Friday, August 29, 2008

Betting On A Little Luxury

Heatilator Caliber Direct Vent Fireplace and Luxurious Blue Pearl Granite Surround



CVS drugstores recently announced the launch of a new (very) high end beauty shop, named "Beauty 360". The new concept will be strategically placed next to some drugstore locations, and will carry luxury skin care, cosmetics and fragrances, and offer manicures and other beauty treatments. Their positioning seems to compete with the luxury Sephora stores (now, there is a spot to kill an afternoon and a few hundred dollars!). Mary Lou Gardner, the senior category manager for beauty, is quoted as saying "If you create the right environment, you can sell any brand."

Unique retailer J Crew is also headed upscale, with a new focus of creating exciting spaces where shoppers want to "hang out", and bringing even more luxury into the brand, from higher end fabrics to high end details in the garment finishes. Even Godiva Chocolates is still opening new stores in traditional and lifestyle malls across the continent.

A recent post on EBrand marketing points out that even though customers are spending less in the market place overall, they are not giving up affordable luxuries. Creating a beautiful browsing experience enhances this consumer experience.


Most of us have chosen not to give up our Starbuck's habit, nor stop wearing cosmetics or getting our nails done. What does this mean to you and your design center?


Consumers are willing to invest in small luxuries that create a personal home environment unlike any other. The 'smaller' upgrades are often higher in gross margin, and the mark up less noticeable to a consumer than in a category such as , say, appliances , which may be price comparison shopped by the consumer on the Internet or local big boxes. Of course, it is mandatory to stay below the 'psychological price barrier', or it will not appeal to the consumer. In example, we will increase incidents and overall volume of upgraded fireplace surrounds when pricing is $999.00 versus $1100.00. Profit and margin are much better in the long run.


Focusing the design center experience on the experience takes the consumer eye off of upgrades and options as commodities, (read PRICE) and helps the consumer look forward to their home, as they 'designed' it, and the fact that it is unlike any other home. This also differentiates you as a builder. The experience can start before the consumer enters, continue through the browsing, consulting and selection process, and even end with a hand written thank you note.


Experience is about emotion, and for those of you who have heard me speak lately, you know I believe emotion connects with your home buyer unlike anything else. In "Unleash the Emotional Appeal Of Your Product" Rita McGrath, Harvard Business Review, McGrath drives us to strongly consider our target consumer segments, and the lifestyles and behaviors that make up these segments. She asks us to consider the situation of the consumer; their mindset, fears and expectations. Finally, consider the emotions that you can appeal to. The article encourages experimenting, and trial and error as you find what works the best with whom.


At Hearth and Home, we are having exceptional results offering affordable luxury in fireplace surrounds. Our assortment includes a few extremely design oriented, rich granites and marbles that are priced as 'best' in the good, better, best of our assortment. For a relatively small price, we find consumers (both at retail and in new construction applications) are very willing to pay for 'What I like" or "What matches" or in the active adult and move up - semi custom market "What I want". Blue pearl granite and marron brown marble are selling to move up, semi and custom and active adult buyers with terrific results.


Review your product assortment in every category for 'affordable luxury'. Place the best items high (yet touchable) in your displays, and let me know how it goes. We will talk about product placement and consumer perceptions of value in a future post. In the meantime, I'm off to Starbuck's.

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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 and lifestyle 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, now the Retail Design Institute. Contact her at brownkr@hearthnhome.com or 952-985-6537.