Why would anyone purchase anything at list price? Today’s marketers continually believe the best way to move merchandise is to put it on sale. Stories no longer seem to be thought viable. And we all thought Amazon was to blame for the price dropping game.
Every marketer knows that email remains a powerful tool to build brand awareness and the email’s subject line is your brand’s calling card. Do you really want it to be all about how much today’s discount is? Can your brand only motivate people to open your marketing emails by shouting your products are marked down?
So after a consistent barrage of XX% off and free freight on any purchase, do you really think people are going to look at your brand as anything but a discount brand? Even powerhouse home brands such as Restoration Hardware and Williams Sonoma seem to run 50% off sales every other day. Why do I want to buy something that no one else wants?
Then think of the poor salespeople in the brick and mortar showroom. The first thing they must do every day is check to see what is on sale today. It is just like working in a supermarket and we all know how low their margins are. It is not sustainable.
As long as sales volume and product turnover remains high, these companies can get away with thinning profit margins but when a slowdown comes and sales drop 5%, that low, discounted margin might not be able to cover overhead and viola, losses appear. Then what happens? The markdown habit a brand gets into in good times are nearly impossible to break in bad times. Quarter to quarter planning is not a good play in the long game.
I hope everybody had a lovely Thanksgiving. A wonderful holiday allowing American families to pause for one day to celebrate the passing year’s blessings. Then consume mass quantities of delicious food.
As Thanksgiving fades into memory, Christmas Day is on its way. The massive barrage of advertisements for Black Friday, Small Business Saturday, Cyber Monday, Giving Tuesday have passed and they have been replaced by a consistent torrent of emails, ads and banners telling me that I can only have XX% off if I buy now! It is all so annoying.
Outside of that noise, I do enjoy holiday shopping. I love to discover just the right gift for my family and friends. Each gift I select has deep logic behind it, and I know it is something they never would purchase for themselves and will treasure for years. I hope to watch them peel back the shiny paper and see a bit of delight on their faces when they discover what it is. I love that look! Then sometimes they unwrap the gift and look at me, what the….? Off to the return counter.
The important thing is that my time searching, not dealing or discounting, is time that I spend thinking about the wonderful people in my life and in small, very small, way give them a bit of Holiday joy.
Ohh, P.S. As the 2019 Holidays pass, all will turn to talking about 2020. Before that happens, find a moment and congratulate yourself, yes you, for all the hard work you did in 2019. Every once in a while, it is good to look in the mirror and say, great job, well done! Cheers
A version of this article appeared in the December 20, 2019 issue of DPHA Connections.
Earlier I wrote an article with the opening line, “So why is it that 47% of top interior designers purchase products online?” and most of your comments were that the websites offered free freight and lower prices. Wake up gang, that isn’t the major reason designers are buying online. We are losing more business to digital savvy designers that are specifying and buying on the Internet. Jobs that we will NEVER know about. Sure, there are top shelf luxury designers that are price obsessed, but most are looking for easy access to information when and where they want it.
Every time you lose a job to a low-ball bid, you hear about it directly from your customer. It hurts badly and sticks in your mind! All that time, all that effort, amounted to nothing. What about the job at that same design house that was completely specified and purchased online? You knew absolutely nothing about it and were not involved at all. What is worse for your business, losing a job to a low balling #@!*#**, or never getting a whiff of a large job as it was all worked on online?
After the recession, website companies remained unsophisticated and price was their key advantage. The surviving sites, and new designer-oriented sites, offer an addictive combination of an easily navigable user interface and anywhere, anytime accessibility with live solid phone and chat support. This is why talented designers are working on these sites. It has absolutely nothing to do with price. Do not mix these two up. Price competition is not going away, but in the luxury market it is not as big an issue as we portray it. People will take the easiest path first.
If a customer comes in and says they want to order a $6,000 list bathtub fromlowestofthelow.com, just let them. Make a note on your calendar to check back when the job is trimming out and ask how that worked out. I think you will remind them not to do that again. I suggest not fighting individual pricing debates, unless it happens often. There will always be sites and stores that offer silly pricing. It is really not worth your team’s time, and you are worth your profit. Take the energy and focus it on the future.
I was not aware how many talented designers were specifying products online until we started to receive RFQs that were 100% built on websites. When we reached out to these good clients, they told us it was nothing against our team or showrooms, it was that our website was hard to work. So they matriculated their favorite brands’ websites that offered them the intuitive interface they craved. Now that hurt. We did everything right except offer our good customers the tools they wanted.
We have to believe and think big. Big like when you opened our business. We knew everyone would come because our look was so damn good. Let’s take that same attitude and build magnetic web sites.
If a solid vendor releases a new product, put it on display. No debate. Get it on the floor ASAP!
It is not about your taste, your style or what you think is hot. How many times have you heard the phrase, “I cannot believe they bought that!” There are fabulous tightly-focused luxury showrooms that are directly reflective of its owners’ style.
They all have their design niche and stick to it. However, if you are to succeed in one or two home product groups, such as luxury plumbing and hardware, be known to have all the latest and greatest. How many times have I heard a showroom saying, “No one will buy that,” and it ends up being the hot look for the year. The truth is we do not have any idea what Mr. and Mrs. Smith will fancy, but it is up to us to make sure we can find it.
Sure some of the new designs die ugly deaths, but that is not the point. If you think every brand always hits the right note, think again. I am not going to dig deep here, but I would postulate that if a designer or go-to vendor hits one out of four, they are in rarified air.
Our market is too small to only show Euro-modern or transitional. At Phylrich, the great dolphin and swan series only accounted for 2% of product sales, but 7% of dollar sales. We never know what look will ignite a passion in a client. Show the new as long as you can. If it is only a fabulous dust collector, then move on. But if it hits a certain cord, Wahoo.
If I am a successful distributor of a quality company and they invest all the money and time to create a new product line, I will put it on display. In fact, we had the rule with our good representatives that if this brand introduces a new product, get it on order. We wanted to be the first in town to display its new look.
P.S. Vendors: If your good distributors follow this path, you should make sure they are supported in their willingness to get your new products on display. A DPH vendor’s best marketing is making sure the best salespeople in the best showrooms have its latest and greatest on display. Without the display, sales are tough.
Except for a few heavyweights, luxury DPH showrooms are poor marketers. Yell and scream all you want, but it is true. It’s not that we cannot market. We do not have the funds to do so. Five percent of $15 million is a lot less than 5% of $100 million. Heck, running a basic digital marketing package runs between $7,000 to $10,000 a month, not including website maintenance. To reach the design and building trade along with the interested homeowner takes coordination between factory and showroom. Both need to work together to get the word out.
Our strong calling card to our design and trade accounts is our function and deep product knowledge. If the Smiths want a faucet they saw in Domus magazine that is manufactured in Denmark and not yet available in North America, we get it.
If it is out there, we will find it and make sure it will work as specified.
If it is new, show it and share the story with anyone and everyone.