The National Kitchen & Bath Association recently released the results of its first-ever study on the current (and future) state of the independent showroom segment. To help make sense of the troves of data the report uncovered, we invited Tricia Zach, head of research at NKBA, onto the podcast. Zach pinpoints the major highlights and findings from the study and more.

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Rob Stott: All right, we are back on the Independent Thinking Podcast and real pleased today to be joined by the National Kitchen & Bath Association for an awesome discussion into some recent research that the association launched. And specifically talking to Tricia Zach, the head of research at NKBA. Tricia, appreciate you taking the time. I need to find out, we’re only a stone’s throw from each other, but have to, well not have to, doing a podcast over Zoom. So we’ll talk about someday getting up there and doing something from the office. But appreciate you jumping on Zoom and diving into it with us today.

Tricia Zach: Well, thank you for the invite and hope to see you in the NKBA office someday, Rob, it’ll be a great treat.

Rob Stott: For sure. For sure. Well, before we jump into the main topic of today in this recent research that you guys launched, tell us a little bit about yourself. Introduce Tricia Zach, and your background and your role at NKBA.

Tricia Zach: Okay. Well, I’ve worked in market research for a very large part of my career, both on the client and supplier side, mostly in financial services, believe it or not. I spent a number of years early on in my career at the United States Tennis Association, a not-for-profit organization, and I enjoyed my work there very much. So a little more than six years ago, I jumped at the opportunity to come to work for the NKBA, another nonprofit organization and I came because I love everything about the industry and I knew the work I would be doing would be interesting and rewarding. So in my current role as head of research at NKBA, I managed a small team of researchers, build and maintain the relationships with our research partners and set the strategic objectives that we follow each year.

Rob Stott: No, that’s awesome. And I always appreciate the chance you talk about your association background. Any chance you know the American Society of Association Executives, does that ring a bell for you?

Tricia Zach: I’ve heard of them of, but I’m not a member. I’m not involved.

Rob Stott: No. All good.

Tricia Zach: I should be. I should be.

Rob Stott: So that was the first stop for me out of college was to work there and part of their magazine staff. So neat to, I always love seeing the association world connections come back to everything I’m doing, so I can appreciate all the work that goes into running an association, all the events and stuff. So, you guys are obviously an important one out there doing work on behalf of the kitchen and bath world.

Tricia Zach: And research takes on a whole different meaning kind of at an association.

Rob Stott: It does.

Tricia Zach: The purpose of everything we do is to strengthen NKBA’s thought leadership role in the industry and to educate and empower our members. And that’s the part that I find really rewarding so.

Rob Stott: Well, and you guys got a, I mean, you have regular chances to do that. There’s some awesome research. Well actually before we dive into the specific report, give us a little highlight on some of the regular research that NKBA does, just to give our listeners an understanding of some of the things that you’re looking into and following on a regular basis on behalf of the industry.

Tricia Zach: Okay. Well, I think we have three bodies of research that we consider our flagship research studies. Right. And so they are the kitchen and bath market outlook. That is published every January with an update mid-year. It just rolling out the mid-year update this week actually. But that sizes the market and it provides forecast for the year and it’s really economic based. Right. It’s tracking all the economic indicators and their impact on housing and the impact on kitchen and bath. So that’s kind of a fun one, but certainly a business focus. The other one is the kitchen and bath market index, which KBMI, which we conduct jointly with John Burns Research and Consulting. Know if you ever heard of that. That’s quarterly. We do that every quarterly. And the NKBA is unique in the sense that we are, we like to say we’re an all industry association. Right.

We have not just one type of member, we have a variety of types. So you have manufacturers, designers, retailers, and then building and construction firms. So what’s cool about that report, there’s other indexes in the industry, but what’s nice about that, it looks overall and it looks by segment. Right. So if you’re a retailer, you can get a view and assessment on a quarterly basis of the health of the industry from your peers, your competitors, your segment of our members. So that’s the KBMI. And then our design trends, right, is everybody likes our design trends.

Rob Stott: Yeah.

