Savvy Shoppers

Today’s kitchen and bath dealers may be enjoying the remodeling boom, but they’re not just sitting on their laurels hoping the good times keep on rolling. Instead, they’re showing themselves to be savvy shoppers, constantly re-evaluating their buying plans to make sure their product offerings continue to attract quality clients. They’re also continually planning toward expansion – of product offerings, of showroom displays, even of the showroom space itself.

That’s the finding of a new survey conducted by Kitchen & Bath Design News, which polled more than 200 kitchen and bath dealers and designers across the U.S. and Canada about their product purchasing plans.

The findings painted the picture of an industry in its prime, led by kitchen and bath dealers who are smart shoppers, constantly refining and expanding their offerings. In fact, more than half of those surveyed expected to expand or change their product lines, while nearly a third cited planned to update or expand their showrooms in 2005. Purchasing Channels

When asked where they purchase products, 82.5% indicated that they buy direct from the manufacturer, while 40.3% also reported buying from a distributor or “whotailer.” Only 0.5% said they purchase products from a lumber yard, and no dealers reported buying from home centers (see Graph 1).

Some 2.9% of surveyed dealers said they buy from a variety of other sources, as well, including fabricators, Internet sites and buying group vendors. “I need the products I need, and I’ll go wherever I have to in order to get them for my clients,” said one dealer. “However, I have good reps and can usually get what I want without trouble from the manufacturers’ reps. But even though I haven’t bought off the Internet yet, I would if they had something I couldn’t get elsewhere.”

The vast majority of those surveyed (87.9%) said they were happy with their supply sources, and did not plan to significantly change these in 2005, while 3.9% expressed plans to change their sources of supply this year, and 8.2% said they were unsure about whether or not they would be making changes.

As one dealer explained, “It really depends on them. I prefer to deal with vendors I know and trust, but if a vendor becomes unreliable, that would cause me to rethink things. Also, if someone came out with a great product that I couldn’t get from any of my existing sources, that would impact it, too. My goal is to offer the best products at reasonable prices from reliable sources, and I will do whatever I have to in order to meet that goal.”

Expansion Plans
While many people believe the old adage about not fixing things unless they’re broken, savvy kitchen and bath dealers know better – and as such, many are willing to continue to change and expand their product offerings, even in a strong remodeling economy. That’s because, as one dealer puts it, “That’s the way you stay ahead of the competition.” It’s no surprise, then, that 56.9% of dealers surveyed said they expected to change or expand their product offerings in 2005 (see Graph 2).

Said one respondent, “Even in good times – especially in good times, in fact – you want to always examine what you’re offering to make sure you’re keeping up to date and selling all of the cutting-edge products people want. And, you want to add products because there’s always great new stuff being manufactured, new trends, new technology. If you get lazy about staying ahead of the curve, your competitors will steal your customers!”

Another dealer swore, “As long as I live, I’ll never stop looking for new products. That’s why I attend events like last month’s Kitchen/Bath Industry Show in Las Vegas. That’s what this industry is about, products that can help make your designs look and work better. You have to always know what’s out there, your customers count on you for that. I can never get enough of new products.”

But, while there’s no doubt that kitchen and bath dealers are buying product, the real question is, what, specifically, are they buying?

When asked what product categories they were changing or adding to, the majority of those surveyed cited cabinetry as the category they’re most apt to add to. In fact, 59.5% of those surveyed said they were planning to add to or change their kitchen cabinet lines this year (see Graph 3).

Countertops were also a popular choice, with 47.9% saying they expected to add to or change their countertop material offerings in 2005. The next popular category was bathroom vanities, with 44.6% of survey respondents saying they would add to or change their bath vanity lines this year.

Always a hot product, decorative and functional cabinet hardware is also a category dealers like to stay on top of, with 38.8% of those surveyed saying they were planning to add to or change their hardware offerings in 2005.

Additionally, 33.1% of dealers expected to change or add to their other-room cabinetry offerings, 33.1% said they would change or expand their bath sink and faucet lines, 28.9% expected to change or grow their specialty lighting products, 27.3% said they would expand or change their bath hardware and accessory offerings, 25.6% expected to change or add to their kitchen accessory products, and 24% expected to expand or change their appliance offerings.

Likewise, 22.3% of survey respondents expected to change or add to both their bath tub and fixture lines and their kitchen and bath flooring lines, while 20.7% said they had expected to revamp or expand their shower and tub enclosure lines and interior fittings/storage aids/closet systems offerings. Another 19.8% expected to change or grow their medicine cabinet and mirror lines, 13.2% said they would enhance their shower system, spa, sauna and steambath offerings, 11.6% expected to expand or change their whirlpool tub selections, and 6.6% expected to change or increase their product offerings in the area of bath heating and ventilation.

Showroom Growth
With all of these great new products, dealers are always looking to maximize their showroom space, be that by expanding the showroom entirely or just constantly reworking and upgrading displays to show off the latest, greatest new lines. In fact, a full 30.6% of dealers said they were planning to expand or change their showrooms out in 2005 (see Graph 5).

By comparison, only 0.5% of those surveyed said they expected to decrease their showroom space.

