The Steel CodCast

📩 Apply to Join the Retail Council Here: https://tally.so/r/vGGdq0 Interest rates are up. Mortgage rates are up. The council was asked if they’re feeling it on the floor -- 70% said yes. Jon’s first response: make sure you know what you’re actually looking at, because if you treat a shift like a decline, you’re going to make every wrong decision for the next 12 to 18 months. The council numbers break down clearly. New construction and production builder business is down. Remodeling is surging. Luxury is holding. The middle is getting squeezed the hardest. Jon says the mistake is looking at those numbers and going into panic mode, because what’s actually happening is very different from a down market. It’s a customer migration. The reason it looks like a shift and not a decline: the homeowner who bought or refinanced at 2.5% in 2020 is locked in. Their monthly payment would more than double on a comparable home at today’s rates. They’re not moving. That kills the new construction pipeline -- the full kitchen outfitting that comes with a move. What replaces it is the renovation customer. The couple who has been waiting to make the home their own. The empty nester finally spending on themselves. These are real customers with real budgets, and in most markets they’re not just compensating for new construction -- they’re outpacing it. The path to this customer is different. The new construction customer came to you because someone else put you in the process. The remodel customer comes because they almost decided, and a designer or contractor they trust sent them your way. That means your pipeline right now runs through relationships. And here’s the thing Jon keeps coming back to: designers are in the same market you’re in. They have more time right now. The dealer who invests in those relationships during this period is building a pipeline that pays off for years. On the middle squeeze: Jon says don’t engage it. The customer who’s trimming packages and asking for your best price was stretching to get to you before rates went up. Every time you have that negotiation you lose margin, you lose time, you lose positioning, and you teach your staff that price is something that moves when the market gets tight. The luxury customer is still there. Mortgage rates don’t change what someone who’s decided to invest in their home is willing to spend on a kitchen they’ll cook in for the next 20 years. The only question is whether you’re going to let luxury win for you.

📩 Apply to Join the Retail Council Here: https://tally.so/r/vGGdq0 The Steel Cod Retail Council was asked this week what matters most when evaluating whether a product belongs on their floor: innovation, price point, or brand recognition. Nearly 40% of the council didn’t pick any of those three. They wrote their own answers. Jon says that is the most damning finding of the whole episode. His own ranking: innovation first, price point second, brand recognition dead last and not close. Brand recognition works in big box because the customer sees a name and buys it. In the independent channel, the customer buys because the salesperson convinced them to. A dealer who uses brand recognition as their primary evaluation criterion has outsourced the most important decision they make to a manufacturer’s marketing team. Wolf has made bad products. Miele has made bad products. Gaggenau has made bad products. Brand name is a starting point for customer expectation. It guarantees nothing else. Innovation comes first, but only honest innovation. Jon’s test is three questions: does it make the result meaningfully better for the specific customer on your floor? Does it eliminate a real frustration? Can your staff demonstrate it in a way that makes the customer feel it, not just understand it? If no to any of those, it does not go on the floor. Air fry is convection. The channel has spent years calling incremental improvements innovation, and the word has lost meaning because of it. Price point is about where a product fits in the conversation you are already trying to have with your customer. It is not whether the product belongs at all. Does it fill a gap in your current mix? Does it create a natural progression toward greater investment? Those are the right questions. The off-script criteria the council actually uses: does it fill a void in my mix, does it add a customer I am currently losing, can it be demonstrated compellingly on my floor, is there rep support, is there service infrastructure. Jon’s bottom line: every brand that listened to this episode just slumped in their chairs, because their reps are walking into dealer meetings ready to talk about the three things the council just said do not matter.

