Lessons Showrooms Can Learn from the Demise of Toys R Us

Your business is not a toy store, but the closure of all of the 735 U.S. big box Toys R Us retail stores, which will in turn eliminate 33,000 American jobs, is another serious blow to the brick-and-mortar landscape.  And yes, the lessons that felled Toys R Us are equally applicable to boutique decorative plumbing and hardware showrooms.  DPHA 2018 Conference Speaker Bob Phibbs, aka the Retail Doctor, had an interesting blog post explaining the lessons that every DPHA member can learn from the demise of Toys R Us. 

 

Phibbs points out that many people will erroneously claim Amazon was the reason for the Toys R Us, but that's not really the reason.  Toys R Us became the most dominant toy store in North America because founder Charles Lazarus capitalized on a demographic shift he foresaw among Baby Boomers who wanted to give their children more than what they received themselves as children.  Lazarus modeled his retail operations after grocery stores, stocking shelves from floor to ceiling with an endless array of offerings.  If you entered Toys R Us you did not have to go anywhere else.  Any toy you could imagine was within your reach.  The go-to-market strategy equated choice as the vehicle to generate easy sales.

 

Toys R Us became a category king before most Americans had heard of Walmart and before Amazon or the Internet was created.  With the advent of the Internet though, the brick-and-mortar retail landscape started to change.  Products became secondary to the experience.  Go to a boutique toy store today and you will find employees and kids playing with the merchandise.  They get a chance to experience it firsthand, ala Apple stores.   Few, if any kids, played with toys at Toys R Us.

 

The parallels between Toys R Us and decorative plumbing and hardware showrooms are eerily similar.  Many showrooms became first-to-market destinations, pioneering products and displaying a vast array of merchandise that "wowed" customers who had little idea that the products on display actually existed.  More meant better based on the premise if you display as much as you can, consumers will believe that you have everything and then don't need to go to elsewhere to find what they want and need.  Similar to Toys R Us, DPH showrooms operated under the premise that choice equated to easy sales.  To paraphrase Bob Dylan, "The Times Have Been Changed."

 

Toys R Us teaches us the valuable lesson that product does not equate to easy sales or profitability.  Consumers are overwhelmed by choices in all phases of their life.  Consider how many emails they receive, the number of channels they have with their cable television subscription, the number of social media posts, texts, snaps, etc. that they encounter daily.  We are inundated with content.  Look around your showroom.  How many faucets look the same?  Can your staff tell the difference between cabinet knobs offered by different manufacturers? If they can't, why would you expect clients to tell or appreciate the difference?  Is it time to rethink displays and merchandising?  Is more better or is better better?  Your vignettes and displays need to reduce sensory overload, not contribute to it.

 

A wall of faucets may not be the best use of space or strategy.  Your customers need to be able to visualize how a faucet, vanity, sink, lighting, tub, and/or water closet would be like to use in their home.  When you look at a wall of 200 faucets, do you expect customers to pick one out and say, "That's the one I know I want."

 

Products no longer sell themselves.  They need to have a story and their story needs to be told by a sales professional passionate about improving their customers' lives.  There's a reason why someone will make the effort to visit a showroom.  They want confirmation that their selections are the best solution for their home.  They need to feel that the guidance received was delivered from someone who was looking out for their best interests as opposed to recommending a product because the sales professional received a spiff.  

 

Does your showroom fundamentally look the way it did when you opened it with the only difference being products on display?  The inability or reluctance to update the retail environment is another contributing factor to Toys R Us' downfall.  Phibbs argues that retailers need to remodel their stores every 3-5 years if they expect clients to return.

 

Toys R Us positioned itself as a discounter.  When you use price as a main attraction, you race to the bottom.  Toys R Us finally hit the bottom.

 

Target and other retailers ate Toys R Us' lunch by cherry picking the best-selling and trending products and then displaying them more effectively, thereby eliminating the need to make separate trips to the toy store.  Every decorative plumbing and hardware showroom should monitor what Restoration Hardware is doing.  Visit an RH store and closely examine the plumbing, hardware, lighting and accessory displays.  Ask yourself, could Restoration Hardware do to your showroom what Target and others did to Toys R Us, eliminate the need for customers to make a special trip?

