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From Home Furnishing Business

Take Five Caroline Hipple

 Larry Thomas

Take 5: Caroline Hipple

After upholstery producer Norwalk Furniture was raised from the home furnishings industry graveyard in 2008 by 12 Norwalk, Ohio-area families, the new owners brought in an Atlanta consulting firm called HB2 to advise the company on strategic planning and merchandising. They liked the work of principals Caroline Hipple and Dixon Bartlett so much that they eventually hired Hipple as Norwalk's president and Bartlett as vice president of merchandising.

Taking the reins at Norwalk a year ago has given Hipple a unique opportunity to put into practice the management principles she had been touting. In a recent interview with Larry Thomas, senior business editor of Home Furnishings Business, Hipple discussed why she went to work for Norwalk full-time,

the impact Millennials will have on the company and the furniture industry, and the close-knit culture that has enabled the venerable company to survive and thrive after its recession-induced shutdown.

Home Furnishings Business: What attracted you to the job?

Caroline Hipple: What attracted me was the potential. We have a 440,000 square-foot plant with very sophisticated and advanced equipment. That's the hardware, if you will. The software is this talented team. We get to be a part of the long and venerable tradition of building furniture with this fine craftsmanship. But because of the history and everything that has happened in the last eight years, we get to do it in a new way.

I believe the Millennial is going to change our world over the next 10 years. So, taking advantage of Norwalk's equipment and facilities, and using that skill to innovate and address this emerging market of 80 million consumers is right up my alley. That's why I did it.

HFB: So you see Millennials as a major source of growth in the years ahead? 

CH: The oldest Millennial is 35. I think a lot of people erroneously see the Millennial as an Ikea customer or a Target customer. But that's because they were college kids not long ago. But now as they're turning 35, they're having babies, they're buying houses, they're getting married. So now is the time where they are going to start aging into better goods -- and there are 80 million of them! Remember, there were 80 million Baby Boomers, but there were only 42 million GenXers. 

The dirty little secret during the recession was that there were also 30 million fewer buyers in the 35- to 50-year-old buying segment. Not only did we have a financial crisis, we also had a dearth of buyers. It was an industry set up for 80 million Baby Boomers. But there were only 42 million GenXers. 

That's getting ready to change. But they're not going to buy like the Baby Boomers did. That means you have to have an online presence.  You have to have retail experience points. You have to be where the Millennial wants to be met. That's a challenge to figure out how that's going to happen for a special order upholstery company. 

HFB: Would you characterize Norwalk as a turnaround situation when you were hired?

CH: I really wouldn't say that. In 2008, Norwalk went away for six weeks. But since it has come back, it has had the best balance sheet that it has seen in decades. So it's not really a turnaround, but a shifting of focus and resources.

HFB: What is the biggest change you've made since becoming president?

CH: What I've had to do is crystallize the management structure into a participatory process that helps us realize the opportunities that are out there. We've been able to see some things and act very quickly because we have this participatory management structure. I'm not coming in from above and saying 'do this now.' Instead, we are working with the head of manufacturing, the head of finance, the head of HR, the head of marketing, and the head of merchandising on a regular basis.

Within six months of me coming on as president, we launched this partnership with Company C with 45 SKUs and a whole market devoted to it. That's very fast for something like that. But it was because of this participatory process where everybody is involved. People need to feel that their opinions are needed, and their ability to execute is needed. It goes faster that way. And it's more fun. Everybody knows what it's like (to be out of business), so they're just so invested in what happens. That's why we've worked hard to make sure there's a participative structure.

I've been to a lot of plants over the years, but there's just something different here in terms of the feeling they have about making it work and making it work well. It's a genuine appreciation for the history, the culture, and the opportunity. That's really a joy for me to be a part of. It's like that (trick) birthday candle that you keep trying to blow out. But that spirit won't blow out. That's Norwalk. It is an incredible spirit that burns inside. We (the executive team) just get to be the keepers of that flame. It's our job to keep that flame burning and find ways to keep it burning brighter. 

HFB: Going forward, what are some of the keys to Norwalk's success?

CH: First, we have to have innovative products and fabrics. As a design-oriented, affordable, special order upholstery company, we have to have a really productive fabric line, which means everything has to be beautiful and useful.

Second, we have to meet the Millennials where they want to shop. We have to have great retail partners to accomplish that. I think it's really important to stay flexible and responsive. So managing that culture to be flexible and responsible allows us to manage all the change that is going on.

This is not your grandmother's or your mother's Norwalk. It has the great history of making great product and servicing retailers, but we have a chance to be fresh, innovative and really look at the world quite differently. That's why I'm so excited to be at Norwalk.

HFB: What happened to the Norwalk retail stores that were open when the company ceased operations in 2008? 

CH: There were 72 franchised and corporate stores before 2008, but those franchise agreements were voided when the company went away. But many of our former franchisees and licensees just kept the name up and kept going. So you will still see Norwalk stores today (about 30 to 40), but those are independent retailers. 

One of my biggest challenges is to make sure that all independent retailers know that Norwalk is a viable manufacturing partner. You don't have to have a whole store (of Norwalk products). A lot of retailers don't consider Norwalk because they think you have to have to be part of a franchise system. That's the main reason I advocated taking that first-floor showroom in High Point with those large windows, as well as our very visible space in Las Vegas. We wanted those showrooms to be big billboards to change the notion that you can't buy into the Norwalk system as a regular retailer.

