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The rules of the game have changed, proclaimed Paco Underhill to more than 500 industry professionals attending the Decorative Plumbing & Hardware Association’s Fifth Annual Conference, held in mid-October, in Colorado Springs.
Underhill is the CEO of Envirosell, a New York-based research and consulting firm with offices throughout the world. He has spent the last 25 years conducting research of different aspects of shopping behavior that has earned him a reputation as the leading expert and pioneer in the science of shopping.
He believes that the tools of 20th century business don’t work as well as they used to, and that traditional advertising, branding and loyalty marketing programs are becoming less effective. Where business was once viewed as warlike, i.e. Coke vs. Pepsi, today’s operating environment is more like a bar fight. The decorative plumbing and hardware showroom’s competitor is not only the showroom down the street or the big box. The competitor is the plasma screen TV store, the trip to Aspen or the male in mid-life crisis who wants the Harley Davidson instead of the new master bath.
Social stratification in retail is dead. You can’t judge customers entering a showroom by their appearance. Someone looking to redo a master bath may look more like a plumber than a socialite in a Chanel suit. Luxury consumers buy high, middle and low end, depending on the level of importance and emotional attachment that the consumer places on the purchase. Luxury buyers’ closets include both Armani and Target. Showrooms that can make the emotional attachment with consumers will win.
The format for a decorative plumbing and hardware showroom or a Nordstrom’s was created more than half a century ago. As Underhill said, “The union of product, fixture and operating culture is tired.” Manufacturers conduct market research, develop products and introduce them to the channel. However, that is where most research and marketing end. In decorative plumbing and hardware, other than industry meetings such as the DPHA Annual Conference, there is little to no consistent methodology for independent owners to provide feedback to manufacturers.
Customer bases are also changing. Less than 25% of American households resemble Ozzie and Harriet. Instead, there are empty nesters, Baby Boomers nearing retirement looking to downsize or outfit their second or third home, and mid-lifers who are starting second families at the same time as they welcome grandchildren.
If your showroom is not female friendly, you’re missing opportunities. Underhill noted that by 2010, 60% of all students graduating from medical school, law school or other advanced degree programs will be women. Every showroom owner needs to ask the question, what makes this showroom female friendly? Are there places for children to play? Are there activities for significant others to engage in while their spouses tour the showroom?
Prior to this presentation, Underhill visited three showrooms, which were selected to represent the three major types of showrooms in the independent channel. One caters only to the trades. A second represents a wholesaler that has expanded into high-end products and the third is the traditional stand-alone showroom that serves homeowners, builders, designers and construction trades.
In each of the showrooms, Underhill found that owners struggled with finding a balance between receiving a return on investment and meeting the needs of the core customer. Underhill related that cutting-edge design is not a guarantee of retail success. He noted that most of the retail operations that win design awards close within two years. While showrooms need to project an image of luxury, a more significant measure of a successful operation is how well the sales staff can help fulfill the dreams of customers.
Underhill observed that when people go to a decorative plumbing and hardware showroom, they arrive with different objectives. It is critical for showroom staff to have different strategies for each customer type. Many showroom customers want to dream the dream. They are on a pilgrimage to a lifestyle that they have researched online, in magazines and at luxury hotels.
Underhill broke down the lifestyle pilgrimage into several buying stages. Stage one is a scouting mission. Stage two is a defining mission and stage three is a buying mission.
Showroom sales staff need to recognize what mission each consumer is on. In doing so, they are in a much better position to establish a relationship based on trust and be viewed as a knowledgeable guide on the journey.
Not all customers are romping through fantasyland when they come to a showroom, however. There are those who arrive to resolve a problem. They may be angry about a sink that arrived chipped and not shy about letting everyone know it. The lesson is to have a place where complaints can be heard out of earshot of everyone else.
Taking Another Look
Underhill also encouraged owners to travel the path that their customers take. It starts in the exterior of the building and the parking lot. Stand in your lot or outside your showroom and imagine that you are a customer looking at the showroom for the first time. Does the parking lot befit a luxury operation or is it pitted with cracks and potholes? Examine signage. Does it communicate the message that the showroom wants?
In every retail operation, there are zones. The zone at the entrance to a showroom is the transition zone. It’s the area the customer first enters that causes a change in peripheral vision and a reaction to changing light. The goal of the transition zone is to slow the customer down. Changing floor or wall coloring can accomplish this. If that is not practical, showrooms should consider some type of physical barrier that articulates the difference between the doorway and the entrance to another world.
In many showrooms, that transition zone ends with a receptionist or greeter. Underhill suggested that showrooms that have receptionists make the transition more comfortable by offering prospects a cup of coffee. The greeter should also engage the prospect in conversation so that a proper transition can be made when a salesperson becomes available.
If customers are forced to wait for a sales professional, give them something to do. Have albums available for them to peruse that feature successful projects.
Underhill also offered guidance to make vignettes more effective. He suggested that vignettes be approached with a female sensibility, and noted that the key is not the number of vignettes a showroom has, “it’s how well you use the ones you put in.”
A theme throughout Underhill’s presentation is the need to pay attention to the details. In one showroom he visited, the rest room was pedestrian. Why? The rest room in a decorative plumbing and hardware showroom should serve as a real life vignette. Likewise, closing zones, or areas where the sale is made or the order is taken, should also reflect a luxury environment.
DPH Perspectives is published bi-monthly in KBDN under the terms of an exclusive industry alliance between KBDN and the Bethesda, MD-based DPHA.