Why Customers Walk Away

There's been lots of press recently explaining the cause for brick-and-mortar store closings and downsizings. There are several reasons for the shuttering of Toys R Us and the problems plaguing Sears and others, but the most compelling one is customer experience.  Who wants to make a special trip for a purchase only to find that the sales professionals know little to nothing about the products, fail to engage the customer to determine his or her needs, or works in a space that does not appear to have been updated in years? 

When someone comes to your showroom, it's for a reason, otherwise they would have purchased the products that you have on display from the comfort of their couches.  Brainstorm with your team to define the reasons why customers will come to your showroom.  It may be to buy something.  They may be looking for information or hoping to discover something new.  Perhaps they have been frustrated while researching online or elsewhere because no one appeared to remotely care about them.  What are you doing to demonstrate to your customers that you care more?  Please share your experiences on the DPHA Facebook page or with our LinkedIn Group.

How to Improve Team Performance

It's rare for a team member to wake up in the morning and decide that "today when I show up in the showroom I am going to be mediocre".  Yet if you asked a number of showroom managers how many of their team members are just average, the answer most likely would be more than one.  Why the disconnect?  It may be caused by a lack of alignment.  There have been volumes written about the neediness of the Millennial generation, but look at what Millennials actually need.  They need a sense of purpose.  They need to be challenged.  They need opportunities to grow personally and professionally.  They need to believe that what they do makes a difference. Millennials get a bad wrap.  In truth, meeting their needs are keys to developing a high-performing team.

 

Start by agreeing on the difference that your showroom makes in the lives of your customers.  Your team may believe that they sell faucets, showers or toilets, but what they really do is to improve the lives of their customers.  They sell happiness.  They reduce stress.   They improve the value of their customers' homes.  To improve your team's performance, discuss with them the impact your showroom has on the world around them. And by the way, don't think this is a waste of time - after all, Millennials now are the largest generation in the workforce.

 

A second key is to be an inspirational resource.  One of the traits of superior leaders is the ability to challenge team members to leave their comfort zones and stretch their skill sets.  The benefits of inspiring your team are higher productivity, commitment, profitability and lower turnover. 

 

A third key is to create an environment and workplace that makes your team become advocates for your business.  How many team members would recommend your showroom as a possible employer to family and friends?  In today's world where unemployment is expected to fall below 4%, the ability to attract and retain talent is paramount.  Creating an environment where employees are encouraged to become corporate advocates will not only improve retention, it will also help attract best-in-class talent.

Answering the Most Asked Question in the Showroom

"How much is my new bath going to cost?" is probably the most asked question in your showroom. Most likely your response is that it depends on a number of factors followed by an inquiry about the person's budget. This approach begs the age-old question of who should talk about budgets first, the showroom or the client? Traditional sales consultants would argue the person who mentions money first loses. Recent academic research counters by claiming that if you mention price first, you take control of a negotiation and set the price range with an anchor.

 

The Black Swan Group however disagrees with those academic claims, arguing that the first to mention price is at a disadvantage because too high of a range for an anchor price may scare the prospect off and without knowing what a potential budget might be, the customer may not be ready to commit to the project or your showroom. Additionally, Michael Silverstein told DPHA members at one of our past annual conference that showroom customers who become emotionally connected to a product or service will spend up to three times what they initially budgeted.

 

For showrooms, an effective tactic typically is to state, "The price of a new bath depends on a number of factors ranging from the scope of the renovation to the quality, originality and customization of products that will meet your desired goals. Before we talk price, let's talk about what you want to achieve with your renovation and the look and feel that will help meet, if not exceed, your goals." Reinforce to the prospect that you can work with almost every budget imaginable. After all, it's not in your client's best interest to have unrealistic or unachievable expectations. One of the very important roles a professional showroom salesperson offers is the ability to minimize surprises.

 

Another consideration is that your prospects already have a basic understanding of the cost of a bath renovation because they have spent months researching things prior to coming to the showroom. If the prospect starts using industry jargon, thermostatic versus pressure balanced or ceramic disks, PVC finishes, etc., you know that they have done their research.

 

If the prospect pushes for a price before a scope is determined and quality levels agreed to explain that a new bath is comparable to a new car. You can spend $20,000 or more than $100,000 depending on the make, model and options. Everyone one of your customers, builder clients, trade professionals and others whom you sell to most likely can obtain the products that you provide at a better price. However, the lowest price is almost never the lowest cost - it's not about product price. Focus on the value-added services that you provide that more than compensate for for the potential to obtain products at a lower cost.

What Colors Trend for the Fall of 2018?

