From Home Furnishing Business
When the much-discussed Baby Boomers started their household formation phase in the late 60s, we had turmoil as they began to reject the traditional styles which drove brands, such as Ethan Allen and Thomasville, to acceptance toward upstarts, such as Scan Design, Storehouse, and Crate & Barrel. Yes, with every generation, retailers and manufacturers must adapt their merchandise, value statement, and retail experience.
However, today the industry is in transition, reluctantly bidding goodbye to the Baby Boomers and also with reluctance greeting the Millennials.
This ambivalence is creating a lost opportunity – Generation X. While not as significant in terms of households (27.5%), Gen X represents as much of a force with furniture purchases (34%), as the Baby Boomers. Unlike the Baby Boomers, they will continue to increase in terms of percentage of furniture sold.
First, let’s find some reassurance that the Millennials are not that much different from all generations. Specifically, their home furnishings must communicate who they are and a sense of style.
Yes, there is a difference in what defines style in terms of product, but this is always the case, as society moves forward.
However, the industry must master how they want to communicate in terms of media and their dependence on the internet, as their first shopping stop. For now, they are focused on the non-traditional channels, but are willing to consider these channels, as well. It will be a challenge, but nothing the industry can’t overcome.
But, what the most immediate concern should be is Generation X. They are here now and they are purchasing 33% of all furniture/bedding and are growing. We need to concentrate on this forgotten generation. What makes them different from their parents?
The attitude toward furniture is the same, as is the reasons for purchasing. However, while depending upon the Internet, they are very much into magazines (10.8%), in fact, 5X greater than their parents.
The input of friends is more important, which accounts for the increased influence of social media.
Generation X is buying form the regional chains, moving from independents which the Baby Boomers prefer. However, they have embraced the mass merchants as well. They are still satisfied with their buying experience, but not as much as their parents.
The challenge is this generation. The retailers can focus on the Millennials later. For the next decade, this generation will determine our success.
The home furnishings industry is in a transition with total growth forecasted to be 3.4% this year, which would be an above average performance for all retail sectors. Next year, Impact Consulting projects a similar forecast of 4.1% (HFB October issue forecast). So, what is the problem? In the last decade, a proliferation of retail formats has emerged to attract an ever-changing consumer. Whether it is price, experience, or convenience, each format attracts a different, but overlapping consumer group.
The traditional distribution channels of Independent furniture stores, department stores, and national merchants, which decades ago controlled more than 90% of all furniture sales, have declined to less than 50%. Capturing that volume has been new retail formats with new value propositions or new ways to satisfy the consumer’s need for creating an environment to enhance their lives.
Traditional channels have themselves morphed into different formats with different product categories. In fact, the loss of product categories, such as small appliances to the mass merchants, has eliminated traffic to the stores. Gone are the days of the credit stores, which ensured a continuing contact with the consumer. This loss of product categories and credit solutions removed an element of loyalty.
The result is fragmented distribution at retail. The accompanying graphic illustrates the distribution of purchasers.
In 2017, Regional Chains have gained share of consumers, which is best illustrated by the expansions of retailers such as Bob’s Discount and Art Van. Department Stores have lost share to both independents and regional chains. Retail Verticals have been combined with Lifestyle and have grown, as Ashley HomeStores have expanded their brand presence. The resulting retail environment is a complex competitive network with each retail format competing for the consumer expenditure.
Unlike the previous 20 years, the Baby Boomers are not the dominate generation in the furniture retail sector. While still a force, purchasing 34.7% of furniture and bedding in 2016, the growth trend is downward. The children of the Baby Boomers, Generation X, represent 34% of the total expenditures and are still in a growth mode, as their children are beginning to leave the home and the consumer is adjusting for the empty nest phase. The emerging Millennials, in size, will eventually dwarf the Baby Boomers and are still in the household formation phase.
The challenge for the furniture retailers is to satisfy all generations, the largest but declining sector, the Baby Boomers, while satisfying the unique needs of Generation X, which will continue to grow. Accomplishing this, while anticipating the future Millennials, can be a challenge. The following addresses some of the differences between each of the generations.
SILENT GENERATION (AGES 71-88)
While representing 13% of the households, surprisingly they consume 8.2% of the furniture expenditures. This generation, especially the younger segment, is pioneering the concept of “aging in place.”
