“The evolution and reinvention of DPH showrooms.” This is the title of a talk I gave to more than 100 showroom managers, sales consultants and vendors at the Winsupply biannual showroom conference recently held in Savannah, Ga.
Like you, I keep reading about the demise of brick-and-mortar stores and how important it is and will continue to be to deliver great customer experiences.
I work hard trying to stay updated and even a little ahead of the curve on all things related to DPH showrooms. I learned more in prepping for this talk than anything I’ve done in a long time. I read two books, several articles and did a lot of “Googling.” The end result was more than 50 pages of notes and 54 slides. Try and squeeze that into an hour-and-45-minute talk.
After all my research I now understand why all those great retail stores I’ve grown up with are either going out of business, rapidly closing stores or struggling to stay relevant. And I think I finally know what this new term “the customer experience” is all about. I’ll try to share this newfound knowledge in these next two issues.
First, let’s briefly look at the evolution of DPH showrooms. The first wholesaler showrooms started showing up in the 1950s and 60s. They were done mainly because of the encouragement from the major fixture manufacturers. Back then, bathrooms were small — a place to do your personal hygiene and move on! Fixtures were white and faucets were chrome.
In the 1970s and 80s, more wholesalers started opening showrooms — and colored fixtures and faucets with more styles and finishes were introduced. The plumbing contractors dictated the buy/sell of the products and most showrooms looked alike.
The concept of marketing the showrooms as a more retail-oriented business hadn’t kicked in yet. By the 1990s, bathrooms and kitchens had become the most important rooms in the home. Builders, architects and designers had jumped on the bandwagon and the number of decorative plumbing and hardware vendors and products had grown tremendously. American manufacturers, along with European and Asian vendors, were making some great-looking quality products. In addition to the growth of wholesaler showrooms, a lot of independently-owned showrooms were opening up all across our fruited plains.
In the early 2000s the plumber had, for the most part, lost the buy/sell of the more luxury products. Showroom doors were open to all clients. Some wholesalers were starting to incorporate some retail merchandising into how they marketed their showrooms. Advertising, websites and social media were being used to attract clients and a few were even starting to offer more friendly retail shopping hours and experiences.
And whoa…then comes the internet! I thought I knew the tremendous impact the internet was making, but in doing all of the above-mentioned homework for my talk, I was blown away by what really has happened, including changes that are occurring even as you read this article.
Allow me to share some interesting facts. Walmart started its business in 1962. Amazon was started in 1995. In 2012, Walmart revenues were 16 times those of Amazon. Just four years later, Walmart revenues were only five times those
In 2015 Walmart carried 11 million products and Amazon was marketing more than 260 million products. Plus, most of us would agree Amazon’s customer service is better than Walmart. Also, 2016 was the first time in Walmart’s history it had declining sales and this year the national chain is closing more than 150 stores across the country. Yes, Walmart’s fighting back and doing ecommerce, next-day deliveries, etc., but will it be enough?
Amazon sales represent 60 cents of every dollar spent online in the U.S. It’s Prime Day (only 2 years old) was the fourth-largest online shopping day in the U.S., last year. I believe we need to think of Amazon not as a retailer, but as a data-technology and innovation company that also happens to sell products.
I don’t have room to list all the well-known large retail businesses that have either gone out of business completely or are closing stores as fast as they can. Many of the retail stores that we’ve grown up with will not survive. Who would have thought Macy’s, JC Penney, Sears/Kmart, Target and Staples and so many more would be fighting for their lives? Not to mention Radio Shack, Sports Authority and others that already have shuttered their doors.
Reasons for the shift
Two major forces are taking place in our economic landscape. First, it is the commoditization of goods and services. People want to buy at the greatest possible convenience and at the lowest possible price.
Secondly, there is a shift into the “experience economy” where goods and services no longer are enough. Customers want memorable events that engage them in an inherently personal way. These would be “experiences” that are unique, personalized, surprising and repeatable.
The more personal you can make your customers’ experiences and your decorative plumbing and hardware offerings, the more engaging and memorable you will be.
Here are a few projections:
In the relatively near future one-third of all shopping malls in America will fail or change dramatically.
By 2020 Amazon, Alibaba and eBay will own 39% of the global
By 2020 non-store retail sales will be 12% of the total of all retail sales (Compared to 9% today).
The global e-commerce business will continue to grow by double digits while global brick-and-mortar stores will grow by 1 or 2%.
Mass media as we’ve known it is dying along with brick-and-mortar retail (that would be newspapers, Yellow Pages, TV, etc.).
Digital and social advertising is up 33%, but there are questions on how long this will last.
We’re also experiencing “mobile mania.” We’re no longer sitting at home on our computers and laptops. We have a mobile device in our hand, pocket or purse everywhere we go — places such as coffee shops, the park and airports. We are glued to our mobile devices. Someone did a survey that indicates 68% of us check our mobile devices the very first thing in the morning and that we check them some 220 times a day! Really? Everything appears to be just two taps on a piece of glass away!
In my opinion, DPH showrooms have a lot of work to do if they want to remain relevant. Too many are still using traditional forms of advertising, the showrooms still look similar, they haven’t been retail friendly, they let the plumber dictate and they don’t make the GP margins they should. In too many cases the showroom still isn’t treated as a separate profit center. Too many folks are trying to sell premium products in a less than premium way!
That’s the bad news! The good news is there are more exciting opportunities happening right now (and on the horizon) that can and will insure the future of our wonderful industry.
We are entering an all-new way of doing business. Showrooms, as we know them today, will cease to be only a physical space or website that clients visit. It will be with us, around us and maybe even in us (via implantable technology). Far-fetched? No! It’s already happening. Here comes the “replenishment economy” — a future state in which sensors, devices and robust analytics will manage a lot of our daily, weekly and monthly needs. Some of this won’t apply directly to how showrooms do business, but technology and exciting experiences in the showrooms will.
Next time, I will share some of the exciting things that are about to explode in terms of how we operate our showroom businesses. It’s going to mean “play the game or take your ball and go home,” because if you don’t make these changes the game will be over.
These are exciting times!! Good selling.