📩 Apply to Join the Retail Council Here: https://tally.so/r/vGGdq0 The Retail Council weighed in on Gaggenau this week and the split between dealers who carry it and dealers who don’t was pretty revealing. Jon’s main takeaway: Gaggenau doesn’t belong in the same evaluation conversation as the rest of the brands on your floor, and if you’re applying that lens to it, that’s probably why you don’t have it. Dealers who carry Gaggenau came back positive. The new design is working. It’s getting second looks it wasn’t getting before. Sales conversations are opening up that weren’t opening up before. Jon’s read on that: the pull isn’t coming from marketing. It comes from a product that is extraordinary enough that people who encounter it want to talk about it. That’s a different kind of momentum. Dealers who don’t carry it didn’t say so directly, but you could tell from the answers. Pricing too far out of whack. No range offering. Ordering complexity. Jon’s pushback: those are the wrong frameworks for evaluating this brand. Gaggenau is not a brand you evaluate the same way you evaluate the brands sitting next to it. The council produced a line Jon found interesting: Gaggenau is never sold, it’s requested. He partially agrees. The customer who ends up buying Gaggenau either already knows the brand or identified it very early on as something that belongs in their life. The dealer’s job at that point is not to convince. It’s to confirm. The dealer who positions Gaggenau as one of several options will get a pricing pushback every time. The dealer who positions it as the answer to a specific scenario for a specific customer will have an entirely different conversation. BSH understands what Gaggenau is. They have Thermador for the Sub-Zero and Wolf cross-shopper. Gaggenau sits above that and has to stay there. It has no direct competitor. Jon says that is not a limitation. That is the entire point of the brand.

📩 Apply to Join the Retail Council Here: https://tally.so/r/vGGdq0 The Steel Cod Retail Council was asked about JennAir’s new stone panel options this week. The responses were the shortest they have ever given back. Jon says that tells you everything you need to know. His argument is straightforward. The panel conversation is an upgrade conversation. You can only sell an upgrade to a customer who is already committed to the product underneath it. The problem JennAir has is not that customers cannot find the right exterior finish. The problem is that JennAir refrigeration is not making it to the specification stage in enough kitchens. That is a completely different problem, and no panel option fixes it. Leather panels did not move the needle. Stone panels are not going to either. The interior finish on JennAir refrigeration has been a friction point in designer and retail conversations for roughly eight years. Designers curate every surface in the spaces they build. When a refrigerator interior does not belong in the palette they are working with, the appliance gets left out regardless of what the outside looks like. You can make the exterior as beautiful as you want. If the designer opens the door and the interior does not fit, it does not get spec’d. On the retail floor, what actually happens is this: a retailer leads with JennAir’s range, the customer falls in love, they move to the refrigerator, and the black interior kills the deal. Now the retailer has to go back and resell the range. That happens enough times and the decision becomes obvious: stop leading with JennAir. Jon says that is exactly what has happened in a lot of markets. There is good product inside JennAir’s columns. Jon is clear about that. The issue is that the interior finish is masking it. His prescription is simple: update the interior. Add stainless steel as an option. That brings JennAir back into conversations that stone panels never will.

🎓 Steel Cod University: https://university.steelcod.com/ 📩 Apply to Join the Retail Council Here: https://tally.so/r/vGGdq0 This week Anthony and Jon are joined by Chris Walsh, Director of Residential Sales at Perlick. Perlick has been building refrigeration for top bars, breweries, and restaurants since 1917, and the G5 collection is their most serious push into the residential space yet. Chris walks through the launch, the two-tier lineup, and how retail salespeople should be thinking about it on the floor. The G5 comes in two tiers: Core and Lux. The real question for retail is how to position both without one cannibalizing the other. Chris breaks down the right customer for each tier and how to keep them from stepping on each other in a showroom conversation. Rapid Cool is one of the G5’s signature callouts, and it makes a lot more sense when you think about how people actually use under counter refrigeration at home. It’s not like a kitchen fridge that’s consistently stocked. It’s for entertainment. It’s for last-minute prep. It’s for the scenario where guests are arriving in an hour and the beverages need to be cold now. Chris explains what the technology actually does and how to use it as a selling point. Anthony shares a story from his days on the floor about a customer who built a full luxury kitchen and decided to cut budget on under counter by grabbing something from a box store. He walked into the house and heard it immediately. The wife’s reaction said everything. Nothing inside was cold, it was loud, and it was heating the kitchen. It’s a category where you don’t get to cut corners and still get the result. Perlick is family-owned, fifth generation, and has been in business since 1917. The G5 collection is at perlick.com.