However, this generation still has a lot of living to do. As the other generations cluster, over a third (36%) intend for their next purchase to be leisure travel, followed surprisingly by a new car (29.5%). Furniture falls at the bottom (7.9%) of their plans. One could assume they are going to visit their kids by plane or car. Hopefully, this will generate second bedroom purchases in the succeeding generations.
This generational cluster, as would be expected, has a different attitude toward decorating and home furnishings. By far (43.8%), they believe their “home furnishings should be practical and meet my basic needs for comfort.” Obviously, they are not concerned (3.8%) with their home furnishings communicating their success and reflecting a sense of prosperity.
Unfortunately, the reason for their purchase was replacement (47.5%), reflecting a quality issue. The other reasons were in line with other generational clusters: desire for new furniture (25%) and redecoration (23.8%).
Like all consumers, the first step in the furniture purchasing process starts on the internet for research (45.8%), but the visit to the store (53.3%) still is favored by the majority.
The use of designers (10.4%) remains an important first step, a characteristic this generation shares with their grand or great-grand children. Input from their friends (7.1%) is also important.
Before this generation starts the buying process, the advertising media having the most influence was the local newspaper ads (29.7%), followed by the internet/email (20.8%). The other advertising media that excelled with this generation was radio ads (6.8%) -- more than three times the rate for all consumers.
As would be expected, this generation remains loyal to the independent retailer, with almost one-third of purchases made in this distribution channel (31.2%). The interior decorator channel is almost twice (7.5%) as likely to be the channel of choice. Only the mass merchants were not favored (13.8%) compared to all consumers. Old doesn’t necessarily mean frugal.
Looking to the future, the Silent Generation would most likely shop the Independent retailer (42.3%). However, the intent to shop the internet (18.0%) increased from the actual purchase. Also, the Interior Design sector saw an increase (14%). Could this be an indication of more of a “personal shopper” need?
The Silent Generation was the group most pleased with their shopping experience, with 35% ranking it excellent, and a nil response below a 3 on a scale of 1-7. As far as furniture shopping is concerned, they are not the “grumpy” generation.
Specifically, what they were pleased with in their most recent shopping experience was ease of shopping, which ranked the best (51.2%). The lowest was product knowledge of sales associates (40.3%), still higher than all consumers. The older generation likes the furniture retail experience.
Why did this consumer purchase the furniture they purchased? Overwhelmingly, it was due to the quality (35.1%).
What does the furniture retailer need to do to continue serving this consumer segment? For the most part, the industry has done a good job from the Silent Generation’s perspective. While not a significant part of the industry volume, it is a segment that has disposable income and is willing to pay for quality and service.
BABY BOOMER GENERATION (AGES 52-70)
This generation, which represents 34.8% of the households and about the same in consumer spending for furniture (34.7%), is an important, but declining segment of the furniture purchasers.
This generation is facing a significant transition as they contemplate retirement. Their choice - whether to age in place or downsize to a retirement community - involves a purchase decision.
However, like the other generations, their first choice in the list of intended next expenditures is leisure travel (37.5%), followed by a new car (35.19%). A furniture purchase, unfortunately, is the last of their intentions (5.7%). They are saddled with the “brown furniture” that was the preference of their generation, but their children don’t want it, and the consignment shops are avoiding this furniture. So, the decision is just to keep what we have. Unfortunately, in downsizing, the scale of their furniture doesn’t work. This decision of what to do with the old furniture becomes a problem.
Unlike the Silent Generation, the Baby Boomers still want furniture that communicates “who I am and reflects my sense of style” (35.1%). However, the Baby Boomers still have the need for home furnishings which “are practical and meet my basic needs for comfort” (28.6%). This consumer is still attached to this more traditional/formal furniture, but is contrary to these statements and provides an opportunity to influence their decision to purchase. A great trip lasts 7 days, but a new power/motion sectional lasts a lifetime – maybe.
Unfortunately, 40% of the consumers in the Silent Generation bought furniture for replacement. We know furniture should have a definitive life span, but from a consumer’s perspective, the life of their furniture is short. The next major reason for purchase is desire for new furniture (24.4%) – an opportunity the industry can stimulate.
