“Disruptive innovations are like missiles launched at your business,” writes Clayton Christenson and Maxwell Wessel in the December issue of Harvard Business Review. That piece struck a powerful chord. Every brick and mortar retailer of decorative plumbing and hardware has had a missile launched at their business, and that projectile is called the Internet.
There are Internet disrupters that have landed direct hits and left established businesses in the dust. Look what the iTunes store did to Tower Records and other brick and mortar retailers of music. Christenson and Wessel point out, “Disruption is less a single event than a process that plays over time, sometimes quickly and completely, but other times slowly and incompletely.”
IMPACT OF ‘ETAILERS’
Most will agree that discount ‘etailers’ are a disruptor that is slowly chipping away at the foundation of brick and mortar DPH showrooms. While this may not cause us to go the way of Tower Records, it may well continue to erode profits – especially if we don’t recognize that the selling paradigm continues to dramatically change.
A key to warding off a disrupter is to determine the aspect of the business model that allows the disrupter to maintain a performance advantage and capture more market share. For example, navigation and mapping systems on smart phones and tablets have a significant performance advantage over manufacturers of GPS devices. These advantages include a technological, convenience and price edge. Most navigation apps are free or included in the phone or tablet cost.
Disruptions can also stem from technological or business model advantages that can scale as disruptive businesses move to better serve today’s more educated customers. This is accomplished by performing jobs more easily, conveniently or affordably than traditional and established businesses. Showrooms need to identify the technological or business model advantages that Internet etailers or other types of competitors have over their brick and mortar showrooms.
For example, a homeowner is looking for new door hardware. They can find a local DPH showroom and make the time to visit the store or they can search for hardware by firing up Google from the comfort of their living room. In the latter case, the customer can receive images, specifications and pricing in seconds. Google delivers everything customers believe they need to know in order to buy. And buying online gives customers the added bonus of free freight and no sales tax.
So why would your potential customers ever leave their living rooms?
To answer that, showrooms need to determine the advantages they bring to their customers that make it more attractive to purchase from them instead of online.
Here, it’s important to remember that showrooms don’t only sell products or provide services. What we do is perform jobs for our customers and solve problems that crop up in their lives.
THE PRICING CHALLENGE
The main advantage etailers have is pricing. They thrive on consumers who believe they know what job needs to be performed and what problems need to be solved.
Brick and mortar showrooms’ advantages lie in our ability to perform these jobs more effectively – which does more for our customers than saving a few dollars buying online. Most customers who purchase luxury products want the job performance that showrooms can deliver.
To better understand and leverage the advantages brick and mortar showrooms have, we need to teach our sales professionals that their customers are not simply buying fixtures, furniture and accessories. They are also buying “us” – our knowledge, expertise and service. We need to better incorporate our competitive advantages in our sales approaches so we can leverage them to not only survive but also thrive on disruption. We need to train them to ask better questions.
We recently analyzed the jobs that we performed for a client on a whole-home hardware project and came up with the following list of roles our showroom played in the process:
- Curator of information
- Design consultant
- Plan reviewer
- Quality assurance consultant
- Contract negotiator
- Purchasing agent
- Material expediter
- Project manager
Every time a client calls or a potential customer walks into our showroom, we perform a job that Daniel Pink describes in To Sell Is Human as ‘curator of information.’ That involves listening to the clients and sharing facts about their lifestyle, preferences and dreams. It requires us to ask the right questions that will help us meet our clients’ needs. By listening carefully, we can take advantage of preliminary research our customers conduct to sort through the massive troves of products, specifications, finishes, styles and available options and present curated information to our customers in the most relevant and clarifying way possible.
For every job and product, we drill down until we are in a position to provide specific suggestions. Customers come to us because we can save them and the design and construction team many hours and considerable dollars – not to mention helping to create something that they could not have envisioned on their own. This serves to differentiate the value proposition brick and mortar showrooms bring to our customers.
There’s no doubt that customers are better educated and have access to almost as much information as our sales consultants. That’s why we need to change our approach in order to confidently respond to customers who claim they can buy cheaper on the Internet. Yes, they can, but that does not mean that their costs will be the lowest.
While it can be tempting to try to compete on price, dropping our pricing ignores the benefits that brick and mortar businesses bring to the table.
Developing your own disrupter is one of the best ways to counteract the disruptive forces of discounting Internet etailers. Creating your own showroom disrupter does not necessarily require new technology. An effective disrupter may highlight your showroom’s problem-solving abilities that expose weaknesses in your competition.
Where are other opportunities? What are the best strategies to avoid disruption? How can we teach our showroom sales consultants to ask better questions and to better understand the jobs that they perform? Those are the questions that DPHA will address at its 2013 Annual Conference at the Sheraton Wild Horse Pass Resort, October 9-12, in Chandler, AZ. I’m looking forward to a lively conversation.
Gary Erickson is a principal of Renaissance Design Studio, which operates showrooms in Beverly Hills and Woodland Hills, CA. He is a member of the Decorative Plumbing and Hardware Association Board of Directors and chair of the DPHA Conference and Showcase Committee.