Following New York Fashion Week, the Pantone Color Institute analyzed emerging trends and developed a list of the top 10 colors it expects to trend in the fall of 2018. According to Color Institute Executive Director, Leatrice Eiseman, "Designers and consumers alike continue to transition away from cyclical trends, and instead focus on self-expressive colors that evade antiquated seasonal structure. We are seeing very notable nontraditional choices." This trend was evident at both the last ISH Fair in Frankfort, Germany, the largest exhibition of plumbing products in the world, and at the 2018 Kitchen and Bath Industry Show where splashes of bright bold colors were featured in products ranging from kitchen faucets to stone slabs.

Pantone's top 10 colors for the fall of 2018 are:

1. Russet Orange (Pantone 15-1255) is an orange with slightly more red than yellow. Pantone links it to nature and foliage explaining "This forest floor orange speaks to earthen warmth."
2. Crocus Petal (Pantone 15-3520) feels like the sweet, barely subdued understudy to Ultraviolet. "A cultivated and refined hue adding light and air-spring like feeling.
3. Valiant Poppy (Pantone 18-1549) is a "brave and outgoing red shade effusive it is allure."
4. Ultra Violet (Pantone's color of the year 18-3838) characterized as a vibrant spiritual purple grounded by deep blue undertones.
5. Ceylon Yellow (Pantone 15-0850) is a "savory and spicy yellow."
6. Martini Olive (Pantone 18-0625) is a "smooth, sophisticated urbane green."
7. Nebulas Blue (Pantone 18-4048) reminds one of "twilight and a thoughtful starry-eyed blue."
8. Limelight (Pantone 12-0740) is a "pungent yellow-green."
9. Quetzal Green (Pantone 18-5025), a "deep elegant blue-green hue suggestive of rich plumage.
10. Red Pear (Pantone 19-1536) is a "deliciously deep red, whose luscious depth entices." Red Pear resembles a soft burgundy with cool undertones.

What trends are you noticing in your showroom?  Please share your experiences on the DPHA Facebook page or with our LinkedIn Group.

Scary Thought: Amazon Gets Brick-and-Mortar Retail, by Tom Cohn, DPHA Executive Vice President

Last week, I visited the first Amazon brick-and-mortar bookstore in the Washington, DC area, a two floor structure in the heart of Georgetown.  As much as I wanted to dislike the store, it was almost impossible to do so.   You could not help but be impressed by the design, merchandising and vibe that existed.  There are a lot of books on display, but not too many, and those that are featured appear to be carefully curated similar to the offerings and approaches used by Amazon online.  Because I mainly read nonfiction, marketing, history and social science books, I was impressed by the titles on display.  This is where Amazon's book store shines. It was obvious that Amazon's merchandising of its brick-and-mortar book store is based on the multitude of data that it has from its ecommerce and data service operations.  

Equally impressive to the merchandising was its signage.  Vertically oriented signs adorning the bookshelves told customers If you like pointing in one direction, you'll love pointing in the other.  It was a stroke of genius.  It's a play on the online version of people who bought this also purchased the following items.  

The layout is airy and spacious.   There's a coffee café on the lower level and inviting spaces for customers to simply hang out and read.  There are also not so subtle signs for upselling with large video screens encouraging visitors to purchase an Echo, Kindle and other Amazon products.  When I took out my phone to take pictures of the store, a sales associate asked if I was checking pricing.  When he asked if I knew how much a book cost, I said "yes" pointing to the retail price on the inside flap of the cover.  The sales associate then asked if I was an Amazon Prime member.  I responded affirmatively and at this point the sales associate introduced me to the Amazon Shop app on his phone.  Using the app to click on an image of the cover of the book, he was presented with the Prime Member price that was 43% off the suggested retail price.  

Checking out was a breeze.  Scan the bar code, swipe a credit card that is tied to your Prime account and just walk out the door.  

Why is Amazon getting into the brick-and-mortar book store business when it virtually owns online book selling, controlling a reported 64% of all online book sales?  The reason is explained by Scott Galloway in his book The Four: The Hidden DNA of Amazon, Apple, Facebook and Google.  "E-commerce doesn't work, isn't economically viable and no pure e-commerce firm will survive the long term," Galloway writes.  He explains, "the cost of customer acquisition continues to rise as consumers' loyalty to brands erodes...In 2004, 47 percent of affluent customers could name a favorite retail brand.  Six years later that number dropped to 28 percent.  That makes pure e-commerce play increasingly dangerous. Nobody wants to be at the mercy of Google and disloyal customers."  Given Galloway's observation, does it surprise you that Amazon's online retail operations do not generate a profit?

