The relevance of virtual showrooms for sanitary retail

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The relevance of virtual showrooms for sanitary retail

Hardly any other technical achievement has influenced the economy and society as strongly as the Internet. It not only offers unhindered access to almost all information in the world, but also helps to process transactions faster and more efficiently. Brick-and-mortar retail is increasingly under pressure due to the sometimes much cheaper competition from the Internet and is losing market share. One solution is a multi-channel strategy that incorporates virtual aspects into customer service. This study uses five hypotheses to investigate the extent to which virtual showrooms are used in sanitary retail and what benefits they bring to companies. The survey among 250 sanitary retailers is intended to provide answers to questions such as whether the use of virtual showrooms will increase and whether the use of a virtual showroom saves time in the customer service process. It is also interesting to see whether a virtual showroom has a positive effect on perceived customer satisfaction.

1 Introduction

Digitalization has been causing massive changes in stationary retail for years. When used correctly, the innovative technology development can open up new doors for addressing customers in stationary retail companies.

Table 1: Distribution of bathroom furniture from 2010 to 2025 in %
Source: Titze (2019, p. 34)

The market for bathroom furniture, mirror cabinets and illuminated mirrors is divided into the following sales channels: bathroom and sanitary trade, furniture and kitchen trade, DIY trade, distance selling and contract business. The distribution channel that is examined in the context of this work is that of the bathroom and sanitary trade. The new TITZE study shows that the distribution in the „Bathroom and sanitary trade“ area as a submarket of the stationary specialist trade will continue to decline in the next few years (Titze 2019, p. 34). In the long run, this submarket has to think about how it can stop the trend with multi-channel sales. Showrooms are an important place for company presentations and product presentations. A classic exhibition space is associated with high costs, the exhibits have to be bought and assembled and kept up to date. The exhibits are clearly presented to the end customer so that these products can be considered visually and haptically. There is usually no sale or take-away of the products here, as the exhibits must be preserved over a longer period for presentation purposes (Heinemann 2017, p. 2). Due to its usual opening times, stationary retail is only accessible to a limited extent. The opening hours in online trading, however, are unlimited and therefore accessible at any time and from anywhere. A fifth of online sales are already made on Sundays (Heinemann 2019, p. 306). Today, the customer is well informed, he wants to buy a high-quality product at the best prices and also enjoy the best advice (Fend 2018, p. 306). The specialist dealer can transfer part of this advisory service to the Internet in the form of a virtual showroom. These not only guarantee optimal customer advice, but also an emotional brand experience that puts the company in the best light. The dealer has the opportunity to take a picture of the baths already created using a 360 degree camera. He enriches this with information and makes it available to interested customers on his website. The customer can thus get information about the dealer at any time and call up its service portfolio.

1.1 Objective and method

The aim of the study is to examine the relevance of virtual showrooms and the impact of their use for retailers. Will this type of presentation increase in specialist shops or how does a virtual showroom influence the exhibition area? Does the specialist dealer save time in the customer service process and does it have a positive effect on customer satisfaction? Previous publications have not answered these questions. To create a basis for discussion, these questions above are summarized into five hypotheses, from which the questions for the online survey arise:
 H1: Virtual showrooms are more relevant in urban areas than in rural areas.
 H2: The use of a virtual showroom leads to a reduction in the size of the exhibition area.
 H3: The use of virtual showrooms will increase.
 H4: The specialist dealer saves time by using a virtual showroom in the customer service process.
 H5: A virtual showroom has a positive effect on perceived customer satisfaction.
The work begins with an introduction and the presentation of the objective in Chapter 1. In Chapter 2, the stationary retail is narrowed down and the distribution channels of the sanitary specialist trade are classified. Chapter 3 describes digitalization in stationary specialist retail and the virtual showroom is explained in more detail using the example of the Immersight company. In addition, the changed behavior in information gathering through the use of the mobile Internet is discussed. Chapter 4 gives an overview of the mortgages presented and the study design is presented. Furthermore, the results of the individual hypotheses are shown and explained to the reader. Chapter 5 summarizes and explains recommendations for action.

