Done with mirrors
Editor's note: Susan Haller and Dale Benedict are vice presidents at Fitch Inc., a research and design consultancy with offices in Boston, London and Columlus. Ohio.
Consumers are more demanding and price sensitive than ever before. Yet satisfying them doesn't always mean selling at the lowest possible price - it can also mean offering products and communicating features that consumers find valuable. The key is understanding consumer needs and developing products, packaging and merchandising systems that meet those needs before the competition does.
This is exactly what Stanley Hardware, a unit of Stanley Works, New Britain, Conn., and Fitch Inc., a Columbus, Ohio-based design and research firm, set out to do in April 1992.
Stanley had recently purchased Monarch Mirror Doors, a maker of sliding mirror closet doors, and the long-term success of the acquisition depended on improving all retail aspects of the category - boosting sales of mid- and high-end products and delivering value to customers, for starts.
The outlook wasn't promising. Research showed that consumers looking for mirror doors usually ended up choosing the cheapest ones they could find. Further, shoppers had little brand awareness, products were not well differentiated, sales were sluggish at best, and more than half of product movement was at the lowest end of the line. Neither retailers nor manufacturers were satisfied with the sales or profit margins in the product category.
Despite the gloomy realities, Stanley felt the market showed promise. Product penetration was low, so if consumer interest could be developed, the category had excellent growth potential. In addition, trends in the remodeling and home building industry boded well.
Stanley and Fitch worked together for a year to define and develop a new positioning strategy for mirror doors and a communications vehicle that would effectively take advantage of market opportunities.
The effort included a full scale research project, involving focus groups with homeowners and contractors and one-on-one interviews with distributors and retailers. The project examined all aspects of development, from clearly defining the user audiences to creating new packaging and merchandising systems based on consumer and retailer needs.
Project participants from Stanley and Fitch worked in integrated teams that included personnel from marketing, sales, manufacturing, communications, product design and research. The multidisciplinary and participatory approach was maintained for the duration of the project.
Defining audiences and opportunity
After reviewing current Stanley quantitative studies and data on market trends, the two companies explored the current positioning of the Monarch brand and conducted qualitative research with key stakeholders (including homeowners, retailers, distributors, contractors and builders) in the mirror door market.
Initially, research focused on consumers who had recently purchased mirror doors and a few members of the trade. But since Stanley was keenly interested in growing the market, the research was expanded to include: prospects for mirror door products; builders and contractors who specified or installed mirror doors; buyers and distributors of mirror doors; and Stanley personnel.
Focus groups were conducted with consumer groups (mirror door owners and prospects) and professional groups (contractors and builders) on both coasts and in the Midwest and Southeast. Store audits and mystery shopping trips were conducted in these regions as well.
Stanley supplied six different current mirror door products and in-store displays to the focus groups to simulate the purchase decision-making process and more effectively analyze respondents' reactions to the product line. Interviews with trade buyers, distributors, merchandisers, and Stanley personnel were conducted in person and by telephone.
Market trends and retail environment
Trends in the home-building/remodeling industry indicated that the mirror door market had plenty of room to grow. Residential remodeling was expanding at a phenomenal rate. The most frequently contracted remodeling activities - kitchen and bath areas, family room additions, and master bedroom upgrades - were all potential candidates for mirror doors.
At the same time, new home construction was picking up, distribution channels for mirror doors (large retailers catering to do-it- yourselfers) were expanding rapidly and research indicated a low level of product penetration (fewer than 15 percent of U.S. households have mirror doors).
But there were problems. Fitch and Stanley's research showed that the retail environment was a barrier to purchases. The merchandising of mirror doors was confusing: It was difficult to determine exactly which products were in stock and which had to be special ordered. Nonstandard products were hard to come by. Low-priced mirror doors sold frequently because they were the only ones available.
In addition, mirror doors were most often merchandised with other door products as a hardware item instead of a home-decorating item. Most packaging was basic even though verbiage suggested that the mirror doors would make homes appear bigger and brighter. Products other than standard stock items (the low- cost metal framed model) weren't available.
Consumer audiences
Participants in the consumer research included current mirror door owners, those who had considered mirror doors, and people who had never considered them but were doing some type of remodeling that used mirror doors. The discussion format was similar among the three groups and included awareness and/or use of mirror doors, the purchase-decision process, brand and quality perceptions, installation issues, review of products and current point- of-sale materials.
Prospects associated closets and doors with things they'd like to hide and mirrors with positive images such as light, airiness and decorative themes. Most hadn't considered mirror doors as a means of enhancing decor because they hadn't been exposed to products used in this capacity. (In general, consumers' awareness of mirror doors was low.) Some were concerned that the mirrors might break even though most had safety backings.
Among mirror door purchasers, quality and style were the most important considerations. Price was a consideration, but finding the appropriate decor solution was more important. Women were especially influenced by the decor value of products.
Respondents said they got their remodeling ideas from decorating magazines, model homes, do-it-yourself remodeling television programs, friends and relatives and from seeing products in stores.
Positive reaction
Consumers were unaware of the brands of mirror doors, but most reacted positively to the Stanley name as a potential manufacturer, especially prospective buyers. It was clear that Stanley's reputation and trustworthiness would help customers overcome their lack of awareness of the product.
Consumers had some difficulty defining quality in mirror door products, especially regarding the quality of the mirror. DIY installers felt quality had more to do with construction - how the mirror moved, the hardware tracks and the mechanisms. To others, the beveling, the handle detail and how the pieces were finished were primary indicators of quality. To all, mirror door quality depended on finish details, the different pieces and parts of the product they could see and interact with.
