The game show The Price is Right was iconic Saturday evening viewing in the Eighties. Contestants had to guess the retail price of a variety of everyday items and the one with the closest bid, without exceeding the price of the item, went through to the next round. So what has this got to do with our industry?

Well, people don’t shop for kitchens, bedrooms and bathrooms every week, month, or even year. In fact, on average, it is at least 10 years between revamps in the UK, so no wonder the general public is in the dark about what they cost. If we were to rerun the game show, but ask contestants to put a price on KBB designs/displays, it would be carnage, with guesses probably tens of thousands of pounds out.

So, holding that thought for a moment, this month I decided to investigate visible pricing in our industry, with a particular focus on showroom displays and quotes, to see how we present prices to our customers.

To kick off, I carried out a poll of KBB retailers on LinkedIn to get a flavour of where we are at on these two topics. I asked if their showroom displays had pricing signs. Rather surprisingly, more than three-quarters (78%) of respondents answered no, 12% said yes and that items were priced individually, while 7% said yes and that the overall price of the display was shown.

No show

So, with a comfortable majority not showing prices, I spoke to several retailers to get their thoughts. Scott Richards, showroom manager at Bathroom and Kitchen Planet in Stirling, gets the discussion started, saying that “in bathrooms we quote each bay with each product priced separately”.

On the other hand, Elizabeth Pantling-Jones, a director at Lima Kitchens in Milton Keynes, explains why she doesn’t: “We have always previously priced our displays, but haven’t done our new ones yet as it’s been difficult to keep on top of all of the price rises recently, so we have taken many prices off. Now the frequency of these has reduced, we feel far more comfortable with reinstating this”.

Retail sales manager at Rossendale Interiors, Mike Skelcher, says that his use of a finance offering tips his hand: “I price displays, but mainly to help customers see what monthly payment they’d be looking at to buy on finance.”

As an alternative to labelling each display price, specialist KBB accountancy advisor Kevin Bannister tells me: “I’ve known clients that will have sections of their showrooms at different price points (entry, mid-range and top end) so that they can guide customers into the area that best fits their budget.”

Not legally binding

And for those of you worried about making a mistake in your display prices, Bannister points out that “when you display a price, it is known legally as an ‘invitation to treat’, and that figure isn’t actually legally binding, so the customer can’t force you to sell it at that price”.

But, despite retailers seeming to think they have a choice in the matter, according to Trading Standards, the law states that product prices in shops should be made clear on or placed near to the product for sale. So how does this leave KBB retailers that don’t currently do this?

There are exceptions to this general rule about displayed pricing though, and these include products comprising an assortment of different items sold in a single package and products supplied in the course of providing a service.

“One drawback is that it can make it very easy for people to make note of the products and price-match online”

Scott Richards, showroom
manager, Bathroom and
Kitchen Planet

So it could be argued that as generally a complete kitchen or bathroom is sold, rather than the individual elements, and that installation prices are unique to each project, displays are more of a ‘sample of work’ rather than seeking to sell the component parts.

Legalities aside, though, what are the benefits and drawbacks of display pricing in your showroom?

Gainsborough Kitchens director Alex Jenman tells me: “The advantage is that you can perhaps better price qualify customers at an early stage, so you’re less likely to waste time doing an expensive design for someone without the budget. You also may lose customers frightened off by a price that may well include elements they wouldn’t want or need.”

Skelcher at Rossendale Interiors likes customers to be able to wander around by themselves and says it’s good “to give them an idea of price”.

Richards at Bathroom and Kitchen Planet goes into some detail to explain his thinking: “We price the individual bathroom products for three main reasons. First, it acts as a silent salesman to allow our customers to decide what feels comfortable for them price-wise when they are browsing the showroom.”

“Quite often people are too embarrassed or proud to ask for prices or show what their budget is, so this allows them to discuss and select products which they already know they are interested in.”

“Second, it allows the designers to identify and cost a product/display when discussing with the customer without having to go and identify all of these products from brochures, so it is an efficiency thing.”

“And third, people are far more likely to order individual bathroom components than kitchen or bedroom products, which are usually ordered as a complete concept after design.”

