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The PDIS Playbook

BY Brae Canlen

As the 2012 Pro Dealer Industry Summit (PDIS) prepares to convene in Savannah, Ga., the nation’s housing market sits on the precipice of a long-overdue recovery. The LBM industry has watched and waited, knowing that the bottom would eventually arrive. Recognizing — and responding to — that turning point will be the subject of several seminars and presentations on Oct. 25 to 26.

An Oct. 26 keynote speech given by housing industry analyst Ivy Zelman may help attendees make some key decisions about their businesses for the next few years. Zelman, who founded her own firm in 2007 after working for Credit Suisse Group and Salomon Brothers, conducts proprietary research that involves all aspects of the housing industry. Although she was one of the first analysts to predict the depth of the housing bust, Zelman is now sounding bullish on the housing recovery. One of the positive indicators, she notes, is dwindling inventory of homes for sale. 

“There’s not enough supply, given higher levels of demand,” Zelman recently told the Wall Street Journal. “With every passing month, distressed homes are being absorbed at better and better prices.” Construction of new homes has been sluggish for years, and an increasing number of renters are choosing single-family homes, removing them from the available housing market.

In addition to sharing her forecast for 2013 and beyond, Zelman will moderate a panel of pro dealers discussing their views on improved planning in 2013.

Moving from the macro picture to the everyday running of an LBM business, the conference will feature two speakers who focus on improving operations in two key areas: negotiating and marketing.

“The One Minute Negotiator” isn’t geared toward consummating a deal in less than 60 seconds, stressed George Lucas, who will open the general session on Oct. 25. The author, trainer and consultant is focused on a one-minute strategy toward sizing up the other side of a negotiation and choosing the correct approach. 

“Most people are fearful of negotiations,” Lucas said. “They think it’s going to damage relationships.” But negotiating skills are more important than ever in the current LBM market, he added. 

“Margins are thinner than they’ve ever been, and it’s extremely difficult to win new business based on price alone,” said Lucas, whose client list includes Orgill and Rust-Oleum. “Any attempt that’s price-based is going to get the incumbent to cut their price.”

Knowing the other side’s negotiating style — i.e., collaborative, competitive, accommodating, conflict-avoiding — is always helpful when entering into a deal-making session. But Lucas can offer pointers when recognizance is in short supply. “I try to help people get their mind around a negotiation in a short amount of time,” Lucas said.

The marketing seminar at PDIS is also geared toward quick results. Brian Bunt of The Empty Bin specializes in word-of-mouth marketing for lumberyards, which means, in a nutshell, using happy customers to advertise for free. Giving them a reason to talk about your product or service is what all good lumberyards do; facilitating the conversations is what takes the extra effort.

Using examples from the building industry, Bunt will explain how to conduct a campaign that leverages a lumberyard’s core customer base and identifies its best “talkers.” In one case study he utilizes, it was the delivery drivers, who were given cameras to take photos of each load they dropped. Individual drivers were then graded as a motivation tool.

“It’s the delivery guys who really spread the word,” Bunt told Home Channel News. “They tell their friends and customers about the extra steps they take.” The cameras worked as a conversation starter. “It’s common for a customer to ask, ‘Why are you taking a photo?’ ” he explained.

Bunt doesn’t believe in traditional methods of advertising. “We try to stress that advertising is the cost of being boring,” he said. “You’re paying someone else to talk about what you’re doing.” And in a radical — and some might say “refreshing” — change of pace, Bunt doesn’t push social media; he estimated that 80% of word-of-mouth marketing takes place off line.

Instead, Bunt goes in for more offbeat and innovative promotions. Windsor Mill, where Bunt works as director of marketing, put a stamp on the back of its Windsor One trim board and moldings that said, “Call Kurt for a shirt” and included a phone number. The free T-shirt offer resulted in a number of phone calls to the head of Windsor One’s customer experience department, which then led to conversations about current building projects, materials being used and so on. In other words, a foot in the doorframe.

Bunt, who has also taught workshops at LMC and the National Association of the Remodeling Industry (NARI), promised other sources of inspiration for those who attend his hour-long seminar on Oct. 25 at the 2012 PDIS event, which is being held at the Savannah Westin. 

“At the end of the [session], they’ll be able to create a campaign the day they walk into the office on Monday,” Bunt said. 

