Millennial Minds Article from AIJ

What does the next generation of ironmongers think about the industry? Three of the IAI Most Promising Ironmongers discuss their experience and views with Nicky Roger

Tom: Everything is changing in the industry. Routes to market are getting blurry, who sells product and specifies it is changing and technology is altering how people work. This means spec breaking is increasing – people are shopping around and acting outside of agreements. But they end up spec breaking with a devalued product. It might look the same but often it’s a debased material – it’s not always apparent when you look at, for example, a door handle, what’s gone into manufacturing it, or what standard it reached.

Brexit and commodity pries are also having a huge impact. Certain commodities have gone up by 100 per cent in a year so the cost of material to manufacture has doubled but it doesn’t mean the product has doubled in price. And it’s been a perfect storm with Brexit added to that: the exchange rate has come down and everyone is sourcing from the Far East in US dollars. Sterling to US dollars lost 15-20 per cent in 18 months which, coupled with the commodities, increased the true market impact which means people are putting different increases in – surcharges. But we can’t pass that whole increase on to the customer as it would mean a 30 per cent increase in a year. So we have to absorb that cost or try and find efficiencies elsewhere.

How does that change the sales relationship?

Lucas: It is one of our biggest challenges. Allgood does get specified a lot but there are similar products out there and with design and build contracts contractors have leeway to tell an architect they can get near enough the same product for half the price. But they don’t look at the goods that have been specified properly. They think it can be bought elsewhere cheaper. I try to build a closer relationship with the contractor rather than quote and leave. When you get a good relationship they will call you first. The contractor will say “I have this quote you’re miles off that price, can you beat it”. I need to get them calling me first rather than them presenting the Allgood quote and asking someone else to compete. The majority of the time they don’t call you. I have to chase hard with some I put two quotes – the one that’s specified and a value engineered – it’s still an Allgood product but this is the best we can do. It speeds up that process. Ironmongery is the first thing they want to value engineer and yet ironmongers are the the last people they speak to.

Tom: The problem with value engineering is the profit. Your gross margins might still be 40 per cent but the profit is now not there. You are still getting the business and winning the contract but you’re only making 50p on a door handle instead of £1.

Adam: There are so many people specifying devalued products within the construction industry. We are small fish in a big pond and you get lots of companies putting rubbish forward working on low margins and changing the specs. It is demoralizing when you come up against that. Architects understand – they know the score but because of the huge shift towards design and build contracts the contractors can do what they want, it gives them more power. Value engineering can’t apply to AI. It works in the steel industry where you can use the same RSJ for instance, but at reduced quality, but a door closer is exactly the same door closer, we can’t make it cheaper so value engineering is a trend word.

Lucas: We manufacture most of our product in Birmingham so we can manage going low on cost. I can give a hefty discount because we are manufacturing ourselves so we have more to play with.

Tom: In the future we will have to compete on service. I’m working with merchants so now I say yes we are 10 per cent more expensive but we can get 6,000 items to you the next day. There are so many entrants to the market and everyone has a speciality and they can work on that but very few do the full range of all the products so that’s my biggest hook. It helps to be a credible ironmonger who can service any project. We offer technical help, we can help write a schedule, and being part of the Guild and having people sit on the various bodies to influence change in the industry helps.

In what direction are things heading?

Adam: The balance of work is changing with about 70 per cent of work now coming from the high end residential sector. There is a lot more interest in the fine detail and ironmongery packages, co-ordinating with finishes elsewhere. Ironmongery becomes key.

Tom: There are a number of new entrants to the market; the world is a much smaller place. It’s much easier to buy products yourself. There is an increase in Far East manufacturers who are able to enter the market directly and we have a lot of concerns on their paperwork and testing. This has huge risks.

Lucas: But post Grenfell this is already changing – in building. I’m asked to include intumescent packs everywhere now. It’s not expensive so I make sure estimators include it as standard now. Another trend is special finishes, specifically with PVD. In our worldwide department we have bespoke, roped handles etc. Our product development is constantly making data sheets and moulds and it is brilliant to see that.