Tricia Zach: This year we split it into two, we do bath trends and now we are just coming out of the field with kitchen trends and we’re going to be rolling both out August, September, October timeframe. And that just looks ahead three years at what’s coming because everybody wants to know what’s going to be hot and where are the trends taking us. So those are our three biggest, and then everything else kind of is supplemental specialty research that we follow the topics, right, where I accept them a year in advance, but inevitably something comes along that says, oh no, this is more important. We got to go look into this so.

Rob Stott: No, that’s cool. And the neat thing too, and I imagine this has to be one of the draws to doing is you’re always learning something, right? To be able to sort of tap into, whether it’s consumers or the members of the association, there’s a lot to learn constantly, and the numbers are just, I mean for me too like from a journalistic perspective, so exciting to dive into and see where things are going and how they’ve changed.

Tricia Zach: Oh, yeah. So the four segments looked at both from a consumer perspective and the industry perspective, and then how dynamic the economic developments are and the impact that they have on us. It really, the challenge we have is to conduct the research and get it out the door before, in some cases, before it changes, because that’s the world we live in. Right.

Rob Stott: No, for sure. Well you mentioned those one-offs, and I know this is a first ever report, so maybe something that eventually turns into less of a one-off and a regular update kind of thing, but,

Tricia Zach: Oh, absolutely.

Rob Stott: Yeah, this independent showrooms report. So I want to start with, what prompted the idea. Of course you mentioned it, you’re always looking at new things and ways to dive in and learn about the space. So what prompted the idea for this study or the kind of kick in the pants to get NKBA to go investigate the independent showroom segment?

Tricia Zach: Well, my goal has always been to really dig into each segment that I just mentioned and be sure that we are understanding their unmet research needs and going after the intelligence that they need. Right. So independent showrooms fall under our retail segment, but as you know, independent showrooms really play a critically important role in the kitchen, bath industry supply chain. They represent multiple kitchen and bath products and brands, and they’re the essential middleman between manufacturers and those who purchase their products. So NKBA has thousands of independent showroom members. So as our in-house research capabilities grew, we knew it was time to provide this group with research that was tailored just for them. So this is the first of many research studies we hope to conduct among our showroom members and for our showroom members. And like I said at the start, it’s intended to educate and empower them and to help them grow their business.

Rob Stott: Yeah. And,

Tricia Zach: Plain and simple.

Rob Stott: It was cool to see, I mean, you guys recently had the webinar that we attended and covered, and you dove into just sort of everything that was involved with it. So I want to give you the chance too, to talk about what is that survey process like and just kind of set up who was involved with the research for this from a survey taker perspective.

Tricia Zach: Sure. So this was a quantitative study and explored showrooms through two lenses. Right. From the perspective of industry pros who own, manage, work at showrooms and from customers who shop and purchase products there. Those were the two views we wanted for this initial work. So there’s a lot more customers of showrooms, but we focused for this study on just consumers and designers. Maybe we’ll go back and get another view, but from the NKBA’s perspective, those were the critical segment customers for showrooms that we wanted to explore. But we conducted in total 1050 online surveys. That broke down as follows, like 158 showrooms, 142 designers and 750 consumers who completed the kitchen and bathroom model within the last year. So we really tried, that’s a pretty big quantitative study in terms of sample size. We wanted to be thorough and we wanted to be sure we looked at it from all the different angles. So there’s more we want to do and we will do, but it was a really good baseline report we feel.

Rob Stott: Yeah. And well I think too from, you hear those numbers and the 750 because that, more consumers the better because it’s always hard to gauge sort of what a sample size of consumers is going to give you, but even with the smaller numbers of the showrooms, you know that those are the professionals in the space and you’re asking them the questions. So not to say that it obviously a smaller number than consumers, but you’re getting the right sort of feedback and answers I think given by that sample size of the showroom and the designer, I imagine, right?

Tricia Zach: Yeah, exactly. When we talk to our members, these industry pros, they’re so talented, they’re so knowledgeable that what might feel like a small number, I mean statistically that 150 is fine.

Rob Stott: Yeah.

Tricia Zach: Is great base. So at some point you have the law of diminishing returns. Getting 600 probably isn’t going to get you any different information than if you had 200. Right. It becomes unnecessary and that’s what research is all about, to figure out what the right number is that it can be reliable and you can feel comfortable with the results, but those are good industry pro numbers and we were satisfied with that.

