hundred thousand pieces a year throughout Europe and the UK.


Harry

Fantastic, brilliant. In terms of the strategy then, in terms of direct to consumer versus your display retailers in your installers as well. What is the percentage split by your e-commerce versus your retail distribution network?


Stephen

Yeah. So we operate three strategies really which we use to promote the product. The main area for us is via a kitchen showroom.


So what we will look to do is display the product with a kitchen showroom. We look for the kitchen showroom to then sell that as part of an appliance with a kitchen.


So 80 percent of our business will go through high street kitchen showrooms. Aside from that, 20 percent of our business is done directly to consumer at home via an e-commerce platform or over the telephone sales.


And that's the people that would enjoy the benefits and the eco benefits the boiling water on tap brings. So they want a tap installed at home. But they don't want a new kitchen.


So we have a strategy where we will deliver that service ourselves direct to the consumer. So we sell direct through retailers and we supply direct to a consumer if they are not buying a kitchen.


Harry

Okay, brilliant. So obviously with COVID that as you know, it is happening at the moment, how has the business shifted in terms of its approach?


Obviously I can imagine a number of those kitchen retailers had to stop trading during that period of time, so what effect would that have on the business then?


Stephen

Yeah COVID was, well it's completely shaken our industry. Considerably with persistent financial pressures, staff welfare, strain placed on retailers, thousands of showrooms of manufacturing plants shut, staff placed on furlough, redundancies, I think we've undergone some of the toughest trading conditions that we've ever seen. 


I mean if I look back at January February and early March we were amazing and come COVID it was difficult. We were immediately faced with full closure of all our avenues to business.


So we felt the strain, we've seen firsthand how it's affected small independent retailers and how changing consumer habits have dramatically impacted our sales. 


During these difficult times, I think brands are faced with two choices. You can either shrivel up and remain inward focused or to work together sharing expertise and resources to help the industry rebuild, recover and thrive.


I've grown up in this industry, and I'm absolutely passionate about it and the wider responsibilities. So along came COVID and we have to immediately relook at how we are going to continue business.


Harry

And what was that approach then? Was that sort of moving towards more of an online focus then?


Stephen

I think we were very fortunate because we have a strategy where we dealt with consumers at home anyway, but it's 80/20. 20 percent of our business is dealing with consumers at home.


So, although we felt that was a strategy we could follow it wasn't going to fill our order book. So we had to come up with some other avenues.


Sadly with the retail showrooms closed and them not selling, there was nothing we could do to recover that business. So during the period of April and May while those showrooms were closed, we suffered a loss of our business, but we continued with our private sales and through that period in April and May the private sales remained the most important part of our

business. 


So people at home, although the COVID brought some complications, lots of them were happy to invest in products that they felt would be beneficial and we were fortunate in that respect.


We also refined all our processes. So one thing that was really really important for me was that we didn't close our business and go into hibernation. So I'm really proud to say that we didn't have to furlough any of our staff.


We took the time and opportunity to re-evaluate our business and as difficult as COVID was it gave us a really unique opportunity to see where we are, look where we wanted to be and what we needed to do.


So we used that 12 - 15 week period to take a good look at that. The other thing that we did and we recognised that our industry would be under financial pressure, so we came up with a couple of support schemes for our dealers where we helped spread the money that they owed us over a longer period of time and that's served us really well.


So we were able to support our dealer network financially and I have to say coming out of COVID, it you know, everybody's at the races when all the shops opened. I've not got staff coming out of hibernation. They're all ready to go.


And yeah, it's strange these difficulties being I find it very motivating and rewarding.


Harry

That's good to hear. And where do you see the future of the business? Do you still see retailers as the primary focus or do you see that there's going to be an even bigger shift towards your online?


Stephen

I think with kitchens it's difficult to envisage a situation where people will buy a kitchen without visiting a showroom so I cannot see significantly how we sell changing.


What I have seen is dealers presenting themselves in a more virtual way. Handling meetings virtually and I think although our industry will change, and perhaps the way we communicate with our customers and our dealers will change, certainly over this period.


I think pre-COVID we were looking at introducing a virtual strategy into our sales network. As one of the complexities we have is we have 5,000 dealers all around the country and it's not always possible or commercially viable to visit those dealers each every month or as regularly you want and we were trying to develop a virtual strategy where we encourage people to use video, FaceTime, Zoom to communicate with us and to hold meetings and I have to say that pre-COVID that was a real challenge. 


Come COVID and we are in a virtual world. So our strategy has, you know, we've increased our departments to three now of virtual people and we see that as a new way of serving our dealers and customers. We also incorporated a virtual installation strategy.


So if you don't want to install a service engineer to come to your house we'll guide you through that remotely on FaceTime, Zoom, Teams.


So strangely we've come up with a brand-new way of operating which helps us through the crisis and we will continue to use that now in our business. So in answer to your question, I think the industry is going to change.


I think the kitchen showrooms are a destination where you want to touch, feel, see and handle the product, so you're going to have to visit a showroom. But I think virtually we will deal a lot more as we are now in video conferencing.


Harry

Yeah 100 percent, brilliant. It's really interesting to hear. If there's one take away, what would that be in terms of from a business point of view or from a personal point of view?


Stephen

I think it's taught me to always be on my toes. And I think we've come out of a financial crisis. We're dealing with Brexit which seems to be going on for an eternity and COVID will go soon and then we'll be back to brexit.


I think it's taught me that you can't take things for granted. You don't know what's around the corner. You have to have your business in a ready state all the time for whatever might happen and that we've been very fortunate that when I've built Quooker we built it on a basis that we could be flexible, we can respond to market demands and we don't have a huge fixed cost.


So the key for us is being nimble and being able to be responsive and I think if anything COVID has taught me you don't know what's going to happen tomorrow.


You have to run your business in a way where you can be prepared for what is going to happen tomorrow and I will always now be very very cautious, very cautious, of what's round the corner.


Harry

There we go, brilliant. Well then yeah, I won't take too much of your time. I really do appreciate that. It's great to hear that the business is backup operational running, you know in full force. And I wish you all the success in the future Steven.


Stephen

That's super. Thank you good to speak to you.


Harry

You too. Cheers.


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