Marketing to the Affluent: Tips for floorcovering retailers and RSAs on how to attract and sell to this niche market - Feb 2021
Interview by Kemp Harr
Chris Ramey knows fl ooring. He also knows how to sell to the industry’s most exclusive clientele. As owner of Affl uent Insights, he helps retailers and manufacturers understand and penetrate their markets, focusing on the luxury segment. Leading up to this current venture, he spent 20 years in the fl oorcovering business as owner of Ramey Rug-a high-end fl oorcovering showroom in Stuart, Florida-and as president of CCA Global’s International Design Guild and a board member of the Wood Floor Covering Association. He is currently president of the Home Trust, a 450-member marketing network, and a consultant for the American Marketing Group and the Floor Covering Institute.
When targeting wealthy consumers, he says there are specific considerations that need to be taken into account. “When you look back,” he says, “success in retail comes from understanding the consumer.”
Here are his tips and thoughts for retailers looking to reach this unique demographic:
Q: Do affl uent people shop differently from the average consumer?
A: Yes, of course. Their intentions, expectations, biases, fears and desires are very different. At the most basic level, their ability to pay for the product, regardless of what that product may be, isn’t as big a consideration. So it’s not as much about low price as they’re not likely desiring the most expensive product. Conversely, regarding price, it’s very likely they are tuned into not getting stiffed. But it’s more about alignment with their product, their home and their values.
Q: When they start to shop, what need are they trying to satisfy?
A: It depends. They buy and sell homes more often, so it could be a new home. It could be matching something in their home. They may have the capacity to change their floorcoverings anytime they want to. They want something that is consistent with their life experiences and something that is consistent with the value of their home. So if you have a $10 million home, you don’t want to dumb it down with vinyl. And because they don’t give much consideration to the product until they need it, they don’t think about these things like we think they would.
Q: Is it feasible that a dealer could service both affluent and average consumers out of the same location?
A: Depending upon the market, yes. In New York City, probably not. In Pittsburgh, probably yes. Every marketplace is different.
There are luxury consumers who aren’t rich, and there are affluent consumers who don’t buy luxury. Having said that, it’s much easier for a floorcovering store that’s positioned as a premium to serve both markets, while it’s more difficult for a mass store to serve both markets.
I’m defining “premium” as a business model that promotes “this is just as good as but less expensive.” A “mass store” is where you have rolls on the floor, you have 20 wood displays, or you just look like Home Depot.
This is really where the buying groups have helped floorcovering stores a lot because they are good at the pre-mium shopping model.
Q: What merchandising changes should a store make to appeal to the upper-end consumer?
A: First off, it’s not just merchandising because affluent consumers are human, and they are looking for clues. Alignment is really important. Say they are looking for carpet, and the retailer has remnants in the back; that tells them that maybe they’re not the right store. If your employees are dressed in jeans, that tells the consumer that maybe you’re not the right store. If you have the same brands as other floorcovering stores that they’ve seen, that tells them that you may not be the right store.
The first thing is, it’s not product; it’s about matching values in such a way that there’s a desire to do business with you. Lum-ber Liquidators doesn’t try to sell to high net-worth individuals, but if somebody is looking for something in a value-oriented store, they nail that. They don’t try to be anything they’re not. Everything you do defines who you are, and it tells the cus-tomer who you are.
When it comes to merchandising and the product, the first piece is that your brand, not the manufacturer’s brand, is the centerpiece of your store. We live in an industry where very few brands have much consumer awareness or brand aware-ness, so the result is the manufacturer brands have very limited value to a traditional floorcovering store.
Walk into a Publix, Kroger, Safeway, and prime is very top, but you have to search for it. You walk into a butcher, and they will sell you primarily prime. So it’s finding the brands that define you, not the product, but the brands themselves, which help define who you are just based on the aesthetic. I won’t buy anything but a Michelin tire, and I’ve been that way all of my adult life. My father taught me that, and I still believe it. I don’t know if it’s right or not, but that brings value to a tire dealer. I can’t think of a flooring brand today that brings value to that dealer. Having said that, the margin killer for most floorcovering stores is parity. It tells customers you’re nothing special because you have the same stuff as everybody else, and it’s ditto for categories.
There’s another piece to this that’s changing dramatically. Traditionally, the most expensive floorcovering stores, the luxury stores if you will, had a huge selection. Where selection was once an asset, it is no longer because if the customers wants selection, they can go online and see everything there is. Today, it’s about editing your selection specific to who your client is. The floorcovering stores serving designers and high net-worth individuals in Miami will be very different from the selection that’s edited in Boston or Minneapolis or L.A., be-cause the markets and aesthetics are fundamentally different.
The moment a consumer is confused at any price point is the moment they leave. A confused customer buys nothing.
A good merchant will make it seamless to find exactly what they’re looking for that it’s never an issue. One of the things I like to do is visit floorcovering stores and count the number of wood displays they have in a store. And it’s not unusual to find 20 different wood displays … and they are all brown. At some point, what you’ve done is duplicated the displays that your competitors have, which means you’re no better than anybody else, except maybe having the lower price. But when that happens, it’s a commodity, and nobody’s making any money.
