IndependentRetailer.com recently had the opportunity to interview John Rudberg, National Sales Director for Diamond Storage Concept, a leader in the garage storage category most known for its HyLoft line of products. Rudberg believes that we’re starting to see the light at the end of the tunnel; that the economy will continue to improve and retail spending is on the rise again, something independent retailers have long been waiting for. Here’s what he had to say:
IR.com: What would you say was the effect of the recession on independent retailing in general? On the garage storage category?
The recession forced consumers to spend less and only spend on essentials. Garage storage was growing at a 20%+ rate from 2002 through 2007 because the need and demand was there. All of that spending stopped in 2008 with the recession and de-valuation of the housing market. When homeowners are upside down on their home mortgage the last thing they’ll do is invest money into their home.
What do retailers need to do to lure consumers back in an era of reduced spending?
The need for more affordable storage options are still there, and as home values start to increase, consumers will begin to spend money on their homes again. And as buyers pick up the foreclosure homes they need to spend money making them livable again. Retailers need to focus on the features and benefits of garage ceiling storage.
Many went out of business as a result of the past couple of years. To what do you attribute the fact that your company has survived?
We have an owner who is financially strong and believes in the HyLoft product and the potential growth of the category.
How would you describe your business’ experience in the past few years? Has it been a struggle?
It has been a difficult couple of years as business slowed. It has been necessary to cut overhead (people & programs) and that’s always difficult. We had to get back to the bare essentials and start treating nickels like manhole covers.
What leads you to believe that we now may be headed for brighter times?
Some of our major retailers that share POS info with us are saying that we’re beginning to see sales improvements. Consumers are starting to spend money again — certainly not at the same reckless pace like before but an improvement. If we can just get the financial markets to settle down and as home prices continue to increase we’ll see better days ahead.
What are some of your competitive advantages, and how can other companies take steps to gain the same advantages?
The uniqueness of our product line is a major advantage. Having those products in a major growth category is a real plus.
What are some of main industry trends you’ve been observing, as well as the opportunities for growth?
Housing values, home foreclosures, retail sales, University of Michigan consumer confidence index. We are also exploring new product opportunities in the home storage/organization and garage categories. We are rebuilding our network of small independent contractors who can sell and install garage storage products for consumers.
Example: During the housing boom, garage door installers didn’t have time for anything else. Now with new construction in the toilet these same garage door installers are looking for opportunities and new products that they can install that will produce new revenue for them. Ceiling storage in the garage is that new product and revenue producer for them!
What does the future hold in terms of brick-and-mortar vs. dot-com?
The biggest players in both sectors will continue to grow and the smaller players will continue to struggle and lose market share.