HFB: Is it a disadvantage having your factory located in Ohio -- far away from upholstery manufacturing hubs in North Carolina or Mississippi? 

CH: We think it might be an advantage. Dixon and I travel all over the world, so it's not like we are not exposed to (the latest trends and designs.) In our plant, what we want are artisans and craftsmen who can make the best product. We have master craftsmen, some of whom have been here for 20, 30 or 40 years, and we've started apprenticeships so younger people can work with them. We are creating our own community. It's an important place to work in our community, and people know it and revere it. 

We're not on the 1-40 corridor (in North Carolina), so we're not competing for those same employees.

HFB: Is 'Made-In-America' an important part of your marketing strategy?

CH: We source as close to home as possible, not because we are jingoistic, but because we believe it makes strong community. Our reclaimed springs are from Indiana; our foam comes from Indiana; our wood frame parts come from the Amish factories all around us. And as much as possible, we source our textiles from the U.S. We are very conscious and intentional about creating community around us.

To a large degree, our retailers love that notion. But the 'Made in America’ is a part of a bigger strategy of creating community and local sourcing. That's more powerful, we believe, than just 'Made in America,' because that gets bandied about so much.

COMPETITIVE BATTLEFIELD

Competition in furniture retail has moved from a simple game of tic-tac-toe to a multi-dimensional game involving more than one player and more than one board.  A key characteristic of 3D tic-tac-toe is that it decreases the likelihood of a tie.

When furniture retailing occurred in a single market among family owned entities, while aggressive, the results, like in tic-tac-toe, was often a tie or a short time advantage reversed in a later move.

The equalizer of all is the economy.  The great recession created havoc, resulting in a loss of almost half of the 60,000+ furniture stores in the period 2007 to 2015. 

While this purge is behind the industry and growth has resumed achieving a compounded growth rate of 4.1% CPGR in the last five years, the competitive turmoil continues. 

Much of this competitive activity was instigated during the downturn as the exiting of smaller retailers created perceived opportunities for the larger independents and regional chains.  Additionally, the changing consumer buying process of shopping fewer stores (1-2), down from 4-5 a decade ago, encouraged retailers to open more stores in a market.  Moving away from a “destination store” to “stores of convenience” significantly changed the business model of the traditional furniture retailers.

The change of the traditional business model has created a need for additional revenue.  As more stores were added in the market, often in higher real estate cost areas with more dramatic store exteriors, occupancy costs had to accelerate. The traditional thought of adding occupancy and advertising costs elements together suggested that with a better location and outstanding facility, advertising cost could be reduced.  Unfortunately, the need to attract a declining base of shoppers put pressure on the advertising expenditure.  Additionally, the explosion of exposures from digital, either social media or email, diluted the power of television and almost eliminated the print alternatives 

The impact of competition has not been as much from the individual competitor as from new retail concepts that better satisfy the consumer demand for a different retail experience.  The graphic illustrates the share of furniture and bedding sales by distribution channel broken down by traditional and emerging channels. 

There have been significant shifts in the breakdown of sales in the traditional channel.  While in total, falling to less than 40% of sales, the independent dealers have lost almost half of their market share.  Some of the gains have gone to the regional chains.  However, the internet and verticals, such as Ashley Home have been the major recipients.  Another major impact has been the free standing bedding specialty stores where now almost 50% of consumers buy in the smaller footprint that promotes their product expertise and significant selection.  The table presents the shifts over the past five years. 

The internet has been the fastest growing non-traditional channel capturing 19% of total sales by 2015.  The rate of growth has declined in recent years reflecting the penetration of the consumer demographic that want to purchase a major consumer durable sight unseen. The major e-tailer, Amazon, has recognized this and, as was reported in the New York Times, is considering brick and mortar stores to facilitate the purchase. 

Why have furniture retailers attracted the attention of other retailer sectors?  Simply put, it is the growth that has occurred over the past five years when compared to the other sectors.  A growth in the furniture and home furnishing stores over the past five years of 24.4% compare nicely to the other retail sectors and total retail as well.  Only building material retailers grew more at 30.8%. The table illustrates the comparison.

The other attraction is the significant gross margin when compared to other product categories.  The challenge most national retail chains have today is, gross margin generated per square foot of selling space.  While multiple store locations increase the convenience of shopping for the consumer, the result is less gross margin per square foot of retail space.  The only solution is the closing of stores, which the furniture industry has, to date, avoided.  For the top quartile performers, the average gross margin per square foot of selling space is in the $9 range compared to a similar graphic of sales generated per square foot.  The graphic illustrates the range by size of the retailers. 

Relating these statistics to the average lease costs illustrate our challenge to control store expansion.  

While all retail segments are considering the furniture product category to date, only the internet has made any significant inroads.  The graphic illustrated the change from 2002. 