Lessons for decorative plumbing and hardware showrooms.  Walk your showroom space.  Do your displays and merchandise mix invite customer interaction, inspire dreams or create a meaningful or memorable experience?  Evaluate your signage.  What messages are you sending?  What could be your equivalent of 'if you like this, you'll love that'?  Is your merchandise carefully curated?  When was the last time you performed a line review to determine which products sell the most and generate the most margin? 

 

Is It Time to Become Uncomfortable?

"In the U.S., they're cutting corners and cheating, and driving everything to the lowest common denominator - in the brands themselves and in the channels of distribution: department stores, shopping centers. And it's reached the point of no return, which means that retail in the U.S. will have to reinvent itself," claims Value Retail's CEO Scott Malkin in a recent Glossy interview.  Value Retail owns  and operates 11 luxury outlet centers in Europe and China. 

 

Malkin explained that it is impossible to have a culture where no one ever pays full price and still make money in retail.  Luxury brands such as Gucci and Givenchy no longer offer sale products at their full-price brick-and-mortar stores.  Malkin asserts that you can't be a luxury brand and discount.  He also believes that luxury brands should avoid Amazon completely.  "Everything that makes Amazon brutally efficient and successful precludes their ability to work with luxury brands." 

 

Malkin questions what an acceptable experience might look like in the future, when consumers could arguably be printing their clothing or shoes in their own living rooms.  The only reason why consumers will visit brick-and-mortar stores in the future will be directly tied to the quality of the customer experience and will have less to do about products. And the quality of customer experience is tied directly to the ability of sales professionals to connect and deliver experiences that will motivate consumers to leave the comfort of their homes. 

 

Malkin views his business differently from other shopping center owners.  "We're in the tourism business; we're in the business of creating experiential destinations that happen to sell merchandise and we've embraced elements in our culture that have nothing to do with shopping centers or retail." That helps explain why he recruits employees from the hospitality industry, events industry, nightclubs and high-end retailers. Eighty percent of his 1200 team members previously worked at Gucci, Prada, Dior, Ralph Loren and/or Tommy Hilfiger.

 

Malkin believes that retail is fundamentally about fashion and fashion is fundamentally about women who shop touristically.  Luxury experiences can't be mass produced - they need to be curated and customized.  That why it is virtually impossible to have exceptional sales professionals in a discounting environment and hope to survive. To appeal to human beings' five senses to deliver outstanding customer experiences requires relying on art as much as science, commitment and passion as much as logic.  This assessment parallels guidance offered by Doug Stephens at the 2017 DPHA Annual Conference. Appealing to a customer's senses and delivering exceptional customer experiences are challenges that all retailers face, including decorative plumbing and hardware showrooms.  

 

Malkin claims that human nature is the primary reason why most retailers and shopping centers will not change.  They are opting instead to invest in new technology, apps and machinery with little to show for those investments.  Change is difficult, especially when you have had a track record of success, and investing in technology is easier than inventing an uncomfortable culture.  The fact remains that the way people buy has fundamentally changed.  Product is no longer the driving reason why someone will get off the couch. 

Does your culture need to change?  How are you embracing your customer's senses and making your customer experience the reason why someone would make a special trip to your showroom?

Enhancing the Consumer Shopping Experience, by Phil Hotarek (Lutz Bath & Kitchen), an Education Committee Member

The silver lining to evolving technology and online shopping is the enhancement of the consumer shopping experience.  It has forced change, creativity, and innovation in how we can create a stronger connection with our market.  Technology has given more control to the consumer with instant accessibility to information, price comparison and product knowledge.  Manufacturers and showrooms are now faced with the challenge of staying ahead of a rapidly evolving market or going to hell in a handbasket.  Let us go beyond stating the obvious - that we are battling Amazon with exceptional service - and delve into how we as innovators can enhance the consumer shopping experience for decorative plumbing and hardware.

Digital Merging of Online and Offline Shopping

Chances are that anyone walking into a showroom is already well researched in the categories of accessible showrooms and products - glorified Google and Youtube experts.  If that is indeed the case, then why would anyone purchase decorative plumbing and hardware products from a showroom anymore?  A one word answer: CONFIDENCE.  Decorative plumbing and hardware is among those categories that consumers are least confident about and purchasing on their own.  They seek expert knowledge and information through showrooms and from there it is our job to gain their trust by coordinating the entire project.  Integrating technology into your showroom experience creates a seamless transition from internet product browsing to the showroom experience.  Tesla has achieved this by providing the technology for customers to build their own car with custom features on monitors right in their showrooms.  A plumbing showroom can achieve a similar experience by improving visualization in a client presentation.  This can be done by using advanced architectural software or even something as basic as a PowerPoint to cast a client's project on a large monitor or tablet.  If you want to take it a step further, the presentation can be brought to the client on the job site or for that matter, anywhere, simply by using a tablet.  Ultimately, clients want to feel valued and want to make their lives easier.  By taking the tedious task of browsing away from them and placing an emphasis on a quality presentation using technology that clients are used to, you successfully merge the online and offline shopping experience.  Lastly, the ability to complete the sale on a mobile device from anywhere can add that final touch of comfort right before signing with their finger and receiving their invoice via email.

