2011 Showroom Survey - Part 2
My eyes hurt! I’ve just spent several hours analyzing the results of the 2011 Showroom Survey by Supply House Times and BNP Media Market Research and comparing them to the past three surveys (2006, 2003 and 2000). This is a BIG project for the magazine (and me), but worth the effort if you take the time to digest this information and compare your showroom numbers and activities to the survey results. Are you stronger in some areas, weaker in others, compared with your peers? Use this benchmark information on wholesaler showrooms to evaluate your own operations.
There were a number of surprises - some good, some not so good! I’ve been writing this column for many years and have strong opinions on what it takes to run a successful showroom. It has been gratifying to see many of you take some of my advice and ideas and incorporate them into your showroom operations. Revenues and profits have grown significantly thanks to the addition of showroom business. Your vendor partners who market higher end luxury products should also be happy.
Survey FindingsThe total annual sales volume of the companies responding to the 2011 survey was $14,327,089 compared to $26,127,458 in 2006. My first reaction was that the downturn in the economy would be the cause, but because different companies responded to the survey in 2011 and 2006, we can’t make a good comparison.
However, 60% of all the respondents in 2011 indicated that they operate one or more showrooms vs. 36% in 2006 - a big and impressive increase. It shows that more wholesalers are getting into the showroom business.
Those that operate just one showroom (51%) vs. two or more (49%) stayed about the same. The average showroom size was in the 1,000 to 2,499 sq. ft. range for 36% of respondents, but 33% reported average showroom size of 2,509 to 4,999 sq. ft., and 17% said the average size was 5,000 sq. ft. or larger.
Here is a comparison of the showroom locations over the years:
Location of Showroom
2011 2006 2000
Wholesale Facility 79% 76% 88%
Retail Oriented Area 13% 17% 15%
Design Center 8% 8% 5%
Significant changes to the showrooms remained fairly constant: 50% of the 2011 respondents said they had done a major remodel in the past two years; 21% said they had opened a new showroom(s); and only 2% said they had closed one or more showrooms.
Showroom traffic adjusted somewhat in 2011 vs. 2006, with 62% of respondents to the 2011 survey reporting an average of 100 to 299 people visiting their largest and/or most active showroom per month in 2011 compared with 44% in the 2006 survey. Monthly traffic of less than 100 was claimed by 24% of respondents in 2011 compared with 30% in 2006. It was disappointing to see that the 3% of 2006 respondents who said their average monthly traffic was 1,000 or more dwindled down to zero in 2011, and the 17% who reported average monthly traffic of 300 to 499 in 2006 shrunk to 7% in 2011. It can only get better!
Who designed and did the layout of the showroom stayed about the same, with 86% saying they used in-house people in 2011 compared with 83% in 2006, while both surveys found 19% used an outside designer or architect. However, only 12% used a supplier’s design service in 2011 vs. 31% in 2006.
Here’s one that pleased me. Non-plumbing-related products being shown and sold in the showrooms increased dramatically. I endorse selling as wide a variety of kitchen and bath related products as possible. Consumers prefer one-stop shopping. Here are some changes over the past several years:
Products Being Sold
2011 2006 2000
Countertops 55% 48% 40%
Kitchen Cabinets 40% 29% 29%
Appliances 19% 13% 17%
Lighting Fixtures 12% 23% 21%
Tile 10% 10% 16%
The number of bath fixture lines being sold stayed about the same with 60% indicating between three and five different manufacturers. However, 19% said they sell six or more. A bit of a surprise!
Likewise, the number of faucet lines carried stayed relatively the same, with 38% saying they show three to five lines, while 50% show six or more. When you show the traditional wholesale lines (Kohler, American Standard, TOTO, Delta, Moen, Price Pfister, Grohe, Elkay, etc.), then add in all the other non-traditional manufacturers, it’s pretty easy to end up with more than a dozen faucet lines. The minus here is it dilutes your purchasing power. You really can’t be an important source when sales and purchases are so spread out. I guess my only comment would be “you can’t be all things to all people.” Be selective!
The targeted price point of products being shown and sold has stayed relatively constant. Here are the statistics:
Targeted Price Point
2011 2006 2000
Higher End to Middle 62% 64% 70%
Middle 33% 25% 64%
Luxury 2% 10% 39%
Low End 2% 1% 13%
By far the biggest emphasis is on the higher end and middle price segments. Low end has all but disappeared. The big changes are between 2011 and 2000 in the last three categories. Do any of these changes surprise you?
Even fewer companies said they display prices on showroom products in 2011 compared with 2006, 21% vs. 30%. This is down from 41% in 2000. Twice as many respondents in 2011 said they show the manufacturer’s list price as said they display their own net price. In 2006, three times as many respondents said they showed the manufacturer’s list price vs. their own net.
I’ve changed my opinion on this over the years. When we owned our showroom we didn’t display any prices or model numbers. I felt it made it too easy to “shop” us. But it also created a perception of mystery. Today I encourage folks to show their own model numbers (not the manufacturer’s numbers) and to show their own net prices. Please don’t quote a manufacturer’s list less a discount – it makes it too easy to do comparative pricing. If you’d like to discuss this important point, please call or email me. The 2011 survey found that 33% of respondents display model numbers on showroom products. Only 21% generate their own in-house numbers, while 79% use the manufacturer’s actual model numbers, making it easy to shop them.
In 2011 76% of the respondents said they have a showroom manager vs. 68% in 2006 and only 51% in 2000. This is a very good trend.
Even more impressive is the compensation level of these managers. It’s grown nicely! Here are the results:
Compensation 2011 2006 2000
Less than $30,000 6% 10% 31%
$30,000 - 39,999 19% 23% 28%
$40,000 – 49,000 22% 20% 18%
$50,000 – 59,999 16% 20% 23%
$60,000 – 69,000 19% 15% N/A
$70,000 Plus 19% 12% N/A
The number of full-time showroom employees vs. part time has increased nicely. In 2000 about 25% of all showroom employees were part time. I assume these part-time people came from counter sales or inside sales. Part-time staff makes it hard to furnish continuity to the clients and it has to be distracting to be pulled away from their main job responsibilities.
The compensation level of full-time showroom sales consultants has also grown. I endorse this trend. Like most things, you get what you pay for. Here are the results:
Showroom Sales Consultants
Compensation 2011 2006 2000
Less than $25,000 3% 16% 59%
$25,000 – 29,999 9% 15% 14%
$30,000 – 39,000 43% 40% 26%
$40,000 – 49,999 31% 21% N/A
$50,000 Plus 14% 8% N/A
Well, I’m out of room for this month. This is great information, isn’t it? If you have ANY questions or comments on any of this, please feel free to get in touch with me. Meanwhile, compare your results to the above. Where you’re strong, give yourself a pat on the back. Where you’re weak, go to work making it stronger. Good luck and good selling!
For Part 1 of the 2011 Showroom Survey Results, go here.