BNP Media Plumbing Group Editorial Director Mike Miazga caught up with Luxury Products Group Director Jeff MacDowell during the recent IMARK Plumbing Spring Expo in Orlando, Florida. During the chat, MacDowell talks about the luxury bath and kitchen product group’s recent changes and growth, the state of the industry, its status as an IMARK Plumbing vertical and what lies ahead for LPG, which now features 150 members (operating 270 showrooms), 80 vendors and 17 service providers.
How do you quantify the group’s recent growth?
JM: We were at about 15% growth rate when it comes to classic vendor year-over-year numbers, which is pretty good. Some vendors we blew the doors off. We’ve basically reinvented the group. We have right-sized the vendors in LPG. The new vendors are the right vendors for us. We’ve been focused on having the right number of providers in each category — lighting we have the right number of categories and faucets we’re in the right spot now. Since you and I talked at KBIS (2018), we will have 28 new members and 10 new vendors along with six new service providers. We want to make sure LPG is about the shopping experience and it’s focused on the consumer and working backward. We’ve made great strides.
What types of programs have you rolled out for your members and vendor partners?
JM: Everything from creating a link program where we link all our members’ line cards together so we can provide faster customer service. For example, if somebody needed a specific brand of faucet and they aren’t in the group, they can look online and see which members sell that. The end game is independents buying from independents.
We’ve also started doing regional training schedules so we can get frontline people trained. I’m doing consulting services for members as needed. We’ve started a scholarship program for members and vendors, which is groundbreaking for us, and we’ve started a young executives division that has taken off a lot faster than I thought it would. We’re growing with subcommittees and people in the group who want to get engaged. We’ve started to do dedicated best practices groups where we take 10 like-sized showrooms and keep them together for a long period of time. At this show (LPG Spring Expo that took place prior to the IMARK Plumbing confab) we had nine concurrent workshops going from anything like a selling authentic luxury summit to how to bring designers into your showroom. We nailed it with this meeting. If you look at the membership, it’s a feeling of overall excitement.
How underutilized is the showroom space when it comes to the buying group arena?
JM: There are plenty of showrooms out there that need to take advantage of a buying group whether that’s us if we are a fit or another buying group. Independents need to stick together during this time and buy together and learn from each other. It’s not just about the rebates. LPG or any other buying group needs to be about networking and learning how to grow your business and have someone to call when you have a problem. Learn how to fix things and make them better. We have the most willing-to-help group of people I’ve seen in my career. Members are helping each other now than ever before.
At the same time, in today’s current marketplace how much potential does the showroom space have?
JM: The potential is great. We’re bringing lighting into showrooms. That’s a key category. Time is currency for the consumer. They want to make decisions and have a range of products to buy under one roof, so the vibrancy of opportunity is tremendous. The things you can do in a showroom to create a buzz and sell more products, there is no better time than right now to do that. There are a lot of exciting products in the market. We brought in a fireplace company as another add-on product that will help that experience and make it so designers are even more comfortable coming into the showroom. The LPG showroom of the future is going to have just about all those home products in it and we expect rapid growth on that front.
How important is to have properly trained folks in these showrooms?
JM: They need training and help. One thing LPG is focused on is being a one-stop shop. We negotiate and vet all the service providers from traffic-counting systems in a retail environment to display companies to turnkey showroom systems with full design platforms. We want to make it so LPG members know how to create that experience. We’re utilizing webinars, conference calls and communicating with each other more than ever so we all know where to get that information.
What benefits does being under the IMARK umbrella bring to LPG?
JM: The lighting showrooms and the Equity Plumbing members that have showrooms have to apply to LPG just like everyone else. We have to make sure they are committed to growing their showroom business. They have to be committed, there has to be a showroom business plan in place and dedicated showroom employees. We stick to our roots of having luxury showrooms. What this now does is gives us the added dimension with IMARK’s electrical division to get into the lighting channel. Now their lighting showrooms have interest in selling decorative hardware and plumbing. It’s interesting to see lighting grow into plumbing and plumbing grow into lighting.
What do you look for in a vendor?
JM: Integrity in the market, an established MAP policy, and I look for products that aren’t sold as a commodity and that fit into a specific niche. It has to be luxury in a defined marketplace. Different products mean different things in different parts of the country. An Aston Martin might sell in New York, but maybe not in a different city. It has to fit the target of luxury, and then you proceed with caution and make sure you have the right vendor. Distribution is part of the equation as well. They have to be able to provide the products they say they can provide. We are all a little concerned with the tariffs in the market, but we feel we will show good, solid growth above and beyond what the normal paces of market are.
Do you accept showrooms that do not have a traditional wholesale distribution component?
JM: We have several like that and more are coming that are classic design showrooms. Many are buying direct already and once they get to the proper volume and start buying direct, they need help. We can help them as much as anybody. The nice part is these companies are 100% locked in on growing the showroom channel because it’s their bread and butter. We can learn a lot from them and at the same time they are looking to wholesale partners on how to grow.
Where is LPG headed in the short-term?
JM: In 2020 I expect to see substantial membership growth, but not necessarily large vendor growth. We want to make sure we have deep relationships with our current vendor partners and do right by them first. I see us expanding into additional categories such as appliances and more hardware. We want to make sure we are driving the numbers we expect our membership to grab onto so that we keep our vendors in the group very satisfied. This group has gone into acceleration mode. We are in a very good spot.