There is a new paradigm for selling the luxury products that are
featured in decorative plumbing and hardware showrooms. Michael J.
Silverstein and Neil Fiske brilliantly describe the harbingers of
change in Trading Up: The New American Luxury. They codify beliefs
that many experienced dealers have known for some time and provide
empirical evidence of a dramatic change in consumer behavior that
is bringing new, more and different clientele to showrooms. It is
also creating challenges that the independent showroom needs to
address to maintain and expand market share.
Silverstein and Fiske contend that there are three main product
categories. Grand luxury is comprised of products whose price
points typically are beyond the reach of middle-market consumers.
At the opposite end of the spectrum are conventional products
purchased primarily for their utility and/or cost. In the middle is
the explosive category of new luxury products that reflects the new
paradigm in manufacturing, marketing and selling luxury.
New luxury products have the most appeal to the aspirational
consumer because they offer a “ladder of genuine benefits,” say
Silverstein and Fiske. “They don’t try to fool their customers with
meaningless innovations, nor do they try to get by on brand image
alone. They make technical improvements that produce functional
benefits, resulting in emotional engagement for the consumer.” If
the ladder of genuine benefits does not exist, there is little
chance to maintain credibility with the customer.
On a Grand Scale
Most decorative plumbing and hardware dealers feature all three
categories of products in their showrooms, with the lion’s share of
sales falling into the new luxury category. Understanding the
differences between grand luxury and new luxury products enables
showrooms to maximize sales and respond to competitive challenges
in the marketplace.
The appeal of grand luxury products is based more on exclusivity
and status rather than emotional appeal. Grand luxury products set
trends and provide cutting-edge design and technological advances.
However, these technological and functional advantages are
increasingly short-lived.
Differentiation between grand luxury and new luxury products is
found in the manufacturing process and in distinctive design,
claims Jerry Abel, managing director for THG USA. Abel believes
that the grand luxury market for decorative plumbing and hardware
is largely untapped. “There is tremendous opportunity to upsell by
educating the consumer to understand and appreciate the differences
in design, casting, manufacturing, finishes and material quality,”
he notes.
Grand luxury products appeal to a certain demographic for whom
price is not an object and to those who understand and appreciate
their distinctive qualities. It is difficult in many cases to make
an emotional attachment between the product and the consumer
because often the grand luxury products sold are specified and/or
purchased by a third party, e.g. architect or designer.
Selling decorative plumbing and hardware products requires
raising the consciousness of the consumer to understand the
emotional appeal to the buyer. When you deal with an intermediary,
you don’t have that opportunity for direct appeal.
Selective distribution is another requirement for success in the
grand luxury category. The products cannot be readily available
from many different outlets in a regional market. They lose their
cache if discounted on the Internet or sold by a big box.
Making the Distinction
The new luxury
category appeals to aspirational consumers those who look to trade
up. New luxury products span a broad range of quality and price
points and are readily available from a variety of outlets,
including big box retailers, the Internet and wholesale clubs.
The competitive advantage that decorative plumbing and hardware
showrooms have over the big box retailer and wholesale warehouse is
the ability to make the emotional connection with the aspirational
consumer. Proper displays can have a dramatic impact on the bottom
line.
Toby Pontin of Kallista notes that while brand is important,
brand alone is not sufficient to reach the aspirational consumer.
Products must be well displayed in quality showrooms and sold by
trained and conscientious personnel. If one of the components is
missing, then success is not assured.
Sales staff needs to understand and appreciate the merits of the
products that they sell to make an emotional connection with
customers. Trained professionals who have a genuine affection for
the products in their showroom and who can confidently and
sincerely communicate them to the consumer will make that emotional
connection. When they do, price rarely becomes an objection.
Avoiding the tendency to prejudge customers is another essential
ingredient in selling luxury and training staff. “It is easy to
underestimate the amount of money that a customer will spend for a
product,” explains Jerry Norton of Designer Hardware, in Oklahoma
City, OK.
Norton’s point is reinforced by Silverstein and Fiske, who claim
that new luxury leaders believe the consumer has the desire,
interest, intelligence and capability to trade up.
Showroom owners need to re-learn and reinforce the need to start
at the top and sell up. They need to teach their staffs how to ask
the right questions to illustrate the quality differences between
products in a showroom and those they might find at other venues
that are lower in price and quality.
Another major challenge facing showrooms owners is the
commodization of luxury products and the development of line
extensions by luxury product manufacturers for the mass consumer
market. When this occurs, the bar is raised for the decorative
plumbing and hardware showroom to help assure that it has the
merchandise, staff and service to meet the competitive
challenge.
The industry has profited from the new American luxury. It will
continue to do so as long as professional showrooms can
differentiate themselves through their inventory, staff knowledge,
service and ability to best emotionally engage customers to meet
their needs, preferences and desires.