Can Interactive Units Increase Impact in Home Center Field?

Home centers and building supply stores offer tremendous potential for interactive displays. Customers are eager for information on products, projects and home remodeling ideas. Salespeople often can't help because they are undertrained on project techniques, unfamiliar with the product's details or simply not available due to understaffing.Yet interactive displays have a lousy track record in the building supply field. Whether they provide a directory of store products, offer project help or describe a specific product's benefits, many of these merchandising aids have fallen flat.The list of home center companies that have tested and dropped systems is long: Scotty's, Central Hardware, Pergament, Chase-Pitkin, Lowe's and others large and small.But the list's length actually encourages some display executives. "The interest in these displays is clear by the sheer number of companies that have tried them," says Scott Owens, vice president of TEP Systems of Bloomington, Minn. Cynthia Cohen Turk, head of Marketplace 2000 in Coral Gables, Fla., agrees. "The home center market is fertile territory," she says. "It just hasn't been sown properly."There are a number of reasons for the failures:Pioneering Costs. "Early on, some of these stores paid a lot for hardware and then discovered that the cost to produce software and keep it current made the payback astronomical," says Turk. Now that costs are dropping, at least for the lower-tech systems, retailers are gun-shy.Jeff T. Dowell, president and chief executive officer of Inter-Ad Inc. in Rochester, N.Y., is well aware of the importance of timing. Three years ago, his firm created a touch screen kiosk directory and project-help system for Chase-Pitkin Home Centers, a Rochester, N.Y.-based 12-store chain. It didn't get sufficient use to justify the $9,000 cost, and the chain dropped it. "Today I could do that same program for $2,000 because the technology costs have fallen so much," Dowell says. "But it's hard to convince people the second time around."High Expectations. Because of the investment, officials often expect these machines to replace salespeople or training programs. Says Paul Bloom, marketing manager for DCI Marketing, Milwaukee, "The advantage to interactive displays is that they send a consistent message. But they supplement salespeople, they don't supplant them."Too Many Messages. "The number-one requirement of any successful system," says TEP's Owens, "is to keep it simple. When the instructions become too complex or you need to do more than push one or two buttons, you will lose the customer." Because stores often try to pack lots of features into the display, customers can become confused as to its purpose."An interactive program requires point-of-purchase and marketing support," stresses Dick Jay, executive vice president of Display Masters in Long Island City, N.Y. "It also must supply information that can't be answered with a printed visual. If you can do the same thing with a sign, you can't justify the expense."Wrong Message. Some of the large retailers, particularly those pushing customer service, fear their customers don't like stores that rely on computerized displays, says Ellen Schmitz, vice president for business development and research at the Howard Marlboro Group, New York, the marketing arm for the computer-display firm Intermark."Several chains have told me that they haven't installed displays for fear that they say to customers that the staff is ill-informed or not available." In addition, some older customers -- particularly many in the 35 to 50 age range vital to home centers -- are not comfortable with computers or video equipment.Durability. "These stores can be dirty and dusty, which harm the reliability of any machine," TEP's Owens says. In addition, because many functions are demanded, a lot of interfaces are needed between printers, keyboards, laser disks, etc. These are more prone to problems than a simpler system would be.Manufacturer Reluctance. "Ignorance is fear," says Marketplace 2000's Turk. She adds, however, that many manufacturers are reluctant to jump into a pricey merchandising concept, because retailers will simply demand to receive it for free. Display Masters' Jay agrees. "It makes sense for a retailer to install a merchandising system for an entire category line, but the reality is that manufacturers must be willing to bankroll the systems," he says. "The retailers own the real estate, and they call the tune."In fact, the systems being utilized today by manufacturers call for a variety of payment programs, including selling the displays out-right, leasing them, using co-op money, and giving them to the store and counting on the payback to make the investment a success.Manufacturers that focus on cost, however, can't see the forest for the trees, Turk argues. It is the supplier who benefits the most. "If a home owner goes into a home center looking for stain, he'll get stain," she says. "But he won't necessarily get Manufacturer X's stain. Manufacturer X needs to show why his product is better than the one sitting next to it; the retailer doesn't."These displays also provide suppliers with a systematic way to get their message across to the retailer's own staff -- often the key ingredient in selling higher-margin products or getting return business. Most vendors offer training programs with their systems and encourage employees to use them on their own to learn more.Because of such factors, sales increases following a display's installation can be dramatic, Turk says, depending on the type of product and store. Obviously, high-margin, complicated products do best.But not exclusively. TEP designed one of its first videodisk systems for this field for a concrete and asphalt manufacturer last year. It offered a payback measured in weeks, Owens says. "If a picture is worth 1,000 words, a video is worth more," he says.The spectrum of available systems covers everything from shelf-edge liquid-crystal displays to personal computers complete with videodisks and design capabilities. Here are a few of the successful systems now operating in the building supply field:Liquid Crystal Display: The Answer Station from USG Interiors features a battery-operated liquid-crystal calculator housed in a protective unit that can be mounted to the top or underside of in-store rack shelving. Its output of four lines of type at a time tells customers how much material they need for their ceiling project, recommends specific products and estimates the cost -- in three languages.The complete display includes a writing desk with a product catalog binder and project sheet cards, plus a back-wall pocket for product brochures. "The