2 Definition of the term sanitary market

First of all, there is a distinction between wholesale and retail in Germany. Wholesaling includes selling directly to the retailer without further processing. The merchandise is referred to as movable goods that are purchased and sold without substantial processing. The activity of wholesalers consists in assembling, sorting and classifying, unpacking, repacking in smaller quantities, distributing the goods in large quantities, storing and delivering the goods. Wholesalers are retail companies that procure goods from various manufacturers and resell them to resellers such as retailers. The retail trade includes, for example, the sale of bathroom accessories primarily to private users or consumers. Here, sales only take place in sales rooms, department stores, on stands, at front doors and on the Internet (German Bundestag 2019, p. 3).

2.1 Definition of sales area, exhibition area and showroom

The sales area is only part of the sales outlet and plays an important role in retail. The sales area includes the areas of the goods presentation, the total area that can be entered by the customer for the purpose of shopping as well as the cash desk area including the area for packing the goods. The sales area does not include storage areas and areas that serve to prepare the goods and customer social areas such as toilets or changing rooms. An inviting presentation of goods in the retail trade decides on the success or failure of products. This presentation of goods takes place on the sales area, also known as exhibition space in the colloquial language of the sanitary specialist trade.
This exhibition area shapes the customer’s perception of the brand (Arno 2020). While in the supply trade, the presentation of goods is strongly geared towards the functional handling of the sales operation, the focus of the experience-oriented shop design is on creating a shopping atmosphere that is as stimulating as possible, with a special impression of the goods. Here, in particular, the merchandise carriers with their decorative elements and material and color-technical radiations will influence the design. The product is presented appropriately for the customer. Thus, the promise of performance of a product and the entire business is no longer communicated exclusively through the words of the seller, but through visual impressions directly from the goods and the presentation (Wirtschaftslexikon24 2020). A good part of real art of selling is to show the goods in such a way that they create a desire.
Showrooms are small rooms that use computer software to virtually represent a created image of reality. They allow the end customer to immerse themselves in a new, artificially created world that looks deceptively real (Handelsjournal 2020). In this way, consumers can swim with whales in underwater worlds, explore a shipwreck or view their new bathroom before it is renovated (Kruse 2018, p. 253). A virtual world is considered plausible if the interaction in it is logical and coherent. This interactivity creates the illusion that what seems to be happening is actually happening. The fidelity is achieved if the environment in the virtual world resembles the real world, it then appears credible to the user. Many showrooms are used in spatial planning, because here the planning can be realized directly from the head virtually in the newly designed bathroom. In the digital world of virtual reality, planning can be implemented perfectly because you can develop visually and physically.

2.2 Classification of the distribution channel of the sanitary specialist trade

In retail, sales forms have changed a lot in the past few decades. At the beginning of the 20th century, the first department stores where founded and the first distance selling developed in the form of catalog mail order. Today, specialist dealers still have a high-quality, industry-specific core range with a corresponding product presentation. This is characterized by the personal advice given to the customer by trained sales staff (Heinemann 2019, p. 44). In contrast to wholesalers, it is not commercial buyers, but rather private households that make up the retail customer base. Traditional and long-established specialist dealers are often located in their own properties within the cities. Due to high rental prices and poor parking situations, companies are increasingly moving to the outskirts of larger cities. In rural areas, specialist dealers can often find cheap real estate and building space. Against this background, it is assumed that costs can be saved by reducing the exhibition space in urban areas and placing more value on digital advice with the 3D showroom. That leads to the thesis:

