Manny Perez de la Mesa
Competition from the internet and big box stores has long been a concern among many industry professionals, particularly retailers and service/repair technicians. Some allege the playing field is not level, with major distributors and manufacturers selling products directly to the public at lower prices. Here, POOLCORP CEO Manny Perez de la Mesa addresses those concerns, offers advice to industry entrepreneurs and explains how his company supports the trade.
AQUA: POOLCORP's record of growth has been impressive by any standard. What advice would you give to AQUA readers who are also entrepreneurs looking to grow?
Manny Perez de la Mesa: First, be passionate about the business. We are all fortunate to be part of a great industry that enhances the quality of people's lives. Appreciate that and immerse yourself in the business. Second, invest in your people to develop them both professionally and personally. Invest in tools to enhance the customer experience, in innovation to find ways to do things better, in marketing to promote the industry and your business and in products to further enhance the breadth and depth of your business.
AQUA: Many retailers in the industry depend on supplier reps for business and technical insight and advice. How does POOLCORP prepare and educate its front-line people?
MPDLM: We have over 300 individuals whose primary responsibility is to work with our customers to help them succeed in their business. Included are retail specialists that are specifically charged with helping retailers succeed. In addition, we host the Retail Summit each year that brings together leading industry retailers to help them grow and succeed. In order to make all of this happen, we invest in the training and development of our people as well as in marketing tools and programs geared to helping our customers succeed.
AQUA: How has pool and spa product distribution changed in the internet age? How do you see it evolving in the next five years?
MPDLM: The internet has been around our industry for over 20 years, but it was more disruptive 10 to 15 years ago than it is now. Part of that has been the maturity of our industry to develop products and services that compete effectively against the internet channel. In addition, manufacturers have become more aware of the importance of the trade and specialty retailers. Specifically, more retailers have geared their websites to their local customers, customer education and ways customers can buy from them more conveniently. (Ordering online and picking up in store, home delivery, etc.) In addition, many specialty retailers have learned to better merchandise their stores and invested in enhancing the consumer experience.
The internet channel has been the most recent of many retail evolutions over the past 150 years, including catalogs, grocery stores, shopping malls, etc. In each case, this progress resulted in enhanced opportunities for those that invested in their business and worked to enhance the customer experience.
AQUA: POOLCORP is the largest distributor in the pool and spa industry, having consolidated smaller outlets over time. From the small pool company's perspective — whether it's a builder, retailer or service company — what are some of the benefits of dealing with a large distributor?
MPDLM: We are a collection of local businesses, as each one of our sales centers is focused on serving the market in which they are located. I believe what makes us unique in the industry is not our size, but our ongoing commitment to investing in the growth and development of our people (providing a significant level of empowerment that few other businesses, in any industry, provide), our investments in tools and programs to help our customers succeed (technology, marketing programs, inventory, logistics, education, etc.) and resources (like our retail specialists) that all together enable us to provide a truly differentiated value proposition for our customers.
Our professional trade customers are selling their talent and their time with the products we provide. Their success is premised on maximizing their time billed by having a rich backlog of business and being able to operate efficiently. I believe that we enable that better than anyone else in the industry. Our specialty retail customers need to create store traffic and have a trained staff and well-merchandized stores to succeed. We work with our customers to help them succeed in every aspect of their business. The bottom line is that our success is entirely dependent on the success of our customers, so we have a vested interest in helping them succeed and we continue making investments to help them further their success.
AQUA: Selling aftermarket products direct to the public through the internet is a sore spot with brick-and-mortar retailers and service companies, who feel shortchanged by the practice. Some allege that POOLCORP offers better pricing to large internet sellers than smaller, in-person retailers. Is that true?
MPDLM: First, we are a wholesale distributor that sells exclusively to the professional trade and to retailers. Unlike others in the industry, we DO NOT sell direct and HAVE NOT sold direct to the public. We are fully invested in helping our customers succeed. Second, we have no control over the prices at which our customers resell products, whether those customers are professional trade customers and/or retailers.
In regard to the internet channel, we established our policy in May 1999 and that has remained in place since. Specifically, as a collection of local businesses, our local managers are empowered to sell to their local customers at competitive prices. Those prices do vary by market, customer and product, and there have been instances when we have had to address issues where certain prices may have been too low or too high — but those are rare exceptions.
What I have observed most frequently are instances where manufacturer-provided dealer or consumer incentives are reflected in one retailer's price, while another retailer may not be aware the same incentive is available to them, as well. I have also seen retailers use loss leaders to create traffic but, again, that's not based on the prices at which we sell, but the prices at which retailers and/or professional trade customers sell. Manufacturers have developed professional and trade-only products to help our customers differentiate themselves. We have been major advocates on behalf of the professional channel for almost 20 years. In that time, we've encouraged manufacturers to develop trade-only products as well as differentiated warranties for professional installation, the enforcement of MAPP or LAPP and investing in the development of innovative products that help our industry grow.
To summarize, we are in a great industry with manufacturers that are investing in new products and constantly improving quality in every aspect of their businesses; distributors that aggregate products from many manufacturers and make them locally available, which helps the professional trade to be more efficient; and professional trade and specialty retailers that help transform the outdoors into a destination for family and friends, altogether enhancing the quality of people's lives.
