One of the many things builders let slide during the recession was their design centers. But now that demand and prices are rising, builders are taking a close look at their centers -- and what they often see are tired, unexciting displays and out-of-date products and styles that don't provide customers the inspiration to buy.
“Builders have to be responsible for influence,” says Jane Meagher, a leading design studio consultant whose Manalapan, N.J.-based company, Success Strategies, has worked with builders on more than 100 design centers in 35 states.
Meagher believes that builders should turn their design centers into streamlined and user-friendly shopping emporiums. That might include setting up studios to accommodate events such as cooking demonstrations. “They need to rival the retail outlet their customers just came out of.”
She adds that what people spend on options and upgrades reflects how committed they are to the new home they're buying; so, a design center must fulfill their desire to personalize their homes. She points to Schumacher Homes, the industry’s largest on-your-lot builder, as one that’s leveraging personalization fruitfully.
Design centers, she says, also offer builders a way to highlight customization to their buyers. For example, she notes that Delaware-based Schell Brothers’ design studio includes a separate area for its custom-home division.
Meagher observes that as builders emerge from the recession, they're using their design centers to reposition themselves with customers, and to generate referrals.The market’s recovery is what spurred one of Meagher’s clients, Pacific Lifestyle Homes, to remodel its 10-year-old, 5,000-square-foot design center in Vancouver, Wash. Pacific Lifestyle took the better part of 2013 planning this $160,000 facelift, and choosing the right vendors and contractors, says its president Kevin Wann.
Design Centers: More Than Sales Tools
The recession and its aftermath changed this builder’s perspective its design center. Before the recession, Pacific Lifestyle was closing up to 350 houses per year, and generating about $45,000 per customer from its design studio, which the builder saw primarily as a profit center. But as its closings plummeted, the design center, says Wann, became more of a “selling tool” to attract customers and help them make product and style choices.
In 2013, Pacific Lifestyle Homes closed 70 units, with options and upgrades averaging about $35,000 per buyer. Wann expects the design center remodeling to boost that spending, although he has not set any goals. He also hopes the refurbished center contributes to the builder's efforts to raise its price points.
Vendors: Key to Design Center Success
Until recently, Pacific Lifestyle Homes had multiple kitchen cabinet suppliers. But as part of the remodeling, it switched to one vendor, Pacific Crest Cabinets of Ridgefield, Wash.
“What I’m sensing is pent-up demand among buyers, and builders like PLH are paying more attention to interior accouterments,” says Bond, who has a long-time relationship with Pacific Lifestyle dating back to his days with the pro dealers Parr Lumber and ProBuild.
Darby Sargent, the builder’s interior design consultant, is director of design for Portland, Ore.-based Macadam Floor and Design, which supplies all of Pacific Lifestyle Homes’ hard-surface flooring. In 2008, the builder outsourced its design center’s consulting to Sargent, who typically meets with buyers by appointment three days a week.
“When we’re in the showroom, we’re part of the team,” she says, noting that each appointment lasts from four to five hours. She also conducts monthly preview tours of the design center, which 15 to 20 guests attend.
Pacific Lifestyle also invited local real estate agents to the Dec. 17 preview to create buzz around the design center’s new look.
Aside from the new cabinet displays, the remodeling changes are mostly cosmetic, and include a different interior palette—“gray is the new hot color,” Sargent says—and a “more modern” space.
The spiffier design center should give the designer more time to educate customers about which products and styles match their ideals. “I don’t want someone putting in standard carpeting just because they like the color.”
And upgraded carpeting means higher profits.
Learn more about markets featured in this article: Portland, OR.