Irecently had a conversation with a wholesale owner who also manages a showroom as part of the Luxury Products Group (LPG). He shared the progress of a remodel and mentioned that he decided to bring in a steam unit display—one that isn’t even part of LPG. The reason? It was offered to him for free, and the representative did an excellent job of pitching it.
However, this decision was made without fully considering the implications. This particular steam line has a direct-to-consumer strategy, cleverly altering its name to obscure its true intent. The harsh reality is that this line is engaging in a parasitic relationship with the showroom. It uses the showroom as a physical display space to attract consumers, who then go online to make their purchase elsewhere, essentially setting up a free showroom for the steam unit.
The loss here isn’t just in sales. The rep who invested time and effort into selling the unit also loses their commission when the sale is funneled to a faceless, price-driven internet retailer. So, the question arises: At what point will wholesale showrooms wake up and stop playing host to these parasites? When will they start prioritizing more unique, harder-to-sell options?
It’s tempting to take the easy route, selling what the consumer asks for when they walk in with a specific model number. But we all know that they’re likely just going to take that price and shop it around. Take a walk down the aisles of Home Depot and you’ll see the very brands you support sitting on the shelves, often at better prices and certainly with more convenience for the consumer.
Our industry is at a tipping point. Despite political narratives, the economy is solid, and there are plenty of people with disposable income. They’re looking for cool, innovative products that they can showcase in their homes. The showrooms that carefully curate their displays and feature items that captivate will be the ones that succeed.
The challenge is that curating these displays requires investment. It’s time to stop engaging in these parasitic relationships with direct-toconsumer brands that use your showroom to drive online sales. These brands often entice showroom employees with heavy spiffs, making it difficult to break free. Sure, your employee gets a $10 bonus, and you’re making 25% on the sale, but you could be making 40% or more if you weren’t settling for these crumbs while focusing on volume sales in water heaters and PVC fittings.
If you want your showroom to thrive, take a look at non-wholesale showrooms that rely solely on showroom sales. These spaces are clean, beautiful and designed to attract customers with disposable income. They maintain store hours that accommodate working professionals and cater to the design community, asking designers what they want to see in the showroom. I assure you, it’s not a wall of products that can be found at Home Depot.
Showrooms have the potential to be a critical part of your business—if you have the leadership and the guts to guide your team on what to sell and why.