H1: „Virtual showrooms are more relevant in urban areas than in rural areas.“

Many sanitary specialist dealers offer complete bathroom renovation from a single source. They want to offer their customers added value and differentiate themselves from wholesalers and online retailers. Due to a more complex environment, customers demand solutions consisting of a bundle of products and services and offering these bundles gives the company a competitive advantage (Überwimmer et al. 2019). The specialist dealer does all renovation work in the bathroom. The old bathroom must be completely gutted. Then the pipes for water and heating are installed. The tiles have to be laid and at least the sanitary objects are finally assembled, e.g. Bathroom cabinets, shower and a toilet. The current Titze study confirms that the end customer is well aware of this fact The end customer uses the sanitary specialist dealer for bathroom renovations to almost 80% as a source of information. In contrast, the Internet is only used by 51% (Titze 2019, p. 87). Complete bathroom renovation places high demands on end customer advice in the exhibition area. The specialist dealer must have exhibits for all the products mentioned. He obtains these from the manufacturer at special conditions. A virtual showroom bundles all information and makes all products of the leading manufacturers available digitally. This means that fewer exhibits need to be exhibited and a collagen room is sufficient to take the products into account visually and haptically. This leads to the following thesis:

H2: „The use of a virtual showroom leads to a reduction in the exhibition area.“

The fact that the exhibition space has fixed opening times is a disadvantage compared to online trading, which can only be compensated for by a digital addition to the sales mix.

3 Digitization in stationary retail

The multi-channel trade represents the parallel use of several types of distribution of trading companies. It is a multi-channel system in which the customer uses at least two channels, mostly the stationary trade and a Online shop that can request services from the same provider (Rittinger 2014, p. 3). With increasing digitization and networking, more and more retailers are switching to a multi-channel strategy. It is necessary, because the mobile devices accompanies us through everyday life. 93.16% of the respondents of a study in 2018 use their mobile devices several times a day to access the internet. When comparing age groups, it is noticeable that 14-39-year-olds use the mobile internet one hundred percent several times a day. The age group over 40 years uses it only to 85.14% several times a day (Diedrich 2018). With multi-channel sales, the retailer can expand its distribution and thus reach more potential new customers. The retailer is permanently available through an online shop, opening hours are no longer an obstacle, because shops can be closed at any time in the online shop. Some companies are already developing 360-degree images. The customer can view a product from all sides and from different camera perspectives from the comfort of their own home. The retailer is thus able to show his renovated bathrooms as a whole on his website as a reference. From this we derive the following thesis:

H3: „The use of virtual showrooms will increase.“

With a few exceptions, digitization in the sanitary specialist trade is in the area of multi-channel sales. The specialist dealer pursues the goal of making customers aware of his company through his online shop. The use of a 3D showroom on the website offers the visitor the opportunity to find out about the services of the company. The process is to be illustrated using the example of the 3D showroom from Immersight: Immersight, based in Ulm, specializes in the development of 3D showroom software. The 360-degree images are displayed on the monitor. The advantage of displaying on the monitor is that you can also integrate the content into your own website. During opening hours, advice is given in the 3D showroom on a large monitor in the exhibition area. The specialist dealer can show his customer already implemented bathroom renovations using 360-degree images. For each individual product he can show the customer virtual exhibits from the portfolio of his manufacturers. This leads to the thesis:

H4: „The specialist dealer saves time by using a virtual showroom in the customer service process.“

The virtual showroom thrives on implemented projects that are transferred to the showroom with a 360-degree camera. These references show the customer what the dealer can do. This leads to transparency, since technical errors are disclosed. This means that the customer knows in advance what he can expect in terms of craftsmanship. The thesis is derived from this:

H5: „A virtual showroom has a positive effect on perceived customer satisfaction.“

