If you want to get a reading on what the consumer is thinking in this post-recession and the painfully slow recovery era, you need to talk with Gary Johnston, Marketing Communications Brand Manager at Invista. We recently spoke with him for Talkfloor.com and got some pretty interesting answers.
The consumer of 2012, according to Gary, is a different breed from the consumer we all knew and loved in 2005. The consumer after the recession and recession-like recovery, according to Invista’s research, has new ingrained buying habits. One factor, Gary reminds us, goes back to the base element of a floor covering purchase: The household. People have been postponing marriage because of the tough economic times and as a result there has been an increase in the average age of people getting married for the first time.
We’ve all read about all of the recent college grads who have returned home to their childhood rooms and old favorite bunk bed with the Spiderman bedspread. The bottom line is that this has resulted in a reduction in the formation of new households, and along with it the virgin turf upon which new floor coverings can be installed.
The difficult economic times coupled with the decrease in the number of marriages has also resulted in a drop in the number of births, and that, Gary says, also nets out to fewer nurseries to spruce up and less space upon which to place new floor coverings. He tells us that the slim economic times have also resulted in a decline in the divorce rate, not because couples have suddenly rediscovered marital bliss and how to get along, but instead that divorce is too costly and tight budgets mean toughing it out. That unfortunately doesn’t really spell getting into the car and looking for some new floor coverings.
Gary’s research also shows that consumers who are in the market and looking for new carpet have indeed tightened their belts, but they are still looking for quality floor coverings at a good price (and by the way, the consumer is the one that defines both “quality” and “good.”)
Changes in the marketplace in general, Gary reminds us, are having a major impact not only on the sales of floor coverings but just about all purchases. A greater share of everyone’s disposable income ends up in the gas tank, meaning that everything that is not a necessity, including floor coverings, is looked at more closely than ever.
He points out an interesting exception to this whole frugal yoke we all find ourselves in, as demonstrated by the long lines outside of the Apple store made up of people clambering to buy the latest iPhone. These new time-saving and entertainment devices evidently represent a break and a much-deserved reward to these frugal-weary consumers for having endured the months on months of penny-pinching they have also had to endure for the last several years.
We’ve all heard the word ”value” so much over the last few years that we’re blue in the face, and according to Gary, we have perhaps lost sight of the reason why the consumer walked into the floor covering store in the first place. He says that sure, the consumer is always concerned about value, but when it comes to prioritizing their mission for entering the purchasing process, the consumer first has to like the way a product looks. Secondly, her concerns are about durability and cleanability; how long will the look she loves in the store stay that way? The customer’s next two questions are: How much will I have to pay to take this product I like home, and how much will it cost to keep it this way for a long as possible?
Gary says the focus at this point is for the sales professional to knowledgably walk the consumer though the process, learning what is it the consumer is trying to do, how long they want the product to do it, and the kind of investment they are willing to make. The customer should leave the store with a good understanding that she has done the best she could for the money she was willing to invest. That’s what value is all about.
Another point concerning value, according to Gary, is that the term is often misunderstood. He notes that value is not synonymous with cheap; rather it means the customer walks away from the purchase with what she wanted for the money that she had to spend. He notes the customer is willing to walk up the price spectrum as long as each additional dollar brings with it additional value.
There are only two things he says that will stop the customer: First, they just simply run out of money; second, they don’t see the value for entering the next step. So as long as the customer has satisfied her value need, says Gary, and she has invested the amount of money she can afford, then she will stop and make the purchase. However if she perceives additional value and she has the money, she will continue to step up.
The whole process, he says, boils down to the sales professional being able to explain the features and benefits so the consumer is willing to take those additional steps. Gathering information on the front end of the process, he says, and going through the steps the sales pro can make will help the customer arrive at the amount of money she should spend. They will, he says, spend as much as they possibly can to satisfy their need.
The data gathered by Invista indicates that shoppers do not enter the floor covering market very often and when they do, especially in this environment, they want to arm themselves with as much information as they possibly can – much more information, in fact, then they were happy with in boom times. That leads them to the Internet, and to friends and relatives who have been in the market. It also leads them to a particular store and to a knowledgeable sales professional. Invista research indicates that about 70% of consumers said they relied heavily on the sales professional for help in selecting the product that was right for them.
Value is real and it’s an element that cannot be avoided in these economic times. But for the sales pro, allowing the customer to define the term while explaining the features and benefits of higher-ticket products that may still be within their definition of value is key to not leaving money on the table, and building sales and margins.