Destination: Luxury
By John Filippelli
CHICAGO To some design professionals, it may seem that the term
“one-stop shopping” is bandied about the kitchen and bath industry
quite liberally. Everyone from the home center chains to the
mom-and-pop dealer on the corner claims to offer “everything
consumers need,” whether referring to product selection, design
services or project management. But, at the recently opened
LuxeHome, located on the first floor of the Merchandise Mart here,
“one-stop shopping” encompasses all of the above and more in a
revolutionary concept targeted at redefining the upscale consumer
market.
In fact, LuxeHome has created such buzz in the two months since
it opened its doors that many industry insiders believe the concept
will change the way the kitchen and bath industry does
business.
Billed as a resource center for interior designers, architects,
custom builders and affluent consumers, LuxeHome features a
collection of 23 upscale manufacturer, distributor and dealership
boutiques comprised of “products that do not exist anywhere else,”
according to Katherine M. Flaherty, v.p./building products and
special projects for Merchandise Mart Properties, Inc. (MMPI).
Offering a “consumer friendly, home-shopping experience,” the
collection of boutiques features a full range of working displays
and vignettes from a host of high-end kitchen and bath
manufacturers, including Clive Christian of Chicago, Poggenpohl
U.S., Inc. and Neff Design Centre, Inc.
Flaherty believes a good part of LuxeHome’s appeal is the way it
ties in to high-end consumers’ growing interest in buying a “name”
as well as a product. “[Affluent consumers] are impressed by the
brand, the experience and the dealer they are interacting with
[when they come into a boutique]. They are very interested in
having something made for them, but they are also very interested
in brands. Therefore, the strength of the boutiques is their
established brand names,” says Flaherty.
Flaherty notes that the LuxeHome brand is being actively
marketed with a no-holds-barred publicity campaign that has
resulted in unprecedented attendance numbers. She cites as an
example the grand opening event, which drew more than 8,000
consumers and trade professionals from all over the country,
including both design industry luminaries and celebrities from all
walks of life.
In fact, many believe the grand opening was a watershed moment
in the kitchen and bath industry. As Mick De Giulio, president of
de Giulio Kitchen Design, Inc. noted, “It was eye opening to
understand the true interest and excitement for what we are
bringing to people. We reached a new pinnacle,” he adds, noting
that there was an estimated seven-to-one ratio of consumers to
professionals in attendance that night.
James W. Livingston, CKD, president of Smartrooms, Inc., concurs
with that estimation: “From early in the evening, there were
wall-to-wall people. There were people we specifically invited back
the next day because we couldn’t get to everybody [that
night].”
But, while LuxeHome’s grand opening drew plenty of notice with
the public at large, the focus of LuxeHome has been on building
successful, win-win partnerships that will benefit the design
community at large, while redefining the luxury market and making
it more accessible.
As Flaherty notes: “This is a place for CKDs and CBDs to
formulate partnerships or expand upon existing partnerships with
these available resources who are more than happy to work with each
of them. There has never been another place for an independent CKD
or CBD to come to show their clients the products that are
available at LuxeHome.”
At its core, LuxeHome is about marketing to a sophisticated
lifestyle and supporting interaction between vendors, design
professionals and their clients, according to Christopher G.
Kennedy, president of MMPI.
“At a time when building and remodeling projects are top of mind
with homeowners, the street-level, consumer-oriented boutiques of
LuxeHome will be an ideal resource for consumers and trade
professionals,” he offers. “It really will define the high-end
marketplace and become a touchstone for every decision
[professionals and consumers] make related to their kitchen and
bath business.”
And, although this is the first time these resources have been
available under one roof for the high-end market, this may just be
the beginning, Kennedy notes.
“We believe the concept has legs and we [expect to] roll it out
to different cities within 18 months to two years,” he says.
New York-based Leslie Hart, executive v.p. for Newport Beach,
CA-based Fry Communications, who attended the grand opening event
and gave it glowing reviews, believes that LuxeHome’s focus on
lifestyle and its recognition of the consumer as an educated
partner in the design process will lead people to its door.
“[LuxeHome enables affluent consumers] to finally see
fashionable, exciting, upscale products that speak to their hearts,
set off by inventive merchandising in attractive boutiques,” she
says.
Therefore, Flaherty notes, it’s no surprise that in the
heartland of America now beats the heart of the kitchen and bath
industry.
“We believe LuxeHome is the haute couture of the kitchen and
bath industry, much as Milan and Paris are to the world of
fashion,” she states.
Beneficial idea
Conceived 15 months ago and
officially opened this past September, the 90,000-sq.-ft. LuxeHome
offers a variety of benefits and services for designers and
consumers, notes De Giulio.
