Hank Darlington 2014-11-06 01:03:58
Our industry is continually evolving and, in my opinion, the next five years will see more change than any period in the past. Last month I wrote about the history and future of retailing and brick-and-mortar stores. I put in many hours of research, interviewing experts and reaching out to industry leaders. I had my eyes opened to what dramatic changes we will see the next several years. That article was broad and fairly generic to retail in general. This month, I want to get more specific and talk about what I believe decorative plumbing and hardware showrooms will look like and how they will need to be operated in the year 2020. Now, I’ll be the first to admit my crystal ball isn’t any better than yours. But as I said, I’ve spent a lot of time and energy researching this subject. I think you’ll find the results of this effort interesting. It should get you to put on your thinking caps and evaluate your own businesses. First and foremost, it will be the Internet that will drive most of the changes I’ll be describing. Can you believe the Internet only has been on the scene since 1991? In that short period of time e-commerce sales grew to $262 billion dollars in 2013 and are expected to surpass $500 billion by 2020. Wow – that’s mind boggling! Where baby boomers and Gen Xers have been the driving force of retail sales, it’s projected that millennials will be in charge by 2020. Baby boomers and Gen Xers are kind of rooting for brick-and-mortar stores to prevail. It’s nostalgic. It’s emotional. Whereas shopping online is clinical. It’s, “I logged on. I found what I wanted. I pressed a button and got it a couple days later.” On the other hand, the physical experience of shopping in a brick-and-mortar store is less important to millennials. They want “unlimited options” at their disposal and they want it NOW! Living in the digital age This all means the store of the future will have to integrate the digital with the physical. By doing this your Showroom can create the illusion of “an endless aisle.” Sales consultants will be armed and wired carrying iPads and tablets. This, plus strategically located fl at-screen Tvs and kiosks, will enable salespeople and clients to key up information at the touch of a screen. Your clients will be able to say, “Show me the reviews on this faucet,” and you’ll be able to do it. Technology of the future must be truly complementary, not just gadgetry for gadgetry’s sake. Millennials, Gen Xers and boomers will want – and even expect – a more satisfying social and emotional experience inside your store. This means comfortable “decompression” areas (soft chairs, couches, tables, refreshments, lifestyle information, and more). If you sell kitchen cabinets and/or appliances, a “live” kitchen would be an important addition. There’s nothing like the smell of fresh-baked chocolate-chip cookies or a turkey breast wafting through the showroom. Showrooms will combine the sociality and the indulgences of food with the pleasure of shopping. As it is today, showroom employees will be the key asset. You will have to hire people who like people. Look at the top-performing retailers today – Apple, Nordstrom, Sephora and Whole Foods. They all have devoted and well-trained associates on the sales floor. This means you will have to offer better salaries, commissions, benefits and training to improve the level of service offered today. The more you are like a “warehouse,” the more Amazon is going to crush you. I have preached teaching selling skills for years. A few of you do, most of you don’t! If you don’t make this an ongoing priority you will be outpaced by the Internet and the competitors that do. Successful showrooms in 2020 will integrate online characteristics into their businesses. Clients will need to be able to order your products via the Internet (either from home or in the showroom) and the products can be delivered to their homes or they can come in and pick them up. You may well have a “drivethrough” pickup area. Both the showroom and the wholesale side of your business will need comprehensive inventory planning, replenishment and warehouse management capabilities. Also, you will have to be able to share this information on apps with your clients (tradespeople and homeowners alike). Take care of your customers Customer relationship management (CRM) will become even more important and complicated. Even if your client has a great experience at your store today they will expect this and more the next time. In 2020 “managing” your clients from start to finish will be huge. How you meet and greet them, qualify them, present your products and value-added story right through to doing the immediate quote, writing the order, delivering the product and after-sale follow-through will all be part of that all-important customer experience. There’s even a new term being used today called customer experience (CX), which includes a whole range of technology and Cloud solutions (including marketing and loyalty apps) that work in concert with a well-crafted CRM strategy. If this information is all new to you then you better start doing your homework today. Integration is everything. Multichannel retail (and that’s what your showrooms are) must be seamless for both you and your clients. This requires a level of systems and data integration that goes well beyond what most companies have in place today. A successful transaction in 2020 will hinge on having the right product at the right time and at the right price. There is nothing new about this value proposition, but there is a lot new about how it’s done. You must start today on developing a strategy for “showrooming” – the popular practice where clients come into your showroom to browse and then make lower-priced purchases online. This has been causing angst with most of you for the past several years. But, you can fight back with real-time price matching and by equipping your sales consultants with mobile technologies and information that puts them on an even keel with smartphone-carrying clients. This way your sales staff can intervene and reduce the effectiveness of “showrooming.” This means you will have to become more transparent with showing real model numbers and a competitive price rather than no model numbers and price, or your own “mystery” model numbers and prices. After all these years of preaching just the opposite, did I really just write that? It just proves that times have changed and so must we! Showroom social You will have to continue to “go social.” In-store shopping is a highly social activity. It’s face-to-face and we are apt to run into friends and neighbors while out and about. So it only makes sense that you should leverage social media to take full advantage of the customer engagement they already enjoy. You should plug into social buzz, listen to customers, capitalize on what you learn, tell stories, use social tools and market your best practices to build even better and more seamless customer relationships. I strongly believe your vendor partners must continue to get tougher and better at managing their IMAP policies. I know if I still owned my business I would be favoring partners that work hard to protect their pricing and partnerships. I further believe that private label, exclusive and semi-exclusive products will be much more prevalent in 2020 than they are today. The strategy of trying to be all things to all people will not work as well as being more unique and exclusive. Today almost everyone shows and sells many of the same products. It’s tough to maintain margins and win orders when this is the case. Next month, I will articulate more on this subject. Lastly, I believe the showrooms of the future will be smaller and more like boutique stores. Products and services will be more exclusive and unique. The customer experience will be paramount. Technology will play a huge role. Sales consultants will be better trained, more informed, more professional and yes, better paid. The difference between the wholesale business and the showroom business will be even more dramatic than it is today. Times are a-changing and if you want to survive and thrive when 2020 comes rolling around you’d better jump on it now. Good selling! Hank Darlington, owner of Darlington Consulting, writes several monthly articles for magazines, teaches seminars, and offers a full range of small business consulting services to kitchen and bath dealers, distributors and manufacturers. Darlington was inducted into the Hall of Fame by the National Kitchen & Bath Association in April 2004. He can be reached at 2010 Granite Bar Way, Gold River, Calif. 95670. Phone: 916/852-6855, fax: 916/852-8866, email: firstname.lastname@example.org.
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