2020 was a turbulent year for retail amid the COVID-19 pandemic. How did Pinch A Penny fare as we head into 2021?
Our brand and franchisees were fortunate to fare well during a time that was so challenging for countless others. Lockdowns and stay-at-home orders fueled more demand to build backyard pools, which has created tremendous opportunity for our business both now and in the future. Also, while people were hunkered down at home, they used their pools and spas more, so our business proved more important than ever in helping pool owners create safe and sanitary water environments for family fun.
The retail industry has faced vast disruption with the rise of technology and e-commerce giants like Amazon; yet niche retailers seem to be immune to this trend. Can you share more into why you think that is?
I believe most niche retailers are catering to a specific consumer need and helping consumers with that need. Yes, there has been disruption with technology and e-commerce in retail, but many consumers seek out expertise that niche specialists can offer them in a one-on-one setting. Take our brand as an example. A lot of our customers don’t understand water chemistry and they shouldn’t have to; it’s not common knowledge. But that’s why they come to us, because we’re experts in it. We offer free water testing in all our stores and our specialists help prescribe the proper chemicals, and then either educate them on how to treat their own pools or we come out and do it for them.
Niche retail brands are mostly need-based businesses, and functioning within their specific marketplace allows them to focus on being the best experts in their field. Consumers being able to access high levels of expertise with a particular niche retailer will keep them coming back into stores because there is a trust there and the need for guidance. In addition, with respect to Pinch A Penny, our stores are locally owned and operated – literally it’s the trust of neighbors helping neighbors.
Home-focused retailers performed very well in 2020. What has it been like for Pinch A Penny and your franchisees?
There’s no doubt that home-centric retail brands did well in 2020 as consumers shifted their spending from going out to staying in; spending less on things like travel, entertainment and dining out to more on home improvement, home goods and beautifying their backyards. Pinch A Penny was no exception to this rule. Our business remained strong and our franchisees have done quite well during the pandemic. Overall, our business is up solid double-digits, and with pool development and installations certainly carrying through into 2021, we expect our business to continue growing as much or greater than it has for the past 45 years.
As the retail segment continues to evolve, particularly following this pandemic, do you think niche retailers only offering products in-store and online will be enough to survive?
I believe it varies by brand and the needs of their customers. For our brand specifically, the retail store makes up the largest component of our business but we have a diversified business model – our stores also offer service maintenance and repair, as well as an array of backyard services ranging from leak detection and pool renovations to power washing and landscape lighting. The service leg complements our retail business and it’s what our customers need. Not only that, but it gives our operators the opportunity to grow their businesses in an organic way because they’re able to diversify without having to invest in other concepts. Combining retail and service allows our franchisees to enjoy top-tier AUVs and, typically, our higher-performing locations are run by operators that are taking advantage of the many capabilities of our business model.
That’s not to say that retail alone isn’t enough for brands to survive. However, at Pinch A Penny, we are able to combine the best aspects of both retail and service and it’s proven to be a pretty powerful combination.
Michael Arrowsmith is the Chief Development Officer for Pinch A Penny Pool Patio Spa.