Data Implementation and Attribution

The driving force behind rapid technological advances is data analytics.  Tech giants, Google and Amazon, invest a large percentage of their resources on the collection, storage and analyzation of data to be more in touch with their market.  Google search "best juicer" and all of a sudden your internet browser is filled with advertisements for juicers and coupons from Sur La Table.  Data analytics is playing an increasingly significant role in all industries, even sports!  For the decorative plumbing and hardware industry it should be no different.  Collecting and analyzing data relevant to your showroom's success is critical for growth.  Some examples are:

• Percent quotes > invoice ratios
• Seasonal sales 
• Style and category 
• Manufacturer specific
• Finishes 
• Hot trends vs. timeless products
• Service callbacks and returns
• Best marketing channels that influence purchases

Measuring attribution can be difficult when making sure your investment in resources produces a greater return.  Taking data analyzation a step further might be sharing those results with manufacturers and representatives to create better synergy for new products that are being released.

Exceptional Customer Service will Never be Obsolete

While enhancing the consumer experience in your business, you can never sacrifice the value of exceptional customer service.  Successfully integrating technology in connecting with your clients and improving data analytics should be built on the foundation of your company's values.  An optimal in-store experience can be reinforced with the heightening of all five senses and making sure the customer walks away with something tangible.  A smooth blending of traditional values with modern technology will speak volumes about your business. 

Lessons From Nordstrom in Earning Customer Trust

Nordstrom is known for its exceptional customer service and does not deny publicly that it once took back a set of tires from a customer who was dissatisfied with the purchase even though Nordstrom does not sell tires.  The story is not true of course, but that's not the point - it speaks to the Nordstrom brand.  Similar to other brick-and-mortar department stores, Nordstrom is challenged by ecommerce competitors and a paradigm shift in the way consumers shop.  In response, Nordstrom is constantly tweaking its business model to maintain its relevancy to its customer base and to create more compelling customer experiences.

 

The company appointed Olivia Kim as Vice President of Creative Projects, whose role is to recruit new customers and make the brick-and-mortar store a destination for fashion inspirations and merchandise that is not easily found elsewhere, according to a recent Glossy podcast.  Kim explained the strategies that she is using to appeal to customers interested in fashion, art, culture and style and thereby turning Nordstrom into a go-to destination for that type of inspiration.  Experimenting with eight different Nordstrom stores, Kim establish theme-related temporary pop-ups within the stores, including digitally native brands such as Everlane and Warby Parker, and obtaining exclusive merchandise from existing partners such as Nike and Alexander Wang. 

 

Kim wanted to emulate Fashion Week's Opening Ceremony that promotes obscure brands or re-imagines existing brands in new ways.  A number of retailers are experimenting with collaborations, but for those efforts to be successful they need to be able to interest and inspire consumers.  They need to say to customers, 'come here because we are on the cutting edge, we have something new and different.'  Kim explained, consumers "Need to look to you as a point of inspiration when they go to make their next purchase.  Earning trust is how you gain wallet share."

 

Kim also recognizes that today's consumer wants a shopping experience that is easy.  There's more to it than how quickly someone can acquire a product - it's more about preference.  While Kim recognizes that Amazon needs to always be on her radar screen, she does not view Amazon as a competitor.  She is focused on bringing experience, product and cool ideas to her customers and matching her customers to new brands.

 

Lessons for decorative plumbing and hardware showrooms: Consider emulating Opening Ceremony in your showroom for your builder, designer and homeowner customers and show how you can re-imagine new baths in different ways.  These may include some of the new technologies for tubs, shower systems, mirrors, integrated in-cabinet and drawer lighting, really cool new storage solutions, advancements in countertop materials, smart water closets, etc. The opportunities are almost endless.  There are also opportunities to pioneer brands that most of your repeat customer base have never heard of.  What prevents you from creating a pop-up in your showroom featuring different products that are customizable?  Other possible pop-up ideas including re-imagining a display area dedicated to "a return to nature", "in-home spa", wellness center or "the high-tech bathroom".

 

When you match your customers to new ideas and brands, you are most definitely making a distinction between your showroom and online etailers whose most distinctive competency is the quickest route from wanting to getting.