Today's economic environment is challenging for most of us. Although consumers are still spending, they may not be spending in your product category. In light of that fact, one way to insulate your business from economic volatility is to cross merchandise your product offerings.
If you think that carrying a variety of floor covering options is cross merchandising, think again. However, if you stock allied products for cleaning floor coverings, you're on a better track. If you carry area rugs to complement your primary floor covering lines, you're doing better yet. And if you carry home-furnishing accessories, you can probably skip this article because you're undoubtedly king of the hill in your marketplace!
As I have often mentioned in my seminars on showroom management, retailers need to court the customer. Offering one-stop shopping is a good step in that direction, but you can add more profit dollars by cross merchandising your floor covering products with other merchandise that the customer may need.
Think about it. If your customer is putting in a new kitchen floor, shouldn't there be other things required for the overall redecorating project? I've yet to work with even one customer who didn't spend more than anticipated on a redecorating project. It's simple logic - once you start improving the looks of a room with one product, the rest of the room starts to look shabby.
Why should someone else be getting add-on dollars that you could be reaping?
A cross-merchandising case studyLet me share with you an example of what I'm trying to illustrate. Bob Rose of Best Tile in Syracuse, N.Y., had a vision for his company. A traditional ceramic tile distributor, he had always envisioned offering more of a design center concept for his customers.
When he expanded his business in a new location several years ago, the building was planned to house other businesses that would be of interest to customers looking for ceramic tile. He created a mini-mall and rented space to a kitchen cabinet dealer, a fireplace dealer, a lighting dealer, and so on. The tenants helped to cover his overhead costs, and they each exchanged materials to help each other with their showrooms. Kitchen cabinets went into the Best Tile showroom and tile went into the cabinet store. Tile was also a natural for the fireplace store. But Bob's dream was to one day include his own accessory space in the mall.
As luck would have it, that opportunity arose when the fireplace dealer went out of business. Naturally, Bob was left with a showroom full of fireplaces - but they also had tile surrounds! And he had on his staff a very talented designer, Ralph Propes, who possessed prior retail experience. The time was right. Bob and Ralph headed to market and began to buy accessories for their new business venture.
Fireplace tools were the obvious buys, but they also added candles, potpourri, decorative pillows and throws, dried flowers, lighting, mirrors, and lots of other good stuff. They even managed to find a line of artwork that they could obtain as an exclusive in their area. Plumbing fixtures and other decorative items from Techno Art Marmi fill out the mix. There was a fountain in the showroom, so they added some interesting lighting and cute floatable items. A little paint, some new lighting and some family antiques were commanded as props. "The Robin's Nest" was the name they chose for the new showroom. Within a couple of months, they were off and running.
They began to market to Best Tile customers as Ralph began to build a database of new customers. Separate advertising on cable stations became imperative. They participated in the Parade of Homes and local Home Shows. They also invited local women's clubs and student interior designers from nearby Syracuse University to tour the showroom or conduct their monthly meetings there. As the other tenants in the mall sponsored events, their customers became familiar with The Robin's Nest as well.
Bob and Ralph were in a trial mode with their buying practices, but they were savvy enough to buy small quantities from a large variety of vendors. This kept the store looking fresh.
As the shop manager, Ralph has grown confident in discerning his customers' tastes. If there are any buying misjudgments, he cleverly blends them in with new merchandise. I asked him how his business was going this year and he gave me some startling news - the numbers are double what they were last year! Can you say that about your business?
He credits that early philosophy of dealing with many vendors to achieve a continually fresh look. In fact, Ralph's lists of vendors totals more than 100.
"If you limit your sources, you limit the potential of keeping your customers returning on a regular basis," says Ralph. "If they feel they see something new each time they visit, they'll keep coming back and recommending the shop to their friends."
Customers who may have visited from out of town are now sending videos of their homes for Ralph to view so that he can offer personalized advice. In response, he sends videos back along with his suggestions. Then the customers can place their orders over the phone. His database contains well in excess of 500 customers, and many of them come back on a regular basis.
Other examplesDuring my travels, I've noticed other cross-merchandised stores. In Los Angeles, for instance, there's a store on north La Cienega Boulevard called Exquisite Surfaces. Their product mix includes tile and stone products - to be specific, these include French limestone, antique terra cotta, antique fireplaces, decorative tiles, fountains, garden items, and architectural elements. The store advertises in upscale designer magazines and also maintains a website.
Outside of the floor covering world, the Dorfman Plumbing Supply Co. in Kansas City, Kan., combines art and plumbingware. Set in an area of the city that was recently rejuvenated through an influx of artists and urban folk, the showroom displays a variety of bathroom products and showcases the work of unknown local artists. The reasonable prices of the displayed art and the brand-name plumbing products are a noteworthy dimension of the showroom. Despite the low-key approach to the perception of the showroom as an art gallery, it is obvious that this display is a wonderful resource for local artists.
While it has been a very unusual forum for artists, the response has been fabulous. We've seen art lovers become enamored with whirlpool baths, while homeowners shopping for plumbing fixtures have discovered an appreciation for the art world.
The Crossroads Art District of Kansas City, where the showroom is located, offers an evening "Gallery Walk" that affords the public an opportunity to stroll through galleries and see new artwork. This type of display brings people in on foot and by bus for viewing.
While Dorfman is modest enough to not go so far as to call the showroom an art gallery, the lines that separate the artwork and product display in this unique space are blurred just enough that they can comfortably state, "We are selling art and plumbing supplies!"
So with just a little bit of imagination, you might be able to blend some different products with your regular offerings. As far as Bob Rose is concerned, he's finally seen his dream of offering the customer one-stop shopping come true. Third-generation owner and former college art major Charlie Dorfman has been able to add a new dimension to the family business.
Hopefully, these examples will spark your imagination and get you thinking. What can you do to cross merchandise products and offer your customers something new and exciting while adding to your profit margins?
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