system includes a toll-free number for maintenance, and most problems can be solved over the phone," says Don Moloney, president of IDT of Chicago, who programmed and produced the system in conjunction with Kestrel Inc. "It's biggest advantage is that it has given USG a foot in the door with a number of new accounts."Video Project Center: Tileak America Inc. of Stockton, Calif., has introduced an interactive display that allows customers to view any of 17 short video programs concerning tile projects.Created by TEP, the system includes a videodisk player and touch screen. The disk holds up to one hour of material and includes sections on topics such as selecting the proper tile for the project and what tools and materials are needed.Color Planning System: A number of paint companies have begun using a PC-based system developed by Colorvision in Fort Wayne, Ind. A creation of Colwell/General, a paint sampling firm, and Target Computers, Colorvision helps customers visualize what their home's new interior or exterior paint color will look like. It also provides screens that show customers how to solve specific paint problems, depicting what the problem looks like, why it occurs and how to solve it.Just two years old, the system currently is being used by Valspar Corp., Pittsburgh Paints, Ace Hardware and Fuller-O'Brien, according to John Lantz, Colorvision's general manager. Home center chains using one of these manufacturers' systems include the 307-store North Wilkesboro, N.C.-based Lowe's and Somerville Lumber & Supply Co. in Waltham, Mass., a 10-unit chain.Touch Screen Designer: The Mannington Premier Flooring Theatre allows customers to view how more than 300 different flooring samples from this Salem, N.J., flooring firm will look in selected rooms of the house. More than 3,500 combinations are possible. It also can calculate the amount of product needed for a specific job and play videos about the product lines.The system includes an IBM PC/2, videodisk player and a touch screen. It was created for the firm by LSI Communications of Philadelphia, which developed the software, and Art Guild of West Deptford, N.J., which designed the kiosk and signage.The displays are leased to the company's specialty retailers, and the payback can be dramatic. Some Mannington stores have seen their sales double since the display's introduction, says Bob Cooper, president of Frontier Media Group of Malvern, Pa., which is now handling the system for Mannington.The theater is one of several elements in a repositioning strategy credited with boosting Mannington's sales 30 percent in 1991, Cooper says, a year in which the flooring market in general saw sales drop 7 percent.CAD Kiosks: The DesignCenter, which Innovis Technologies of Bellevue, Wash., helped design and recently purchased from Weyerhaeuser Co., allows an employee to work with the customer to custom design a project. Beginning with decks about three years ago, the system has since been expanded to include shelving units, garages and fencing. Other ideas on the drawing board include landscaping, lawn sprinklers and even specific manufacturers' lines of cabinets or ceiling tiles, says chairman James Navarre. "Our intent is to be a multipurpose design system."Using a rollerball and mouse, the system creates any design to the customer's specifications. The finished plans can be viewed from any angle. On deck projects, for instance, it shows the underside structural members required to support the finished design. The system also creates a list of materials required and a price list.A similar system from Osmose Wood Preserving Inc. of Griffin, Ga., uses a keyboard and mouse to help customers design decks, landscaping, fencing and other outdoor projects, plus kitchen and bath design. The Backyard Designer's Macintosh PC can be housed in an optional cabinet that takes less than 9 square feet of floor space.Features of the system include complete design capability, project pricing, continuous help prompts and add-on sales suggestions. Like the DesignCenter, it was designed for the salesperson to operate with the home owner -- in part to ensure customers don't use the design service and then shop elsewhere.CAD/Video Kiosk: The Andersen Window of Knowledge combines a PC with a videodisk to offer a wide range of design and selling tools for its window and door lines. One module called "Ask The Experts," for instance, lets the customer listen to what four different types of users -- architects, designers, home builders and home owners -- think about a particular topic.Working from an Apple Macintosh IIfx, the system offers segments on the Andersen window product line, design ideas, price quotes for home owners and contractors, energy efficiencies and finished designs for interior and exterior window and door projects. This March, the firm issued its 2.0 version, which allows for faster switching between segments.The system is offered on a five-year lease program and is maintained through General Electric Computer Services. It is being carried by Andersen distributors as well as 70 retailers, according to Bill Proesch, who helped develop the system at Andersen.Regardless of any system's functions, maintenance is critical. "A broken machine is worse than none at all," says Frontier's Cooper."It makes the store look incompetent and uncaring."TEP, for example, offers three maintenance programs: on-site servicing at various speeds, such as same-day, overnight or longer; replacement and repair, in which a new machine is sent overnight while the damaged one is fixed; or time and material, in which the leaser pays those costs. "The cost to maintain a system is a small part of it," Owens says. "But it is a critical part."Because of stores' past (bad) experiences and concerns over costs, experts agree that progress in infiltrating the industry will take time. "There won't be any great catalyst," says Marketplace 2000's Turk. "I foresee slow, but steady growth as manufacturers learn how to use these tools."In the future, though, many believe that retailers may take a more active role in getting vendors to join together to develop displays. At Intermark, for example, a retailer is working with two manufacturers to create an LCD program. The retailer supplies the data, Intermark inputs it and the suppliers are billed for the cost.If such tests prove successful, the future may hold more such partnerships. "Interactive displays are the perfect medium for retailers and manufacturers to work together," says DCI's Bloom. "They let both parties reach the customers with a consistent, effective message."

Can Interactive Units Increase Impact in Home Center Field?

P2PI MEMBERS

JOIN P2PI

Related Images

Business Topic

Company

Market Segment