Q: What can active adult builders learn from the retail industry?

A: By the end of the 1970s, more than 70% of the merchandise in any large department store was identical with that of any other department store. The shopping experience had become commoditized, much like the home-buying experience today. In response, consumers have grown increasingly concerned with individualism. There is a growing demand for uniqueness, differentiation and mass customization on every level, which in turn demands greater diversity and creativity in design.

Consequently, what retailers have learned, and now practice better than any other industry, is the crucial value of outstanding presentation. Savvy retailers long ago recognized that the key to presentation is design, and that superior design is always driven by knowledge of the brand.

   Brand              +      Superior        +     Outstanding      =       Product
   Knowledge             Design                 Presentation              Differentiation   

What is your Brand Promise? Leading retail brands understand that trust is the key to ongoing success. They make Brand Promises that directly connect with what is most important and relevant to the target markets that they seek to form relationships with. Weak brands are unsure of what to promise. Because they are confused, they confuse the marketplace. Brands that do not have a clearly defined promise are forced to live in a world of reaction instead of leadership.
 
Consider what some leading retail brands promise:

* Apple: Think Different. Apple consistently provides consumers with meaningful innovation and memorable experiences (Apple Store—displays, genius bar, interactive for all ages)
* Target: Expect More. Pay Less. Target provides “design for all” featuring world-renowned designers like Michael Graves at discount prices.
* Nordstrom: Legendary Service. Ever hear the story about the Nordstrom sales person that accepted a set of four tires back from a disgruntled customer, even though Nordstrom doesn’t sell tires? Now that’s LEGENDARY service!

Now consider your own brand. What promise can you make to the active adult market that will resonate with relevancy and create a clear distinction for your brand? It’s not easy, is it? But it is important. That’s because the active adult market is very “brand-centric.” This audience has grown up with brands that provide deep emotional attachments based on consistent interaction.  They’re not about to plunk down hundreds of thousands of dollars on a new home without feeling really good about what the developer and the builder are promising. So, what is your Brand Promise?

Q: What retail strategies can builders use to maximize their revenue potential?

A: There probably aren’t any retail strategies that can’t be applied to the homebuilding industry, not to mention the active adult market. After all, where do you think grand openings and discounting originated? Here are a few areas worth considering:

Memorable experiences: The term Experience Economy is first described in a book written in 1999 by B. Joseph Pine II and James H. Gilmore, titled "The Experience Economy.” In the book, the authors propose that today’s businesses must orchestrate memorable events for their customers, and that memory itself becomes the product – the "experience." In the retail world, this concept shows up as “Shopping as Theater,” in which the customer becomes the focus of attention, the key participant in the exciting experience of shopping. This is an extremely valid concept for the active adult market, especially boomers. Boomers are the “Me Generation;” they expect to be the center of attention. Boomers are attracted to experiences that provide meaning and fulfillment while reinforcing their desire to be perpetually perceived as young. Every effort should be made to manage the total experience with this market. From the Web site to the closing table, boomers are the ultimate experiencers. 

Personalization: Every day, Barbie-obsessed young girls go to the Mattel Barbie web site and design their own Barbies. They pick out her name, personality, friends, style, hair, eyes and accessories. Seven days later, the doll arrives in a box that reads: Lulu, designed by Maya. Consumers have grown accustomed to choices. Take some time to explore what you do with existing assets to offer “perceived” customization without overwhelming buyers with too many choices or making the construction process too complex.

Customer service: While Nordstrom sets the bar for customer service, there are other brands worth noting as well. Here’s how the Four Seasons Hotel Web site describes its mission:  "Four Seasons is dedicated to perfecting the travel experience through continual innovation and the highest standards of hospitality. From elegant surroundings of the finest quality, to caring, highly personalized 24-hour service, Four Seasons embodies a true home away from home for those who know and appreciate the best."  The deeply-instilled Four Seasons culture is personified by its employees – people who share a single focus and are inspired to offer great service. And, finally, Lexus. Through innovation in technology, employee training and customer-centered strategies, Lexus continues to pay off on its Brand promise: The Relentless Pursuit of Perfection.

Each of these companies places the customer first. And that registers big-time with boomers. Boomers want to be on top and in charge. They believe they know best and seek control. This generation believes that what they get is more than what they have earned — it’s what they deserve. With such a strong sense of entitlement and expectation, active adults can be very demanding customers. A key component to successfully selling to the active adult market will inevitably be determined by the level of customer service that accompanies the process.

In many ways, the home building industry is a retail industry. But there often is a disconnect between the level of experience and customer service we receive when we make a $30, $300 or $3,000 retail purchase when compared with a $300,000 new home purchase. The retail industry has taught all consumers to have high expectations. The more we study what’s working in retail and apply the basic principles to the active adult industry, the more successful we will be.

David Miles is president of Miles Strategic DNA in Denver. Miles’ career spans more than two decades, with a highlight being named one of the 50 most influential people in the home building industry by Builder magazine in 2004. Miles is a frequent speaker at industry conferences and will join co-panelists Dawn Duhamel an dJane Meagher on a panel, titled “Think Like A Consumer, Act Like a Retailer,” at the upcoming Building for Boomers & Beyond: 50+ Housing Symposium ^SM in Philadelphia. Miles can be reached via e-mail or 303-293-9191. [Return to top]