Volume 35, Number 5, May 2000

Can They Do It All?

Lowes, Home Depot and the new line of EXPO Centers, offer everything needed to fulfill a customer’s home improvement needs—all under one roof. Although these superstores are horning in on shower door companies’ terrain, glass shop owners aren’t bothered--most say these stores are a welcome annoyance.

 by Tara Taffera

Its total revenues equal more than $24 billion. Its stores are found in virtually every city in America. Yes, do-it-yourselfers everywhere are in love with Home Depot. But, what about the shower door industry? While Home Depot, Lowes, and other similar “big-box” stores are selling shower door products, is it as easy for shower door companies to be enthralled with these home-improvement superstores as is the rest of America? Surprisingly, many shower door dealers say Home Depot’s presence in this arena isn’t having a devastating effect on the industry. In fact, some shops are placing their stores in close proximity to Home Depot in the hopes that customers will gain ideas there then go to the experts—the shower door dealer.

 

And, that’s another reason shower door companies aren’t threatened. They say they have the industry know-how and product knowledge with which Home Depot and other stores can’t compete. Not even Home Depot’s new line of EXPO design centers worries them. Shower door dealers say these high-end stores, complete with bath showroom and certified installers, don’t pose a real threat. In fact, they encourage people to walk through EXPO and gain ideas. In the end, they are confident that, again, most customers will return to the shower door company.

EXPO Design Centers

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The company describes its EXPO design centers as a “one-stop decorating paradise.”

Just when many people may have thought Home Depot had peaked, it started toying with a new concept—a high-end 90,000-square-foot-showroom aimed at affluent customers who don’t have the time to do-it-themselves. The company describes its EXPO design centers as a “one-stop decorating paradise.” But, the stores aren’t aimed at those customers who are tight with the purse strings. To get an idea, the minimum cost of a shower enclosure displayed in the bath showroom in the Fairfax, Va., EXPO store is $1,330.50. The most expensive enclosure is $7,750.

While EXPO Centers sell more upscale items than Home Depot stores, EXPO Centers offer additional services as well, including installation, a perk not offered by Home Depot.

At the EXPO Center, a project designer works with the customer to assist him or her with the product selection. Once the details are agreed on, a project superintendent takes over and works with the contractors and installers to complete the job. According to the company, the EXPO stores only work with professional, licensed contractors, and the company warrants the installation in writing for as long as the customer owns the home.

Home Depot opened its first EXPO Design Center in San Diego in 1991. Stores followed in Atlanta in 1994, Dallas and Westbury (Long Island), N.Y. in 1995. The San Diego store was a test store that explored a warehouse style familiar to Home Depot stores. “Off of that, we developed the concept for the current footprint of our EXPO Centers,” said Melissa Watkins, EXPO Center spokesperson.

While the company currently has just 15 locations, Watkins says EXPO will open 200 additional EXPO centers by 2005. Stores are currently located in the following cities: San Diego, Monrovia, and Huntington Beach, Calif.; Alpharetta and Atlanta, Ga.; Miami, Davie, and Boynton Beach, Fla.; Westbury, N.Y.; Dallas, Houston, (two stores in Houston), Plano and Richland Hills, Texas; and Fairfax, Va.

 

Shower Door Companies
View on EXPO

When I interviewed one dealer located close to an EXPO store he quipped, “Oh yes, hasn’t that burned down yet.” But all joking aside, shower door dealers don’t seem to be too concerned that EXPO stores have entered their zip code.

Dennis Haney, branch manager for the Fairfax, Va., location of Banner Glass, has his shop located just a mile and a half from an EXPO center, but said he never even knew they sold shower doors there. When he found out, he visited the same day and reported his findings.

Overall, Haney said the showroom was very nice and that he was “very impressed,” but in the next breath, described the store as “extremely pricey.” According to Haney, the showroom displayed top-of-the line heavy -inch thick extrusions. He said one particular shower enclosure was slightly more than $4,000 as is, while the other was $3,600 installed, a price that Haney found a bit on the high side. “I can give the customer a comparable item, including installation, for a lot less,” he said.