The bottom line is that the battlefield is littered with mines and booby traps that furniture retailers must consider as they plan their strategy forward.  While the traditional furniture retailers have seen significant loss of market share in the past 20 years, there is a 2.0 version of the traditional retailer emerging.  More sophisticated in terms of marketing, finance, and technology, this new generation will succeed.  The major retailers have concluded that the consumer wants what we have always provided – product displayed with style, delivered and placed in the home by people who care.  Now on to the next generation.

Is an Amazon Furniture Store Coming to Your Town? 
By Larry Thomas

Furniture industry tongues were wagging furiously last month when a New York Times story briefly mentioned that e-commerce behemoth Amazon has had discussions about opening brick-and-mortar furniture and appliance stores.

The story, quoting anonymous sources, said such stores “would be showcases” for large items that many consumers are hesitant to purchase online without seeing them or touching them.

According to the story, the stores would use cutting-edge virtual reality or augmented reality to give consumers a better idea of how the products would look in their home. And while the Times story didn’t mention it, these stores presumably would not have traditional, commissioned retail sales associates. (The story, which was mostly about Amazon’s difficulties selling groceries online, noted that the company is testing a cashier-less brick-and-mortar grocery operation where the customer’s account is charged as soon as the product is removed from the shelf.)

So if the store was only a product showcase with no sales people, a big key to Amazon’s success with a brick-and-mortar furniture store would be logistics — a category in which the company also claims to be a world-class provider. But while a small item such as an end table or lamp could be easily shipped via FedEx or UPS, that can’t be done with a large item such as a sofa or dining room table because they far exceed the shipping company’s 70-pound weight limit.

And can Amazon deliver those large items the next day — or even the same day — like many brick-and-mortar furniture stores?  That’s debatable.

“It’s not so easy to deliver quality assembled furniture to a consumer in that manner. Every internet company has trouble doing same day/next day with large products,” Pat Cory, president of Cory Home Delivery, said in a recent interview with Home Furnishings Business. “It’s very difficult for them to do, and it’s incredibly expensive because of the inefficiencies you have with the loss of productivity on a truck and loss of density on a route. It creates a huge cost increase that most consumers would not be willing to pay.”

But Cory was quick to point out that e-commerce companies such as Amazon and Wayfair “absolutely” could accomplish that feat with two- or three-day delivery in many markets.

The question there, of course, is will our “I want it all and I want it now” culture accept that “slower” delivery cycle? That’s a question that Amazon may well spend millions of dollars to find out.

Cory said Amazon already has opened two enormous distribution centers — as in 3 million square feet each — in central New Jersey just to serve the New York and Philadelphia markets. And while he says they have hired top people away from FedEx and UPS to try to develop their own logistics network, he remains skeptical.

“They came into logistics with a sense of arrogance…like the rest of us didn’t know what we’re doing,” said Cory. “It’s one thing to sell a product on a computer. It another thing to create a supply chain from scratch and be successful at the level of FedEx and UPS. Those are two different worlds.”

WAITING FOR THE INVASION

The die has been cast with major regional chains expanding into the large markets (markets with sales over $50 million).  The most aggressive is Bob’s Discount playing catch-up with infusion of Bain Capital.  The recent acquisition of Art Van by T.L. Lee can only indicate a further expansion of the Michigan powerhouse.  The remaining significant players, Haverty’s, Raymour and Flanigan and Rooms to Go, continue to expand, but not at a frenetic pace.   

While the industry has not outpaced other retail sectors, the demographic trends of the much-anticipated Millennials have been the focus of many of the larger retailer behemoths.  Recent statements by Big Lots and Target have all mentioned furniture in their future expansion plans.

On a daily basis retailers with 75+ year histories are announcing their closings.   Their reasons may vary, some because of the lack of a viable transition plans, others because of competition from a more aggressive chain.  The fact is that consumers’ shopping habits have precluded the opportunity for many.  The consumer’s shopping excursions are often limited to 2+ stores while they are relying more frequently on the Internet to narrow their choices.

At least the furniture sector has avoided the problem of being “overstored.”  Major retailers are announcing store closures weekly.  Unfortunately, from a strategic perspective, the addition of the furniture category to their product category with its comparatively attractive gross margin could provide an alternative to their lack of gross margin per square foot of selling space.

Bottom line, the larger markets will be a battlefield resulting in 2-3 surviving retailers with multiple locations.  This is similar to what happened in the home appliance sector with several major retail entities presenting limited brands competing primarily on price.

The major question for retailers in mid-sized markets is “When will the “war” come to my market?”  This is a similar position that building supply and hardware stores found themselves in 20 years ago when the new concept store, Home Depot, emerged on the scene.  The question was “How far down the market size spectrum would Home Depot go?”   They had the answer shortly when Home Depot came to town  along with the copycat competitors, such as Lowes and others.

What should a significant retailer in the smaller markets do besides wait for the inevitable invasion?  The first and most obvious action is to be acquired by the expanding retailer.  However, at this point the strategy of the expanding retailer has been to establish a presence and then capture market share.  The logic is that to modify the culture of the existing retailer to the culture of the acquiring retailer would not be economical.  

