Thursday, May 29, 2008

Capturing the HEART of the Home Buyer - Emotional Purchases versus Commodity Comparisons


Those of you who have heard me speak recently know this is a hot topic we are capitalizing on at Hearth and Home. Men and women shop differently. For a retail science perspective, most retailers are merchandised and presented for the manner in which women shop.

We know that women drive 80% of home improvement decisions (Lowe's study), but overall, more than 85% of all consumer purchases. Isn't a new home the largest consumer purchase that a consumer is likely to make?

Back to the basics. Men are hunters, women are gatherers. Men approach a retail experience with focus and intent. They know what they want, enter the store, and walk directly to the item, then leave. Unless necessary, they will rarely choose a cart. Milk; BAM! Bread; BAM! to the front of the store, eyeing for the shortest checkout line. Visual cues are the fastest method for reaching the male shopper, but he will be much less likely to add on to his purchase.

Women gather and experience. Enter the store with an idea of what they need, still will typically get a cart. Women turn to the right to start to shop (74% of shoppers begin shopping to the right). In a grocery store setting, you will see the seasonal and sensory departments placed around the perimeter of the store to lead the shopper through: floral, card and gift, bakery, produce, deli. All senses are engaged; very effective with the female shopper. Fresh bread or flower aroma? BAM! Ripe avocado or tomato to touch? BAM! Sample pasta salad at the deli? BAM! Fresh latte steaming (sound, taste, smell) at your coffee cart? BAM! For any of you ever in the Twin Cities, check out local grocery experts Lund's and Byerly's - they set the bar very high.

Enter for milk and bread, leave with much more. It's the experience.







The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary by Joseph Michelli is a wonderful read that really boils down the key philosophies that will drive consumers to pay 4 times as much on a half caf, no whip, soy almond latte at Starbucks as one could at the local gas station for a 'good cuppa joe'. The truth be known, coffee is a commodity. It is bought and sold on commodity markets just like wheat, oil or coffee.


With no value added additions, the focus for the consumer will ALWAYS be price. (97 cent gas station coffee) By adding surprise and delight, service, and the customer's ability to personalize their coffee experience, the perceived value to the consumer is huge. Could millions of consumer's really be paying 4 times as much for a cup of coffee? You bet.



It is about the experience. When one enters Starbuck's, all senses are engaged, current music playing (and available for sale along with various gifts), coffee aroma, the sound of steaming milk, even the color of the retail environment is messaging: (greens for growing beans, reds and browns for roasting beans, blue to represent brewing coffee, and pastels to represent the coffee aroma). Tribal Knowledge: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture by John Moore Wireless Internet, a comfortable club chair, and yes, a FIREPLACE, all add to the experience. Although later version prototypes have moved away from this concept, store layouts were originally designed to allow the customer to watch the theater of the coffee process and chat and engage with the baristas. As you all have experienced, one may come in for a coffee, but may leave with a cookie, a mug, or upgrade to a larger size.



As of late, you all have heard the news that Howard Schultz felt the company had gone off track from core principals. He is back at Starbuck's, and he just re-engaged his original store design partner to return as well. You can bet we will see the 'wall' in the service area move down or become more transparent, as Howard works to bring the 'experience' back to Starbucks. This fall the Starbuck's store design team is headlining the International Retail Design Conference (held in Seattle) and there is much discussion about a possible new store prototype designed with the 'experience' in mind.


The experience in our design centers can be much the same. When the consumer sees their option upgrades as commodities, and the selection experience is a 'checklist', price is the natural comparison factor. I know all of you love hearing "This faucet is only $99 at Home Depot!".


In our design centers, how can we make the experience happen? Creating an experience for the consumer takes time and personal connections (we are all working with smaller staffs now). It takes choices and the ability to personalize (SKU reduction focus' have impacted every single builder). But it is important. Very important.


If we consider a fireplace, cost will always be the focus when it is about the 'appliance'. But, we have proven results that show the consumer is willing to pay for options and upgrades when we deliver the experience. In our setting, this means fireplaces that burn, chairs in front, decor on the wall, and the ability to create a unique combination of fireplace, surround and mantel that will remain the heart of the home for a lifetime.




Of course, the consumer views the fireplace as the heart of the home - where is every family photo taken/ Where are holiday decorations displayed? Where do we gather after dinner on Thanksgiving? If you Google "Family Fireplace" in Google Images, you will find family photos at fireplaces from all over the world.



To the female consumer, she views the whole wall as the 'fireplace' : mantel, surround, art or decor, and oh yes, that box in the middle. In the facings category, she is extremely likely to choose an option or upgrade when offered, if we offer the right items for your consumer in your market. We don't need thousand of sku's, let us help you find the right sku's for your market. (Hearth and Home Technologies is also in the retail business, don't forget.)



Once again, it is about the experience: when your consumer feels they have 'designed' their fireplace by choosing a mantel, a stone or marble surround, and a decorative fireplace front, this is no longer a commodity that drives a price comparison. You have created her experience.



Although these specifics are about creating the fireplace experience in your design center, take it one step further - what else can you offer your home buyers to add perceived value to your homes, and the purchase and design process you offer as a builder, and design center? I would love to hear what you all are doing that works!

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The Design Minds at Hearth and Home Blog is geared to support design center staff and the new construction industry in selling options and upgrades to the new home consumer. Subscribe for updates. Contact Krisann Parker-Brown for merchandising or marketing support of your design center. She will be happy to work with you on your assortment and presentation to ensure you are on track for the upcoming decor trends.

Krisann Parker-Brown is the merchandising manager for Hearth and Home Technologies, the leading manufacturer and retailer of fireplaces and hearth systems. Krisann supports design centers and new construction builders in presenting Heat & Glo, Heatilator and Quadra-Fire hearth systems, and consulting on design center merchandising, point of sale and the consumer experience. Krisann is a member of the Institute of Store Planners. Contact her at brownkr@hearthnhome.com or 952-985-6537