Pantling-Jones at Lima Kitchens also concurs that it seems to go down well with browsing customers, adding that “we get really good feedback for having our displays priced.”

Price matching

Richards at Bathroom and Kitchen Planet, however, says that one drawback is that “it can make it very easy for people to make note of the products and price-match online.”

So would it be easier if brands and suppliers set an RRP (recommended retail price) for products to be advertised at? Well, there definitely seems to be some confusion across the industry on this topic.

According to the Government’s Competition and Markets Authority (CMA), setting an RRP is not illegal, as long as they aren’t used to control the price at which the products can be sold on, which is known as Resale Price Maintenance.

“By pricing displays you can better price-qualify customers at an early stage, so you’re less likely to waste time doing an expensive design for someone without the budget.”

Alex Jenman, director, Gainsborough Kitchens

The UK’s advertising regulator, the ASA, also has something to say on the topic: “Marketers should be aware that, while it is acceptable for them to quote RRPs if they are genuine, such price comparisons are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold. Even if they can provide documentary evidence that the quoted RRP was recommended by the manufacturer, marketers should be aware that if they cannot demonstrate it was actually sold at this price, the ASA is likely to uphold complaints.”

I asked retailers about their thoughts on this and got some really interesting feedback. Jenman tells me: “Having a ‘retail’ price list makes selling easier. A casual appliance or sink customer walking in will probably end up with something out of the Waterline or CDA catalogues because they are to hand, and priced, and can be opened in front of the customer and discussed.”

Richards agrees, saying: “We almost always price at RRP,” while Mark Sewell, business and partnership development manager at franchise operator Raison Home, tells me that “the company sets the overall pricing, but the franchisees are free to apply their own discount”.

So when it comes to hitting, or getting beneath, certain price points, I was interested to see what was happening out there and so set my second LinkedIn poll. I asked companies about how they set their pricing levels.

The results came in as fairly evenly split (48% and 44%) ‘between to the nearest pound’ (48%) and ‘to the penny’ (44%), with ‘under the next big number’ (£999.99 rather than £1,000) only getting 4% of the votes.

As a mainstay of retailing for a long time (although many home improvement outlets such as B&Q and Ikea seem to have moved away from this a while ago), I wondered how KBB retailers viewed the 99p approach.

Sewell, Pantling-Jones, Jenman and Jones-Britain MD Dan Stronge said they found it did not work for their businesses, but Richards admits: “I do like to keep below the big numbers. I am more likely to make £30,500 into £29,950 though, which looks like a much lower number. I try to also work on whole numbers rather than with pence, but that is a personal thing.”

Trust

With many retailers narrowing their quotes down to pence, it seems that perceptions of trust are the main driver.

Sewell at Raison Home tells me: “We price in pence, with full breakdowns of everything priced line by line, which can run into 10 to 13 pages. It’s part of our policy.” But, of those that go to the nearest pound, Jenman says: ”We price (down) to the nearest pound, sometimes rounding down a few pounds if it makes the number falls below the nearest hundred or thousand. Pricing in pence seems unnecessarily messy, and slightly greedy if you’re looking at a total project in the tens of thousands.”

“Quotes for a full kitchen are complicated enough and need to be easy to follow and take in. Customers often try to round you down to the nearest big number and that doesn’t worry me too much. They might want to go to the nearest thousand, whereas I’m prepared to drop to the nearest hundred. I don’t mind that. If they’re haggling for a few quid, it means they’ve basically accepted the proposal and are ready to close.”

Stronge agrees: “I might bring a price under a big number like £50k, but I don’t think that I’ve ever sold a kitchen at full retail price, as customers like to make it to the next nearest big number.”

As an interesting aside on the topic of pricing quotes, though, Jenman at Gainsborough Kitchens observes: “We use our kitchen suppliers’ own software to price and order kitchens. We have presentation and quoting software for presentations and our own commissioned app for keeping track of projects from point of sale through to finishing, but we’ve not used a universal pricing tool for all kitchen items. Maybe we should.”

With big changes in the CAD and pricing-software scene happening as we speak, this is going to be a huge topic going forward.