Are Building Product Generalists Dying?

Christina Lewellen
June 22, 2011
THE TALK... | Strategies & Practices, Management
About six weeks ago, I asked whether window and door retailers were getting in the habit of “channel blurring,” a concept whereby former product specialists or niche-targeted retailers start branching out to carry seemingly unrelated products for the convenience of their customers. Like the Home Depot carrying laundry detergent or a window specialist carrying fencing or something along those lines.
 

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At the time, almost half of poll participants said window and door companies are beginning to carry unrelated product lines. This week, I’d like to turn the question around.
In a blog I recently stumbled upon, author Jason Fraler argues that there’s no room in the marketplace for the blurred business model. Because of certain market dynamics—including the internet and increasingly-complex building products—he argues that customers now expect the specialized knowledge of specialty retailers.

Six weeks ago, I contended there’s room in the marketplace for both approaches. Fraler’s blog presents the contrarian view. What do you think? Will generalists in today’s marketplace be gasping for their last breath? Will specialists emerge as the winners in the survival of the fittest? Please send me an email or post a comment below to share your thoughts.

 

Survey Results as 06/28/2011:

 

Are building product generalists a dying breed?

Yes, specialization is necessary to be competitve today.

  

 

53%

No, the generalist business model is still valid.

  

 

38%

I'm not sure

  

 

9%

Thanks to our voters this week, we see that more than half of participants believe specialization is the key to success in a competitive market. I’ve already shared some of my thoughts in these last couple of Talks, so I’m going to include a few comments I’ve received in response to this topic.
One reader writes:
“It sounds to me like some are painting all generalists with the broad brush of incompetence. I am not a generalist, but as a manufacturer I can say that if you know your products (as any good rep should), you can provide a valuable service to your customers. After all, Walmart is a pretty good example of what happens when you already have an established market and then simply offer more and more items. Where they fall down is not hiring competent help and not having a training program to make their employees ‘experts’ on everything that they sell. One-stop-shopping will never die because there will always be buyers who are too busy to research and shop and others who are simply too lazy or ambivalent to do their jobs.
Also, how risky is it for a business to put all of their eggs in one basket? In today's world of global exposure, how soon will it be before your product is in direct competition with someone from overseas who has the advantages of low manufacturing costs and the political leverage to invade your market? If you don't have some way to diversify or augment your product line during the lean times, you could be signing the company death warrant.”
Offering an overseas perspective, another reader writes:
“Many of our customers are window manufacturers and installers and the ones that are growing are doing so by adding additional products into their ranges. This could mean anything from roofline (fascias and soffits) or external services such as decking and garage doors. In fact, there is a significant shift taking place in the UK with general builders being asked to install windows and doors, add bathrooms, replace kitchens, etc. The reason for this is trust; if a householder can develop a relationship with a tradesperson, then they seem to be willing to go back to that person or company time and again.”
So perhaps the generalists are still alive and kicking.

Contact Christina Lewellen, senior editor, at clewellen@glass.org.

Comments

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Interesting that you have input on both sides of the question - should a retailer be primarily a product/service source, or an information source?

I think it depends on whether the customer is a contractor (2-step) or a consumer. It also depends on the manufacturers who are looking for market share and don't sell direct. Those manufacturers don't have sufficient access to the customer. They're kind of buying "shelf space".

Mr. Fraser's article is blurring the outlets into one segment. If Home Depot has a "contractor desk" it hardly compares to Norandex who sells the trade primarily. Perhaps the biggest change is due to the shift in the end use specifier. It's really contractors who are losing their position as the information gatekeeper. For any distribution firm, the goal has always been value-added; either to the manufacturer who gave exclusivity in exchange for availability to the marketplace, or to the contractor where the distributor hinged the doors or offered nails and sheetrock he could pick up when he stopped in to buy his Andersen windows. Also, the housing collapse, causing the shift towards remodeling, favors specialists since remodeling is usually centered on a few products, while new construction depends on delivery of a myriad of products, and that favors generalists.

The internet's effect has been most evident in the role of the contractor in the decision making process of the consumer. Consumers used to need the expert to help them decide on product and service. They do that shopping on line now. I have attached a paper from AWDI/Jervis & Associates discussing that change in relationship. So it isn't as simple as "generalist versus specialist". It's now a question of "who controls the sale?". That designation belongs to the source of the necessary information to make an intelligent and valued purchase. And it is the Internet that has blurred that distinction. That said, generalists will never go away. Who wants to drive to 10 specialists to pick up the supplies for a major remodeling job or new house build?