4 Survey

The stationary specialist trade is faced with the challenge of having to offer its customers service 24 hours a day, seven days a week. Compared to online shopping, it must remain interesting in order to be able to exploit the advantages of personal sales in a retail store. An interesting solution is a virtual showroom that can be used both in the store and on the company’s website. The study carried out was aimed at the sanitary specialist trade of the 2-stage distribution channel. The studies were conducted in January 2020 using an online questionnaire. As part of the study, the choice of concentration was consciously made. All buying companies in the bathroom and sanitary trade were filtered out of the customer base and included in the sample. In order to find out the relevance of virtual showrooms and the impact of their use for retailers, five hypotheses were defined:

 H1: Virtual showrooms are more relevant in urban areas than in rural areas.
 H2: The use of a virtual showroom leads to a reduction in the size of the exhibition area.
 H3: The use of virtual showrooms will increase.
 H4: The specialist dealer saves time by using a virtual showroom in the customer service process.
 H5: A virtual showroom has a positive effect on perceived customer satisfaction.

Interview participants (s): 251
Survey method: Online questionnaire
Investigation period: January 2020

Hypothesis 1: Virtual showrooms are more relevant in urban areas than in rural areas.

The first question is intended to clarify how many retailer are already using a 3D showroom, or are considering using it, and how many are not using it and are not planning to use it.

Table 2: What is the status quo regarding a 3D showroom in your company?
Source: Authors

The overall status of the use of virtual showrooms is relatively balanced. 48.21% of the retailers surveyed say that a 3D showroom is not planned. Of the remaining 51.60%, 20.32% are already using the digital possibilities of the showroom. 31.47% think about using a 3D showroom.

Table 3: Use in rural areas.
Source: Authors

In rural areas, the picture deviates only slightly from the overall picture.

Table 4: Urban use.
Source: Authors

The situation in the city is only slightly different. The proportion of 3D showrooms used is slightly above the overall picture at 22%, but fewer respondents think about using a showroom. Ultimately, it can be said that the thesis cannot be confirmed.

Hypothesis 2: The use of a virtual showroom leads to a reduction in the size of the exhibition space.

The following questions were only answered by the 130 traders who are already using the showroom or are considering using it.

Table 5: What influence do you think a 3D showroom has on your exhibition? [Multiple answers possible].
Source: Authors

The fact that both exhibition space and exhibits are expensive suggests that companies that use a virtual showroom will reduce their exhibitions. However, this thesis is only supported by 17.05% of those surveyed. 5.43% of the retailers even plan to enlarge their exhibition space. By adding an additional collage room, the exhibition area is further enlarged (25.58%). The majority of those surveyed will not change anything in their own specialist exhibition (44.96). The proportion of specialist dealers who only want to work virtually is very low at 3.88%. The hypothesis that the use of a virtual showroom leads to a reduction in the exhibition space is therefore not confirmed.

Hypothesis 3: The use of virtual showrooms will increase.

Table 6: Will the use of virtual showrooms increase?
Source: Authors

60.50% of the retailers surveyed are not planning a 3D showroom in the near future. Only 39.50% of those questioned- think about the use. The hypothesis can be confirmed that the use of showrooms will continue to increase, albeit to a clear extent.

Hypothesis 4: The specialist dealer saves time by using a virtual showroom in the customer service process.

To test hypothesis 4, the question was asked whether a 3D showroom would speed up the customer advisory process. To test the hypothesis, a five-level Likert scale was used, in which the answer scale ranged from -2 (strongly disagree) to 2 (strongly agree).

Table 7: Does a 3D showroom accelerate the customer service process?
Source: Authors

6.25% of those questioned tend to disagree. 23.44% stayed neutral on the question. A total of 43.75% tend to agree and 26.56% strongly agree. In hypothesis 4, the mean is 0.91. Since this value is above the average of 0.0, it can be confirmed that a virtual showroom speeds up the customer service process. All respondents who answered ‘agree rather’ or ‘fully agree’ were able to state the reason for the acceleration.