But, another shower door dealer disagrees with Haney’s high price tag assessment. “EXPO charges a fair price,” said Paul Rupp, owner of Wilbur Enterprises Inc. in Miami. Rupp added that he charges the same in his own shop.

But, price issues aside, Haney was also impressed by the types of items on display. “They had some very nice sandblasted patterns that I’ve never seen before,” he said. But, according to Haney, the “super-heavy” glass panels are approximately 4-by 6-7 feet, and -inch thick. He added that this includes a few anchors, plates on either end and silicone seals. “If they have a regular contractor put that in, they’re going to run into problems.”

This lack of expertise is one of the reasons shower door dealers say they are not threatened by the EXPO’s entry into the shower door market. Although Watkins said EXPO puts its sales representatives through extensive training, and only uses highly-trained installers, Ray Adams, director of sales for shower door manufacturer Southeastern Aluminum Products, is still skeptical. “I still have a hard time believing their employees could be adept technically,” said Adams, who also serves as president of the Bath Enclosure Manufacturers Association (BEMA). Ron Floyd, owner of RKF Shower Door in Fairfax, Va, agrees. “Shower doors are a very complicated product,” he said. “You can get into trouble if you don’t know what you’re doing.”

While some in the industry may believe EXPO installers are not as qualified as glass shops, this may not be entirely true. In fact, EXPO stores have approached owners of glass shops to perform some of its installations. Jerry Wright, owner of AAA Glass & Mirror in Fort Worth, Texas, has been contacted by EXPO to perform installations but declined the offer. “What they’re paying installers is nothing,” said Wright. “And, why would I want to represent Home Depot?”

But, Rupp doesn’t feel the same way. He both furnishes and installs shower door products for all three of the EXPO stores in the Miami area, in addition to owning his own glass shop. Although he was wary in the beginning he said he is pleased with his decision to work with EXPO stores. “I had reservations when I first started, but it’s allowed me to expand,” he said.

Rupp said he likes the EXPO concept because “they take the organizational end of it and do everything for the customer,” acting as the middleman. “What EXPO does is put everything under one roof,” he said.

Although this one-stop shopping concept may be convenient for the customer, Floyd, (whose shop is located just a few miles from EXPO) said his business has not been affected. He attributes this to his 27 years of experience in the shower door industry, and said he won’t be threatened by EXPO, “the new kid on the block.”

“The difference between my shop and EXPO is that we have the knowledge and expertise in the shower door industry that they don’t have,” said Floyd. “And, we provide a higher level of customer service.”

Floyd said he, and other glass shops like his, also offer a wider variety of products. “Shower doors come in so many shapes and sizes,” he said. “You won’t see each exact application sitting on the EXPO floor.” He added that RKF Shower Door has a catalogue showing 367 different sizes of doors that come in 25 different configurations. This is something Floyd said the EXPO center cannot provide. “They don’t have the ability to do custom units,” he added.

While EXPO centers may not be able to provide all the services that a shower door dealer is capable of, one thing the store can do is act as an idea gallery. Glass shop owners say many customers visit EXPO to gain ideas, but then go to the company with more expertise—the glass shop.

“I can’t see someone going in there and purchasing one of those items,” said Haney. “A customer may get an idea there then come to me. All I have to do is dig deep, find some hardware and install the job.” Others agree. “They [EXPO] charge so much more than us that many people go there, get ideas, then come to us,” said Virginia Hylan, president of Davie Glass & Mirror in Fort Lauderdale, Fla.

Watkins agreed that one of the great things about EXPO is that it opens up a wealth of ideas to the customer. She even acknowledged that although consumers may gain ideas from EXPO stores, they may go to a glass shop to ultimately purchase the product. “We encourage customers to go and get other bids and shop around,” said Watkins. “It’s a win-win situation that expands the category and expands the market.”

