Diversified showrooms are finding success offering consumers convenient one-stop shopping.
[dropcap style=”letter” size=”52″ bg_color=”#ffffff” txt_color=”#e5144f”]F[/dropcap]or many years, the strategy of most wholesaler-distributors was to focus on one niche product category, ink exclusive distribution agreements with select vendor partners, and become the go-to resource for trade professionals in their marketplace. Today there is a growing trend for a more diversified approach. Innovative distributors are venturing outside their traditional boundaries to blend new, related product categories into their showrooms.
Two key developments — the popularity of the Internet and the rise in “big box” retailers — and the resulting effects of both were instrumental in creating this trend. Previously, distributors almost exclusively dealt with trade professionals rather than consumers, and those professionals also typically specialized in one niche. The Internet’s endless stream of information fueled DIY popularity, giving consumers a chance to explore beyond the selections offered by their contractors and encouraged distributors to rethink their showroom design and sales strategies. As a result, many began providing a one-stop shopping experience to an expanded customer base. Once distributors discovered what a natural fit and lucrative addition related product categories were for their operations, the trend turned into a full-blown evolution.
A new business model
“The decorative market is much different than our traditional plumbing wholesale business model,” says Max Bender of BENDER (formerly Bender Plumbing Supply) in Connecticut. “Over the past five years, we’ve become a turnkey operation for home renovations, adding a complete selection of decorative plumbing, kitchen and bath cabinetry, surfaces, lighting, tile, and stone. As we got more involved in the retail business, we discovered how profitable and rewarding it could be. Our showrooms are much more focused on margin than volume. It’s not unusual to get margins of 45 percent or more on lighting — much more than we see on the plumbing side.”
BENDER’s long history was a tremendous asset when opening new categories. “We had already added several other categories before we got into lighting in 2015,” Bender notes. “We knew the looks we wanted and what would coordinate well with our existing product — and we wanted innovative lines. That helped us narrow the list of vendors we wanted to partner with. Thanks to our established track record, vendors were pretty open to giving us a shot.”
Despite increased competition from online sources, BENDER has experienced continuous growth. “Our philosophy is full transparency,” Bender comments. “We don’t play SKU-hiding games because that’s not how we want to be treated. All of our pricing is at, or below, Internet pricing. We’re not looking for a ‘one-hit wonder.’ We want customers to have a great experience because we believe that is what will drive more of their friends our way.”
Manufacturing opens new markets
When distributors expand their product offerings, it doesn’t just benefit their customers. It also gives manufacturers the opportunity to grow their sales. Buying groups have been a key avenue for lighting vendors and plumbing distributors to create partnerships.
Lighting industry veteran Steve Falk of Golden Lighting credits Luxury Products Group, which is affiliated with Omni Corporate Services, for helping Golden open new markets with plumbing showrooms. Falk believes showrooms “should use the entirety of their available space — floors, walls, ceilings — to display product and add to their sales potential.”
From mechanic to designer
After studying art in college, spending nearly a decade in the Air Force as a mechanic, and working in the music industry, Joann Mills of Ellen Lighting & Hardware in Texas entered the lighting community on a friend’s recommendation.
“It’s kind of an odd combination of technology and art that led me to lighting,” she recounts. “Once I got into lighting, that was it; I was sold.”
Mills initially worked for a distributor, and later a manufacturer, before moving to Texas. “I decided it was time to branch out a bit, so I went to work for Morrison Supply, which is where I learned plumbing, hardware, and appliances,” she explains. “That experience helped me see the advantages of multiple product offerings.”
When Ellen Lighting & Hardware was building “The Showroom,” a 10,000-sq.-ft. campus in a Houston suburb, its executives offered Mills the job of showroom manager, gave her a budget and, “let me have fun!”
“Lighting can be daunting when you’re starting out,” Mills comments. “Salespeople sell what they know, and customers can tell whether or not you know what you’re talking about. So if a manufacturer doesn’t educate the showroom staff, they won’t make an effort to sell the product.”
Mills’ experience at Morrison played a significant role in designing The Showroom. “It is set up a little differently than most lighting showrooms,” she notes. “I saw how important a greeting area is, so it’s very open as you walk in. There is a seating area with a sofa and chairs. We have a large hand-built bar table that is perfect for designers and their clients to spread out their project plans. We also have a working kitchen and often provide lunch or snacks,” she adds.
“Our vignettes are eclectic, and not your typical ‘matchy-matchy’ style,” Mills remarks. “I find things that work together and catch people’s eyes. People want their houses to look ‘found’ rather than ‘designed’ — like they went somewhere cool and found something special to bring home. It’s much more fun to design than just ordering a suite!”
Life in the luxury market
Jeffrey Valles, of Chown Hardware in Portland, has been involved in the luxury market all of his life. His father sold high-end textiles to clothing manufacturers in Los Angeles, and he grew up with a love of design and luxury. After college, Valles joined Phylrich, working for founder Alfred Dubin, whom he describes as “the man who brought high-end plumbing into showrooms.”
“When I started in the early ’80s, most plumbing wholesalers looked at their showrooms as a nuisance,” he recalls. “Usually the receptionist or the owner’s daughter was ‘the showroom girl.’ There were very few wholesalers who put a lot of resources into creating beautiful showroom spaces.”