 

Debt was another reason for Toys R Us' collapse.  It was unsustainable and that teaches another lesson.

 

Average does not cut it anymore.  Products for products' sake are not the keys to success.  More is not better.  The ability to tell compelling stories, ask the right questions, listen intently to responses and establish a trusting line of communication will help ensure continued prosperity.  What are you going to do differently tomorrow than you did today?

A No-Fail Negotiation Strategy

Do you like to negotiate deals?  Whether you do or don't, here's a suggestion that one of the nation's premier negotiation trainers, the Black Swan Group, says is almost always successful regardless of industry or context.  To get to "yes", eliminate the negatives up front.  Make a list of every unreasonable, unfair, crazy, ridiculous accusation your gut instincts are picking up that the other party might say about you, advises Black Swan.  If you sense that you would like to say to the other side, "I don't want you to think this about us," that's something that should be on your list to address immediately.  Don't deny or hide what you believe the other side does not like about you or does not know about you.  Here are some examples for a decorative plumbing and hardware showroom sales professional who meets with a prospect for the first time.

• "I bet you believe that you can purchase better online?"

• "I can understand why you don't want to be sold."

• "I recognize that you don't want to share budget information because you rightfully fear that you'll pay too much?"

• "I'm sure you are concerned about problems that occurred on your friends' and familys' renovation projects might happen to you."

The reason why you address the negatives up front is because of the way the brain works.  Alex Korb's book, The Upward Spiral, explains that when negatives are identified up front, they diminish every time.  Black Swan claims that's why it is critical you don't deny the negative when using this strategy.  You use it to "induce a contemplation of it by your counterpart to trigger the effect." 

 

It's also easier to pitch negatives than to convince a prospect of value.  Black Swan claims that the equivalent reasons for not doing something weigh three to nine times more heavily on us than the same value reasons for doing something.  That helps explain why most of your customers will spend six to 12 months on average researching a project before setting foot in a showroom.  That's why some sales training experts believe you have to show nine times the value in order to make a sale.

 

When you eliminate the negatives, reasons why a prospect would want to rely on your showroom for their new bath or kitchen take over and it's easier to get to "yes".  Black Swan claims addressing the negatives up front works almost 100% of the time.   Try it and let us know if it works on our Facebook page or post a comment on our LinkedIn Group.

Why Clients Do Buy

Between 20 to 30% of all retail customers, including those coming to decorative plumbing and hardware showrooms, don't buy, because the experience stinks. Salespeople who are living in the past, pressing the easy button to sell what they are spiffed on or directing customers to tried-and-true solutions that may or may not be appropriate for the job are a problem. The reason why many people opt for online purchasing is that it offers a better (or easier) option than schlepping to a showroom only to be frustrated by a sales professional's inability to ask the right question, care about the response they get or determine the reasons why the prospect wants to renovate their bath or kitchen in the first place.

 

Consider this: When someone walks into your showroom, it's not because they need to purchase from you. They can find faucets, shower systems, tubs, vanities, lighting, accessories, etc., in many other locations, including from the comfort of their couch. The reason prospects come to your showroom is because they want to. It's a choice that they make.

 

A new way to looking at closing a sale is assisting your clients accomplish the goals they set out with, which is to obtain guidance for their new baths. When you help clients achieve their goals, you are transformed from sales professional to trusted advisor and at a minimum you are delivering on, if not exceeding, their expectations.

 

A primary reason why customers won't buy from your showroom is that they don't trust you. Establishing trust requires knowing the real reasons why a customer has made the actual effort to visit your showroom. What is the motivation to renovate or build a new kitchen or bath? What goals, aspirations or dreams do your clients have or want to achieve? Why is the renovation important to the client? When you look beyond the basics of having something new or replacing something that no longer works, you can drill down, understand the personality of a person you just met and then craft solutions to meet their individual needs.

 

Once you determine true motivators, the next step in establishing yourself as a trusted advisor is to paint a picture of what your customer truly values. When you do, you help establish an emotional connection to your solutions. Using the word imagine, is a powerful tool to help connect. "Imagine what it will be like when after a hard day, where nothing seemed to go right, you can take a few minutes just for yourself, soaking in your tub or sitting in your steam bath and washing away the stresses of the day." "Imagine how much better you will feel knowing that the lighting around your mirror puts you in a position to look the best you can be." "Imagine how much easier it will be to prepare for the day knowing that everything in your bath has its own special place, making everything easier to find and use."

