Is it time to reposition how you market your showroom business_
Chris R Boyd

Chris R Boyd

Founder, Upspark Digital

Is it time to look at your showroom’s positioning?

The market in which your showroom operates has changed dramatically in the last 30 years. If we were to look at the what competition there was for fireplace showrooms starting out 30 years ago we would have probably mentioned the gas board and other fireplace showrooms.

Now, the market landscape is unrecognisable. In 2020 there is so much more competition than before, causing a lot of showroom business’s growth to flatline and profit margins to erode.

Here’s a table showing how the market is now so much more competitive.

Competition

1990

2020

Other Fireplace Showrooms

x

x

Installers

x

x

Gas Board

x

 

Large chain DIY stores: B&Q etc

 

x

Specialist online  fireplace retailers

 

x

Large multi-product category online retailers: ao.com, wayfair.co.uk

 

x

Chain retail stores with online and offline stores: Argos

 

x

Marketplace businesses with individual vendors: Amazon, eBay, Esty

 

x

   

What do we notice about the competition?

In each of the above business categories there are a multitude of players all competing for customers. They compete fiercely and their business models are set up to win customers on price and convenience. The internet and high-volume retailers have created a highly commoditised low end market in which price is the decisive factor. This market dynamic drives prices downwards and the only way to compete is to win on price by selling in high volume at low margin.

Race to the bottom

This is a clear case of a race to the bottom where only large retailers or internet only retailers can actually make decent levels of net profit and have a healthy business. It is my belief that a fireplace showroom should not try to directly compete with these retailers. It’s most likely the best route to a slow death.

Customer’s that only care about price see the products and services you offer as indistinguishable from other types of retailers. For them, you have become a commodity, where price is the only factor that matters. You don’t want to attract these types of customers because they just won’t ‘get’ what you do and the value you offer.

The market has changed and so must you

If I put all these retailers on a positioning map, you’ll see where the market is saturated and where there is clear room to breathe.

How showrooms are positioned

Red dot- You sell at the cheap end of the market and therefore have the most competition. You offer the same level of products as much larger businesses who can all beat you on price. Your revenue and profit margins are most under threat.

Purple dot – You sell a multitude of products at different price points. Many of you sit in this top right quadrant but your business is not differentiated enough from some online and chain sellers and you end up directly competing with them on price.

Blue dot – One way of avoiding a price war and a saturated market is to position your business to appeal to a completely different type of customer. You’ll see from the above positioning map that the market is far less saturated in the upper right quadrant. Position your business to the top right of this quadrant and you’ll appeal to customers who value high quality products and don’t mind paying a premium for it.

Should showrooms be positioned to deliver high quality at a higher price-point?

The answer to this is multi-faceted but to sum it up in once sentence, it’s about where your business can deliver the highest value and provide the most remarkable experience to your customers.

I’ll give you an example:

Customer 1

Anne, 71, Looking for a cheap electric stove to sit in the corner of her living room. She has surfed the web and seen there are stoves available on Amazon for £50. She now has a budget in mind and the perceived value of a stove at this price and doesn’t really want to spend much more. She pops into your showroom and after  lengthy conversations you manage to convince her to buy the cheapest stove you have to sell her at £249. She prefers shopping in store so hesitantly agrees to buy.

Have you created a remarkable experience for your customer here? Has she gotten value from her shopping experience? Have you created a happy customer that is going to rave about your business? Have you even made a decent profit?

If you’re still reading this blog then you know the answer to these questions are no, no, no and no.

Compare this to customer number 2:

John and Helen aged 53 and 49 are looking for a wow factor for their living room. They’ve searched online looking for ideas. They’ve seen designs they like on Pinterest, but every online retailer is selling more traditional or cheap looking fireplaces and it’s just not what they are looking for. You have a good looking website where they see you offer a bespoke design service and therefore they have come to you for help. You give them specialist expert advice that they can’t get elsewhere, offer to create a unique design for their living room and provide a fully fitted service.

John and Helen are delighted and fully understand the unique value your business has. They tell all their friends and family about you and leave a fantastic review on Google and Facebook. You’ve made a high value sale and from their feedback you do another two sales on the back of their project.

Obviously these two examples are at different ends of the spectrum, but the point of this comparison is to drive home to you that your business is more valuable to people at the higher end of the market than the bottom. Your unique value is in the expert advice, bespoke design and fitting services you offer and therefore you must market your business to customers who value these services.  These are your unique value propositions which differentiate yourself from the rest of the market.

This doesn’t necessarily mean you have to be super expensive but you should price yourself appropriately to reflect the additional value you offer to your customers.

You might have completely different valuable products and services that I haven’t mentioned. In fact I’m sure of it. Your business has unique value that you take for granted or maybe you just don’t know how to market them to customers. This value needs to be unlocked and shared with the right customers. 

Position your business towards these target customers and you won’t have to compete with online retailers or chain stores. You’ll attract a different level of customer that loves what you do and is willing to pay for it.

You’ll also get more joy out of your business as you’ll enjoy interacting with these customers and providing a level of service that you know they’ll love. Oh and there’s also the small matter of healthier profit margins too.

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on google
Share on pinterest
Share on print
Share on email