Slough-based Tile Depot have applied the same price-cutting philosophy to stone tiles as to their man-made ranges. But Tile Depot boss Rob Gilbert believes stone’s meteoric growth has reached its peak. He explains why.

When confronted by smiling people with clipboards, shoppers often rate quality and style above price in their list of priorities for the products they want. And it is true. Most people will buy the best quality they can afford. But they want the lowest prices they can find so that they can afford a better quality product than they otherwise could.

The reality of the market is not lost on Rob Gilbert, who ran his own advertising agency before selling it in 1994 at the age of 39 to turn to tile retailing. 

At the company’s 14 Tile Depot stores in London and the South-East the claim is boldly made: “We won’t be beaten on price.” In a new promotional brochure called Life’s Tile they launched this year the claim is even more unequivocal. “We’re cheaper than our competitors,” they say, inviting local residents to visit their stores in order to take the ‘tile challenge’.

It is an aggressive stance, especially as the latest Tile Depot, one of a new generation of modern stores replacing older units, opened in January on Slough Trading Estate just two units away from a Topps outlet and across the road from yet another tile retailer.

“We’re next to Topps in four or five locations,” says Rob Gilbert from the company’s new head offices and 1,800m² central warehouse half a mile from the latest Tile Depot on the same estate. The proximity of the warehouse has meant the new shop is their smallest yet at 420m² instead of the usual 500-600m² because it can easily re-stock from the warehouse. 

Rob was Managing Director but has just restructured, becoming Chief Executive Officer and Chairman while the Financial Director, Danny Steptoe, becomes Managing Director.

As many retailers in the home improvement sector have discovered, there can be benefits from grouping similar outlets together as a way of drawing shoppers from a wider area to one place to satisfy all their needs. Of course, those who have been forced out of business when a massive B&Q Warehouse opened next to them also know it is not necessarily beneficial.

“The benefits of Topps and Tile Depot being next to each other are more to us now than to Topps,” says Rob. “We say on the window we won’t be beaten on price, so they don’t like us. But this wasn’t started by us. They were terribly aggressive towards us when we were smaller. It started when they moved next door to us in Basingstoke. It affected our business for a while, but we dealt with it – we had to because we had a 15-year lease on the building. 

“We changed our product range, cut prices, gave better customer service. We built brand loyalty.”

That loyalty has come from a number of initiatives. They give monthly product training to staff and Rob says: “I’m absolutely obsessed with product training. It’s one of the most important things we do.” 

They will buy back any un-used tiles they have sold. They will let customers take tiles home to see them in the environment in which they will be used. They open seven days a week. They offer free parking and loading. 

They deliver, and in four outlets are now trialling the offer of free delivery on orders of more than £100, although Rob remains to be convinced it will improve sales. Most people, consumers and trade, take the tiles away with them in their own vehicles. People who want deliveries are usually spending £1,000 or more and they don’t mind about an extra £20 delivery charge.

Brand awareness includes own-branding adhesives, grouts and sealers using a cuddly cartoon character they call Ronnie Reptile (as in rep-tile, they thoughtfully emphasise) as a logo.

Rob Gilbert is proud of his staff retention record and believes that when customers, not least the trade that accounts for around 35% of their business, see the same faces in Tile Depot each time they visit they build up a rapport that helps reinforce their confidence in the brand.

“We’re all very much part of a family,” he says. “We look after our people. I’ll try to see each store every two weeks and the managers can telephone me 24 hours a day, seven days a week. A big company can’t do that. I like people coming to me… talking to me, because that’s the way you find out what’s going on in the world. 

“The managers care about the business and get excited by the new products we introduce. Once a year we take them to see some of the manufacturers in Spain. We have nurtured this feeling of closeness and that permeates through to the customer. Managers grow with the company.”

And the growth of the company is not over. The plan is to have increased the number of outlets in and around London to 30 before the end of 2012, doubling the current £12million annual turnover. 

“I’m not sure the economy is going to have grown but we’re lean and efficient enough to be able to,” says Rob.

It is clear there is a lot more to Tile Depot than just low prices, but they believe they need to emphasise their price competitiveness to attract customers into the depots in the first instance. 

After all, what does a promise not to be beaten on price really mean? It only applies to comparable products and part of the staff training involves teaching them why a product such as travertine is not all the same. 

“Customers do compare prices,” says Rob. “They go all over the place. But we try to help them to understand the product better.”

And the product he is talking about is tiles. Whether or not they happen to be made of stone is purely coincidental to him – he is not steeped in the traditions of the stone industry. Although the company running the Tile Depot outlets is called Tile and Stone Depot Ltd, and Rob is more than happy to sell stone because clearly there is a demand for it, it is just one of the materials he sells to meet customer requirements. He has no particular preference what the tiles are made of.

In the 1990s he only sold a few marble tiles and did not introduce travertine until 2004. “Stone arrived overnight and got bigger and bigger and bigger. We didn’t understand the complexities of the product and neither did the customers. I took many trips to Turkey learning the whys and hows of travertine and where to get it.”

At first they had a high proportion of wastage with the stone getting broken in shipping and handling, but as packaging and understanding improved, both in Turkey and the UK, the waste was reduced.

As well as travertine, Tile Depot now stock limestone, slate and granite tiles that account for about 40 of the 200 tile ranges they sell. They say they import 250,000m2 a year, buying directly from sources all over the world, including India and China. Rob says: “I might have personal qualms about the ethical issues of the production of stone there but there’s not much I can do about it in a competitive market.”

He says environmental issues are now raised at every meeting with suppliers of every material. “Three years ago that wouldn’t have happened. It’s got to become a bigger issue, which gives us a problem and an opportunity.”

In stone, black Galaxy is currently popular, but Rob says fashions are changing quickly. And he thinks stone has reached its peak.

“I have seen so many places where people have used stone for floors and it just doesn’t wear well. There’s a learning curve and people have started to understand this is how stone is.” 

He says customers have learnt that even after being sealed stone can stain and show traffic routes of lost polish. Customers are beginning to understand it requires regular specialist cleaning, polishing and re-sealing. Man-made tiles don’t. 

“There are so many porcelain copies of stone now that are so good without any of the issues related to stone it’s going to hurt the stone industry.” 

He is talking about ranges such as Elegance by Johnsons (pictured above) that he sells. The tiles might be described as ‘naturally’ stylish on the p-o-s display but they are porcelain. And with several factories now working on making porcelain tiles as thin as 2-3mm, Rob thinks stone could lose its appeal. 

“I think things will change quickly now. The more people know, the faster they change.”

Rob believes Tile Depot can stay at the forefront of those changes, but life has not been without its ups and downs for the company and the past year or so has been one of the downs. The remodelling of the business is designed to tackle that and maximise the potential of the current trading conditions. 

Like most home improvement products, tile sales are directly related to the housing market. There is a common belief that if people are not moving they are improving, but Rob believes that is one of those fallacies people tell themselves to combat the fear of the dark days. “When people improve they only spend 40% of what they spend if they move,” he says.

There were signs of recovery in the second half of last year and although this year started quietly, Rob attributes that to the snow and is confident his philosophy will expand his share of the market even if the market itself does not grow.