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Showerheads, by the numbers

BY HBSDEALER Staff

Channel analysis
There’s good news in the nation’s showers. After flat sales in the 12 months ended July 2011, showerheads began to heat up, eventually beating the performance of last year by 12.4% and the year before by 10.6%. Consumer research from The NPD Group also showed specialty stores as the fastest-growing channel.

Product attributes
From next to nothing, rainfall/drencher showerheads increased to 7.1% of market share in the 12 months ended July 2012. The most common type: “handheld with massage,” at 20.7% penetration. Chrome is the leading finish for all showerheads, as shown below.

Demographic analysis
The young millennials have charged into the lead among age groups purchasing showerheads, just barely surpassing the 45-to-54-year-old group. Meanwhile, the gender of the buyer has turned increasingly masculine in each of the past two years.

Purchase motivators
Price leads the list of motivators among the reasons to shop at a specific retailer, and also as the motivator for the actual purchase once in the store, where features are a close second.

Methodology: NPD data are based on monthly tracking of more than 30 home improvement-related categories and 30,000 opt-in consumers.

 *2012 data reflects the period August 2011 through July 2012.

**Key: WHC: warehouse home center; MM: mass merchant; DS: department store;
SS: specialty store; HS: hardware store

*** More than one answer accepted

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Innovation showers the bathroom

BY Ken Ryan

Convenience and the creature comforts of home are factors shaping the market for bath accessories, which are increasingly incorporating digital technology into the newest offerings, according to designers and suppliers.

While trends in fixtures encompass square-shaped and clean-lined faucets, high-arc units and single-level chrome handles, hands-free faucets using smart technology is the biggest trend in 2012, experts say.

“Hands-free faucets was a huge success for Delta in the kitchen with its smart touch technology,” said Ashley Perry, showroom consultant, Ferguson Bath, Kitchen & Lighting Gallery, King of Prussia, Pa. “They have now introduced this in the bathroom on the single-handle lavatory faucet from Jason Wu.”

Wu, a fashion designer, collaborated with luxury bathroom company Brizo to create a collection of bathroom faucets featuring SmartTouch Plus technology, which allows for a hands-free and touch-sensitive operation.

This so-called “smart faucet,” with its sleek modern design and pink glowing light, is gaining wider appeal in the higher-end markets. The faucet can be programmed to dispense water at a chosen temperature; the technology recognizes the user’s face and automatically turns on the water to that temperature.

New faucets entering the market in 2012 included Kohler’s Tripoint, a touchless electronic faucet that is factory set, so there is no need to calibrate; and the Muirsis Pinnacle in satin nickel, which includes motion-activated on/off, flow control and temperature adjustment with multiple pre-sets.

Perry said most manufacturers offer matching bath accessories to their faucet lines for added convenience. “Most often the accessories are the last decisions to be made by the homeowners,” she said. “This allows consumers to save money on the initial purchase but also take some time to think about what kind of accessories they would like to add to the room.”

Max Isley, co-founder and partner of The Kitchen & Bath Channel, said that while convenience is influencing purchase decisions, there is still a segment of the population that wants to pamper themselves. “The hotel/motel industry has started to upgrade their bathrooms, so people who are coming back from business trips and enjoyed some of the bathroom amenities in these hotels will say, ‘I want this in my home,’ ” Isley said.

Isley noted that advanced technology is being integrated into a variety of fixtures to provide a better user experience while increasing the value for the consumer.

Gina Bon, a kitchen and bath designer at Airoom Architects & Builders, in Chicago, agreed. “People are definitely going with digital technology today,” she said. “Typically it is more expensive, but they see the value aesthetically in electronic interfaces that incorporate features like steam and music in the shower.”

Universal designs

Playing into the convenience theme is the increased popularity of universal designs that allow for easy access into and out of the bathroom. These barrier-free bathrooms feature walk-in tubs; curtainless showers; push-button doorknobs; grab bars for the shower area; and pullout or pull-down, single-lever faucets.

While baby boomers are primarily driving this trend, Isley said the demand for products that are accessible and functional for everyone increases as these products become more attractive, available and appreciated.

He cited an industry statistic that by age 40, 85% of consumers will need a universal bathroom at some point. “These people may have been injured, have carpal tunnel syndrome, etc. But they also like the convenience of a push-button front knob that they can open with their elbows,” he said.

Grab bars, once the domain of eldercare facilities, are increasingly turning up in conventional bathrooms, designers said. “Bath manufacturers are working to not make them look so utilitarian,” Bon said. “Today’s grab bars offer much sleeker styles than in the past.”

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