What was their buying process? As with all consumers, the majority of the Baby Boomer generation starts with research on the Internet (51.8%). However, a visit to the store is still favored by many in this generation (40.5%). The brick and mortar stores still have the opportunity to influence the sales. Many of these consumers “scout” the store with no intention to purchase at that time. Retailers, be careful with slighting the “tire kicker.” We only have one time to make a good first impression.
Of all the generational clusters, the Baby Boomers have some use for the local newspaper, especially in small markets.
Interestingly, the Baby Boomers have embraced the internet/email as the number one media to influence their intent to purchase (28.6%). This is not to be confused with social media, which was the major influencer for only 5.8% of this generation. As can be seen from the accompanying table, television/print magazine/direct mail/local newspapers are in a neck-to-neck race for the number two spot.
The Baby Boomers are still the major customers of the independent retailer (33%), followed by the regional chains (20%). Their support of the other distribution channels is comparable, with the exception of the lifestyle stores (6.7%), which they have discovered. Stores such as Pottery Barn, Arhaus, and Restoration Hardware reflect their need for a new style and comfort as they transition from their more traditional/formal furnishings.
Looking forward, they will consider regional chains (33.7%) at a higher percentage than their past purchases, along with the internet (20.5%). The designer channel will also be one which will increase in importance.
As with the older generation, the Baby Boomers are pleased with their most recent shopping experience, with over 60% giving a positive rating (6 or 7) on a scale of 1 to 7.
The Baby Boomers are pleased with the courtesy of the store personnel (46.1%) and less pleased with product display and selection. But overall, it was a positive experience.
What brought the product they purchased to their attention was quality (38.8%), reflecting the attitude of all consumers. The continued identification of product quality, as reflected in the reasons for purchase (39.6% all consumers) is creating a wary consumer.
Functionality is important to the generational clusters, reflected in the increased sale of “power” in upholstery and bedding.
Warranty is of little value to this consumer group, reflecting past experience, as well as an attitude of never buying extended warranty.
GENERATION X (AGES 36-51)
This generation is the overlooked or forgotten generation. While smaller (27.5%) in terms of the number of households, they represent more of the consumer expenditure (34%) than the much-touted Millennials. In many ways, this generation is leading the transformation in furniture retailing. While the Baby Boomers are declining in terms of furniture purchase volume, Generation X will be increasing.
As with the other generations, they have a desire to travel, with over 43% stating this as the number one intent as to a major purchase. While important, the car is slightly below (25.9%) the other generations.
The attitude of Generation X is comparable to their parents, with 34.9% believing decorating/home furnishings should be reflective of “who they are and reflect a sense of current style.”
This generation is contending with furniture replacement (43.9%) as are the other generations. However, compared to the others, they are remodeling and adding to their homes (17.9%). The older end of the generation is seeing the first born depart, freeing up a bedroom for the “man cave” or “she-shack.” All of this creating a demand for new furniture.
How do they go about their purchase? Like all consumers, the Internet (50%) is the first stop in the process. However, it is important to point out 40% make a shop excursion first.
The other important difference is their use of magazines. Print is not dead for this generation. The importance has been confirmed with Home Furnishings Business magalogs, which combine lifestyle editorial content with product to achieve a response rate of more than 9%.
Unlike their parents, few get recommendations from friends and relatives (7.6%). Remember this is truly the Facebook generation.
What is this generation looking for in their products? As with other generations, the number one feature is quality (38.1%), Design and aesthetics (24%) are important, along with comfort (16.7%), but most important is value (11.9%). Consumers are both time and budget constrained.
What advertising media influences them? As compared to their parents, they are more likely to be influenced by the Internet/email (44.6%). The next most influential media is targeted direct mail (15.4%). While more influential (8.0%), social media is next to the bottom, just above radio. Television viewing declined from their parents (12.8%).
The regional chains are the distribution channel of choice (24.1%). Surprisingly, the Internet is less important, compared to both the Millennials and the Baby Boomers. Unlike their parents, they accept the mass merchants as an acceptable retailer for furniture. However, for their next furniture purchases, it appears Generation X would be very likely to consider the lifestyle stores and the internet, and less likely to consider the independent retailer and regional chains.