 

What does it mean when a prospective customer pauses, telling you they are not sure or not ready to move forward? Usually this means they are overwhelmed. As Robb Best explained at the 2017 Conference, when you offer customers too many choices, they become overwhelmed and shut down. Another reason why customers may balk is you forget to ask for the sale. If someone hesitates, find out the reason why. Inquire about the next steps and where you may help them. Most showroom customers have been researching a renovation for at least six months. When they near the end of their journey and balk, it is your role to explain they won't get closer to achieving their goals. This puts the decision to delay in a new light.

 

Everyone has a budget. Price is never, ever the reason someone does not buy from you. If a prospective customer takes the time, effort and energy to come to your showroom and after spending considerable number of yours and their hours looking for a solution walks away because your recommendations cost too much, that's the excuse but not the reason. When someone says the price is too high it is because the salesperson failed to prove the value they bring to his or her project.

 

Picasso is quoted as saying, "If I knew what the point was before I began, why would I paint?" Here's a fact - your customers have not changed. Their access to information has gone under a revolutionary metamorphosis, but their need to feel good about the purchase, to work side-by-side with a trusted advisor who takes the time to understand their true needs and to believe that they spent their resources with those who care about them and respect their time have not changed. The keys to closing more sales is asking the right questions to establish trust and need, making emotional connections, minimizing the risks associated with ripping apart one's home and learning how to deal with price sensitivity.   When you approach sales with those goals, you will not only increase the number of sales you make, you will see your referral business and positive reviews skyrocket.

 

The Secret of Telling Great Stories: Understand the Point

In their best-selling book, Made to Stick, Chip and Dan Heath relate an anecdote from Nora Ephron, the screenwriter who penned Oscar-nominated scripts, Silkwood, When Harry Met Sally and Sleepless in Seattle. Before captivating Hollywood, Ephron worked as a journalist for the New York Post and Esquire magazine. Her career choice was the result of a lesson taught during her first day of journalism class in high school. Most of the students believed that journalists research facts and then report what they find. Fact finding involves finding the who, what, when, where and why - also known in the trade as the five Ws.

 

The class's first assignment was to write a headline for a lead newspaper article. The facts conveyed were:

• The principal of Beverly Hills High School announced today that every faculty member will travel to Sacramento next Thursday to participate in a colloquium in new teaching methods.
• Speakers will include anthropologist Margaret Mead, college president Dr. Robert Hutchins and California Governor Edmund "Pat" Brown.

The class dug into the assignment, typing away to craft compelling headlines. Most responses, according to Ephron, reordered the facts and condensed them into a single sentence, wrote the Heath brothers. "Governor Pat Brown, Margaret Mead and Robert Hutchins will address the Beverly Hills High School faculty in Sacramento next Thursday," was a typical offering.

 

The teacher looked at the headlines his students developed and then stopped. Made to Stick relates, "Finally he said, the lead to the story is, 'There will be no school next Thursday'." 

Ephron had an epiphany. She realized then that journalism is not simply about regurgitating facts. Instead it requires figuring out the point. It's not sufficient to know who, what, when, where, and why if you don't understand what the facts mean and why they really matter.

 

Therein lies the lesson for decorative plumbing and hardware showroom owners, designers and sales professionals. To connect with customers emotionally which thereby enables you to become their trusted advisors, you need to understand the hidden point of their projects. You need to go beyond the who, what, when, where and why and determine what those facts mean to your customers and why they are important. What is the motivation for the project? What does the ideal solution look like? What will your customer feel when they enter their new space for the first time? Answer these questions and the odds are you will not have to squabble over budgets.

How to Make Great First Impressions

When someone comes to your showroom unexpectedly, how you approach, greet and interact with them could be the difference between landing a new customer or having them walk out the door. Frankly, idle chit chat most likely will not land you a new customer. When you approach them don't ask "how are you doing" because the prospective customer most likely figures you really could care less about how he or she is doing. A much better approach is to say, "Welcome to our showroom. Please feel free to wander around. If you don't mind, I'll then check back with you in a few minutes to answer any questions you may have."