“Unlike home centers, it’s an environment where there is a
consolidation of product that is more entrepreneurial in spirit.
Therefore, instead of having products at a home center where you
have one person understand each product, there is more specialized
assistance,” he says.
Hart agrees, noting that LuxeHome has the potential to change
the way professionals and consumers interact during the design
process.
“Consumers aren’t buying the ‘designers only’ idea anymore. They
want a more egalitarian approach with access to the best products,”
she says.
“A buyer can come in from anywhere and find world-class product
here. It is centralized, which makes it very accessible,” says De
Giulio.
Barry Wachtel, president and owner of Abitare, Inc., a custom
furniture manufacturer that creates custom interiors, notes that
clients have even flown in on private jets to visit LuxeHome. “The
overwhelming variety of resources in one house is the main
benefit,” he offers.
He adds: “Being a manufacturer and having the client buy
directly from the shop [is also an advantage], because it offers a
price break for the client. “
And De Giulio notes that comparable pricing structures among
vendors at LuxeHome help to answer price objections, explaining
that, in the end, LuxeHome clients will be more likely to make
choices based on “taste, style and perceived ability to
deliver.”
Above all, Flaherty points out, LuxeHome facilitates a
full-sensory, interactive experience as each boutique encourages
the public, as well as interior designers, architects and custom
builders to work with the boutiques’ on-staff designers during any
phase of a design project.
To better meet that need, Flaherty notes that LuxeHome also
offers the 8,000-sq.-ft. “Design Resource Center,” which features
separate displays and vignettes of industry products. Attended to
by a concierge charged with facilitating product selection, the
design center was created to enable trade professionals and
consumers to find and purchase new products and gain additional
direction in their plans and needs.
Also of note, LuxeHome will offer regularly programmed special
events such as in-boutique cooking demonstrations, while the
Merchandise Mart is coordinating a series of Saturday events that
will include book signings and design lectures by industry
notables, Flaherty adds.
Good luxe
According to Kennedy, since
LuxeHome’s target clientele is affluent and educated, it only
stands to reason that LuxeHome offers a comparable environment. To
accomplish this, a strong marketing strategy was implemented to not
only create the LuxeHome brand, but also to capitalize on the
pre-existing and recognizable brands offered by each boutique.
Once a plan was established, Flaherty ensured that her boutique
choices reflected LuxeHome’s marketing message. She says, “We were
very particular about the product mix and representation in
LuxeHome. I contacted the appropriate manufacturers, distributors
and dealers that would be best served at LuxeHome.”
Kennedy adds, “We edited and sifted through prospective
candidates and brought together a collection of individuals [the
sum total of whom] represent [something] greater as a whole than
individuals.”
He continues, “The power of association is so important to
branding. Therefore, we have conglomerated these companies so that
there is a ‘halo effect,’ with each illuminating each other’s
brand.”
Many of the boutiques had originally been located on the 13th
floor of the Merchandise Mart, yet according to Jaime Rosen,
president of Birger Juell, Ltd., “[A lot of] people didn’t think
the 13th floor was open to the public.” Thus, the move to the first
floor created greater visibility.
Summarizing his short-term goals for LuxeHome, Kennedy notes:
“We want every architect and designer involved in residential
products to have seen our ads, heard our message or visited our
location, and we want every wealthy consumer to demand that they
get a chance to come here.”
Flaherty points to an estimated 400 percent increase in traffic
and the response to the grand opening event as two indicators that
Kennedy’s goals are attainable. “The time is definitely right for a
resource like this,” she states.
Mix and match
With 23 boutiques established
and four more planned, LuxeHome is designed to offer a wide range
of upscale products, including cabinetry, countertops, flooring,
kitchen systems, hardware, appliances, bath accessories, doors,
marble, stone, granite and tile.
“The products are really luxury kitchen, bath and building
products used in home-building and renovation projects and the
services that are aligned with these types of products, including
initial consultation, design, project management and installation,”
Flaherty describes. “In each boutique, there are completely
designed and fully appointed room settings so that clients can see
every aspect of the kitchen and the bath.”
De Giulio adds: “The boutiques are entrepreneurial, therefore,
[clients can] be handled better than they would in a big
environment.”
For Livingston whose boutique features antique stone, water
elements and a bistro part of LuxeHome’s appeal is that it affords
the boutique owners creative latitude with their space. “When you
walk through LuxeHome, you see that there is a lot of European
style and design in some of the showrooms, but then there are
traditional showrooms, as well,” he notes.
Peter Sallick, president and CEO of Waterworks, suggests that
opening up his flagship showroom at LuxeHome offers great
opportunities for his company. “The Mart is the perfect location as
it combines convenience for clients in the design community and an
amazing retail location,” he notes.