Rob Stott: Yeah, that’s awesome. Did you have any expectations going? A first ever report, I’m sure there’s a lot of exciting, people listening are like, man, what data nerds? But some very exciting expectations about what you could find out of this and things you could uncover. So did you have any of that going into it?

Tricia Zach: Oh, our list was, really, really long. I mean, obviously I wanted to know everything that I sometimes get a little criticized because my survey lens is too long, but I just can’t feel, everything’s important to me. But in a nutshell, we kind of wanted to know whether kitchen, bath showrooms were financially strong, how they were performing post COVID and whether e-commerce was eroding the volume or quality of their in-person visitors. We wanted to ask them about what they considered their biggest challenges and how they were overcoming them. So those were kind of the big picture items that we wanted to go after and that we got in the report.

Rob Stott: Yeah. I mean well, we keep mentioning in the report I should say, we can provide some links underneath for those that are interested in learning more, maybe seeing it too, where they can go view. But impressive too to watch sort of as you ran through it on that webinar, just the amount of data that came out of it was impressive. So many different nuggets and areas of the space that were covered and just a lot, like a lot to dive into,

Tricia Zach: Oh, yeah.

Rob Stott: Which it’s a good thing.

Tricia Zach: Oh, yeah.

Rob Stott: Because you can learn so much. Right.

Tricia Zach: It’s filled with sound bites I’ll say.

Rob Stott: Yeah.

Tricia Zach: It’s just from every angle. What are the designer’s relationships with them? How many showrooms do they interact with? Who’s doing the buying? Are the consumers coming with designers? Are they coming by themselves? It just, I mean really, I’m a little biased I suppose, but I think there’s something in that report for everybody, no matter your angle. And it’s a good reference manual. Right.

Rob Stott: For sure.

Tricia Zach: It’s probably not something you’re going to read cover to cover perhaps when you sit down, but you could go back, use the table of contents, go back and on any given day, delve into a topic and relate it to your perspective as a showroom owner.

Rob Stott: And I was just thinking of it from the, we have some coverage that we did, and I was trying to narrow it down to picking out for our independent retailers and appliance dealers, like the three biggest findings that they could pull out. And I was going through it and trying to pick out just three was really tough. Because there were so many, I mean, a lot of different angles to cover it, but a lot that were so relevant to what I think our retailer members care about and the way it covers kind of that shopper journey too, and the different ways showrooms are upgrading, areas that they’re focusing on in upgrading and things like that that might not necessarily have to do from a retail perspective, the kitchen and bath space, but how they’re upgrading their showroom, whether it’s lighting, having good natural lighting or the technology. There’s so many different areas of this report that even if you’re not specifically a kitchen and bath showroom, you can still learn from about just the way they’re approaching what they’re doing to their showrooms so. Just,

Tricia Zach: Exactly.

Rob Stott: A lot to learn.

Tricia Zach: Changes they’ve made.

Rob Stott: Yeah.

Tricia Zach: Yes, I agree.

Rob Stott: So, anything, we mentioned kind of the expectations going in. How about coming out of it? Did you learn anything that was surprising or that kind of caught you off guard as you’re digging through all these numbers?

Tricia Zach: Well, I’m glad you said that it’s hard for you to find one. It’s really hard for me to just find one or two, but I’m just, financials aside, I thought some of the consumer stats were really interesting, about the consumer journey. So I’ll share some of them. One was that we learned that the role of showrooms is not about to be replaced or diminished by online retailers anytime soon. More than 80% of homeowners feel it’s important to see and touch kitchen and bath products before buying them. So we kind of thought that, but hearing that 80% like to see and touch, that’s a powerful number. The second was consumers look to showrooms for education. This was interesting to me. About eight in 10 homeowners admitted, this is them admitting their knowledge level when they first came to the showroom was fair, poor, or very poor. So that’s why they’re coming. They’re coming to learn about product features, functionality, brands, and pricing. I thought that was really interesting. Showrooms need to, I think they know that, but they’re playing an important role in that education.