The reason for the propensity to consider other distribution channels may be found in the satisfaction with their last buying experience. While not negative, it is not as positive (54.4%) as the Baby Boomers. A significant area they ranked lower compared to their parents was the “courtesy of store personnel.” This paints a portrait of a time-constrained consumer who does not have time for a sales pitch and has little patience for a lack of product knowledge (25.4%).
As Baby Boomers (ages 52 to 70 in 2016) are aging out of prime furniture buying years, Generation X households (ages 36 to 51) who are more affluent than ever have picked up the reigns with robust consumer spending – despite a much smaller population size. Couple the Gen Xers with the sheer population size of the Millennials (ages 35 and below in 2016) and the future for the furniture and home furnishings industry looks promising as more Millennial consumers age into adulthood and form households (Figure 1). It is estimated that in 2016, well over one third of Millennials had yet to form their own households, many still in college and others delaying household formation for various personal and financial reasons. The 2016 Consumer Expenditure Survey gives a snapshot of the five adult generations as shown in Figure 1 which also discusses the conflicting end year to be included as a Millennial. This article picks up from Statistically Speaking’s February 2015 article Age Shift Impacts Furniture.
Baby Boomers still have the highest number of households representing 34.8 percent of consumer units, compared to 27.5 percent for Generation X, and 22.9 percent for the up and coming Millennials. Though smaller in size than the Baby Boomers, Generation X continues to gain influence and make its mark in the U.S. economy alongside the fanfare of Millennials entering adulthood and peak buying years.
In 2016, U.S. Households spent $7.42 trillion in the U.S. economy with Baby Boomers controlling 37.2 percent of all total consumer expenditures and Generation X close behind at 32.8 percent. Millennials, with lower average household incomes and smaller numbers, control only 19.4 percent of the total (Table A). Regardless, with almost 10 million more consumer households, Baby Boomers still outspend Generation X – despite growing incomes for Gen Xers.
For Furniture and Bedding expenditures, Millennials are stepping up to spend more of their income on home furnishings than any other generation, but still control only 22.4 percent of industry sales. Generation Xers are closing in on Baby Boomers as the generation that controls more industry sales, 34 percent, compared to 34.7 percent for Boomers. As Baby Boomers age out of the furniture industry, the influence of Gen Xers and Millennials will continue to grow.
As shown in Table B, Generation X had an average household income (before taxes) of $95,168 last year, the highest mean household income of any generation in history. Gen Xers households earnings on average are 19 percent higher than Baby Boomer households and 45 percent more than Millennials. Of importance is that Generation X has the highest number of earners per households, 1.7 earners, compared to Millennials, 1.5 earners. As Millennials age and grow in the workforce, rising incomes paired with numbers of consumers will increase their 19.4 percent share of consumer spending dramatically.
With the highest incomes and an average age of 43.3, Generation Xers are prime consumers (Table C). At an average age of 60, many Baby Boomers have retired, while a majority of Millennials who have entered the workforce are gaining more purchasing power at an average age of 28. In fact Millennials have now surpassed Gen Xers in the number of individuals in the U.S. workforce.
Shown in Table D, Generation X represents the bulk of families with children. They have an average of 3.2 total people per household and 1.2 children under 18. Millennials, however, are starting to have children at a higher pace averaging 0.9 kids under 18 per household – bumping up the average size of a Millennial household to 2.6. Baby Boomers still have an average of 2.1 persons per households, most likely reflecting leftover Millennials still at home for younger Boomers.
As would be expected, only 33 percent of Millennial households are homeowners, but that number is increasing daily. Generation X has not quite embraced homeownership like their parents, with 62 percent owning their own residence compared to 76 percent of Baby Boomers (Table E).
As shown in Table F, ethnic diversity continues to grow the younger the generation. For heads of households, Hispanics or Latinos have become the second largest segment after Whites, Asian, and all other races – increasing from 9 percent of Baby Boomers to 18 percent of Generation X and Millennials in 2016.
The data continues to confirm that Millennials are the most educated generation. In 2016, 71 percent of Millennials were college educated versus 69 percent of Gen Xers and 63 percent of Baby Boomers (Table G).
Although Baby Boomers account for a greater percentage of consumers’ spending, Generation X consumers spent more per household with an annual average expenditure of $68,532 in comparison to the $61,204 of Baby Boomers (Table H).