 

Home Depot Encourages Customers to Do-it-Themselves

Home Depot, touting itself as the world’s largest home improvement retailer, has more than 900 stores in the United States, Canada, Puerto Rico and Chile. Customers strolling its aisles will find such glass-related products as shower doors, windows and doors. With such an impressive reputation, the company’s 1998 total revenues equaling more than $24 billion, were hardly surprising.

Although Lowes serves as Home Depot’s only real competitor, it still lags a good distance behind. Lowes has 536 stores in 37 states and a 1998 total revenue of more than $10 billion.

Lowes 100,000-square-feet of retail space is stocked with many of the same items found in Home Depot. The stores even have their own glass cutting station where consumers are urged to do such things as, “create your own storm panel,” enclose your porch,” and “winterize your home.”

But, while Lowes and Home Depot sell shower door products, they are still geared toward the do-it-yourselfer. Although both companies offer installation services for some of the products they sell, shower doors is not one of them. Still, many consumers opt for one of these stores, as opposed to visiting a glass shop. Though a few may disagree, for the most part, dealers again believe that as with EXPO, Home Depot/Lowes is not having much of a negative effect on their business.

Hylan is situated among a plethora of super stores. The EXPO center is located two miles to the left, Home Depot two miles to the right and a new Lowes not far off. But, although Hylan is literally surrounded by the competition, she said her shop isn’t feeling any negative effects.

“It doesn’t take an hour to get into our store, as it does Home Depot,” said Hylan. She added that customers come to her store because it is a full-service shop that handles the job from beginning to end, including traveling to the home, installing the product, etc.

Floyd has another take on why customers choose glass shops, such as his, over Home Depot. He said many customers go to Home Depot, but don’t get an acceptable answer to their questions, so they call Floyd, where he said customers don’t have to go through a voice mail system to air their question or concern. “What it boils down to is that we practice regular, old-time business practices and we stand behind our product,” said Floyd.

“The key when a customer calls is that the person who answers the phone has the knowledge to answer their questions without putting them on hold and asking someone else,” he added.

Others in the industry agree, adding that Home Depot employees don’t have the technical expertise to answer consumers’ questions. “Every week we get a call from a customer saying, ‘I bought this at Home Depot and it doesn’t work,’” said Wright.

“They [Home Depot] drop the ball on the technical side,” said Adams. “It’s an easy out for them [a Home Depot employee] to say, ‘There’s a glass shop right across the street that can do that for you,’” a situation that Adams says happens frequently.

While Home Depot employees may refer customers to a glass shop, the reverse is also true. Haney says he frequently sends his customers to Home Depot and tells them they can purchase the product, bring it back, and he will install it for them. Haney said he does this because he doesn’t want the customer to pay more, if he or she can get a similar product for less at Home Depot.

Some customers want to stay with the glass shop, but try to haggle over price. Jerry Sparling, owner of Plano Bath & Glass in Plano, Texas, said one customer griped at the $300 price tag he was quoted by Sparling for a shower door. “He said he could get the same door at Home Depot for $97,” said Sparling. He told the customer his door was a much better quality and the customer left. But, the customer called back two hours later and ordered Sparling’s $300 shower door.

As with EXPO stores, many customers visit Home Depot to gain ideas, but not to make the final purchase. According to Adams, some Southeastern dealers in the Northeast purposely placed their shops in sight of Home Depot stores because they knew people would get ideas from Home Depot then visit their shops.

While many dealers only see the positive side, Wright is one glass shop owner who said he’s seen both a positive and negative impact. “On the positive side, the public becomes aware of glass products,” said Wright. “On the negative side, they [Home Depot, Lowes], have the home field advantage like crazy.”

Sparling said stores like Home Depot and Lowes are still tweaking their concepts and warns that once this is completed these chains may have more of an impact on the shower door industry. “These stores [Lowes, Home Depot, EXPO] are still working on the nuts and bolts of their business. As a result, they are losing some of their business to us,” said Sparling. “But, when they figure it out, we may lose people later.”

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While Lowes and Home Depot sell shower door products, they are still geared toward the do-it-yourselfer.