 

Another no-no is to talk about the weather since you can't change what is going on outside, what is likely to occur in the future or what has occurred in the past. Frankly, discussing the weather is a waste of time. A better way to ingratiate yourself with potential customers is to compliment them on what they are wearing, a piece of jewelry or their hair style. Doing this indicates that you are not only observant, but you care about them personally.

 

Most initial visits to a showroom are information gathering expeditions. In fact, most of your customers conduct research for more than six months before deciding to move forward with a renovation. A good approach would be to ask, "which room in your home are you looking to make over?"

 

Avoid the temptation to ask about a budget because the odds are they might not have one or the figures in their head may be wholly unrealistic and possibly obtained from watching HGTV or the DYI network. And never forget that people will spend up to three times their budget on things that they connect emotionally to. Think of your own habits. You will splurge on the things that you want the most and that make you feel the best. A better option when budget comes up is to simply say that "the showroom has a range of options with different prices. To ensure that your dreams are realized, would you mind if I give you a tour and explain the differences?"

The Only Thing We Have to Fear Is Fear Itself

President Franklin D. Roosevelt uttered that prophetic phrase as part of his first inaugural address in 1932. Little did President Roosevelt realize at that time that his observation would apply to decorative plumbing and hardware showroom customers in 2018.

 

You will close more sales if you realize that price is never the reason why a sale is lost, nor is it the type of shower system, faucet, steam unit, vanity, lighting or any other product that is featured in your showroom. The primary reason prospects will abandon you for some other option is that you failed to eliminate your prospects' fears and establish yourself as a trusted advisor. Your prospects come to the showroom for affirmation and guidance. If they have spent considerable time already researching their options, they are in the showroom looking for solutions. It's a big deal to rip apart one's home and be without a kitchen or bath for many weeks. When you focus on understanding what your customer's fear the most and you help allay those fears, you will inevitably watch your closing ratios skyrocket.

Let's Get Organized, by Darryl Jones of QuickDrain USA (an Education Committee Member)

Organization is key when preparing to meet with a showroom client for the first time. A planning template is essential for maximizing your time and your clients. When a client visits a showroom for the first time, it could be overwhelming. A template will guide your customer and keep them focused on the task in-hand. A good template should be broken out by room and have the specifics already listed, and Excel rows are easy to delete and insert. It helps to have the main products listed first and then the coordinated accessories. Include anything and everything that may or may be purchased by the customer in that room. Be methodical about including every single product that can be used in that room. A little work upfront will speed your client thru the selection process. I've included a template to help you get started, however feel free to make changes in order to make it your own. And be aware that this template will only be available for a short time. Click here to download the template, and what now follows are some tips and tricks.

 

Code Box is used for Discounts: 

 

Percentage of discount given of list price can be found on the Codes and Calculator Tab under discount codes. Example: Entering 1 into the Code box will give 10% off of list Price.

1 = 10% off   3 = 15% off   5 = 20% off  7 = 25% off   9 = 30% off   11 = 35% off

Tax Code Box defaults to Colorado tax code, however it can be changed for your State, City tax structure. I will show you where the changes can be made in the formula. This is where it gets geeky. Get some help if you don't know what the local tax codes are. Just change the highlighted percentages to your local tax codes after the * if you need to delete a string of the formula, just remember to delete up to the ")" which is used for the closing of a formula.

I've also included the following Calculators and Charts.

• Gross Profit Margin Chart
• Sale Price Calculator Driven by gross profit margin
• Gross Profit Calculator

Why use Excel? Excel allows you to use hide cells, lock cells and create formulas. Once you understand how it works, you can use this program to streamline the decision-making process. Remember, make it your own and invest the time to get it exactly how you want it. Don't leave any money on the table.

Don't Judge Books by Their Covers

A common challenge for every showroom today is to avoid determining a client's budget before understanding what's most important to them.  Determining what's important requires catering to the new shopping paradigm, which most likely means your potential customers are already 75 to 85 percent into the customer journey when you meet them.  They have spent months online, viewing magazines and thinking about what their new dream kitchen or bath will look like. 