Staying in line with overall expenditures, Generation X also spent more money per household on Furniture Expenditures in 2016. At an average annual furniture expenditure of $744, Generation X spends on average 24 percent more than Baby Boomers and 26 percent more than Millennials. (Note: The Consumer Expenditure Survey (CEX) projects total furniture industry expenditures at a lower rate than the Personal Consumer Expenditures (PCE) survey conducted by the Bureau of Economic Analysis, which is tied to the GDP. Mapping the CEX to the PCE reflects a more accurate picture of expenditures shown in Table I.)
Where Do Different Generations Spend Money?
Age and generation greatly affect what consumer items people buy and the share of a consumer’s total expenditures allotted for these items. Figure 2 illustrates a few major consumer items bought by each generation and which generation spends a higher percentage of their expenditures on those items.
As housing is a major expenditure for all consumers, Millennials are spending a higher percentage (22 percent) of their income on rent or mortgage payments. For rent alone, 37.6 percent of total spending comes from Millennials. For homeowners, Generation X spends the highest share of their expenditures on mortgage interest (6.6 percent). As they age, many Baby Boomers are paying off mortgages and simultaneously becoming by far the largest consumers of home maintenance, repairs and insurance. Last year 45 percent of these consumer expenditures were by Baby Boomers.
Millennials spend more of their income eating out than any other generation but due to population size, Gen Xers and Baby Boomers control almost 70 percent of the total dollars spent. In family-oriented Generation X, households on average spend far more than any other generation on entertainment – roughly 38 percent of total entertainment expenditures.
Cell phones, vehicles, and education are bigger ticket items for Millennials, while Gen Xers and families spend more of their incomes on apparel and shoes. Not surprisingly, Baby Boomers control much of the healthcare spending, averaging 9 percent of their consumer spending.
Perhaps the most important statistics for the furniture industry is that while Millennials currently control 22.4 percent of furniture industry sales, they also spend a higher percentage (0.9 percent) of income on furniture than any other generation. This should bode well for the industry as Millennials continue to flood into household formations. Couple this with the growing wealth of Gen Xers and the furniture industry has the demographic profile for growth in the future.
Producers say the category is finally showing signs of life after several years of sluggish sales, and is due for a significant rebound. Millennials, for starters, are starting to form new households in earnest, and non-Millennials are starting to feel comfortable about spending money to replace their well-worn existing bedroom suites.
And when they do make those purchases, they’re likely to find an array of finishes that weren’t available the last time they shopped. Not only have gray finishes become all the rage the past couple of years, but the time honored brown finish has taken on a variety of new forms that are nothing like the high-gloss, lacquer-heavy traditional finishes that have been a staple of the category.
“Even in the most sophisticated environments, we see consumers gravitating towards a more relaxed aesthetic,” said Randy Wells, vice president of creative at Stanley Furniture. “We believe there’s a call for finishes that convey the natural characteristics of the veneer or wood species they are applied to.”
And in many instances, that has meant gray finishes – especially the past two to three years. Producers say grays have been prevalent in Europe for many years, but have caught on only recently in North America.
“All of a sudden, it just seemed like everything became gray,” said Geoff Beaston, vice president of case goods at Klaussner. “I am hearing people are tiring of it, but I believe it will be here for quite a while. Just like the classic traditional finishes, I think gray will still be one of the popular finishes.”
And given today’s increasingly sophisticated finish treatments, there are now some brown finishes that have a gray tone, which pleases those who think there’s too much gray in the marketplace and those who can’t get enough of it.
“If you can come up with a finish that is brown to the people who like brown, but yet gray to the people who like gray, they you’ve got a winner,” Beaston quipped.
Research by Impact Consulting Services, parent company of Home Furnishings Business, showed that replacing old furniture was the most frequently listed reason for buying new bedroom furniture, but buying a new house was not too far behind.
In a survey of recent bedroom furniture purchasers, 33.6% said replacing old furniture was the primary motivation, followed by buying a new house, which was cited by 24.9% of respondents. The next-highest motivation was a desire for new style, cited by 19%, followed by a change in family size, cited by 11.4%, and a desire for new function, cited by 11.1%.
