How to Invest in a Merchandising Program

Business Management
Model home merchandising takes into account the demographics and buying patterns of a market to create interiors designed to sell homes on the first visit. NAHB spoke with four of the country’s top new home merchandisers and asked them a few questions to help those new to merchandising get an idea about how it can fit into their marketing plan. 1) When should a builder consider merchandising a model home? KAY GREEN: The builder should always consider featuring a professionally merchandised model when they have a community or subdivision of more than 30 homes. Builders should take note of their competition for market share. Having your competitor showcasing a model home is a clear cut indication that you need to have one. Another factor to consider is having a floor plan that is new to the market, or which could be difficult to view two-dimensionally. ANGELA HARRIS: A model home is always a good idea. Although this may be their most expensive marketing tool, if done correctly, it will increase sales and speed up the sales cycle. 2) How much should a builder plan to spend on merchandising? MARY DEWALT: Budgets vary from $18/sq. ft. to $30+/sq. ft., depending on the part of the country and the product. It’s important that the merchandising fits the demographics and psychographics of the target market and it must be attainable so they can see themselves living there. DORIS PEARLMAN: Your merchandising budget is impacted by the region of the country, the sale price of the home, the type of community, and the buyer expectation. Prices vary greatly, but an average price can range any place from $28 to $32/sq. ft. 3) What does the budget typically include? KAY GREEN: Typically a merchandising budget will include all interior furniture, fixtures and accessories (FF&A) such as upholstered furnishings, case goods, window treatments (typically decorative only), artwork, area rugs, decorative lighting, accessories and lifestyle elements. A designer will hand-pick the finish materials (flooring, plumbing, cabinets, counters) from your preferred sources, specify any interior architectural details (built-ins, millwork) and create a uniquely individual trim detail and paint plan to highlight the builder’s floor plan and enhance the model. 4) What are the advantages to merchandising a model? MARY DEWALT: Today’s consumers have very high expectations when it comes to style and design, and they also decide within about six seconds whether they like a home or not. Good merchandising lays out how they want to live and shows them that the possibilities are endless. DORIS PEARLMAN: Model home merchandising demonstrates the potential for a buyer’s dreams and aspirations of a lifestyle they hope to attain. A well-designed model emphasizes functionality as well as available options and upgrades, which are essential to the sales process. 5) What is the biggest mistake you see builders make when it comes to merchandising? MARY DEWALT: Everyone’s a designer—or so they think. Don’t second guess the merchandiser’s decisions when it comes to color and style. Let them finish before starting to question selections. They are the experts and will help builders sell their homes faster. ANGELA HARRIS: The biggest mistake builders can make is to underestimate the power of a successful model home program. This includes not only the merchandising, but the design program as well. Not investing the time, money or in the right merchandising partnership can be a big mistake. Mary DeWalt, MIRM, is the president of Mary DeWalt Design Group in Austin, Texas. Kay Green, MIRM, is the president and founder of Kay Green Design in Winter Park, Fla. Angela Harris, MIRM, is the principal and creative director of TRIO in Denver. Doris Pearlman, MIRM, is the president and founder of Possibilities for Design in Denver. This post is adapted from a story in the Nov./Dec. 2018 issue of Sales + Marketing Ideas. Download the Sales + Marketing Ideas app on iTunes or Google Play to read it.

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