“If I were still in Norfolk [Virginia], I would say Home Depot and Lowe’s were killing me, because there everyone wants a deal,” said Haney. “But, here people are too busy. They just want someone to solve their problem for them.”

And, if people aren’t too busy, Wright said many of them are too lazy which is why he doesn’t see the do-it-yourself market getting much bigger. “The baby-boomer generation were the do-it yourselfers,” said Wright. “But, today, people are lazier and people just don’t want to do that.”

But, even if Home Depot and Lowes stores notice a slight drop in their business, it won’t mean the end of these home-improvement superstores. “We have lost market share to Lowes and Home Depot and I think it will only get more competitive,” said Wright.

He added that glass companies will have to change their business tactics in order to compete with these chains. Wright, who frequently, travels the country speaking at industry trade shows, has had many conversations with shower door companies. “Of all the research I’ve done, 95 percent of glass companies rely solely on the Yellow Pages for their business. They have no marketing efforts taking their products to the end user.” But Wright said his shop is concentrating more on marketing each year, including direct mail and even television advertising, and other shops should start doing the same if they want to survive.

“They’re smart [Home Depot/ Lowes] because they’re taking their product directly to the end user. They’re being proactive while we’re being reactive,” said Wright. “We’re so job-oriented; that’s why we’re losing business to Lowes and Home Depot.”

 

Shower Door Manufacturers: How do they Fit in?

Some manufacturers that traditionally sell their products exclusively to glass companies are now selling its products to stores like Lowes, Home Depot and EXPO. Walk down the shower door aisle in Home Depot and you’ll see names like Maax and Sterling (a division of Kohler); in EXPO you’ll see Kohler and American Standard; and in Lowes American Shower and Bath and Sterling will be found in the aisles.

Although, this is not an all-inclusive list, these are just some of the companies who sell to these stores. While many glass shops don’t carry products by many of these manufacturers, a few of the manufacturers sell both to Home Depot, and related stores, as well as to glass shops. So, are shower door companies bothered by the fact that these manufacturers are selling its products in these
superstores?

“From the selfish side, I don’t think they should have ever done this,” said Wright. “But from the business side, I would have done it earlier.”

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“The key when a customer calls is that the person who answers the phone has the knowledge to answer their question ...” Others in the industry agree, adding that Home Depot employees don’t have the technical expertise to answer consumers’ questions.

Sparling, who sells Alumax products, said he was not happy with the manufacturers’ decision to sell its products to EXPO and Lowes. “This is hurting a lot of smaller companies like us,” he said. Sparling said he told representatives of Alumax his concerns but they simply “downplayed the situation.”

While some manufacturers have enjoyed success by selling directly to the consumer, others say this simply isn’t the best decision for their respective companies. Adams said Southeastern Aluminum has never pursued expanding its products into Home Depot/Lowes or other similar stores. “As a manufacturer you have to make a decision on whether or not you’re going to join forces or not … we would have to completely rethink our product lines,” said Adams. “We made the choice that it just doesn’t make sense for us to do that.”

But, if Southeastern were to expand into this market, would it be concerned that it would alienate its existing dealers? “Initially that would be a concern of mine,” said Adams. “But, really, it could be done. We would just have to ask ourselves how we would service these guys and the group we service now.”

Adams added that he doesn’t fault the manufacturers who have decided to sell to both groups. “Just because it’s not right for us, doesn’t mean it’s not right for someone else.”

Shower Door Companies Gain Independence

As a whole, shower door companies do not seem to be as threatened by the home improvement superstores, the same may not have been true several years ago, when the Home Depot phenomenon was just gaining steam. “When Home Depot was in its earlier stages, there was a huge outcry, particularly in the plumbing industry, where people struggled with how to compete,” said Adams. “Now, Home Depot is just a fact of life.”

According to Adams, although these superstores may think they can do it all, this really is not the case. “There are a lot of opportunities for the dealer to figure out that they [Home Depot/Lowes, etc.] can’t be everything to everyone.”


USG

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