To no one’s surprise, a headboard or headboard/footboard combination was the most frequent bedroom furniture item purchased, cited by 56.7% of the survey respondents. But a dresser and night stand were close behind, purchased by 53.6% and 53.1% of respondents, respectively. A chest was purchased by 25.3%, while a platform bed was purchased by 13.4% and a desk by 12.9%.
The armoire, a fairly common bedroom furniture purchase prior to 2000, was acquired by only 9.3% of the survey respondents.
“The bed is still the focal point, and we all want to make that grand statement,” said Beaston.
Increasingly, that statement is being made with upholstery, as upholstered headboards continue to gain market share. Estimates of the market share captured by upholstered headboards vary widely among producers, but they all agree their popularity is not waning.
“Upholstered beds remain an important option in our whole-home collections,” said Wells. “Even if we don’t cover an entire bed, our beds will typically employ some level of upholstery to add a valuable element of texture and softness.”
Bedroom furniture producers also are making a statement by increasing the height of their headboards. No reliable data is available on the number of tall headboards offered by producers, or just how tall they are, but it appears the headboard heights may be limited only their ability to fit into a container (for importers) or a truck (for domestic producers).
“It seems like every time we look at a sample, we say, ‘gosh, we need to raise it a couple of inches’,” Beaston said.
Headboard heights weren’t part of the Impact Consulting survey, but the overwhelming majority of respondents (63%) said it was the bed that initially drew their attention. The dresser came in a distant second, cited by 18% or respondents, and all other bedroom pieces were cited by less than 5% of recent bedroom furniture purchasers.
And while the ability to customize bedroom furniture isn’t nearly as important as upholstery – except at the very high end of the market -- nearly all of the survey respondents said they would be willing to pay extra if they were able to customize. In fact, 25.8% said they would pay an additional $100 to $250, and another 24.2% said they would pay an additional $250 to $500.
Plus, some 14.4% said they would pay an extra $500 to $1,000, while 8.3% were willing to add more than $1,000 to the price tag.
In last month’s Coach’s Corner column, we discussed the fact that almost half of the home furnishing customers in 2016, did business with distribution channels that do not have sales people in the traditional sense. We touched on some of the possible reasons for this, including the consumers’ increased confidence level, the historic lack of trust many have for sales people and the perception that many of these newer retail options offer a simpler, quicker and cheaper purchasing experience. All of these factors play a role I am sure, but my main point was that perhaps we are not doing as good a job of creating value in the customers mind for what our sales people do.
The following statement pretty much summed it up: “What I am saying is that if the customer felt they really needed a sales person, then that number would not be nearly as big.” That was followed by observation: “Of course, as we know, most customers actually DO need the assistance, either making the right product selection or putting the total room package together. The problem is they don’t believe that we can help them so they do not value the service we provide.”
My final recommendation was that we need to do a better job of communicating the benefits of visiting our stores and working with our sales staff, to make the customers dreams for their home come true. After all, the only reason we have sales people on our floors is so they can help our customers find what they are looking for and if the target consumers don’t know that or can’t buy into it, then a significant part of what we do has little or no value to them. But what if we are wrong and our staff is not helping customers find what they want? Now that is a really scary thought.
It is very possible that many of our sales team members are not being as successful as they should be at their basic task of helping customers find what they are looking for. Why do I say that? Recent research indicates that as many as 50% and an average of 40%, of those consumers who shopped a store and left without buying, stated that it was because the store “did not have what I was looking for.” Wow, that is an awfully big number. Let’s take a look at what could cause this to happen.
Myth: Does the store really not have what they are looking for? While this is certainly a possibility, it is not that probable. Research done even before the Internet came on the scene indicated that in roughly 85% - 90% of the studied responses of customers who left a store for this reason, the store indeed had or could have obtained what they wanted. Now with the Internet providing so much information about what a store has, the probability that a consumer would visit a store that does not have what they are looking for is very small.
Reality: A huge percentage of customers are rejecting our sales person’s assistance. The truth is that due to all their pre-shopping research, plus the aforementioned lack of positive expectations for the experience, many of these more confident shoppers are just not letting our sales people help them. They come in with the “I’m just looking” attitude and reject any initial contact from our staff members. In many stores this is indeed the number one reason that potential customers leave without buying.