The rationale of “taking” instead of “acquiring” should be reexamined when considering the challenge of developing effective sales associates and building brand awareness.  The cost of attracting, training, and retaining those sales associates who can achieve a close rate of 35%+ and an average ticket of $1,500+ is well over $50,000.  In addition, achieving a brand awareness (to be considered) requires an expenditure of 3% to reach a growth of 5 points over a 3-year period.  The fact of the matter is that the invading retailer’s market share will level off at about 8-10% and then gradually compete with the existing substantial retailer.

Earlier we have addressed the major expansion of the larger retailers, such as Bob’s, expanding from the Northeast down to Washington, over to Chicago, and on to San Diego.  Haverty’s and Rooms To Go, while not being as aggressive, are quietly filling out their distribution capacity.

As in any war, the major concern is the battle map and where the battles are occurring. It is better to focus on the individual markets.  There are 401 distinct market areas in which 90.7% of all furniture is sold.  Graphic A breaks down the specifics of these markets. 

The current focus of expansion is in those markets with over $500M.  This represents over 50% of the industry.  These markets have the size to support both the distribution infrastructure and the advertising required to penetrate an existing market.  Interestingly, the larger the market, the better the per capita demand is for furniture.  

While it is somewhat comforting to know that the battle is at a distance, the faint sound of the artillery is enough to give a solid retailer a pause.  The strategy to prepare for the coming battle is complex.  The first step is to create a dominant market share that would cause the expanding retailer to pause before entering the market.  

There are many examples where the dominant retailer is executing this strategy.  For example, Steinhafel’s in Milwaukee, a dominant retailer for many years, has expanded its distribution north into Fox Valley (Appleton) and south into the suburbs of Chicago.  While Bob’s Discount has entered the Milwaukee market, Steinhafel’s dominance in the immediate market and the expanded market will present a formidable barrier.  The map illustrates.

One of the most competitive markets in the United States is the Minneapolis-St. Paul market.  The metro area is crowded with HOM Furniture, Schneiderman’s, Slumberland, and Becker Furniture along with a strong Ashley presence.  Even without the threat of additional competition, each retailer has expanded its footprint to neighboring markets.

The bottom line is not to wait for the invasion, but to maximize your market share and establish a marketing parameter within your 200-400 mile delivery zone.  

In the Dining Room, No Jacket Required

By larry Thomas

When it comes to dining at home, every day has become casual Friday.

And it has transformed what was once a niche within the dining room furniture category into the principal driver of business in the category. In fact, when retailers and manufacturers discuss the dining room category these days, it’s essentially all about casual dining. 

“Those huge dining room groups just aren’t as important as they used to be. Those sales are few and far between,” said Bob Colin, senior buyer at Indianapolis-based Kittle’s Furniture. “In a lot of houses today, there’s a great room instead of a dining room. It’s much more casual now.”

And today’s casual dining means more counter-height tables, smaller case pieces, few large china cabinets and an incredibly wide array of finishes, textures and styles that didn’t exist in the days when formal dining ruled the kingdom. 

“The more transparent the finish, the better,” said Jeb Bassett, senior vice president of Bassett Furniture’s wood division. “There’s not a lot of traditional cherry out there — even though it is available.”

Bassett Furniture, in fact, is so committed to casual dining that it has an entire factory in Martinsville, Va., devoted to the category, which it calls Custom Casual Dining. The company recently spent about $2 million to upgrade the facility, and the new equipment allows for faster drying times for the many custom finishes that are the centerpiece of the program.

But even with the upgrades, Jeb Bassett said business has been so brisk that the factory often operates 50 to 55 hours per week to keep up with demand and meet the company’s commitment to having custom-order furniture in the consumer’s home within 30 days of purchase.

“The more casual looks are more popular today than formal dining,” Bassett said. “Whether it’s a larger home or a smaller home, the living environment has all changed. The American consumer is just more casual.”

Research by Impact Consulting Services, parent company of Home Furnishings Business,  bolsters that viewpoint. In a recent survey of consumers who recently purchased dining room furniture, 88% of respondents said they most frequently eat meals in a casual dining area or room, while only 12% said they regularly eat in a formal dining room.

Respondents said they also do a variety of other activities in the dining room or kitchen in addition to eating. The most frequently mentioned activity was simply sitting at the table and talking, which was listed by 28.7% of respondents. Some 17.9% said they watch TV, while 16% said they pay bills and 15.5% said they work on hobbies. 

In addition, 12.3% said they do school work at the table, while 9.7% admitted to doing work brought home from the office.

“The open kitchen is taking on a role similar to that of a multi-purpose room, with a lot of other living activities happening in a space that was traditionally reserved for meal preparation and eating,” said Chris Henning, president of iron furniture producer Wesley Allen, which is enjoying success with metal dining sets featuring round tables that are 36 to 48 inches in diameter.

Not surprisingly, the Impact Consulting research showed that 72.8% of recent purchasers said their furniture was purchased for a casual dining area, and only 27.2% said it was for a formal dining room.

Among those who did buy casual, 45.5% said the purchase included a table, while 42.3% said they bought chairs. Only 3.7% said they bought a buffet or sideboard, and the same percentage said their purchase included a china cabinet.

Among formal dining purchasers, 13% said they purchased a buffet or sideboard, while 5% bought a china cabinet. And interestingly, the majority of those same purchasers said they didn’t eat in the formal dining room very often. Some 26.2% of respondents said they dine there less than four times a year, and another 35.2% said they eat there four to 12 times a year. Only 15.4% said they eat there daily. 