Rob Stott: It’s exactly what I was going to say. It really empowers that showroom to make an impression on that. Not to say it’s make or break, but if you really put your expertise at the forefront or your sales associates can provide that level of experience where you are educating and the consumer’s clearly getting something out of it. Opportunity to build a connection and maybe develop some loyalty with that customer.

Tricia Zach: Absolutely. It’s not just look around, see what we have. It’s let me tell you more about this product. That’s that really important education piece. So and here’s another fact that I thought was really interesting. So two thirds of homeowners significantly upgraded the products they intended to purchase after their showroom visit. So after they came in and they learned about these features and brands, consumers have a tendency, they had a tendency to upgrade to higher quality products, materials and finishes. And on average those upgrades account for 31% increase in kitchen and bath product costs. But I thought together that was really interesting. Right. If you spend the time with them, they are upgrading to higher quality products and materials and finishes and the showroom’s benefiting. They’re doing 31% better in their sales than if you had not.

And I also thought this was interesting. That 31% increase is obviously good for the showrooms, but it’s also good for the consumers. Right. You’re not taking advantage of them or exploiting them. Yes, those upgrades cost more, but consumers told us that in the long run they are happy that they made those substitutions. There’s nothing worse than bringing something home and redoing your kitchen and having a neighbor or friend walk in and say, why didn’t you do X? And you say,

Rob Stott: Right.

Tricia Zach: I didn’t know. I didn’t know about X. Right. So they want to know about all their options so that they can make informed decisions and that’s what they’re coming to the showrooms for.

Rob Stott: Well, I swear this wasn’t planned and I don’t know if you read our independent thinking blogs, but I want to call out, you just called out three stats and I want to highlight two of them because I mentioned that I pulled out the three biggest stats. So one, spending goes up 31% when visiting a showroom.

Tricia Zach: Okay. Good.

Rob Stott: Two, 60% of consumers do the virtual tour before visiting a store and then 62% rank independent showrooms is the high influence on purchase decisions. So we were pretty close in alignment,

Tricia Zach: There we go.

Rob Stott: On the things we thought or,

Tricia Zach: Well, if I had to put a fourth, it would’ve been that tour because I think they underestimate, oh, I don’t need a good website. Well absolutely you do. They’re going to look before they come, so.

Rob Stott: No, that’s awesome.

Tricia Zach: That’s cool.

Rob Stott: Neat to hear. So like you said, a lot of findings that did come out of this. So a showroom or even a retailer that might click through and read this report, what are some of the things they can do to leverage it? And obviously lots to learn from. So learning’s kind of the one thing you think how you leverage it, well learn from it, but what are some pieces of advice you’d give a retailer or showroom as they dive into this?

Tricia Zach: So what comes to mind is that it could be used as a benchmarking tool. Right. They can benchmark themselves against the 160 plus showrooms who participated in the study to see how their actual 2022 sales and their 2023 expected sales measures up. You don’t often get to see financials like that. Right. You can look at changes that other showrooms have made in the past two years and what changes are planned in the next two years. Because I think that’s why the showrooms that are doing well are doing well because they are really evolving. They’re not just, they’re upgrading, they’re trying to stay relevant and put things in their showrooms that are of interest and make that showroom experience really valuable. And technology would be another thing, right, just to see how others have used technology and to improve the customer shopping experience and to improve their own operating efficiencies. So all that’s in the report and I think somebody who peruses it can take away something that they can benchmark and leverage for themselves.

Rob Stott: And I’m glad you called out the upgrades because I think a unique question and an important one to dive into on any given report, but specifically you think about the way you guys asked it over the last two years. Right. And then what they might do over the next two years. The last two years were something. So to see sort of how the respondents, they responded to that and some of the upgrades they made in the last two years, I think awesome to see that they realized they couldn’t, even during a time where people might not have been able to come to the showroom, the ways in which they were still focusing on their business and making changes to adapt so that by the time we’re sitting here today and we’re kind of on the other side of this, that they’re set up for success moving forward.

Tricia Zach: Yeah, they’re playing the long game,

Rob Stott: Yeah.