Tom: It’s about how long it takes from observing trends – which come from fashion – but how many years before it hits demands in AI? And London is different to Carlisle. Copper is everywhere now but that trend was three years ago in highend fashion but it takes that long to get to the masses. In the long term technology is interesting – the smart home is here. So how much longer will we have a door handle? Will everything just slide away into a panel in 10 years?

The development of 3D printers: will our industry actually be a design function to produce blueprints to then click print – print out your handle to stick it on your door? Or your lock or your hinge? When will it be that it’s actually really easy to have in every city a 3D metal work printer and you just go and upload your file and click print and out it comes? So is there a need to distribute?

Lucas: A recent client wanted all the access control to be automated and app managed. The market is becoming electronic. But architects are forward focused. They love specifying everything – ‘this is beautiful’, ‘this works well’, ‘this looks nice’. The problem I have as a sales rep is to say ‘hold on’ and pull them back and suggest perhaps they don’t need it or where things could work. That’s our job.

Tom: We set up a high end brand for architects, producing high end work, fantastic designs and finishes but when I deal with a merchant who says I want this product and hang it up on that peg and in a blister pack and I don’t care if it doesn’t sell. We have to try to lead that change and if it was in a retail space that approach would have gone. Screwfix uses its catalogue as its retail space – with online. That one metre in your merchant space is a waste of time. But in our traditional route to market many merchants are still faced with 500 options on a wall: people have 40 handles to choose from and need help, leading them through it. There’s almost too much choice and we need to go back to the AI advising and lead them through it. But long term is that face to face or over a Skype call or via blog? How will that work? People buy from people and with handles – it’s about the ergonomics and tactile nature: people like to see it and feel it. So how will it be sold using new technology?

How do we attract new blood to the industry?

Adam: To attract new blood to the industry you need an incentive. It’s so hard to describe what we do and make it attractive. We need to make it easier to explain what AI is, to encourage people to go for a career and not just a job that happens to be in ironmongery. The industry needs a reputation overhaul but until we can easily explain what it is we do we won’t attract new blood. And we need to increase the value of our role among construction. We are too small to matter.

Tom: To get people into the industry it’s up to the bigger players to create a brand and a cool place to work – yes it’s handles but there are lots of things that go around that, like any industry. Getting good talent in to do the sales and marketing roles is key. But the industry is stuck in the past. I suggest ideas but I come up against objections all the time. We have to get the dinosaurs to think beyond how they’ve always done it, to do things a different way.

What skills does a good AI need? Is it hard to find skills?

Adam: It is still hard to attract skilled people; internal roles can be hard to fill. There are good people out there but the demand outweighs the supply. It is an incestuous industry and at many industry events it’s heavily weighted to manufacturers. AIs need an incentive to attend events – a room full of architects would work. Manufacturers are there because it’s full of their customer base.

Lucas: The skill an AI needs is attention to detail.

Tom: There is a lot of problem-solving and thinking on your feet in the job. It’s trying to work out what the client is trying to achieve. It’s interpreting their needs and turning it into a solution. That’s what the job is.

Adam: You have to be able to work with people, you do business with people not companies. My clients are my friends – I was out at football with some the other night on no sales agenda. It’s about building relationships and you have to be able to meet and work with all sorts of people and adapt accordingly. An architect will want to talk technical detail but a contractor will only be interested in the bottom line, discounts and commercial concerns. You mould yourself to different types of people; you can’t be taught that you have it in you.

Tom: We have a leadership programme and I have a coach outside the business who helps me so they are investing in me to become a better leader. The skills for someone in our industry depends on their role: yes, the ironmongery bit is important and technically important to get it right but if you’re in customer service then the best thing to do is a attend a customer service workshop.

Lucas: My experience is different. I did the GAI training to become qualified but when I moved into sales I didn’t have any sales training. I had my patch and quote bank and just tackled it for a year to see how I progressed so I was learning on my own as I went on the job. Now after four years I’m finally getting sales training. And it is opening my mind up to new ways of doing things. It’s been really good.

Adam: Internally there is support for training and we are given time to study but I have learned on the job having good people around me, who take the time to explain the technical and product details and I have taken in information like a sponge – to gain as much knowledge as possible.

Roger, N. (2018). Millennial Minds. Architectural Ironmongery Journal. Spring (Opinion), 24-28.