Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.
-John Kenneth Galbraith
“We can’t change that. Really, what are you thinking? That has done nothing but make money for us. I see no reason to change.” Sound familiar?
We loathe change and will protect our past decisions to avoid replacing a product, brand or process with something new. Change is even more difficult as a business owner, so much more. You not only need to handle change, you must decide what to change, when to change and how to change. The always intimidating triple-whammy.
We all know change is hard but if we do not improve our businesses it will become irrelevant to our customers. We need to grit our teeth and fully accept change, aggressive change. Change must become a major part of our business planning structure.
This level of change is necessary for two market driven reasons. First, we are in the luxury business. A business where yesterday’s hot profitable products will be copied by many. This diminishes its glow with luxury’s progressive product seekers and its profit will slide to commodity levels. Secondly, the 21st century is about how tech can make business better. In fact, quite a few learned people think all businesses must fundamentally be a tech business first, market-looking second. Might your next showroom be a new website?
In decades past, we walked into our businesses asking what was broken and needed to be fixed. Today, we need to ask what is next, and how do I get there as fast as my team is able?
Change is hard and it is even harder when you, yourself must plot the course, craft the process and get it done.
“You knew the job was dangerous when you took it…”
That moment, that very moment when you are in-between something over and something beginning, your “the next thing”. Are you there? Well no you are reading this, I hope…
The next time you are in that moment, do not face with your cell phone, do not look for a book or a magazine or anything to occupy your mighty-mighty brian, FULL STOP. Feel the slow creep of boredom setting in. Let the blahness overcome you. no
Now, you hear the slight, persistent whisper of “what do I do now, what do I do now…” Let the weird feeling of anxiety slip in and out, in and out and then you are there, utter boredom. The state when you mind starts looking at everything inside and anything outside. It’s called creativity.
Your alluring showroom is targeted to captivate your market’s best architects, builders and designers. You know you display THE best product mix in the market. Or do you operate more on the “gut feel approach” – “I hope the product I selected at ICFF will captivate my good clients?” Hope is a prayer, not a business strategy. Data added to your market knowledge increases your chances for a WOW product mix. Good data can only make your business better. But where does this good data come from? How do I get it? How do I use it? Let’s keep it simple and focus on which finishes are your foundation – those that are starting to trend up and maybe (if you have the space) a handful of classic styles in their most royal, garish look. If a finish is not selling, there is no need to waste the space. When that unique customer comes in looking for satin chrome, your team is talented enough to control the sale. A finish sample will work just fine. What finishes do you actually sell, what is selling in your regional market and what is trending in New York, Los Angeles or Miami that you can show to keep your well-read trade professionals happy?
Step #1: What data do I need?
Bathroom Fixtures: Simply look at lavatory faucet sales finish data.
Bathroom Accessories: Every bathroom needs a paper holder, so focus there.
Cabinet Hardware: With this category’s diversity, this total finish breakdown is best left to the wisdom of the crowds. Ask your top six cabinet hardware vendors for their finish sales in dollars and compare it to yours and get to it. Look for trends here. This segment is all over the place.
Door Hardware: With the diversity of door hardware styles (really, no finish has a historical dominance), use the same process for Cabinet Hardware above, focusing on door knobs and levers, only.
Step #2: How do I collect the data?
Download the last 18 months of sales data, filed as noted, from your database for each product category listed above.
Contact your key vendors in each product category and ask them for their last 18 months sales reports by finish (filtered as noted above) in North America, your market only and New York, Los Angeles and Southern Florida.
Step #3: Review the data:
Walk your showroom and see what could be removed, changed and what needs to be added.
Review the data with your sales purchasing teams. They all have their individual perception and seeing the actual sales data will help them see the market a bit clearer.
It is paramount that showrooms and vendors work together on this to present the most viable products to the trades and engaged homeowners. These are the people that specify and buy, so show them what they want to see, not what a vendor or showroom thinks might be “hot.” Finally DO NOT LEAVE THE SALES REPRESENTATIVE OUT OF THE LOOP. If they are guessing on what to present on their trade calls and miss the mark, vendors and showrooms lose. Finally, all data is important and should be actively shared, reviewed and evaluated every six months. Why guess?
“The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little.” - Daniel Kahneman
Got a gut feeling Got a gut feeling Got a gut feeling feeling - Devo
Today’s Venture Capital companies are constantly looking
for new style trends and products to improve their portfolios and improve their
market shares. These businesses are
managed by savvy entrepreneurs who are constantly harvesting the latest data
and then adding market knowledge to help them create and implement their best
strategy. Sounds like a good strategy,
right? Is this how your business works?
In our DPH world, each vendor and showroom has its own
unique ways of market testing and the most popular process is each business’s
perceived reality, your intuition or gut feelings. You know it well; over a short period of
time, a few showroom sales people sell a job or two in a matte black
finish. Then they frantically search for
what manufacturers offer this finish and run to management proclaiming “We
absolutely have to have this on the sales floor NOW! This is getting really big! We all think rose gold will be the next oil
rubbed bronze… “ Well, we all know where that went. Did anyone look at the showroom sales history
and your product quote report? How about
calling a handful of manufacturers and simply asking them for a “most popular
finish report”, noting the current percentages and a 3 to 6-month percent
change? Would that help? Why in the DPH world is DATA not the
foundation for market evaluation and forecasting?
I can hear the words ringing in my head – “I know what
is going on in my business and my gut instincts have gotten me to where I
am.” This is the way so many DPH
showrooms and manufacturers have governed their business since the 60’s, and
yes, a lot of those businesses are still quite successful. However, would you invest in a business with
intuition as its sole source provider of market research?
Perceived reality plays a large part in all of our lives, but it should be based on solid data from your business, one’s key vendor partners and monitoring leading style media. Yes, it will take time to dig through your sales figures and quotes, as well as sharing vendor information and referencing 10 good style sources. But at the end of the day, don’t you want to have the right product on display at the right time? Don’t you want your customers to know your showroom is the place to see the popular, new and classic looks?