They enter the store, are greeted by a sales person and tell them they just want to look. Not wanting to be “pushy”, the sales person releases them to browse, without even trying to determine what they are looking for or give them further assistance. Many customers assume a furniture store is just like Target or the grocery store so they browse through the store, thinking they will see everything you can provide to them. When they don’t see what they want they leave, unless the sales person or someone else reconnects with them. Yes, this is the customers fault to begin with, but in the end, it is the sales person’s main responsibility to break through the initial resistance and find a way to help every customer find what they are looking for. This is one of the toughest training and coaching challenges that every retail sales manager has, but it is also one of the most important.
Recommendation: Because of this situation, the most important element in the selling process today, has become the opening or greeting. The first words a sales person says and how they say them have the power to make or break their potential connection to each customer. Here is a brief glimpse into some of the points we make when training about the greeting.
First we need to understand that the greeting has four critical purposes:
· To make the customer feel welcome and at ease
· To get the salesperson and the customer connected and talking
· To begin to establish a trusting relationship
· To eliminate the “I’m just looking” response
We have found that the best greetings include the words “welcome” and “thank you”. Something like “Welcome to our store, thank you for coming in today”. These words are similar to how you would greet someone visiting your home and begin the process of helping the greeter become a person instead of a sales person in the customer’s eyes. The greeting needs to be rehearsed so that it becomes second nature so it is said sincerely and comfortably, to every store visitor, without hesitation.
If on the other hand your staff members adopt the role of salesperson with all the affectations attached to it -- such as lurking around the front door or by using phrases such as “How may I help you?” -- The customer will quickly take on her accustomed role. She will issue the words that go along with that role, which are “I’m just looking.” The key to greeting is to have the customer see them as a person first and a sales person second. Train them to stay out of the classic role. Say and do the things that customers will view as people things. In reality, the purpose of their opening greeting process should be to say things that most salespeople don’t say.
What you do and say after “welcome” and “thank you” is one of the most crucial aspects of establishing a trusting, person-to-person relationship with your customer. Now you must connect with the customer to learn what he/she is seeking as the result of this visit and how he/she wants to be assisted during the process. To do this while establishing trust, there are some basic points to remember:
· Stay away from the selling role
· Ask NO qualifying questions
· Make an acquaintance
· Ask questions about the customer
This is traditionally referred to as “small talk”, but in reality, it is actually “BIG talk”. The goal should be to have a casual conversation, just like at a party or gathering of friends. It should not be formal or forced. The more natural this is done, the better. It should relax the customer and allow them to get to know the sales person a bit and vice versa.
This last point is the hardest thing to train because it is a “people skill” and is often what separates the truly gifted sales person from the ones that struggle. How we deal with strangers is for the most part ingrained in our personality long before we show up for sales training. It is based on our life experience and what we learned growing up. How we handle our fear of the unknown and our own confidence in dealing with new situations are key factors. The only way to improve here is through roll play and reinforcement of positive body language, a sincere smile and caring mannerisms. Practice does indeed make perfect, well at least almost perfect in this case.
The greeting is not completed until the customer is ready, willing and able to talk with the sales person about why they came into the store. The best transition questions we have found are something like: “So what brings you into our store on a beautiful day like today?” or “Which room can I help you make perfect today?” Of course, even with a great greeting that is properly delivered, many consumers still will not be won over and easily surrender that information.
There are many ways to deal with these untrusting customers and which direction to take the conversation depends a lot on what the sales person reads as the main reason for the rejection at that point. Based on what we have discussed here, many customers already think they know what they want and say this so they can just walk through on their own to see if you have it. As stated earlier, we know that usually does not work well for them or the store. Our recommendation for these “browsers” is to just be honest and tell them you are there to help make their search easier, quicker and more successful. Something like the following often works:
“That is wonderful, we have a huge selection for you to see. However, even as large as our showroom is, it is impossible for us to show everything we have available, particularly items we can have made specifically for you. If you can just tell me what you are looking for and perhaps a little about the room it is going into, I am sure I can save you some time and effort finding it.”
These are just some basic first steps of the greeting process. Using a solid training program including role play and mentoring, your sales team must be developed into exceptional greeters who can and will make every customer they meet feel welcome in your store and willing to talk about what they want for their home. Not easy, but it is doable with enough effort, dedication and discipline.