Hank Darlington: Big changes for kitchen and bath showrooms
I recently gave a talk to the EFI buying group, an audience of kitchen-and-bath dealers that all operate showrooms. The theme of my talk was what major changes will be taking place in the next several years. How a showroom looks and will be operated will change dramatically. Those of you that respond and stay ahead of the curve will prosper. Those who don’t — will not!
Some things will remain very important. First and foremost is good business management. That includes good financial, human-resource and marketing management. Having a three- to five-year business showroom plan will be more important than ever. Searching out and hiring great people and then having a formal written training program that starts day one and never ends will be paramount. How about teaching salespeople how to sell? After all, yours is a selling business — so teaching folks how to sell to the ever-changing needs/wants of your clients will be more important than ever.
Do you do an annual showroom budget? How about a detailed written marketing plan and budget? Too many folks don’t do many of these aforementioned business basics. In my opinion, this could be the demise of their businesses.
In the past 20 years we’ve seen two major forces take over our economic landscape, the commoditization of products and a rapid move to the “experience economy.”
The commoditization of goods and services means people want to buy at the greatest possible convenience and at the lowest possible cost. The internet and big-box stores are leading the way in this area. The experience economy means goods and services are no longer enough. Customers, especially your showroom customers, want memorable events that engage them in an inherently personal way when they shop in a brick-and-mortar store. For today’s luxury shoppers, the shopping experience needs to be engaging, personal, surprising, appealing, unique and repeatable. Your goal and challenge is to make your clients want to spend time in your showroom. You want them to come back and you want them to tell their friends and relatives what a great experience they had shopping at your store.
To help deliver that great experience you should: meet customers at the door with a latte and scone; Have a comfortable “decompression” area where they can sit and relax so you can qualify them and find out what brought them into the showroom; Have a showroom app and quick-response (QR) codes on products and vignettes to help the clients navigate the showroom; Have several HD monitors playing educational and informational things that will engage the clients; Have sales consultants use tablets and/or laptops to capture client information and show products and pricing; Look into utilizing virtual and/or augmented reality technology to help design spaces and select products; and have as many working displays as feasible. Your goal is to involve all five senses of your clients. You want them to see, hear, smell, taste and touch as much as possible.
Advertising as we’ve know it in the past is changing. Your showroom is becoming the media. Your website is the most important way of telling potential customers who you are, where you are, what you do and why you do it better than everyone else.
Customers will experience several “touches” with your business, including: Most likely your website or a referral; The drive up and first look at your showroom; The first step inside the showroom and looking left, right and straight ahead; The meeting and greeting; The presentation of your products and services; How well you handle the quotation and delivery of the product; and after-the-sale follow-through.
How “retail” is carried out has changed very little since the 1950s. Many stores and malls look very much the same. The process has been: go to a store, browse products, make a selection and go through a checkout line. Many of the stores that we’ve all grown up with are either out of business or are scrambling trying to reinvent themselves. For some, it’s probably too late. According to reports, there have been more than 6,000 store closings so far this year, resulting in more than 100,000 jobs lost. It’s estimated that a third of all malls in the United States will fail or be reinvented within 10 years. Other major changes that are/will be happening include:
Email may become passé as messaging apps become the most used form of communication.
Social networks are morphing into chat networks. What’s App, Facebook Messenger, We Chat and Viber are attracting more users per month than Facebook, LinkedIn, Twitter and Instagram.
I don’t have room here to list all of the name stores that have closed or are closing, but this alone should get your attention and make you start planning what your showroom will look like and how it will be operated in the next five to 10 years.
How consumers shop is changing dramatically. Online shopping represents 9% of all retail sales and is projected to continue to grow. We’re experiencing “mobile mania.” Everyone has a mobile device in their hand, pocket or purse. Every coffee shop, park, airport or other public place has people glued to their devices. Everything is just two taps on a piece of glass away.
It’s not surprising Amazon and Apple are leading the way in these changes. As an example, Amazon has opened three “Go” stores in the Seattle area. These are similar to convenience/deli stores. You enter the store, scan the Go Store app, go about shopping and pulling products off the shelves, put them in your basket and exit without going through a checkout line. You are automatically billed for your purchases. Amazon has developed “Dash” buttons and “Dash Replacement Services.” These are used with commodity products such as laundry soap, paper towels, etc. When you get down to the last cup of laundry detergent, touch your dash button and a box of detergent will be on your doorstep the next day.
Then there’s chat bots, which are interactive, artificially-intelligent programs that draw on cloud-based data to respond in real time to queries and conversation using natural language processing. An example: You call a company and are connected to an automated call attendant who asks questions and hopefully leads you to where you want to go. Examples of these are What’s App, Facebook Messenger, We Chat and Viber. All of this is part of conversational commerce. There’s also Apple’s Siri, Microsoft Cortana, Google Now and Amazon’s Alexa. They all are vying to become the preeminent brand of personal assistant. Merely speak your needs and they will be fulfilled. Simply say, “Alexa, Oreos” and Oreos cometh.
We are evolving from e-commerce (electronic commerce, which is only 23 years old) to c-commerce (conversational commerce) to v-commerce (virtual commerce), which includes virtual reality and voice commerce.
A definition of v-commerce is a totally artificial environment experienced three-dimensionally through sights and sounds provided by a computer and in which one’s actions partially determine what happens in that environment. It’s interactive and offers a full visual illusion of reality.
Virtual reality allows you to see and hear people, places and things. Clients can view products in three dimensions and with your help can design their own kitchen or bath. They also can tour your showroom, a vendor’s factory and meet your sales team.
Lowes is experimenting with its Holo room in one of its Seattle stores. Ikea is using virtual reality to design and select products for the kitchen. Macy’s is using it to help select furniture and Winsupply has introduced VR into 10 of its showrooms. VR is here and it’s going to continue to grow!
Be aware of demographics
Another important fact to be aware of is the generational changes. Baby boomers have been your main clients for the past 10 years. They are retiring or passing on. Since the 2006–2009 recession, they have become much more conservative. So decreasing numbers of baby-boomer shoppers, plus the fact there are 10 million fewer Gen-Xers than boomers, means for the next 10 to 15 years there will be fewer potential clients. The good news is there are 82 million millennials following in their footsteps. However, these folks have a totally different way of shopping. They’ve grown up with the internet. It’s their go-to place to shop. Plus, unlike boomers who preferred large homes, millennials will be happy with 2,500- square-foot homes, but they will want every automated convenience available. Smaller homes mean fewer bathrooms. It’s projected by 2020 millennials will account for a third of the total spending in the U.S. You will need to learn how to attract them to your showroom and then how to deliver that great experience that will keep them in there. A couple more facts that will affect your showroom business:
The number of new homes being built and sold decreased dramatically with the 2006-2009 recession. New-home construction is on the rise, but it’s a long way from where it was 10 years ago.
Gen-Xers and millennials prefer to live in condos and apartments in the larger cities.
46% of these folks are renters and not homeowners. Only a small percentage of them have enough liquid cash to make a 10% down payment on that new home.
DIY shoppers will continue to shop online and in the big boxes. The D4M (do it for me) shoppers will need your help and advice. You must become the authoritative voice knowing that “selling solutions” is one of the greatest advantages of face-to-face retail selling. Educating clients about your products and services is the greatest benefit you can share both in your showroom, and with your website and social media.
Next month, I will look into my crystal ball and make a number of predictions on what I see in your future. In the meantime, good selling!