Differentiate in the Details - Special Not Spendy Options

I came across a terrific product that made me realize there is still opportunity in the details. Modernhousenumbers.com is a small company based in Arizona, offering a very basic product, with stand-out design.  Adding small, well-designed details to your homes will help to differentiate them from the competition, as well as offering a profitable option your competitor hasn't thought of. 

Modern House Numbers offers an element of design in an often overlooked detail - house numbers, mailbox numbers and even street curb stencils.  Four up-to-date fonts are available, and the house numbers come in multiple sizes. Wouldn't your home buyers find value in a reasonably priced but incredibly stylish house number as an upgrade?

The website is a treat as well - start by typing in your own house number, and you will automatically see them in each of four available fonts. Wow - '5320' never looked this good before - (SoHo is my personal favorite). The product assortment is simple and clean, just like the product design - aluminum house numbers, mailbox vinyl numbers and curb stencils with all matching type face.

A sustainable product, the numbers are made of recycled aluminum and cut with water jet machinery to lower energy use and contributes no pollutants.


Started by two young architects, Modern House Numbers is definitely filling a product void. See their product at http://www.modernhousenumbers.com/
Bulk orders for your next developments are available.

The Soho Direct-Vent Gas Fireplace by Heat & Glo

The Soho is also a terrific but small detail that will help differentiate your home from the competition without using valuable floor space. See sexy footage of the SoHo burning here. At just under 30" square, it offers a lot of style in a small space. In fact it frames in at only 11 1/2" deep.  For those of you reading overseas, the Soho is available internationally!

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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.

Twitter http://twitter.com/kparkerbrown

LinkedIn http://www.linkedin.com/in/krisannparkerbrown

Learning from Retail - Creating Option Packages That Sell

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.

Twitter http://twitter.com/kparkerbrown

LinkedIn http://www.linkedin.com/in/krisannparkerbrown

Smaller Foot Print Homes - With Design That Matters

In 1973, the average home was 1,660 square feet. By the second quarter of 2008, the average home had reached an all-time high of 2629 square feet. (US Census Bureau) Now, the trend is headed the other way, dramatically. By the end of 2008, the average home had dropped to 2343 square feet.

Builders are having successes with smaller floor plans that are well planned out , and make wise use of space within the floor plan. KB Home has seen growth in their small footprint product, "The Open Series". Jeffrey Mezger, president and chief executive officer of KB Home is quoted: "With The Open Series, we are going beyond offering our buyers choices on design elements such as flooring and counter tops to giving them a say in the floor plan layout itself. The result is a line of beautiful, functional homes that give buyers exactly what they want and can afford in a new home, and nothing they do not need." KB Homes has seen a 26% increase in ordered homes.

The economy is an obvious influence, as we see consumers making trade-offs, and "doing more with less" A social movement can also be seen, as we all remind ourselves and each other to slow down and simplify life. Bert and John Jacobs founded Life is Good, a ­Boston-based apparel company that last year had sales of $120 million (Financial Times) The product line promotes an appreciation for the small pleasures of life.


The "Small House Movement" and "Small House Society" are also gaining membership and momentum, though some members take things to the extreme. Greg Johnson, of Iowa City Iowa, is considered by some to be a founder of the movement - he lives in a home of 140 square feet.

Sarah Susankah's "Not So Big House" book, now 10 years old, remains as relevant to new construction as it does to remodels.

Sarah Susankah

What does this tell us as we work to offer the new home consumer the options they want, in the footprint they need (and can also afford)? A smaller home stripped of options to gain 'price point' entry may not stand out in the marketplace from another builder's product (or even from a "home on wheels' as they like to say in the South). Consider choosing differentiating options that add value (both appraised value and perceived value) without driving a great deal of incremental cost into the product.

Last week on a sales recap call, I heard a report of a small builder who had contracted a installing distributor to add fireplaces into his standing inventory of 14 constructed homes. The homes were standing still on the market, and the builder realized that a fireplace would be the emotional touch point that would differentiate his product.

Heat & Glo's Cosmo Slim Line Fireplace

With the shift in smaller footprint, each addition needs to be thought out in terms of the space it takes in the home, the cost it adds to the home, and the value it implies to the consumer. All of these need to line up when the appraiser walks the home. (Here is my opportunity to let you know that adding a fireplace adds up 6 to 12% in home value - National Association of Realtors)
Regarding the floor space versus impact discussion, a contemporary linear fireplace can create instant emotional and design appeal, add value to the home, AND take no floorspace at all!

Cost is of course very relevant to the homes you build, and purchasing teams are working harder than ever. Consider stepping away from the core cost of the product, and looking at overall lower installed cost. In addition, work with your installing suppliers, they will be able to consider aspects of the product install that will save you additional level. For example, at Hearth and Home, we are currently working with several National builders to value engineer the placement of fireplaces in the home plan. By moving a fireplace even a few feet, it is possible to save a great deal on vent pipe and installation. Still offering a product the consumer desires, differentiating from those 'stripped down' homes on the market, and working together with your manufacturers and installation teams to get the best value.


When choosing options for your smaller footprint plans, consider:
ROI (Return on Investment)
ROE (Return on Enjoyment for the home buyer)
Differentiating your Product
and lastly

Cost (Total installed cost, after value engineering all aspects of adding the option)

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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.

Twitter http://twitter.com/kparkerbrown

Linked In http://www.linkedin.com/in/krisannparkerbrown