Shopping should be easy.
Q: What type of flooring are affluent customers most interested in?
A: One pillar of luxury is authenticity. Fake stuff, like vinyl, is out. You want to look for products that are natural or at least some type of nylon. You need to have a healthy selection of wool products if you want to make the sale.
Q: Is the sales approach different for affluent customers?
A: Yes, because you don’t sell to an affluent individual. They know all the money-grabbing tricks. Instead, you match values, and you fascinate them. And if you can do that successfully-of course, they have to like you-then you’ll be successful serving them.
That’s something else with the sales approach that’s differ-ent. You don’t sell them; you serve them. You have to have a servant’s heart.
Q: Do they shop the big box stores, or have they figured out most of what’s sold there is mass produced?
A: They certainly know what’s mass produced, but they need nails sometimes, too. Are there items at Home Depot or Lowe’s they require? Sure, it could be light bulbs, but it doesn’t mean they are going to get their big-ticket items there. They certainly won’t buy their appliances there.
Target was the number one store of high net-worth wom-en, according to one study, because women buy toothpaste, but it doesn’t mean they buy their clothing there. So you have to be careful. Some dealers might say, “Well, if they can carry everything, so can I.” No. You’re not Target, you’re not Lowe’s, you’re not Home Depot. You have to focus; you’re a specialty store.
Q: What percentage of affluent homeowners have a professional designer involved? And if they don’t, how should a dealer communicate that they offer that service?
A: At some point, the vast majority of the homes do, just as the vast majority of those that hit the tipping point of $90 million have an estate manager. But it is all over the place, and this is part of the reason the value proposition for many designers is so difficult to make, because professional designers haven’t done a good job of demonstrating their own value proposition.
A floorcovering store that wants to sell to designers can’t really act like they’re designers. You’re still a consultant who is helping a client who has chosen not to use an interior designer to find the right product for them. You don’t want to be a poser, because the moment you’re a poser, you become the enemy of your designers, and they won’t do business with you.
To communicate to the customer your services, all your touchpoints have to reflect that value. That’s what will tell the affluent consumer you’re of their ilk. That’s why walking into a Neiman Marcus is very different from walking into a Target store, and yet, the number one store for Neiman Marcus customers was, in fact, Target. You really have to tear your store apart-all the touchpoints, from the market-ing to the parking lot to where you’re located to the way people are dressed to the ceiling height to…you name it. It has to reflect who you are. And that probably requires a designer. It’s presenting yourself in a way that says, “We serve you.”
Q: Should pricing be marked on the product so they don’t think it varies based on the size of their diamonds or the neighborhood they live in?
A: Yes. I think pricing should be on every product that’s sold, wherever it might be. This is how you build trust. No one will buy from you if they don’t trust you.
Too many dealers don’t want to do it because it’s a pain, but you’re in the business and you have to be transparent. If the price isn’t there, people often won’t ask-they will walk, and you don’t want that to happen.
There is a group of high net-worth individuals that feel like they have a target on their backs. And that’s one reason why online has gotten so popular among them.
Q: When trying to close the sale, how might their priorities/buying triggers be different from the average consumer?
A: For an affluent consumer, it should be an assumptive sale. By the time you get there, it should be “sign on the dotted line,” otherwise, you’re trying too hard, or you’re missing something. You are, after all, serving their needs, wants and desires, not selling them something.
Q: Is it feasible for retailers to have a bou-tique area or an area where finer products are displayed?
A: Yes. Any opportunity to allow the affluent consumer to be away from products they aren’t interested in would be a good opportunity. It is about merchandising discipline, saying no to things so that you aren’t intellectually annoying them while they are looking at products. You want them to walk into a room and say, “I feel comfortable here. This is where I belong.”
When you get to certain price points, there should be phrases that are not sales-y but demonstrate how you serve individuals. And stores should manage that down to a granular level. They should manage acceptable behavior and the ap-parel salespeople wear. It can’t be “You can wear anything you want.”
You know the most beautiful retail store I’ve been in recently? A marijuana dispensary in San Francisco. They had real artwork, a beautiful chandelier in the middle. I had never seen anything like that. As a merchant I was thinking, “Wow. They do so many things well here … and they are selling grass.”
There’s a saying about being a professional concert pianist: it’s not the notes you hit, it’s the space between the notes. And it’s a lot like that for floorcoverings. It’s the space betwe-en the products that add value to it. We need to all look for that space.
Q: What other advice do you have for retailers?
A: You really have to sell differently because your brand is the center of what you do. If you sell your brand effectively, then the product is secondary. That’s what good luxury marketing does. It creates desire for your brand.
Also, don’t attempt to size up the client. How they dress, how they look, what they are driving has nothing to do with their net worth. A good salesperson never looks for clues. And the second part is anybody can af-ford one nice thing in their home: make it their floorcoverings. You have to go out and earn it.
You have to judge your level or service on your consumers’ experiences elsewhe-re, like the Ritz Carl-ton, not other floor-covering stores. That’s the level of service they expect.
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