 

When prospects come to your showroom, the chances are that their smart phones or devices will also be omnipresent.  Keep in mind, however, that in today's world of "business casual" its even more dangerous than in the past to judge those "books by their covers".  The CEO of the hottest tech start-up with millions in disposable income may wander into the showroom wearing a workout suit or grubby jeans and a tee shirt.  You can't let someone's looks and dress cloud your opinion of them or what their project budget might be.  In fact, it could be substantially higher than a prospect wearing lots of real bling and designer clothing.

 

Flip the Funnel to Create Raving Fans

Have you noticed that customers will readily drop $20,000 on a new refrigerator for their kitchen renovation, but they balk at spending $500 on the most used appliance in their home, a new kitchen faucet. The fact that they may be without a place to cook for two months does not seem to bother them as much as a $200 change order. If you examined the things that drive your customers crazy, chances are they are not big picture items at all. Instead, it's the small, pesky inconveniences that send them off the deep end.

How can you eradicate annoyances that create negative impressions and leave your clients with a bad taste in their mouth? Flip the funnel. Everyone in your organization is a consumer. They purchase products and services. Have a brainstorming session and ask your team to relate the things that drive them crazy when they themselves go to a store or rely on a service provider. When you flip the funnel, you change perspectives and make problems easier to identify, claims management consultant Rick Houcek.

 

You are not asking your team to identify the complaints that your customers make, but the irritants that they actually experience when relying on others to provide them a service. Once they have identified the foibles that make them crazy, ask what they would do to eliminate them at businesses they patronize and then subsequently at your showroom. This is an exercise that should be conducted at least twice a year. When you eliminate the little details that leave negative lasting memories, you greatly enhance the opportunity to create raving fans who will recommend your showroom to their coworkers, neighbors and friends. Even if they don't, you'll save oodles of time and frustration from not having to deal with those little annoyances that drive your customers and you crazy.

When Email Is a Way To Avoid Communicating

How many times have you sent an email rather than picking up the phone or attempting to meet face-to-face to discuss a difficult, controversial or complex matter? How would you feel if you received an email from a builder who you have been supporting and working with for the last decade that said, "We won't be needing you on the estates project. We've decided to go in a new direction." What?! You most likely would be disappointed, angry, upset and at a loss.

 

Here are several situations where email should not be used to communicate a message.

• Don't use email to relate controversial decisions. Sending an email message, "I am sorry that you did not get the promotion. Hope you understand," most likely will result in a misunderstanding. 
• Don't use email to share sensitive information or for the sole purpose of covering one's backside. Creating a paper trail may be appropriate, but it may be more appropriate to relate the information face-to-face or over the phone and then confirm things in writing.
• Don't use an email to avoid a conflict or a confrontation. Sending an email to inquire why a deadline was not met, a problem not corrected or a budget not followed will only put the recipient on the defensive and most likely will result in an unproductive series of back and fourths that leaves everyone at a loss.
• Don't use email to paint the recipient into a corner by outlining every reason for your position so as to avoid questions or disagreements. Email is not effective as a court brief. How many times have you received a six or seven paragraph email and rolled your eyes?
• Using email to say things you would not say face-to-face. How many emails have you sent or received and thought, wow, that really should not have been sent?
• Using emails because you don't want to take the time to meet, call or simply walk down the hall. Yes, email is easy and quick, however, that does not mean it should be used when a more appropriate and effective form of communication is required.

A good rule of the thumb is that if an email chain goes beyond three back and fourths, there's a good chance continuing a written dialogue is not going to result in a solution. That's when it's time to pick up the phone and have a candid and mutually respectful conversation. You can diffuse tense situations by starting a conversation or an email by stating, "We don't seem to be on the same page, but we both want to make sure the project goes well. When's a good time to talk? Let's schedule a call."

 

Another key is to downplay or eliminate emotion and focus on facts and solutions. And when you do have a difficult conversation, recognize that the first 30 seconds are critical. That's the time you have to state your case before asking what the other side is thinking. If you speak longer than a half minute, chances are the other party will tune you out and not hear what you are saying.

 

Email is an extremely effective communication tool, but it's not a be-all and end-all. Recognize when email is not the preferred communication medium. When you call or meet face-to-face for difficult, controversial or complex discussions, you will save time, reduce stress and eliminate misunderstandings.