However, 45% of recent casual dining purchasers said the casual dining area in their home was within the kitchen, while another 6.7% said it was a kitchen bar area with stools or chairs. Some 45.4% said it was an area separate from the kitchen, and only 1.9% said their home didn’t have a casual dining area.

Those trends have caused Wesley Allen and many other producers to target at least a portion of their product line to Millennials, and to a lesser extent, Generation X. In many cases, that means the consumer won’t necessarily buy chairs that match the table, said Diana Zaldivar, vice president of sales and merchandising at International Furniture Direct.

“The mix-and-match trend has been around for quite a while, but it’s finally getting into the mainstream,” Zaldivar said. “We’re no longer requiring our dealers to buy a set. And we’ve designed our tables so that you can use almost any of our chairs with them.”

She said these eclectic purchasers are moving the design needle away from traditional and toward contemporary and transitional looks. “People are looking for something that’s not too traditional but not too crazy, either,” she quipped. “It’s not a look that you will get tired of seeing. It’s a nice contrast that you can live with.”

Zaldivar and other executives agreed with Jeb Bassett that there has been a significant shift away from the traditional darker cherry and oak finishes and into lighter gray and white finishes.

“Gray is growing, but not as the same pace as white,” said Zaldivar. “People just can’t seem to get enough of the white finish.”

The same is true at importer Sunny Designs, where its Bourbon County collection, which features a white finish called French Country, is its top-selling dining group.

“We’ve got that group placed coast to coast. It’s retailing everywhere,” said Gil Sturtzel, Sunny Designs’ vice president of merchandising. “When you get something that you can sell everywhere, you know you’ve done it right.”

Sturtzel said one very popular feature is a storage system for larger dining tables that allows expansion leaves to be placed in felt-lined shelves underneath the table top. And many Millennials, meanwhile, are asking for wine storage racks to go along with their dining tables and chairs.

“I think Millennials are drinking more wine than anybody in the history of the planet,” he quipped. “So, we’re adding wine storage to a lot of our groups.”

At Kittle’s, Colin said the retailer’s key vendors include Canadel, which is popular at middle to upper middle price points because of the almost infinite number of custom finish combinations that are available, and Jofran, which he said is a top-selling line at lower price points because of the quality, styling and value it represents.

“Canadel is extremely hot. Our customer loves the ability to custom order it and get it quick,” Colin said. “They’re willing to pay for quality. They’re willing to pay to customize it.” 

However, he said the number-one dining room product currently on Kittle’s floor is Klaussner’s Trisha Yearwood Home line, which he described as being styled well and priced well. “That’s about as formal as we really get,” he said of the Yearwood line. 

He noted that Kittle’s also is having success with the Rachael Ray Home dining room line from Legacy Classic. And while he acknowledged he has not always been a huge fan of licensed collections from celebrities, he said it’s hard to argue with the success of both the Trisha Yearwood and Rachael Ray products.

“Some of the celebrity products do make sense on the dining room side,” he said.

Jofran’s Studio 16

Featuring a warm, wire-brushed distressed finish and metal detailing, this stylish group is suitable for a variety of room settings, especially when paired with the genuine leather Avalon dining chairs shown here. The table and four chairs retails for about $1,099.

Caracole’s Open Invitation

A restrained yet elegant silhouette defines this statement-making rectangular mahogany table. The custom designed finish brings out the mahogany grain and offers a subtle gold fleck, which is suspended in the finish. The legs and table apron are finished in a complementary Espresso Bean finish, and a thin Gold Bullion bead delineates the table’s apron. The table is 98 inches long and can be extended to 142 inches.

Bassett’s Artisan Dining

This bench-made domestic product is crafted from Appalachian hardwoods selected for their distinctive wood grains. The hand-planed live edges and exquisite finish give it an heirloom quality. Rectangular tables that seat eight to 10 are available in 72-inch, 90-inch and 108-inch models. 

International Furniture Direct’s 962

A longtime best-seller, it features a hand-wrought iron base with metal trim and nail heads around the top. The table top features a distressed multi-color finish on solid wood, while the chairs are 100% solid wood and ship fully assembled. Approximate retail for table and 4 chairs is $1,299.

Fine Furniture Design’s Brentwood

The Brentwood Mila dining table, combined with the Mina dining chairs, feature an artful mix of styles, textures, materials and details that appeal to those who are equally comfortable at a world-renowned restaurant or eating takeout at the kitchen table. The table, shown here in a Sherwood Natural finish, has a tulip pedestal base. 

Approximate retail price is $5,500 for a table and four chairs.

Klaussner’s Trisha Yearwood Home

This popular collection includes Trisha’s Table, which features a coffee brown finish with heavy distressing and burnishing to create an uneven, relaxed appearance. It is shown here with the Nashville arm chair and Monticello Display china cabinet, which is a statement piece itself. The 102-inch table and four chairs retail for about $1,399.

Sunny Designs’ Bourbon County

The distinctive ladderback chairs, wire-brushed oak top and French Country finish have helped make this dining group a winner in all regions of the country.  Made of poplar solids, the leaf can be stored in a felt-lined compartment under the table. Approximate retail is $999 for the table and four chairs. 

