Patio, Pools & Spas adds custom values
Chris Gigley -- Casual Living, January 7, 2011
"It was a fraction of a percent, but nonetheless a positive," said Dave McKibben, retail and spas manager for Patio, Pools & Spas, which has five stores in greater Tucson.
Gene Ragel Sr., founded the business in 1969 as Patio Pools. Within a year, it became one of southern Arizona's largest custom pool and spa builders and has since added complementing product categories, including patio furniture. The Ragel family still owns and runs the operation.
There's little doubt the Ragels haven't seen anything like the last two years. The housing market in Tucson, which McKibben described as "a step or two" behind Phoenix, bottomed out last year and projections for 2010 didn't look much better. McKibben said local economists expect foreclosures to remain far ahead of new home builds. But there is hope.
"In the spa category and in furniture, we're starting to see minor gains over prior year comparisons, finally," he said. McKibben said he is cautiously optimistic about how this year will turn out.
Consumers are starting to buy foreclosed homes and are looking for pool accessories and furniture, he said. Existing homeowners, meanwhile, are finally loosening their purse strings. Another sign is the amount of competition.
"We have plenty of competitors in all the categories we cover, but a lot of them are like weeds in the desert after a rainstorm," McKibben said. "When the economy gets tough, the businesses with magnets on their doors go away. But when the economy comes back, they pop up again. We're seeing more competition in the furniture category now. Businesses that have been considering competing with us look at the Tucson market and the population down here and think they can make inroads."
But the Tucson market is harder to crack than they think, McKibben said, and that is the beauty of Patio, Pools & Spas. McKibben and Rich Kariolich, store manager and furniture buyer, have figured out a way to keep customers coming through the doors. The store's success is not due to only reputation after all.
New consumer mentality
For better or worse, the average Tucson consumer is different. In the aftermath of economic crisis, everyone wants value, McKibben said, which has been both a blessing and a challenge.
"We sell predominantly wrought iron furniture," Kariolich said. "It's heavy stuff that can withstand pretty good wind, but I also think a lot of it is the perceived value in wrought iron. Consumers are getting wiser. More of them are skipping big box stores and the furniture they'll have to replace in a year, and they're doing it right the first time."
On the other hand, customers are pushing harder than ever for value this year, Kariolich said.
"In the old days, I could say, ‘Choose one: Good quality, good service or low price,'" McKibben said. "Now even highend customers want all three."
Kariolich is figuring out how to take customers' minds off money. Last year, he began working with a Phoenix-based vendor, Sunset Patio, which can customize any piece of furniture in its collection. If a customer is interested in a table but wants it six inches shorter than the display model, Sunset Patio can turn around the order in a matter of weeks, Kariolich said. The relationship has allowed the store to offer customers fully tailored solutions.
That, he said, has changed the way he and his sales team work with customers.
"When we're getting the larger bids, we've gone from trying to sell them on the price to, ‘Let's customize your backyard,' " Kariolich said. "When you use the term ‘customize,' customers put money on the back burner and start thinking about how they're getting exterior design service for free."
McKibben said Kariolich also has done a nice job of making the most of the limited floor space he has for furniture. Only three of the five stores are furniture outlets. The Oracle Road store has about 8,000 square feet of showroom space, while the 22nd Street store has 5,000 square feet. By the time all the spa and hot tub displays are installed, Kariolich has precious little room to romance furniture sets.
"The first thing you need to figure out is which sets to put on the floor, depending on buying habits and sales history and trends," Kariolich said. "Then you have to put it where customers can get to it easily. They need to see the differences between the sets. You're up-selling the customer without them knowing it."
He will also display a dining set next to a sofa, for instance, to let customers see there's more to a collection. He said customers intending to buy just the dining set, for instance, will buy the sofa, too.
Kariolich's final trick is to constantly change displays.
"It keeps the product fresh and adds a little sense of urgency," McKibben said. "Customers realize a set they like won't be there forever."
Always ready for business
The excellent reputation of Patio, Pools & Spas and its savvy staff have the business poised for more than just fractional growth by the end of this year. While McKibben is cautiously optimistic about the future, he believes the tough economy has only strengthened the store's brand name and business practices.
"We've been forced to run a tight ship and be just as efficient as we possibly can and still keep that high level of service to the customer," he said. "We've tried some new marketing strategies that have worked for us, too, such as VIP special customer mailings and television advertising."
As the retailer embarks on its second selling season, courting snowbirds moving down from the northern part of the country every fall, it is already showing the smarts that have kept it growing through even the most difficult economic times. As temperatures dip into the 60s and force the locals indoors, many local retailers are following their lead.
"One of the nice things about the winter is all the big box stores put up their outdoor furniture and display their holiday decor," Kariolich said. "When we get a bunch of snowbirds looking for nice furniture sets they can put by a fire pit, we're ready."
Solid merchandising and a long-standing reputation in the Tucson market has helped Patio, Pools & Spas withstand one of the worst real estate markets in the city’s history.
The economy has changed the sales approach at Patio, Pools & Spas. Rather than focusing on selling a single chair or dining set, its sales forces pushes the notion of redesigning the entire back yard.