Table 8: Why is a 3D showroom accelerating the customer service process? [Multiple answers possible], n=90,
Source: Authors

One reason for the purchase of a virtual showroom is the acceleration in the customer service process. 70.31% of the specialist dealers surveyed agree to an acceleration. At 75%, the focus is on creating trust through the references shown, followed by reference to projects that have already been implemented (70.45%). 60.23% of the retailers use the virtual showroom to communicate the costs using the reference bathrooms already created.
The retailers do not seem to place as much emphasis on the aspect of online communication as they should in multi-channel sales. Just under a third see the constant accessibility of the virtual showroom as accelerating. Only 40.91% see an accelerating aspect in bridging the waiting time. The following points were mentioned under Other:

 We can present more diversity!
 It is easier for the customer to visualize than, for example, in catalogs or
2D drawings
 Due to the virtual representation in 3D, the decision-making process is much shorter due to the tangibility and detailed visibility of the products and the space
 The customer sees „in real“, what he is buying
 The customer can imagine it better and decide faster
 Customers can better imagine your bathroom
 Customers can already „experience“, their newly planned bathroom

Table 9: Why do you see no acceleration in customer service? [Multiple answers possible], n=8,
Source: Authors

Only eight respondents answered that a virtual showroom does not speed up customer service. Six of them believe that the showroom is just another channel that needs to be maintained. Three people state that digital advice distracts from the actual advice process.

Hypothesis 5: A virtual showroom has a positive effect on perceived customer satisfaction.

To test hypothesis 5, the companies were asked whether a 3D showroom had a positive effect on customer satisfaction. To test the hypothesis, a five-level Likert scale was used, in which the answer scale ranged from -2 (strongly disagree) to 2 (strongly agree).

Table 10: Does a 3D showroom have a positive effect on customer satisfaction?
Source: Authors

1.55% of those questioned tend to disagree. 24.81% stayed neutral on the question. A total of 48.06% tend to agree and 25.58% fully agree. The mean is 0.98 and thus confirms the thesis.

5 Implications and outlook

5.1 Theoretical implications

Digitization also has a significant impact on buying behavior: more and more customers use the Internet as part of their general buying process. For example, many do research in advance of the stationary purchase on the Internet. Many prospective buyers get the actual impulse to buy on the Internet before they buy the product in brick-and-mortar retail. In addition, brick-and-mortar retail is increasingly under pressure due to the sometimes significantly cheaper competition from the Internet and is losing market share. The traditional way of customer advice takes place in the sanitary specialist trade on the exhibition area. The customer will be advised on the exhibits. In addition to the knowledge of the seller, the product presentation determines the success or failure of customer advice. An experience-oriented shop design and the creation of the most stimulating shopping atmosphere is no longer enough. The fixed opening times of the sales rooms contrast with the constant availability of the Internet. It is therefore recommended that retailers of the stationary retail trade adopt a digital strategy that includes multi-channel sales. This represents the parallel use of several types of sales in retail as part of the distribution. This multi-channel system usually includes brick-and-mortar retail and an online shop, through which the customer can access the dealer’s services. A virtual showroom can play a major role in the context of this distribution, since it creates great benefits both in personal customer service and on the company’s website. This benefit consists on the one hand in the presentation of references, i.e. bathrooms that have already been implemented, and on the other hand in the online catalogs provided by the manufacturers.
The aim of this work was to get an overview of the relevance of virtual showrooms and the impact of their use for retailers. Five hypotheses were set up beforehand:
 H1: Virtual showrooms are more relevant in urban areas than in rural areas.
 H2: The use of a virtual showroom leads to a reduction in the exhibition space.
 H3: The use of virtual showrooms will increase.
 H4: The specialist dealer saves time by using a virtual showroom in the customer service process.
 H5: A virtual showroom has a positive effect on perceived customer satisfaction.