Decorative, costlier models preferred
The six mirror doors supplied by Stanley for the focus groups included a metal-trimmed model, frameless and bevel-edged models without trim, and mirror doors with wood frames. Most consumers preferred the more decorative and costlier models - either the bevel- edged or the wood-framed ones. Suggested prices for these products were, in general, higher than prices of models available in the market at the time.
The research showed that the instore merchandising materials available at the time did not overcome barriers to purchase. They did not answer consumer questions concerning safety, installation or product availability. Consumers could not effectively examine the product at the point of sale. Overall, the product and information display were confusing.
The pros
Though some of the research involved interviews with home builders and contractors, greater emphasis was placed on people with remodeling experience because the remodeling market seemed to hold the greatest potential.
Builders and contractors were more aware of mirror door products than consumers were. Many had seen mirror doors in middle- to upper-class homes, where designers or architects had called for their installation, and in smaller homes, where they were used to enhance room size. In some cases, contractors and builders recommended the product because mirror doors positively influenced the outcome of a project.
The pros most often bought mirror doors at large retail outlets and lumberyards (Home Depot, Lowe's), as well as at smaller specialty retail locations. Mirror doors were more popular on the West Coast and in the Midwest than on the East Coast. Quality, style and price influenced purchase. Builders were more concerned about price than contractors were.
All of the professionals wanted no "callbacks" on projects, so they stressed that mirror doors should work well and consistently (high quality, low breakage, and good safety backing), and be readily available (five day to two-week delivery).
Professionals felt the brand name bore significant relevance when it came to reliability and warranty issues. Monarch had some equity as a dependable brand, but it also had a reputation for using lower-quality hardware. The Stanley brand (and hardware) in mirror doors was a benefit, but Stanley was not known as a manufacturer of decor products.
Like consumers, most professionals felt their customers would prefer mirror doors with wood frames, which offered more pizzazz and more value. Professionals were surprised at the variety of Monarch products and suggested several design enhancements to make the products more appealing to consumers.
Retailers, distributors
Focus groups with members of the trade included distributors, buyers for retail hardware and home center stores and Stanley employees. Participants discussed trends affecting mirror doors, brand issues, merchandising and packaging issues and financial and sales issues.
Trade audiences felt mirror doors presented a significant market opportunity. They felt current lines were filled with unimaginative products, and improvement in middle- to upper-end products would ensure growth. Hardware and home center retailers were planning to expand the retail space devoted to decor-type products and mirror doors fit the bill nicely.
The respondents said that the Monarch name had plenty of trade equity. Monarch was known for having good quality products and group participants felt the company was more responsive to retailers than some of its competitors. Reaction to Stanley's purchase of Monarch was positive but cautious. Retailers wanted Stanley to bring the benefits of working with a large company to the business but didn't want to lose the market responsiveness provided by Monarch, a company that knew the mirror door business.
Like consumers, retailers identified problems with current in- store merchandising efforts. They wanted manufacturers to provide a greater selection of products and displays and other merchandising efforts that differentiated the various manufacturers' offerings. Repositioning the product and improving packaging and merchandising were important and integral to growth and success, retailers said. The current line needed help with imagery, packaging and in-store merchandising. ("I sell the line and I don't understand it very well," one respondent said.)
Market opportunity and implementation
After reviewing research findings, Stanley repositioned the line as a decorating rather than a hardware product because the decor value of mirror doors was more important to consumers than the hardware used in their construction.
The company felt that satisfying prospects' needs at the point of sale would increase sales both in the product category overall and in products that provided more value to consumers.
Both the Stanley and Monarch names were retained because each played an important role for retailers and consumers. The use of Stanley hardware in the product was a benefit, but it wasn't the key selling message. Stanley gave consumers confidence in the products and Monarch reassured the trade that the business of mirror doors was an independent entity at Stanley.
The Stanley/Fitch team worked together to explore ways to improve the product appearance and to develop effective methods of improving product fit and finish. More attention was given in product quality reviews to the product details that were important to consumers.
To reposition the line and emphasize the decor angle, Fitch and Stanley reviewed all products in the Stanley line and created four product categories based on the way consumers selected mirrors, with names reflecting the decor elements:
Basic: metal-framed doors in one color and four sizes
Accent: better-value metal frames, thicker glass, color options, improved hardware (special order item)
Prism: frameless, beveled products, improved hardware (special order item)
Woodwork: wood-framed products, variety of styles, improved hardware (special order item)
With a revamped product line, Stanley and Fitch designed and developed a merchandising system that worked well in decor-driven design centers as well as in the traditional hardware section of a store. The system made it possible for retailers to select specific products as part of a core offer or as part of a special-order program. This ensured retail differentiation and improved competitive positioning. Consumers could easily see what mirror doors were in stock from a design and size perspective. The system also included different design scenarios for using mirror doors, product line differences and safety and installation information.
The packaging system was an extension of the merchandising system and focused on helping consumers find the model and size of mirror door they wanted. When choosing mirror doors, consumers could easily see which designs and sizes were available. The system included different design scenarios for using mirror doors, information on product line differences and safety and installation information.
The packaging system also made restocking easier, reducing out-of-stock situations. Special-order forms made it easier for consumers to order without having to depend on in-store personnel for assistance.
Mission accomplished
Thus far, it appears Stanley and Fitch have met all of their original goals. The product line is well differentiated and the selling system has been thoroughly explained to retailers. The system is easy to understand and use, and it solves both consumer and retailer needs better than competitors' plans. Sales have increased dramatically in the special-order business and the basic line no longer represents the largest proportion of retail sales. The success of Stanley Monarch mirror doors reflects how much a research provider and client can accomplish by working closely on a thorough, wide- ranging project.