Mid-Cape Home Centers: Reinventing to stay ahead of the curve
by Cape Business staffRecently, top local chefs congregated in a demonstration kitchen at the new Complete Home Concepts in Plymouth to share their cooking prowess with scores of local businesses. The scene was a far cry from the simpler roots of an Orleans lumberyard founded in 1895 by a seafaring captain, Oscar Nickerson, whose first full year in business recorded $9,200 in sales.
Today, Mid-Cape Home Centers and its high-end division, Complete Home Concepts, represent a diversified corporation from Wellfleet and Dennis to Hyannis, Middleboro, Plymouth and Kingston. To thrive amid a challenging economy and growing competition, Mid-Cape Home Centers has adopted an aggressive geographic expansion, committed significantly to the Internet and reorganized its management structure to keep pace with changing markets and increasingly demanding customers.
In many ways, Mid-Cape is a barometer for the rapidly evolving marketplace that is spanning Cape Cod and Plymouth County – the growing number of wealthy second-home owners; the construction of larger and more expensive housing; richer tastes among consumers when it comes to kitchens and bathrooms; greater interest in outdoor living and home offices; a movement toward “green” building and conservation; and more collaboration by homeowners with their contractors on building and remodeling projects.
At the same time, a full-service company like Mid-Cape also is confronting unprecedented competition from big-box stores like Home Depot and Lowe’s at one end of the spectrum and companies that specialize in kitchens, window treatments, bath fixtures or appliances at the other.
And while a company that is more than 100 years old has encountered many housing recessions, the current downturn comes just as it opened its newest Complete Home Concepts Showroom at the Shops at 5, off Exit 5 of Route 3 in Plymouth.
Staying ahead of the curve
“In my 35 years here, we have gone from a lumberyard to a home center to an upscale provider of goods for high-end renovations,” said President Doug Bohannon. “The pace of growth is constantly intensifying, in large part because the Internet has provided homeowners and builders with much more information and access to many options. It is a full-time job just staying ahead of the curve.”
Many second-home owners bring with them urban and suburban tastes, which requires Mid-Cape not only to carry more product lines, but also to stay constantly abreast of new trends.
“They come from New Jersey, New York, Connecticut, loaded with information they researched online. They want a specific skylight with cherry wood on the inside and stainless steel hardware,” noted Bohannon. “Or a builder will call and inform us of a new product that came on the market that is green, or doesn’t harbor toxic waste. Our buyers have to stay constantly on the quest of new information.”
New home buyers, for example, are demanding higher ceilings and open floor plans. That requires different quality building materials than in the past, as well as different building techniques. Similarly, homeowners want heavy granite countertops, which mean stronger loads and more complex floor construction.
The Web is playing another unprecedented role. Many homes are being built with automated security and management systems, controlled over the Internet. Such long-distance maintenance has implications on the range and quality of construction materials.
One way to educate customers is through the Internet. Recently, Mid-Cape hired Lynn Mason-Small, former director of marketing and communications of the Yarmouth Area Chamber of Commerce, as its marketing director. Among her first charges: update and expand its Web site to display the company’s extensive lines and also provide lessons and resources on these products.
Another way Mid-Cape has responded to the changing world is to create its Builders’ University. At its most basic, the university teaches contractors about new trends and products. At its most sophisticated level, Mid-Cape actually takes customers, expense-free, to national homebuilders’ shows or to manufacturers such as Andersen Windows in Minnesota to sit with its CEO.
“This builds relationships and shows local contractors what the baby boom generation expects in other parts of the country,” Bohannon explained.
“When we started Builders’ University, it was a defensive strategy,” he added. “With consumer demands growing and products diversifying, it is critical to make sure the builder or remodeler knows how to install properly. If a product fails or does not perform as the customer expects, it often is not due to the product’s reliability, but rather due to the installation. Builders’ University allows us the opportunity to teach our customers about the product and give them the knowledge they need to ensure their customer is satisfied.”
“And now it has evolved much further. We actually educate local building inspectors and architects who need increased training and credits to maintain their licenses.”
The university classrooms are in Mid-Cape’s Complete Home Concepts Showrooms in Hyannis and Plymouth. That location works well for another reason: Architects and others who come for classes are exposed to the store’s products and services; and that can lead to new business relationships with them.
Meeting customer needs
It’s one thing to know your customer. It’s another when competitors from every direction are trying to win them over. In that regard, it has to be somewhat reassuring for Mid-Cape to see Home Depot fail to grow a separate division serving contractors and commercial customers. The giant company recently sold that unit for a reported $2 billion less than it originally expected.
For Mid-Cape, those contractors are its prime customers – and supporting them often goes beyond traditional customer service. For example, it will help subsidize the marketing for a residential subdivision if the developer purchases a whole family of products for its houses, such as all Andersen windows, from Mid-Cape.
Today, as much as 85 percent of its customer base represents builders and contractors. As recently as the 1970s, the number was half that. But beginning in the 1980s, more and more specialty businesses – focusing on flooring, kitchens cabinets, countertops – arrived on the Cape.
“This day and age, you cannot serve both equally well,” said Bohannon. “You have to be focused on one area.”
That doesn’t mean Mid-Cape disregards consumers in favor of builders; to the contrary – unlike some lumber and home supply companies, homeowners are welcome to purchase their lumber and building supplies at the locations directly.