Wesley Allen’s Tucson

Aimed squarely at Millennials and their dislike for formal dining tables, this is one of several casual dining sets that have become hot sellers. Made of hand-crafted iron, it is suitable for an eat-in kitchen and can double as a place for the kids to finish their homework. 

Universal Furniture’s Synchronicity

The boldness of mid-century, California coastal architecture inspires this casual contemporary group, reflecting the relaxed 1960s culture in Southern California, with strong linear forms, cantilevered and slab elements. The mellow two-tone finish features a medium brown Horizon stain and a creamy Morning Light complement. The table retails for about $1,425.

John Thomas Select 

The snow white finish of this gathering height table, paired with black onyx chairs, is one of more than 2,000 finish combinations available with this domestically produced line. 

LumiSource’s Oregon

The industrial look is in full view with this popular set, which features metal legs and backrests juxtaposed with wood-finished seats and tabletop. It is available in antique metal/espresso wood, Grey metal/brown wood, and vintage white metal/ espresso wood. Table and four chairs retail for about $679, while bench retails at $199.

Standard Furniture’s Cambria

Featuring vintage styling, this best-seller invites you to gather ‘round with friends and family. It has weighty vase turnings and a distressed two-tone black and dark toffee finish. Approximate retail price is $1,649 for the table, two armchairs and six side chairs. 

Vanguard Furniture’s Hoag Lane

From the Thom Filicia Home Collection, this table is made of Manchurian walnut solids and veneers and is available in a variety of finish options, including standard stains, artisan wood stains and premium leaf’s. It includes two 20-inch extensions, allowing the table to expand up to 120 inches for up to eight guests. Suggested retail starts at $4,497. 

Cause Marketing – The Retail Connection

Although it’s been around since American Express’s 1983 Statue of Liberty Restoration campaign, cause marketing has gained a lot of momentum in the last few years. More and more retailers have grasped the value in partnering with the organizations, people and happenings their customers care about. It’s a meaningful way to achieve corporate social responsibility goals while increasing customer loyalty, solidifying your brand, and growing your business.

Cause marketing is the marketing of a for-profit business that benefits a nonprofit charity or supports a social cause in some way. Usually it takes form as a marketing partnership between a nonprofit charity and a for-profit business in service of both parties’ goals. Businesses typically benefit from the good virtue associated with cause marketing while nonprofits benefit by increased exposure and the funding driven to their cause.

The motivation is in part a matter of social pressure because consumers have come to expect charitable conduct from companies. But the list of retailers sponsoring causes is also driven by the need to drive store traffic, engage employees and demonstrate community involvement.

At the end of the day, the connection between corporate and the consumer is the retailer. Retailers tend to emphasize cause-marketing programs with a local component, which makes sense because people typically feel good about doing business with companies that do good, allowing the merchant to draw attention to themselves and build good will.

We surveyed a sample of our retail readers and heard about many inspiring programs that have helped transform causes, local communities and the world. Many raise funds for a main cause but contribute to others during the year as well. It’s a testimony to the generosity of the furniture industry and the passion and commitment that has been ignited.

______

Retailer: Bernie & Phyl’s Furniture

Program Name:  Multiple Sclerosis Fundraising

Benefit to: National Multiple Sclerosis Society

Contribution: $100,000 per year

In addition to supporting the MS Society, the Rubin Family has contributed to various charities for many years including combined Jewish Philanthropies, The Boys and Girls Club of America, Bridgewell, and The Home for Little Wanderers. Toy drives, ginger bread house contests and outings to Red Sox games with local children, are among the creative events organized. The retailer also donates furniture they are not able to sell to an organization called Teen Challenge, which helps teens recovering from drug and alcohol addiction.

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Retailer: Brooklyn Bedding and Coconis Furniture

Program Name: Ante4autism Poker Event

Benefit to:  Five Autism Charities

Contribution: $110,931 

At the 9th Annual Ante4autism event at the Golden Nugget during the January Las Vegas Market, celebrities, professional poker players, Las Vegas residents and furniture industry attendees enjoyed a fun evening, while raising awareness and money for Autism charities.  Brooklyn Bedding and Coconis Furniture are co-hosts for this worthy event.

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Retailer: City Furniture

Program Name: The Kevin Koenig Memorial Covenant House Cup Golf & Fishing Tournament

Benefit to: Homeless/runaway youth in Broward County

Contribution: $100,000 this year ($1.5 Million+ over several years)

City Furniture cares greatly about their community and has earned the Philanthropic Company of the Year award in Broward and Dade, Fla. Counties in the same year. It all started many years ago by making a donation to Covenant House, a faith based runaway shelter for kids and teens. They also began supporting the Museum of Discovery & Science and have donated close to $1,000,000 over the years. Their biggest focus for donations has been Habitat for Humanity 

City Furniture is a major sponsor for; the Making Strides against Breast Cancer Walk, Dolphins (Cycling) Cancer Challenge event and the Broward Heartwalk.  They also support Camillus House and many others.