“Branding is critical,” he states. “We are trying to brand our lighting because we believe the brands a showroom carries has a lot to do with its success. We want people to learn and know [our] brands, so we hired an ad agency to help us get our message out. We’ve spent the last eight months in strategy and branding meetings, and completely redesigned our Website with a focus on SEO.”
Despite Chown’s new technologies and branding efforts, Valles still believes that people are a distributor’s greatest asset. “Our staff knows the value of the relationships they build because they see how it continues to bring them referrals. It’s our job to guide customers to the fixtures that will give them a little bit of glee each time they see or touch them,” he says.
Providing a little lagniappe
One of the most interesting families in plumbing — and now lighting, hardware, appliances, and outdoor furniture — is the Vinturellas of Southland Plumbing Supply in New Orleans. Much like the city they call home, their personalities and marketing savvy are almost bigger than life. It’s a true family business: Alan Vinturella, son of the company’s founder and a chemical engineering graduate of LSU, is the company owner and by his side — since they were four years old — is his wife Mona, a gifted designer who manages their outdoor living center and works closely with Southland’s showrooms. Their son, Chad, and daughter, Loni, also hold hands-on management roles at the company.
Southland is the only independent plumbing wholesaler serving the New Orleans market. Ironically, much of their growth came after Hurricane Katrina. With his long plumbing industry relationships, Vinturella was able to ensure that Southland could provide customers with the products they desperately needed for rebuilding. They expanded into new product categories primarily in response to customers’ need for convenience and reliability at a time when getting around the city was extraordinarily difficult.
“When we started looking into lighting, Mona and I went to the lighting show in Dallas and we knew right away it would be the right mix for us,” Alan comments. “At the same time, we hired two women who had previous experience in lighting, which was extremely important because lighting is a completely different type of sale.” They also lobbied their buying group, Omni/LPG, to bring in its first lighting vendor: Kichler. Since then, several more have been added.
Mona says renovating the showroom was a major endeavor. “We had to reconfigure much of the space because of all the behind-the-wall electrical work to do. Every fixture on display has to be lit and displayed in a way that makes both the lighting and plumbing products stand out. We still keep our electrician on speed dial! It seems like there is always something we need him to do — from adding breaker panels and clouds to additional power outlets and even extra switches,” she states.
The biggest difference is in managing inventory. “Every lighting fixture in the showroom has a price tag on it and is sold off the floor,” Alan explains. “We change out the displays every time we sell something, and we don’t keep much inventory on-hand because more than half of the products are discontinued every year.”
Southland’s long-standing community involvement has been extremely helpful as it expanded. “Our plumbing contractors helped us establish relationships with appliance and lighting specialists,” Alan states. “And because plumbing selections are typically the first to be made, we get early access to consumers. When they’re ready to make other selections, they feel very comfortable coming back here. Our retail business has gone from 25 to 50 percent of our total volume.”
During the recent Luxury Products Group (LPG) Showplace, Chris Bailey of Hinkley Lighting noted that one of his favorite lines from Executive Director Jeff MacDowell’s opening presentation was “Let’s put luxury back in LPG!”
“Lighting is very much a fashion-forward product,” he says. “It changes just as rapidly as clothing fashion, so it regularly gives showrooms something fresh and new to sell. Now even light bulbs are designed!
“I came away from the LPG meeting with more than 25 members who said they are interested in partnering with Hinkley,” Bailey recalls. “Lighting is an ideal partner for plumbing showrooms that want to add a new category. It’s an easy transition to get into lighting because it can perfectly synchronize with, and complete, any kitchen or bath project.”
Bailey says to be successful selling lighting, you need two things: passion and training. While passion can’t be taught, plumbing showroom managers are typically very engaged and interested in learning about lighting, he explains. Hinkley provides Web-based training programs that cover everything from a company overview to the technical aspects of various lighting products.
New to the game
Earlier this year, Randy Wool and his son, Jeff, of Florida-based Wool Plumbing Supply and Wool Kitchen & Bath attended Lightovation in Dallas for the first time and came away impressed.
Randy, who has been in the business since 1978, said the showrooms’ hospitality events provided a great opportunity for them to network with vendors.
“Before going, we got advice from some of our peers about vendor partners to consider,” he recounts. “Even though we have six decades of success in the plumbing industry, it can be challenging to get the attention of vendors when you’re new to a market. We concentrated on six of the larger vendors we wanted to meet with and were very encouraged by the reception we got. They each spent about 30 minutes with us discussing doing business together. They recognize that this is a ‘win’ for them, too,” he states. “Our showroom can bring in customers they’ve not had before because of our reputation in plumbing.”
Jeff, who joined the company in 2006, adds, “Customers already have a lot to deal with when they’re doing new construction or renovation. They don’t want to visit multiple stores. When a bath or kitchen customer comes in, we’ve got a captive audience. It only makes sense to capitalize on that opportunity.”
The Wools aren’t deterred by the growth of online sales in categories such as lighting. “Diversifying our offering will help grow our business and combat sales lost to online sources,” Jeff affirms. “We believe there are still plenty of consumers who want to see the product, touch it, and compare finishes.”
Wool Plumbing Supply is a member of Affiliated Distributors (AD), which recently formed a Decorative Brands division. “A lighting vendor is already on board, which will be a great connection for us and other AD members,” Randy remarks.
The Wools hope to finalize vendor agreements by the end of April, and be up and running in lighting by the third quarter. “We’re also considering doing some rebranding for our showrooms and updating our Websites,” Jeff adds. “It’s an exciting time at our company.”