Tricia Zach: Is the way I look at it, right? They’re not dwelling on, oh, it’s COVID. I shouldn’t. They were viewing it as an opportunity. Well now’s a good time. Maybe if the customers aren’t coming in, now’s a good time for me to upgrade this display or now’s a good time for me to make improvements to my website. So I really think there’s some stellar retailers out there and that they’re playing the long game and they’re just staying one step ahead if they can. And as a result it’s turning out, people are showing up. It’s not going to go away anytime soon. I thought of one other thing I wanted to tell you that this report kind of has, the research generated two reports, basically, a baseline report if you will, but a supplemental report that ranks the top 100 geographic markets based on the overall attractiveness of K&B showroom locations.

I’m not sure if you saw that over the next few years. So that’s kind of fun. They can go to that. We bundled the two reports together just to make it easier and people don’t get confused between one and the other, but in the report we profile the top 10 kind of in detail, but we list the top 100. And so that might be fun for a retailer to open it up and see where their geographic market falls. Not everybody’s will make the 100, but the list will surprise you. I know, it surprised me.

Rob Stott: I know. It was sad to not see Philly a little higher, but no, it’s all right. It is like, to your point, unique to be able to dive in some of the ways you guys pulled that together, it was not only just on what sort of the construction and remodel business has been like, but the potential for it too with like new home starts and what the future potential of that market could be, which was really unique.

Tricia Zach: Absolutely. There were five factors, I won’t bore you with them now, but it was kind of this involved very objective approach to not only the level of new construction in an area, whether it’s under built or overbuilt.

Rob Stott: Right.

Tricia Zach: Right. But because if an area is under built, it’s just any matter of time that they’re going to start building to catch up with that demand. And that was just one of them. Whether a kitchen and bath remodel affect the home value was another one, for instance. And so all those combined formed to come up with the list. You put all the inputs in there and then no human, it’s unbiased, right?

Rob Stott: Yeah.

Tricia Zach: You’re just waiting to see what comes up. And it was fun for us to do that. We don’t often do things tied to geography, so we think our members will enjoy that.

Rob Stott: Oh, that’s awesome. And again, too, just another point to this research that a lot to learn and leverage as well. So I could ask what’s next, but it feels like everything we’ve been talking about is what’s next. So I guess I’ll ask it anyway. So what are sort of, from your seat and your perspective, kind of the next steps for this research or anything else you guys are doing around these independent showrooms?

Tricia Zach: So, a couple things come to mind. As I said, we cast a pretty wide net for this initial study and we really just scratch the surface, but we hope the projects that are coming are going to be more specific and dive deeper into the subjects that matter most to the independent dealers. One in our qualitative discovery phase, I interviewed the showroom owner and he’s like, you didn’t ask me one single question that I thought you were going to ask. And I’m like, what did you want me to ask? But he was all about getting very specific into the displays and live displays and just product selection. So what we do, we asked the people who attended the NKBA live research report reveal to suggest research topics and we’re combing through them now and we got lots to consider. We haven’t made a decision.

So it’s not like I’m not telling you something I know, but really it will be letting our members, our showroom members guide what’s next really. What don’t they know that they need? And that’s what we’re going to go after for them. So I’ll let you know. Come to the office and I’ll let you know what those are. But we’re trying to figure that out now and it’s perfect timing because we’re doing our 2024 planning and we hope to do something more for the showrooms. They’re just really are very important membership segment for the NKBA.

Rob Stott: Yeah.

Tricia Zach: And we’ve overlooked them a little bit and we’re going to correct that from now on.

Rob Stott: No, that that’s,

Tricia Zach: Special for them.

Rob Stott: That is awesome to hear. And like I said, just an interesting space too, the research space to be involved in, because you said it at the top, kind of full circle moment, but it’s constantly learning, the industry is constantly evolving. So research is one way to attempt to keep up and keep the industry informed of how things are going. So awesome to hear sort of what you guys are doing and how you’re approaching it and look forward to seeing what’s to come. So we appreciate it.

Tricia Zach: We’re happy to share.

Rob Stott: Yeah.

Tricia Zach: Happy to share. And thank you for the opportunity, Rob.

Rob Stott: Absolutely. Look forward to getting up there sooner rather than later.

Tricia Zach: Okay. You got it. Thanks again.