This month, I’m sharing with you a few observations from recent conversations with our industry partners. I have noticed, and I would imagine your showrooms have noticed, that the national news coverage of the container issue in the Suez Canal has put a spotlight on the shipping challenges we are all having right now.
I must admit I was happy to see that container ship jammed up as long as it was because it created consumer awareness of a much larger problem facing our industry these days. Getting product seems to be more difficult every week. Showrooms should be responding to this in a few ways:
• Overcommunicate lead times. As mentioned in the past, not letting your customers down is vital in today’s world. Make sure they know if it is 10 weeks to really expect 12 weeks to get the product. Email, text or call your customers weekly with updates — until they tell you to stop.
• Capture the sale now! Use the Suez Canal issue as justification to tell your customer to order it now. Lead time is an issue, but so is a price increase of another 20 percent by the time the client “overthinks” it. Use the copper market, price of gas or lumber as a method of proof. Only guarantee quotes for 15 days. Doing this will help force the sale along.
• Use price as pressure. Implement freight surcharges. Use this unprecedented time to capture profit and don’t be sorry you did. It’s just that simple. We don’t know what is around the corner in terms of economy, pandemic, etc., but it’s fair to say while things are good, make them better.
If you are not comfortable with the concept of price increases on product, freight is the easiest. It’s a most justifiable method of giving your profit a bump. There is no reason to share the expense or lose money on freight costs, ever.
So, focusing on freight a bit here. Rates are increasing and dependability is decreasing. Make sure you are working with companies you trust. Add some sort of pad into the price for the reality of future increases.
Increase your pricing as you hear of an increase, not 30 days later. So many companies are sending new price sheets out — and then pricing to correct the new price sheet. It’s a circus. If you want to stay ahead, simply raise your pricing and hold your ground. If consumers are confident you can get the product right now, they will likely order with you.
Another major observation is the lack of people out there to hire. Many showrooms, restaurants and retail establishments cannot find people. Here is what you should expect to happen:
• People still want to experience brick-and-mortar showrooms. If you have less staff, technology must step in to solve the problem. QR codes are generally ugly to place around a showroom, but if done tastefully, they will help solve some of your staffing issues. The American consumer is finally used to using the QR code from dining out during the COVID-19 pandemic (typically used to view a menu).
Imagine you are using it for spec sheets or web links on products in your showroom — it could speed up the sale and closing process. First adopters here will win. The best systems will have the QR code link back to the ERP system, so the customer could at least start the order on their own.
Yes, I know that finishes and trim would have to be adjusted to match, and there are more technical aspects to complicate the sale, but if you could get even 20 percent of the sale started, it’s a win on time, payroll and staffing.
• The showrooms will have to be redesigned for digital. Not only for QR codes but also for kiosks to assist in self-serve functions. This means more spacing out of product for informational reasons, and more space needed with spots for customers to research products on their own. Combine this with the new social-distancing guidelines, and your space will look much less cluttered.
This will put pressure on manufacturers to better curate their lines — and give you the information you need as to what sells in the marketplace. You will have to make some tough decisions on that dreamer display you like but never sells versus the daily driver that you move 10 a week.
• Outsourcing of hiring and HR functions will accelerate. Showrooms just do not have the time to find help, and so many showrooms make the mistake of looking for showroom people at design schools and their competition. Typically, design school students have no desire or knowledge of selling. They simply want to design.
A good HR company can help you find the attributes you need for a successful showroom salesperson — usually good listening skills, empathy, hospitality and a competitive spirit.
• Support your reps! Right now, the observation is one-third of showrooms will allow reps to visit, one-third won’t, and one-third will but with a strict appointment and definitive purpose of visit. My push would be that the reps should always have a purposeful visit and, you, the showroom owner/manager, should be equally prepared and have a thoughtful discussion on growing together.
Now is not the time to shut reps out of your showroom. Now is the time to learn more about what you sell and go like hell to support those who support you.
My last observation of this month would be to forgive, but do not forget, when a supplier lets you down. There have been several mentions of suppliers under communicating and underperforming. While we are all struggling to make sure our customers are happy, we need to make sure the people we partner with are allowed to make mistakes — but own up to those mistakes and fix the process moving ahead.
There is no shortage of great companies willing to step in and while the incumbent will promise a much better experience, make sure you do your homework and get references to make sure you are not just changing dance partners.
This is a business of relationships and a small community of companies. The supplier(s) you throw to the curb now may be the supplier(s) your future new employer happens to love. Speak carefully about your relationship with them.