“It’s not rocket science,” explained one. “It’s just how you do business. You add lines, test them out, get rid of what’s not performing and bring in better offerings, and you’ll continue to reel in business. As far as showroom space is concerned, bigger is better – and changing things out frequently helps keep your showroom fresh.”

The same seems to hold true for product offerings, according to dealer response to the survey. Indeed, dealers reported offering more kitchen and bath lines in 2005 as compared to 2004, with dealers’ average number of kitchen product lines being offered in 2005 reported as 10.2, as compared to 9.5 in 2004. Likewise, surveyed dealers reported carrying an average of 9.8 bath lines in 2005 compared to only 8.7 in 2004 (see Graph 4).

“Clients not only want quality, they expect choices nowadays. These are not the clients of yesteryear who came to a designer and expected to be told what to do. Today’s consumers watch TV and read magazines and know what’s out there, and if you don’t have what they want, they’ll go elsewhere,” noted one dealer, in explaining the importance of offering a wide selection of products.

Added another, “The trend toward personalizing your space means people no longer want the same thing as everyone else. So you have to offer enough choices to make them feel like they can make a unique statement with their kitchen or bath. We make a point of having displays that are traditional and contemporary, in light colors, dark colors, and even a few daring bright colors like red and green. People need to feel like you can give them something special that no one else has, and you can’t do that without having a good selection.”

A healthy number of kitchen and bath dealer respondents also noted plans to expand the number of displays in their showroom this year as compared to last year, with 29% of those surveyed planning to expand the number of kitchen displays and 23.8% saying they were planning to expand the number of bath displays in their showroom this year (see Graph 6).

In fact, nearly two thirds (65.8%) said when they add new product lines, they make it an addition to their showroom, rather than a substitution for another product, compared to only 34.2% who generally substituted new products for non-performing lines (see Graph 7).

“Don’t get me wrong, we’ll get rid of a product that doesn’t sell,” said one dealer. “But we like to give them time to find their legs. Our goal with adding new products is to make our showroom bigger and better. That’s why we add displays, too, and why we’re planning a major expansion of our showroom at the end of the year.”

Showroom Makeup
When it comes to their showrooms, kitchen and bath dealers are always looking to figure out the best possible use of space. “And it changes,” noted one dealer. “You have to watch what sells; sometimes it’s full displays, sometimes it’s vignettes, sometimes it’s the live ones, and something totally different.”

Of those surveyed, there seemed to be a consensus that no matter how much showroom space they had, space is always at a premium. Dealers surveyed noted an average showroom space of 2,491 square feet, and said that, of that, they devoted an average of 82.2% of their display space to kitchen products and 17.8% of their display space to bathroom products (see Graph 8).

The survey showed that dealers participating had an average of 4.1 full kitchen displays and 5 kitchen vignettes or partial displays, as well as an average of 2.7 full bath displays and 3.8 bath vignettes or partial displays. And, many expressed that they change these around frequently.

“Part of it is keeping things fresh,” said one dealer. “That’s not just for your clients, it’s for your salespeople, too, because they’ll sell better when they’re excited about what you have on the floor, when it’s not just the same old, same old. But you also have to pay attention to your [geographic] area, what people are responding to, whether it’s a hot new color or some great new cooking technology.”

Added another surveyed dealer, “Some people like full kitchen displays because they can’t envision their kitchen without seeing that sort of live environment. You can show them product samples or drawings, but they can’t feel it until you show it to them in a whole kitchen set up that they can walk through and imagine themselves using. But other people find it crippling. They see the display and think, ‘I don’t like that countertop,’ and now the whole kitchen is ruined for them. They can’t get past that one thing [that they don’t like]. Those people do better with just product samples; full displays just confuse them.”

The bottom line, dealers agree, is that you have to know your market. As one dealer advised, “Know what works for your clients, know how they think, how they experience product, whether it’s visually, or by touch, or by smell when it’s cooking appliances. Figure out whether they like to imagine or whether they need to physically walk through it…anyone can buy product, but how you display it, how you sell those possibilities…that’s what really counts.”

Of course some dealers are not so quick to make changes. “Things are good, sales are strong, so why change things around?” asked one dealer. “Change for change’s sake is silly. Your clients will tell you if they’re not happy with your product choices by their decision [to buy from you or not to buy from you]. That’s when you change things, when your customers aren’t happy.”

Another dealer warned about the danger of getting “change crazy.” He said, “This industry has so much product, and a lot of it is actually very similar. Some people make constant changes in the name of ‘keeping things fresh,’ when what they’re really doing is like a kid in a toy store who just wants to play with all the toys at once. They’re doing it for themselves, not their clients. If you change too much, too often, your showroom never has a chance to find its own personality, its own voice. Your business shouldn’t change so much that no one can tell what it’s about, or who it’s for. Especially when business is good, I don’t recommend constantly changing out displays or product offerings. Do a little at a time; in this case, less can actually be more…”

But many others disagreed. As one said, “The technology changes fast, not just the trends. If you aren’t cutting-edge, your clients will know it. The new thing they saw on HGTV, they expect you to know about it, they expect you to have it. Otherwise it’s like you’re a clothing store carrying last year’s styles.”

Concluded another designer, “Even if your clients aren’t buying that apple green cabinet, they want to see it in your showroom. This is a design business, so you have to be hip to what’s new and hot. And there’s always something new in design. That’s why buying is so much fun.”