Service stars: Putting price in perspective
Retailing can become a focus on price very easily. I remember attending a conference years ago where one of the speakers chided the audience of retailers for using the same basic market positioning: “We have stuff, and we sell it for a low price.”
While price/value will always be an important element in purchase decisions, it isn’t the only one. Retailers who find marketing approaches that transcend pure price can enjoy superior sales, higher margins and more loyal customers.
Understanding the target consumers who want more than just low prices is an area that is clearly important to the success of retailers. One attitudinal statement tracked by the Home Improvement Research Institute (HIRI) regularly since 1988 reads: “A home improvement retailer who can give me good product information and advice is more important than one who only has low prices.” Study respondents rate their agreement with this statement on a 1 to 5 scale, where 1 is disagree completely and 5 is agree completely. (The data in this article are based on the top-box ratings of “agree completely.”)
Looking back over the history of this study reveals that overall agreement with this statement has remained fairly constant, but there are meaningful differences in the types of people who strongly relate to this statement. One clear distinction is in how various generations view this issue. As can be seen in the graph on the left, significantly more members of the mature generation agree completely that information and advice are more important than low prices. Since the youngest of this generation is 64, this can indicate that getting information and advice from retailers may become less important versus prices in the future.
But looking at a different set of numbers reveals a more service-oriented outlook. The HIRI study covers 228 specific products used in home improvement. Respondents are grouped for analysis based on how many products they report purchasing. This ranges from none (zero products) to light (one to four products) to medium (five to nine products) to heavy product purchasers (10+). It turns out that as people buy more products, they tend to value information/advice more heavily in relation to low prices. The chart on the right shows this trend. Certainly this heavy purchaser segment is a highly valuable one for retailers to attract.
These attitudes also relate to where people shop. Among those who reported buying at least one product in a hardware store, the number of respondents who said product information/advice was more important than low prices was significantly higher than it was for people who had purchased at least one product at a discount store (25% versus 19%). Since discount retailers tend to offer little in advice on products, it is quite logical that shoppers in that channel would have a different set of attitudes on this type of issue.
What does this mean for retailers today and in the future? While price is clearly an important factor in where consumers shop for their home improvement products, it by no means is the only factor. From other HIRI studies, we know that convenience and product selection are also very important. In-store service can be another important differentiator and has clear appeal to older shoppers and those heavily involved in buying home improvement products. Knowing your target customer and having the right mix of merchandising elements is the key to success. It will get you beyond just having stuff and selling it at a low price.
Inside the home
Consumer research from The NPD Group connects the dots of appliance ownership in its most recent report, “Inside the Home: Appliances We Own & Use.”
According to the report, ownership in the major appliance category over-indexes among those who also own their home. However, homeownership does not fully predict who owns these products, nor who has recently purchased them. While one in four homeowners indicate having purchased a major appliance in the past 12 months, one in five renters have as well.
Here are some of the key findings:
• Small kitchen electrics: The most owned and purchased products are often considered traditional countertop appliances, such as toasters, coffee makers, electric can openers and toaster ovens.
• Home environment appliances: The products used most often are those within the water filtration category, followed by upright vacuums. Close to half of upright vacuum owners are using their product once a week or more often.
• Hair appliances: Hair straightener owners are most likely to own other hair care appliances. Three-quarters of hair straighteners owners also own a curling iron or brush. The likelihood of a curling iron/brush owner to own a straightener is far less likely at 46%, however, a significant figure. • Americans who have a refrigeration filtration system are least likely to own a pitcher, pour-through water filtration, or a faucet-mount device — just 18% and 15%, respectively.
True Temper sale completed
“Our five-year plan for Ames True Temper Inc. was to expand the business, increase market share in the U.S., create international exposure and broaden product lines for distribution through our pipeline. We have done that and are pleased with the results. We wish the company continued success as part of the Griffon family,” said Castle Harlan co-president William Pruellage.