If you like to shop, you will agree with me that the deals have never been better. No matter what category I check out in the mall, I can find a bargain. A proven retail strategy you can expect to see over the holiday selling season is the concept of product packaging.
By grouping complementary product together, the retailer can capture both incremental sales and a higher average sale. The consumer will capture savings, try new product they may not have tried in the current economic environment. and suffer less buyer remorse about their decision. Buyers will often justify an emotional purchase decision with value statements.
To increase new home option sales and increase the perceived value of your homes, consider creating well thought out product option packages in your design center or sales process. Package retailing is most effective when product packaging strategies follow one of the proven retail formulas .
There are several ways to “package” products which can be applied to option packages in your design center or new home sales process: In order to be relevant to the consumer, all packages should have easily measurable savings to the consumer.
Value Package - Consider this the Costco technique. Consumers are motivated by savings and may purchase a larger than typical amount of product at one time. Value packaging might be volume related (How long will it take me to get through this gallon of shampoo?) or what is commonly known as a BOGO (Buy One, Get One). To be effective, savings to the consumer must be measurable. Example " Upgrade your bedroom light fixture to a ceiling fan light fixture, and get a second fan free, a $350 value."
Category Package - Keeping in mind the target buyer, create a package of associated product that complements a faster moving item. In example, begin with your top selling energy efficiency furnace, and then add several corresponding items such as windows, insulation, and water heater. Clearly illustrate the savings on both the items in the package, and the potential annual energy savings to the buyer. ( A double savings!)
Complementary Product Package - Again, choosing a faster turning product, create a package which provides value and yet gives the consumer more options than they thought they could actually afford. For example, using your top 3 selling granite countertops, create a 'granite package' that would allow the homebuyer to add the same granite surround on their fireplace, counter in their bathroom and bar top for a competitive price. Again, show the consumer the specific and measurable savings they will capture, while getting more options than they expected.
Introductory Package - The cosmetic industry does a terrific job of this technique, knowing that when consumers try it, they often buy it. Work with your key product manufacturer partners to launch a product attribute first, before your competition, in order to stand out from your competitiors. Examples might be a unique appliance color (laundry might be actually fun to do with a bright orange or teal deluxe washer and drier) or new technology (LED lighting, for example).
When presenting option packages, a sales technique is the "For only $xx more, you can get....". Ensure your sales team is aware of packages and can clearly and confidently communicate the value to your homebuyers. Showroom point-of-sale indicating value and savings is a critical communication tool to educate your home buyers.
Donna Tang, marketing expert from Inventrak Retail Services, also warns against creating too many packages, which can lower the perceived value of your brand. This can also make a consumer perceive fewer overall choices, and feel associated resentment. (I'll refer you to the "I'll throw in the undercoat rust proofing with your new car.." scene from "Fargo".)
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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 upcoming decor trends and your target home buyer.
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 Retail Design Institute. Contact her at brownkr@hearthnhome.com or 952-985-6537.
LinkedIn http://www.linkedin.com/in/krisannparkerbrown
