Kitchen & Bath Design News

NOV 2018

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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Page 17 of 67

THE MARKETS ARE strong, business is booming and you're working 24/7 to keep up with the demands of your clients. You're thinking it's once again an awesome time to be a kitchen and bath professional, yet anxiety lurks in the back of your mind concerning the future relevancy of you and your business. Yes, consumers are gobbling up your products, but technology, information, logistics, trends, generational transitions and buying habits are changing at mind-numbing speed. New com- petitors appear every day, and you can't help but wonder if your business will become irrelevant or how long until it is "Amazoned," "Wayfaired" or "Houzzed." You see the external forces sur- rounding you – clearly shouting that you need to make a change in your business strategy. It's time to put your foot down, holding tight to your core kitchen and bath expertise and pivoting in a new direction. Stop fighting change. Rather, embrace it and leverage it for your benefit and future relevancy. Big and scary stuff, right? And it's certainly going to take a lot of thought and effort. Let's kick this off together and identify six future- forward keys to pivoting your business. LISTEN Customers aren't shy about letting you know it's time to change. Listen to them; they are asking you for products and/or services that are different than what you offer now. You hear them valuing certain parts of your business more, or less, than before. As an example, a dealer recently shared with me that two of his current clients purchased appliances online, and he was struggling with the specs as he managed the cabinet sale and overall install. He then revealed that he was starting a bath remodel where the client purchased the vanity on Wayfair, yet he was supplying material and labor for the rest of the remodel. His customers are clearly telling him that the market is driving the need for him to pivot his business. They value knowledge and in- stallation abilities over these products. Now, he wasn't really fighting the change; he was more exasperated by it. The best thing he can do for his business is to consider new alternatives to replacing the revenue he would have made from the appliances and the vanity. He needs to listen to what his customers are telling him about their needs and to strategize accordingly. OBSERVE Pay attention to your competitors. Are they going to market in a new way, or are there new competitors gaining market share? Be sure to discern why your prospects are attracted to them. Study your clients and your own buying habits, too. Look for changes when it comes to inspira- tion, research, purchasing and implementing the product and services you specialize in. I have a friend in Florida whose business was down even though the economy was boom- ing. When I asked for her thoughts, she stated that her contractors were buying cabinetry from discount cabinet centers instead of from her. She reviewed with me how the consumers in her area were focused on just a few styles and colors; she felt they were seeking simple designs, and that new discount cabinet centers were specifically catering to these needs. She divulged that their products were quality and also that the prices were lower because fewer SKUs were required and they didn't need to provide the same level of service that she does to the contractors. She shared her observation that the market had shifted to simple design, quality product, less service and speed to mar- ket. I asked what she was doing since the mar- ket demands had changed, and her response was…lowering her prices. That is not a pivot. IDENTIFY Ask yourself, how can your business be the most relevant based on what you've observed? What products and services are diminishing or increas- ing in value to your clients? In both cases above, consumers were able to discover value, find quality product and have their product delivered to their homes without the traditional dealer. And both paradigms are relevant because there's no doubt that the efficiencies of purchasing product online or at large centers will continue to in- crease exponentially. Yes, most of our products in the kitchen and bath world are big and heavy, but they're not special; they ship in cardboard boxes, on trucks like any other product. But the good news is that consumers can't just open a box with a 36" sink base in it and start rinsing dishes. Our products are dependent upon other factors to become functional in the home, and these are areas of opportunity for us. • They have a higher level of com- plexity than most products. • They can involve codes, permits, struc- tural evaluation, professional design needs, tear out, disposal, tile, floor- ing, plumbing, electrical, etc. • Most people are not capable of self- installing their dream spaces. • Most consumers do not want, nor have the time, to do the work. Additionally, recognize that even online re- tailers need local experts – maybe some place for consumers to touch and feel product. There may be potential for a kitchen and bath firm to be- come part of a new, larger distribution channel. STRATEGIZE Your approach starts with understanding the facts and not fighting them – rather, leveraging them to determine your future-forward plan. So, what is your pivot? The businesses above could pivot more toward the professional and service side. Focus on being the specialist; sell your services as in-home experts in areas such as electrical, plumbing, design barriers, evaluating construction needs and installation of projects. Possibly go one step further and offer services to fix/complete jobs that homeowners started on their own but did not finish. Professional remodel "medic" services should grow in need. (My own family would pay handsomely to have you com- plete the projects that I started and never complet- ed!) Maybe partner with online retailers to be the expert in the local market with small displays of product and the above services. Or build a hybrid model and offer two price points for your prod- ucts: one that includes all of your services and one that has no services, like the discount store. PREPARE Once you have your strategy set, establish the knowledge and systems that you must have in place to be successful. • Educate, certify and license yourself to do the things that the homeowner cannot. • Employ quality installers to your firm apart. • Communicate the value of your service and how it will improve your customers' results. • Build the internal infrastructure to sup- port your business and your customer. • Start building relationships in your community and with future-for- ward product providers. EXECUTE Without execution, planning is nothing more than dreaming. Put your foot firmly down, hold tight to your kitchen and bath expertise and pivot your business toward future success. ▪ " Stop fighting change. Rather, embrace it and leverage it for your benefit and future relevancy." Pivot Your Business to Stay Relevant JOHN MORGAN 18 Kitchen & Bath Design News • November 2018 FUTURE FORWARD

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