The nation’s housing and kitchen/bath markets may currently be more sluggish than at any time in the past several years, but kitchen and bath dealers seemingly remain highly ambitious when it comes to their product-purchasing plans, as well as their efforts to hone their business to meet the demands of a changing market.
That’s one of several conclusions gleaned from an exclusive survey of kitchen and bath dealers and designers sponsored by Kitchen & Bath Design News in an effort to determine 2008 product usage and buying plans, while gauging relationships with suppliers and studying other key business activities (see related Editorial).
The e-mail survey, conducted early this year by The Wayman Group, Inc., a Cedarhurst, NY-based independent marketing research firm, involved more than 400 dealers and designers – a sample which ensures that the results reflect an accurate picture of the general opinions of the kitchen and bath industry.
Among its other findings, the survey revealed that dealer-designer respondents currently carry an average of 12.2 separate product lines for kitchens and 11.4 product lines for bathrooms.
However, survey respondents are apparently not sitting pat when it comes to the product lines they carry.
In fact, nearly two-thirds (66%) reported to KBDN that they plan to add or change product lines during the next 12 months (see Graph 1). Nearly two-thirds (62%) report they are likely to add a new line to their current product mix, while 38% say they will change out an existing line.
More specifically, survey respondents report they are planning during the next 12 months to add or change an average of 7 separate products/services. More than half (57%) indicate they will add or change kitchen cabinets. In addition, slightly more than half have plans to add or change bathroom sinks, lavs, faucets, bathroom hardware and accessories, bathroom vanities, and countertop surfacing materials. Similarly high on dealers’ product buying wish lists are decorative and functional cabinet hardware and kitchen sinks and faucets (see Graph 2).
When changing a product line, over half (57%) of those surveyed say they will likely try a product that has been on the market awhile, while 43% say they are willing to try a brand new product.
Product-purchasing patterns have also clearly changed as the industry has evolved from its former structure in which dealers purchased a high percentage of their products through two-step distribution.
Although more than half (51%) of surveyed dealers say they still purchase from wholesale distributors, more than two-thirds (70%) report they purchase products directly from manufacturers, while 17% say they buy from merchants and/or lumber yards.
And the tendency to buy direct from manufacturers is likely to increase somewhat in the future, surveyed dealers say.
Dealers and designers are also resoundingly clear about the reasons they tend to specify one product over another.
In fact, the vast majority of survey respondents (83%) indicate that “overall product quality” is, far and away, the single-most important factor in their decision to specify a kitchen or bath product.
A wealth of other factors plays into specifying decisions, as well – but those pale by comparison to product quality. For example, 41% of the surveyed dealers reported that “price/profit margin” is their most important factor in the specification process, while 33% identified “accurate and timely deliveries” as the most important factor. Well down the list, in contrast, were such factors as sales incentives, promotional literature and brand name (see Graph 3).
In today’s softer housing market, it is also not surprising that consumers are more sensitive to price than they were three years ago, when the new construction and remodeling sectors were far more robust.
According to the survey, 61% of the respondents reported that the question of price is more important to their customers now than three years ago. In contrast, only 5% said price was less important, while roughly one-third (34%) reported it has the same importance now as three years ago (see Graph 4).
Dealer-manufacturer relationships, according to survey respondents, have apparently not changed significantly in recent years.
In fact, nearly half of those dealers-designers surveyed (49%) report that their relationships with manufacturers have remained about the same compared to three years ago, while 27% indicate the relationships have improved somewhat and 11% say they have worsened somewhat. By comparison, a mere 9% say their relationship with manufacturers has improved substantially over the past three years, while even fewer dealers (1%) say their manufacturer relationships have worsened substantially (see Graph 5).
The majority of respondents (82%) report they feel there currently are adequate distribution channels for the kitchen and bath products they carry. However, only 60% indicate they are supported with exclusive representation for key products in their primary area. Similar numbers feel that manufacturers are less likely now than in the past to support them with exclusive representation for key products in their primary area.
Survey respondents report they have visited different manufacturers’ showrooms an average of 5.4 times in the past two years – with most of the dealers (40%) visiting 1-2 times. Interestingly, the majority of respondents (81%) report that these visits improved their relationships with manufacturers. In contrast, only 14% said their visit had no impact on the relationship, while a scant 1% said the visit detracted from the relationship.
Suppliers also get fairly decent grades when it comes to the myriad services they provide.
In fact, on a scale of 1 to 10, with 10 being “excellent” and 1 being “poor,” the average rating for the overall performance level of suppliers when it comes to support services is 7. And, of the surveyed dealers, 41% gave their suppliers a rating of 8 or higher.
Nearly half (46%) of the dealers surveyed report that supplier services are about the same as five years ago, while nearly one-third (32%) believe services are better now and 22% say supplier services are worse now than they were five years ago.
The top three most important supplier services, according to surveyed dealer-designers, include: “prompt, reliable and complete delivery” (71%), followed by “consistent and competitive pricing” (51%) and “product availability” (51%).
Slightly less than half (45%) of those surveyed report they see in-house or manufacturers’ sales reps enough to truly meet their needs. Most of the surveyed dealers (89%) report the majority of the reps they see are knowledgeable. Most (89%) report the majority of the reps they see are helpful, and even higher percentages indicate their product distributors are knowledgeable (91%) and helpful (93%).
Other survey results include the following:
- Internet use, it is clear, is growing. Nearly all survey respondents (94%) report they regularly visit manufacturer web sites to research or buy the products they specify. The majority of respondents (87%) anticipate their usage of the Internet will increase in the future.
- The top three sources for information about products/services specified or recommended include: kitchen and bath industry publications (80%), the Internet (67%) and sales representatives (61%). Ranking somewhat down the list, but still important factors, are trade shows and manufacturers’ catalogues (see Graph 6).
- More than half (54%) of the respondents say they attend trade shows at about the same rate as they did in the past, while one-quarter (25%) say they attend them less frequently and 16% say they attend more frequently. More than half (57%) indicate that trade shows are “important” as a factor in product selection. In sharp contrast, only 4% say they are not important at all.