He continues: “This store goes beyond anything we’ve done in the
past in our stores simply because of the square footage. It has
four complete bathroom vignettes which give the customer a real
sense of being in the environment. And we’ve added a lot of other
unique and special elements to the space.”
De Giulio, in contrast, took a different approach to setting up
his boutique. “In terms of a message, we have taken a risk as to
how we did our showroom. Unlike most, we did not center on product,
but rather lifestyle settings. We did not need to put in a lot of
door styles and confusing things. We designed it simply and more
spare than most people on the floor have done.”
Flaherty believes that technology is an important component of
each boutique as well, saying: “Whether it be in a traditional or
contemporary design aspect, [technology is very important] because
you see a lot of lighting controls and computer technology. We have
no less than 20 plasma-screen televisions hidden in the millwork.
The entertainment and information components are being brought into
every showroom.”
Wachtel, whose boutique features technology that creates a
two-way video link between his showroom and a technology
dealership, continues: “Our entire showroom is operated off a very
sophisticated system.”
He also points out that at the center of the Abitare boutique is
a home theater mock up as well as a sample area that shows the
firm’s offerings, including various veneers and custom doors.
But, regardless of how each boutique’s wares are presented, De
Giulio notes that there is one thing that will make the difference
between success and failure: “We need to interact and connect with
the clients and they need to feel that the designer understands
them and what they want to do.”
Ready, set, compete
While some might see the
concept of locating multiple kitchen and bath firms in one place as
a competitive threat to each, the consensus is that the benefits
outweigh any potential downside.
In fact, many see the competitive environment as being a driving
force for LuxeHome’s success, since it encourages a higher level of
creativity and excellence key ingredients to selling the high-end
market. As Hart notes, “Clearly, clustering all of the boutiques in
one area open to the public sparked a competitive environment that
spawned creativity.”
Flaherty agrees, noting, “the competitive setting has really
made every designer, dealer and manufacturer rise to the occasion
and strive to have the best boutique and identity for what their
products and services are.”
De Giulio concurs that there are benefits to having the
competition located nearby, explaining, “Clients still want to be
informed and they won’t settle for [committing to investing large
amounts] in their home without having a sense of competing product.
We still need to sell them.”
Others believe the focus on branding and the diversity of styles
offered create a less competitive environment than one might
expect. As Livingston states, “I think a product is a product and
price points can move or sway that decision. But, design is not
that way, and I see only a few in competition to us.”
Wachtel agrees: “There are no fears about competition because
[what I offer is unique]. I am the only company that is offering a
full-service, turn-key scenario and I am the only custom furniture
manufacturer here.”
But De Giulio believes “Anybody who is selling like products in
the market place should be perceived as competition. That is great.
If you are afraid of that, you shouldn’t be in the business.”
However, perhaps a bigger concern has been the demand caused by
the enormous amount of press LuxeHome has received and whether
vendors will be able to meet that. For instance, De Giulio
questions whether there are enough trained professionals to serve
the market, not only in his firm, but all of the boutiques. He also
wonders if manufacturers can deliver enough one-of-a-kind products
in a timely fashion.
Says Hart: “LuxeHome proves that there will be more business for
everyone. Now we have to be sure we develop the infrastructure and
capacity to satisfy demand.”
Flaherty notes, however, that as a response to high demand, most
boutique owners as well as MMPI have implemented contingency plans,
with many having already increased their staff size substantially
in preparation.
Livingston agrees: “We’ve geared up for [high demand]. We have
realigned some of our people in order to keep an eye on the traffic
as it comes in. If the ultimate outcome and the net worth of the
move [from the previous location] in volume is more than 25%, then
we would have to refigure it.”
De Giulio concurs: “Each raise of the bar causes others to raise
the bar and [in the end], the strong will survive.”
Future luxe
While LuxeHome has proven so far
to be an enormous success, Kennedy and Flaherty believe that this
is just the tip of the iceberg, with plans in place to duplicate
LuxeHome in major metropolitan areas around the country.
“I think that LuxeHome is the future,” she notes. “[The reason
for this] is that affluent homeowners desire quality high-end
products in their home and they need a place to facilitate that
purchase.”
She notes that MMPI is considering “a number of locations,” for
future LuxeHome centers, and expects to roll out the LuxeHome
concept elsewhere in the next 18 months to two years.
In order for a new LuxeHome to be created, Kennedy notes, a
consensus needs to be developed among potential vendors.
Summarizing, he offers: “We believe in the power of
partnerships. Together we are stronger than apart. We can attract
more attention by creating a larger spectacle.” KBDN