“We enjoy a substantial amount of consumer business,” Bohannon said, noting that all its stores are physically geared to display a wide array of products. Moreover, the Complete Home Concepts Showrooms are designed to accommodate consumers and often, contractors will use the showroom as their own – sending customers up to meet with the designers or coming to the showroom with them.
Being attractive to consumers also helps Mid-Cape’s relationships with contractors. In some cases, that consumer doesn’t have a builder; so Mid-Cape can provide them with a list of referred contractor customers. In other cases, a satisfied consumer can be the link to a contractor that currently is not using Mid-Cape.
With all this in mind, Mid-Cape is investing in in-store presentations to keep as much product as possible in front of customers rather than in warehouses, as well as paying close attention to competitive pricing and constantly introducing new products.
While the growing affluence on the Cape and throughout Plymouth County has meant a reduction in the do-it-yourself customer, Mid-Cape executives definitely see a growing preference by these wealthy arrivals to work closely with their contractors – from the architectural design all the way through to countertop selection.
Vice President David “Skip” Carleton notes that Mid-Cape’s most successful customer is what he calls “design/build organizations.”
“They have customers who want to be involved in the whole project. They need architectural support and product research from us.”
It forces a “cutting edge” mentality throughout the company’s workforce. “Initially, we may not know anything about a product request, but we have to know immediately where to look for the answer,” he said.
On the other hand, Mid-Cape must be prepared to educate these new homeowners to the unique environment of the Cape and South Shore. What they may want replicated from New York might not work in the harsh sea climate of the Cape.
“A homeowner doesn’t want to arrive to their second home on the Cape, push the button to open their skylight and have it fail because the hardware has been destroyed by salt air,” said Carleton.
Growing with the competition
For years, Mid-Cape has watched competition come to the Cape from as far as 100 miles way. Not necessarily companies setting up shop there, but those sending salespeople – attracted by the wealthy demographics – to woo Cape builders.
That is particularly true during housing downturns like the current one, because as difficult as it may be here, conditions are much more daunting elsewhere in Massachusetts.
Now, Mid-Cape is not only interested in securing its home turf, but expanding into new markets. To implement a growth strategy, it needed to find a distribution site on Cape Cod large enough to serve its local businesses and push product off-Cape as well.
In 2002, it purchased the old Cape Cod Coliseum in Yarmouth for just that purpose. Once the site of concerts such as Three Dog Night and hockey games, its 50,000 square feet were converted without the need for Cape Cod Commission review.
“We probably could never find a facility like that again,” said Bohannon. “It gave us the impetus to go off-Cape.”
With the success of its initial Complete Home Concepts Showroom on Route 132 in Hyannis, Mid-Cape began plans for its second location in Plymouth nearly three years ago – before the current housing downturn. It opened in June 2006.
Then, Mid-Cape had the opportunity to purchase lumberyards in Middleboro and Kingston. It was its second venture in Kingston, having once been located on Route 53, an area that proved relatively inaccessible.
All this expansion is occurring during less than perfect timing, acknowledged Bohannon. “Our Plymouth Complete Home Concepts was developed when we were still in a housing boom. In addition, our Hyannis store is right in the middle of a major road widening along Route 132 that obstructs it from traffic.”
Still, Bohannon and his management team have weathered economic cycles before. They understand that downturns actually are good times to expand if done with a careful eye to expenses.
“At this point, we have the resilience and stamina,” he said. “As a business professional, you must be ready to change direction based on the economy. Any business facing a challenging economy must look at its expenses, but it is experience that leads you to the right decisions.
“And while payroll is the largest part of a budget, you also have to be careful not to trim too much in advance of an economic recovery,” he noted.
One area he will not trim is sales and marketing. “I need pitchers to win. I have always used the baseball analogy. It is no different whether you are Mid-Cape Home Centers or the Boston Red Sox.”
The company’s growth arc, as well as the changing economy, also precipitated a generational change in Mid-Cape’s management structure.
Without realizing it, that growth led to 22 managers reporting directly to Bohannon as president. He recently promoted three long-time managers to run separate divisions – retail sales (Richard Grout); contractor sales (Carleton) and support operations (Gary Haigh).
Jan Nickerson, whose family founded the company (which still legally carries the Nickerson name), recently retired from the day-to-day operations, but remains CEO and chairman of the board.
Meanwhile, the Internet is serving not only to provide educational resources to its customers, but, increasingly, to help the company operate more productively. This is most illustrated by the growing ability of contractors to log on to secure accounts and conduct business directly with Mid-Cape 24/7 – everything from ordering product to paying bills.
Looking ahead – and beyond the downturn – Bohannon is very bullish about Plymouth County and the South Shore, calling it the “next frontier.” He looks enthusiastically at Cordage Park, A.D. Makepeace and Pinehills as changing the face of the county.
Its Middleboro facility is perfectly located as well for the impending development of a casino and its inevitable ripple effects in terms of development.
In addition, there is the growing trend of redevelopment on Cape Cod – older residential structures being purchased and knocked down for new, more expensive houses.
Then there is the intensifying movement toward green construction and energy-saving strategies. In planning for 2008, green will take center stage in Mid-Cape’s marketing and product lines, said Mason-Small.
Still, challenges are clear: Competition will only get stiffer; finding and retaining good workers remains a constant battle; government regulation – especially on the Cape – increases the cost of construction and the willingness of developers to commit to new projects.
But in the context of a 112-year history that included the Great Depression and two great wars, this modern-day version of the Nickerson Lumber Company appears to be as well poised for growth as the two counties it calls home.
Published in Cape Business November/December 2007
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