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Retailer: Furniture Fair

Program Name: The Anthony Munoz Foundation  (Celebrity Dinner and Auction, and Youth Football Camp)

Benefit to: Tri-State Youth 

Contribution: Approximately $450,000 each year

Furniture Fair has given to many different charities in the Greater Cincinnati and Northern Kentucky area over the past 54 years. They are great supporters of cause marketing and feel it is a wonderful way to show Furniture Fair cares.

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Retailer: Hudson’s Furniture

Program Name: Pink Fundraising Event 

Benefit to: Moffitt Cancer Center

Contribution: $10,000 per year

Hudson’s Furniture’s Pink Fundraising Event benefits the Moffitt Cancer Center and is Hudson’s largest fundraising effort. 

Others include Hudson’s and the Salvation Army Angel Tree, The Boys and Girls Club of America, Back to School Supply Drives, and Basecamp. 

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Retailer: Gates Furniture 

Program Name: Extreme Home Makeover

Benefit to:  A Medford Oregon family 

Contribution: $50,000 worth of furniture

The designers from Extreme Home Makeover approached Gates Furniture to ask if they would donate furniture to the local project. The Grants Pass, Oregon retailer was happy to oblige. When the house was ready, Gates closed for a half day and the staff of 30 went to the makeover project property and furnished the entire house.  Owner, Giff Gates said “the team has been inspired by others. They’re fantastic”. Gates also donates to other causes including Hearts with a Mission a cause that serves local homeless and at-risk youth.

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Retailer: Michael Alan Furniture & Design

Program Name:  Sleepless for a Cure in Havasu

Benefit to: Cancer Association of Havasu’s low cost Mammogram Program

Contribution: Over $212,000 in eight years

Sleepless for a Cure in Havasu starts with a 24-hour sleepless-a-thon- at the store kicked off by the Mayor.  Women from the community decorate mattresses in honor of those that have fought breast cancer followed by a vote for the most outlandishly decorated mattress.  The event continues with chair massages, auctions, fashion shows and trips to the local coffee shops to stay awake all night.  After 24 hours, local cancer survivors join in to announce total donations.

As a local, family operated furniture store, owner Chris Cooley said, “We want to be more than just a furniture store, we want to give back and be good neighbors to our surrounding communities.” 

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Retailer: Olinde’s/Ashley HomeStores

Program Name: Habitat for Humanity Donation of Goods

Benefit to: Habitat for Humanity

Contribution: $101,934

In addition to charitable donations of goods to Habitat for Humanity, Olinde’s supports the Inner Wheel of Baton Rouge Trash & Treasure Sale donating approximately $70,000. Other organizations like The American Red Cross, American Cancer Society, Baton Rouge General Foundation Burn Unit, the Greater Baton Rouge Food Bank as well as many local churches and schools have also benefitted from door prizes, gift certificates, auction items and monetary donations from Olinde’s.

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Retailer: Schneiderman’s

Program Name: Annual Golf Tournament 

Benefit to: Ronald McDonald House – Twin Cities

Contribution: $650,000 (Total Direct Giving)

Schneiderman’s Furniture contributes to charitable causes in which their customers and associates are involved. They participated in a fundraiser for Parkinson’s research and contributed $155,000 to the University of MN. They have also partnered with Bridging, a charity organization that helps those in transition. When delivering new furniture, the delivery team often re-purposes customers used furniture (when in acceptable condition) to donate and have passed the 10,000 mark for items contributed.

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Retailer:  Turner Furniture

Program Name: 100th Anniversary Celebration 

Benefit to:  Local charities

Contribution: $100,000 for charities plus $100,000 worth of free furniture to customers with a value match to a charity

For their 100th anniversary Turner Furniture gave away $100,000 to local charities and $100,000 in free furniture to their customers. The customers that won the free furniture were allowed to choose a local qualifying charity and Turner Furniture donated a dollar amount equal to the furniture they won to the charity of their choice.

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Retailer: Wolf Furniture

Program Name: Annual Vendor Outing

Benefit to: Local women’s, children’s, and veteran’s causes.

Contribution: $60,000 to $100,000 annually

Since 1902, Wolf Furniture has recognized the importance of being a good neighbor to its local community and supports well over 100 local charitable organizations allowing for increased visibility for events with limited budgets. Wolf’s is also involved with The United Way, The American Cancer Society, Boy and Girl Scouts of America and Habitat for Humanity. The Wolf family also has a foundation that supports the arts and education in their region. 

Through charitable donations and philanthropic community activities, the furniture industry has a reputation of being committed to making a positive impact. So find a cause, if you don’t already have one and start planning.

Consumer Trends: NRF Says Consumers Plan to Save Tax Refunds for Later

A record low number of Americans will spend their tax returns this year while the second-highest number on record will put the money into savings, according to the annual tax return survey released in late February, by the National Retail Federation and Prosper Insights & Analytics.

“Financial security continues to be top-of-mind for all Americans, and consumers are hanging on to their tax refunds tighter than ever,” NRF president and CEO Matthew Shay said. 

“Consumers are leveraging their tax returns to build up their savings, but that’s good news in the long run because money saved today is money that can be spent down the road, particularly during the back-to-school and holiday seasons later this year.”