5.2 Practical implications

The distribution of current and future users and non-users is almost balanced in this submarket. Of the current and future users, only 17.05% will reduce the size of the exhibition, 44.96% will not change the existing exhibition. Just under a quarter will add a collage room in which you can see and feel the materials of the products intended for the bathroom. Only 3.88% want to work completely virtual. Ultimately, it can be said that virtual showrooms are only seen as an addition to traditional sales on the sales floor. This can also be seen from the fact that only 32.95% of those surveyed see the advantages of being permanently available. The references shown in the sales talk are in the foreground. Nevertheless, the Internet sales channel must not be left to Internet trade. The sanitary trade has to deal more with the possibilities of multi-channel sales.

5.3 Limitations

With the help of the hypotheses mentioned above, a questionnaire was created with which retailers of the bathroom and sanitary trade were interviewed. In addition to this sales channel, the following further sales channels are possible in the market for bathroom furniture, mirror cabinets and illuminated mirrors: furniture and kitchen trade, DIY trade (hardware stores), distance selling and contract business. As part of the study, the choice of concentration was consciously made. All buying companies in the bathroom and sanitary trade were filtered out of the customer base and included in the sample. Concentration selection involves consciously concentrating on a part of the population that is considered essential or typical in relation to the subject of the survey. Taking a sample according to the concentration principle means that one draws a sample on the part of the population in which the majority of the elements sought are suspected. These selection procedures are problematic with regard to the representativeness of the results in the samples, since the selection is not based on the probability principle, but on factual considerations. This targeted selection is wanted because this study specifically addresses a submarket.

Literatúra/List of References

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[3] Diedrich, M., 2018. Everyday internet use. How do end users use the mobile internet? In: Marketing Science and Inspirations. 2018, 13(1), pp. 21-29. ISSN 1338-7944.
[4] Fend, L., 2019. Digitalisierung in Industrie-, Handels- und Dienstleistungsunternehmen. Wiesbaden: Springer Gabler, 2019. ISBN 978-3658269630.
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Kľúčové slová/Key Words

social media marketing, social networks, web 2.0, mobile internet, virtual reality, showroom
marketing sociálnych médií, sociálne siete, web 2.0, mobilný internet, virtuálna realita, výstavná miestnosť

JEL klasifikácia/JEL Classification

M31

Résumé

Význam virtuálnych výstavných miestností pre sanitárny maloobchod

Málo ktorý iný technický úspech ovplyvnil ekonomiku a spoločnosť tak silne ako internet. Ponúka nielen neobmedzený prístup k takmer všetkým informáciám na svete, ale tiež pomáha spracúvať transakcie rýchlejšie a efektívnejšie. Maloobchod so stavebninami je stále viac pod tlakom v dôsledku lacnejšej konkurencie z internetu a stráca podiel na trhu.
Jedným z riešení je viackanálová stratégia, ktorá zavádza virtuálne aspekty do služieb zákazníkom. V tomto príspevku sa zameriavame na päť hypotéz na skúmanie rozsahu, v akom sa virtuálne výstavné miestnosti využívajú v sanitárnom maloobchode a aké výhody prinášajú spoločnostiam. Cieľom prieskumu medzi 250 sanitárnymi maloobchodníkmi je poskytnúť odpovede na otázky, ako napríklad, či sa využívanie virtuálnych výstavných miestností zvýši a či využitie virtuálnych výstavných miestností šetrí čas v procese poskytovania služieb zákazníkom. Je tiež zaujímavé zistiť, či majú virtuálne výstavné miestnosti pozitívny vplyv na vnímanú spokojnosť zákazníka.

Kontakt na autorov/Address

Dr. Marcus Diedrich, Diedrichs Creativ-Bad, GmbH, Lehmbachstraße 1, 59969 Hallenberg, Germany, e-mail: [email protected]

Markus Peplinski, Diedrichs Creativ-Bad, GmbH, Lehmbachstraße 1, 59969 Hallenberg, Germany, e-mail: [email protected]

Recenzované/Reviewed

10. March 2020 / 31. March 2020