Retail Observer

RETAILOBSERVER.COM FEBRUARY 2014 32 A ccording to Bloomberg News, consumers are poised to begin snatching up durable goods. The average age of these long- lasting products—like furniture and home appliances—is the oldest since 1962. We've hung on to our sagging sofas and our weary washing machines longer than our grandparents did. As confidence in the economy improves, the likelihood of replacing these household stalwarts increases. John Silva, chief economist for Wells Fargo Securities said that those purchasing these products "can only be postponed so long." Increases in home values, improved consumer confidence and falling unemployment give consumers the feeling that it's now worth reinvesting in their homes with things like new appliances. Americans are in a better position to make big ticket purchases now than at any time since the recession began and they can start replacing worn out or outdated household goods. Having paid down record high debt, consumers are now in a position to make large purchases. When queried, Americans say that staying current on their bills, reducing debt and saving more is still a priority. That being said, they are less willing to run up their credit card bills on things like entertainment and restaurant meals than to refresh their homes. But just because your prospects have the need and the desire to buy what you sell, you can't throw caution to the wind in the way you serve them. There's no "get out of jail free" card here. This isn't going to be a sprint or a gold rush; but rather, as one home improvement retailer said in an earnings call last November, "a slow build." You'll still have to offer value and provide an exceptional customer experience. Just like you, your competitors are eager to ride the coming wave of consumerism. Here are some thoughts about how you can capture more than your fair share of the replacement wave. • Continual promotion is key. Get your name out frequently. Use a wide variety of traditional and digital media to capture consumers' attention. • Trade in; Trade up. Use your website, social media and email list to tell customers about new features and benefits. Offer free removal of old models. • Go green. Many new products are more energy efficient than their predecessors. Help take energy hogs off the grid. • Get healthy. Remind your customers that a better night's sleep has been proven to help improve health in many ways. New refrigerators help keep fruits and vegetables fresher for healthier eating. • Find good partners. Furniture buyers might also be in the market for new flooring. People buying appliances might need new cabinets or countertops. Everyone needs a good handyman. Be a referral resource so your customers get the whole job done right. • Hold DIY classes. Ask a designer to put on a seminar about practical kitchen design. Bring in someone to talk about the different kinds of countertops available and the pros and cons of each. The professionals might get some business and you'll have knowledgeable customers right in your store. • Bring on the chef. Cooking classes can teach customers why induction cooking, professional cooktops, wine coolers or warming drawers should be part of their kitchen remodels. Charge a fee for a celebrity chef and donate the proceeds to a local charity. • Make new friends. Just like you once courted home builders, go meet the remodeling contractors in your area. Develop a loyalty program that encourages them to send clients to your store. • Be transparent. Don't try to fool customers by pricing your merchandise at some inflated "list" price and then offering them a "discount." Contrary to some old thinking, customers do not want to negotiate to get a deal. Few feel like they've really gotten one. Instead be sure you can match the lowest price in the market in every category if necessary. Train your associates to professionally explain more full featured product benefits. Offer a price guarantee to instill confidence. Customers may be more willing buyers now but they won't give up their quest for value and service. They want to buy quality products from dealers they can trust. They want to have confidence that you are giving them a fair price and that you'll stand behind the merchandise they buy from you. The business is there. Now you just have to go out and earn it. Elly Valas Retail Views GET READY FOR THE COMING BOOM Elly Valas is the Marketing Services Director for Nationwide Marketing Group. She can be reached at elly@ellyvalas.com or at 303-316-7569. Visit her website at www.ellyvalas.com. RO

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