Of the 66 percent who are expecting a refund this season, only 20.9 percent of consumers will spend their refunds on everyday expenses, 8.7 percent will use them for major purchases such as a television, furniture or a car, and 7.6 percent will splurge on special treats like dining out, apparel or spa visits. The numbers are down from 22.4 percent, 9.2 percent and 8.3 percent last year, respectively, and are record lows in the history of the survey. The number planning to spend the money on vacations dropped to 10.7 percent from last year’s 11.4 percent, the lowest since 10.3 percent in 2013. In addition, 8.8 percent plan to use their refund on home improvements.

The survey, which asked 7,609 consumers about their tax return plans, was conducted February 1-8, 2017 and has a margin of error of plus or minus 1.1 percentage points.

Furniture Retailers Missing Another Chance to Engage Customers? 

Omnichannel — the buzzword of retail in recent years — is being added to the vocabularies of retail finance professionals as well, but an executive at one major finance provider is concerned that many furniture retailers may be missing the party because they don’t have a mobile app for their store.

Mike Ritter, who heads retail card services at TD Bank, said a survey the company conducted at the winter Las Vegas Market showed that 58% of the retail respondents didn’t have a mobile app. Only 32% said they had an app for their customers, and another 11% said an app was in the works, but wasn’t live when the survey was conducted.

He said the results were “a little surprising,” especially since 47% of those who didn’t have an app said they didn’t see a business need for one.

“It’s something the industry is still wrestling with,” Ritter said of the use of mobile apps. “We’re working really hard to try to do this omnichannel experience of promoting product and promoting financing until the purchase takes place, regardless of where it takes place.”

Of the 142 retail executives surveyed, 59% said most of their customers make the purchase in their brick-and-mortar store, while 31% said most make the purchase online and only 4% said most use a mobile app.

And even though physical stores still account for a majority of purchases, Ritter said the vast majority of consumers shop online first, which magnifies the importance of having a good website and mobile app.

“The more information you put in their hands, the easier you can make that final transaction,” he said. “It makes it more likely you’re going to be able to close the sale.”

He said TD Bank, which offers private label credit cards and promotional financing programs, encourages retailers to allow consumers to apply for credit online before they come to the store — or while they’re using a Smartphone in the store. He said the company is “very active” with mobile apps and can help develop promotions and financing programs that engage customers through the app.

“As we work with our partners on app development, it’s very important to make financing a part of it,” Ritter said “The ability to serve up product offers or financing offers when people are engaging at the store can be a really powerful tool from a financing perspective. Most people think they can afford less than they are actually going to qualify for.”

In addition to the retailers who didn’t see a business need for an app, 19% said technology limitations prevented them from having an app, 18% said their customers didn’t want one, and 14% said financial limitations were holding them back.

In addition, the majority of respondents (64%) said most of their customers were 35-54 years old, while 19% said the majority of them were age 55 and up. Only 16% said the most of their customers were age 18 to 34.

Storis Does it Again: Awarded Best Place to Work Honor

Retail software provider Storis has been recognized by New Jersey publication NJBIZ as a “Best Place to Work in NJ” for 2017.

The Best Places to Work in NJ is an awards program produced by NJBIZ since 2005. The program identifies, recognizes and honors the top places of employment in New Jersey that benefit the state’s economy, workforce and businesses.

“This award is greatly influenced by the team of people here at Storis. It’s gratifying to know that our people are happy to come to work every day,” said Barbara DeGenova, senior manager of human resources.

The Best Places to Work in New Jersey program is made up of 100 companies split into two groups: 65 small/medium-sized companies (15-249 employees) and 35 large-sized companies (more than 250 employees). Companies from across the state entered the two-part process to determine the 100 Best Places to Work in New Jersey.

A significant factor in determining who makes the list is feedback compiled anonymously from the company’s employees. The registration and survey process was managed by Best Companies Group, who analyzed the data provided and used their expertise to determine the final rankings.

Storis currently has 116 employees in New Jersey.

Companies who made the list will be honored at an April 26 awards ceremony, during which each company’s specific ranking will be revealed for the first time. In 2014, Storis received the #1 Ranking in the Small to Medium Business Category. 

Where is My "Upstick"?

                                                  

The excitement of the election is in the distant past even though the media continues to do replays of what happened.  With some degree of optimism we forecasted a modest increase of 4.5% for 2017.  Historically, with the exception of 2008, the year after an election has been an improvement over the election year.  

After getting off to a slow start in January, President’s Day was a bright spot.  March has been all right, but not a barn burner.  All the soft data – consumer confidence, stock market indices, and manufacturer’s sentiment are very positive.  Unfortunately, the hard data continues to show the slow, but steady growth that has been the case for the past five years.  The upturn in housing starts/home sales sputtered a little in January/February with the increase in interest rates.  However, the first time home buyers continued to participate,which is key to industry performance.

As an industry we should all continue our optimism.  I believe that barring an international event we will achieve the forecasted growth.    However, with this optimism we should take a hard look at the underlying value of our industry, specifically what the consumer is willing to pay.  In the past six years all home furnishing prices have continued to decline with furniture and bedding leading the way.  Why does the consumer not value our product when compared to other consumer products? 
The answer cannot be to allow quality to deteriorate.  Or is it that what the consumer wants is disposable furniture?  Our future is not bright if this is the case.

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