Showcase showrooms hit customers' hot buttons

By Laddie F. Hutar Certifi ed Management Consultant Hutar Growth Managenrent Institute

I N THESE rapidly changing tinres I with many new players, a proliferation of new products and a consun.rer group that is "shopper sn'rart," it is a challenge to be doing the right things for today and still be preparing for the uncertainties of tonlorrow.

It is also difficult to be tuned in to the subtle but inrportant trends that are developing. By nature, building nraterial retailing is a local business.

But it is important flor the retailers, for future growth, survival and profits, to be ahead of conrpetition and to have an edge that allows for above average gross margins and profits. Obtaining that edge is not easy. One technique is to use market research as a management tool. Good nrarket research information, however, is hard to conte by and expensive. Sources for it are linrited. Large conrpanies have thenr but indepen- dents do not always have access to what is available. Many times what is available is biased.

Over the past four years, I have crisscrossed the country doing market research on how building material distribution has changed. The biggest changes in millwork have come in the marketing of what I have deflned as DHP Millwork or decorative high profit millwork. These are itenrs such as decorative leaded glass entry door systems, beveled glass French doors, attractively shaped windows, decorative staircase railings, mantels and wall systems, upscale kitchen and utility cabinets, upscale storm doors and interior and exterior columns.

These are not necessarily commodity items, but functional items that have more beauty and decorative value than their basic "plain vanilla" product counterparts. Other DHP millwork items include architectural embellishments such as fluted door frames, pediments, cupolas, ornamental interior mouldings, exterior mouldings and shutters.

The change in the nrarketing and retailing of this nrillwork has resulted in the creation of "showcase showrooms." In the past, building materials were sold with the product installed on a free standing display in a crowded home center/lunrber yard environment. With nrore sophisticated consunrers the best way to reach thenr today is to show them "settings." A setting is the product displayed in such a way that it shows what the product will look like when installed in a home.

As the consultant responsible for creating the "showcase showroomo' DHP millwork concept, I have identified a nunrber of key facts that are of interest and value to retailers:

(l) Since showcase showroonrs involve a higher barrier of entry because of "setting" costs, competition is not as intense and profit nrargins are above average. However, greater research effort and above average knowledge of products beyond their pure technical and functional value is required.

(2) Sales generated in this area can also expand sales for other basic products provided a companion showcase showroom selling system is installed when the showroom is created.

(3) The payback period for nrany showroonts is within l2 to 30 months.

(4) Employees in showcase showrooms are more motivated and have more pride in their company.

(S) tfre showroom enhances the company image.

(6) By focusing on a selected number of products and product lines, sales personnel can do a better job of selling (as contrasted to much "ordertaking" that is done today).

Showcase showrooms require a different approach to selling than the usual nrindset prevalent in the industry where the focus is: (l) price, (2) utility and function, and, maybe, (3) beauty. In a showcase selling atmosphere, the approach is: (l) beauty, (2) utility and function, (3) price.

Through a professional and creative selling approach, the sales person can control the point at which price is mentioned since price signs or tags are not on the itenrs shown.

Selecting DHP nrillwork itenrs is not just adding more of what is now displayed. DHP millwork products, because of their features, are not always easy to source and nray require outside assistance to find.

New showcase showrooms are just one of the trends in building nraterials evolving fronr the traditional store display approach. Our research has shown that nrass merchandisers are not able to participate to a high degree in this nrarket because their basic appeal is price, crowded stores, large inventories, basic comnrodities, large signs, bright lights and colors.

Showcase showrooms have a relaxed, comfortable atnrosphere; feature unique, attractive, upscale products, and are serviced by knowledge- able personnel who understand beauty, design, sales and the intportance of satisfying the custonrer.

Upscale products today are being purchased, nrore than before, for average honres, but the key to getting that business is that the selling situation nrust be such as to appeal to the aesthetics of the product as well as the utility and [unction.

I)uring the 20 years we have specialized in the building nraterials area, working with contpanies interested in additional growth and profit inrprovenrent, we have never seen any itenr that had as nruch potential as the DHP nrillwork niche, with its showcase showroonts and upscale selling techniques. The dentand ex- ists for these high quality, unique, innovative decorative high profit millwork products and continues to grow. Those progressive independent retailers who see this opportunity and take advantage of it, will have additional sales and profits conre their way.

Story at a Glance

Using upscale selling and showcase showrooms to sell decorative high profit millwork... techniques for getting more sales, higher margins and profits.