From Home Furnishing Business
Tracks to a Green Space
By: Sheila Long O'Mara
Consumers aren’t quite committed to purchasing eco-friendly home furnishings, and pricing is a hurdle that must be cleared.
As the furniture industry and the overall economy continues to rebound from the great recession, it appears consumer demand for eco-friendly home furnishings is taking a bit of a back seat to rebuilding 401k accounts, savings balances and acquiring postponed purchases.
While its far from being all doom and gloom, the sustainable movement, although very much alive for retailers and vendors, seems to have stalled a bit during the downturn in the eyes of the consumer.
Retailers and proponents who are supportive of producing and selling green home furnishings say making sustainability part of an overall business plan is not only good for the environment but is also just plain, smart business. That smart, green approach to business, they say, can add to a company’s bottom line in energy savings, less expense in waste management and other measures that can make a difference.
The 2015 Green Home Furnishings Study completed last month showed that consumers are concerned about environmental issues like pollutants in the waste stream, deforestation and depletion of natural resources. Consumers’ attitudes on sustainability are outlined in Table 1.
While those attitudes toward sustainability are very real, they aren’t strong enough to override price considerations, style requirements, discounts and other purchasing considerations when it comes buying a sofa or home entertainment center that is sustainably made.
“Good for the environment” scored a smidge better this year than last year in the survey, but the factor remained at No. 9—or dead last—behind other considerations.
The survey, conducted for the Sustainable Furnishings Council by Impact Consulting Services, parent company of Home Furnishings Business, was completed in January. The survey gathered data from a national sample of 500 consumers.
Green home furnishings just may be suffering a bit from a lack of buzz or promotion on a large-scale manner, preventing a tsunami of interest from those that matter—consumers with money to buy.
In the survey, nearly 45 percent of consumers said they had not bought green home furnishings because they weren’t aware they were available. (See Table 3.) In addition to that, only 9 percent of those surveyed had bought furniture that was considered green.
Advertising and marketing are key to educating consumers that eco-friendly home furnishings are available and where they are sold. Some of the responsibility falls to retailers selling the goods, and some of it falls squarely with manufacturers who are supplying the environmentally friendly furniture.
Consumers don’t learn via osmosis that green home furnishings are available in their area. They must be told, and through a smart advertising, marketing and public relations campaign, a great green story can be told.
Acton, Mass.-based Circle Furniture has always had a sustainable mission at the heart of its business strategy. The retailer makes a point to source as much product as it can from the Northeast area of the country. In fact, six-store Circle took it one step further in December when it went live with a solar panel installation to help fuel power to several locations. (See separate story.)
Peggy Burns, queen bee at the retailer, said the focus on eco-friendly and sustainable furnishings offers Circle a way to differentiate itself in the extremely competitive Boston market.
Burns wasn’t shocked by the stats revealing a relatively low awareness for eco-friendly furniture, and she said overall, the industry could improve its pitch.
“As an industry, we don’t promote furniture as a value, but as a commodity on price,” she said. “If you promote it as a way to create a healthier home with healthier product, you can change the way people think about the issue. We have to start with the little things.”
Burns said the industry, through the work of the Sustainable Furnishings Council and others, was making headway on sustainability prior to 2008 when the recession took hold of the economy.
At Room & Board, the 14-store lifestyle retailer based in Minneapolis, sustainability is at the core of its mission. The retailer has a sustainability message throughout its stores, catalogs and on its website—all shared in an effort to inform consumers about that portion of its core values. Despite those marketing efforts, many of the company’s consumers still aren’t as well versed in the green options available in furniture.
Steve Freeman, vendor resource manager for Room & Board and president of the Sustainable Furnishings Council, said most consumers are more concerned about creating a healthy home than the concept of going green to save the environment.
“They’re curious about the environmental component, but they’re most interested in keeping flame retardants and other chemicals like volatile organic compounds (VOC) out of their homes,” he said.
Clients of three-store HW Home in Boulder, Colo., haven’t flooded the stores with demands for eco-friendly goods. Ron Werner, co-owner, said there was a time when he thought consumers would demand environmentally friendly product all the time, especially considering the retailer operates in one of the top 10 greenest states in the U.S.
“We talk to customers about it a lot, and we try to offer as much eco-friendly products as possible,” he said. “To be honest, consumers are much more concerned about when the kid dumps over a bowl of SpaghettiOs that the sofa won’t be ruined.”
Selling sustainable product is the right thing to do, Werner said, adding that the retailer “does all sorts of things in our business that are right and smart for the environment.”
“The majority of our case product is built with FSC-certified wood,” he said. “There are other ways to skin a cat, and that’s really important.”
Overall, the industry is making progress, although, according to the survey, it’s slow and tedious when it comes to consumer awareness and acceptance of green home furnishings. Retailers and others believe it’s imperative that sales associates who interact with consumers receive training to better share the sustainability side of the business. Another key point: Marketing teams need to improve point of sale materials to better share the sustainability story of product displayed in retail showrooms.
“We are getting better, but we haven’t moved the needle enough,” said Susan Inglis, executive director of the SFC. “It’s a matter of sales people being willing to point out that not only does sustainable furniture represent a value, but it’s eco-friendly because of the various attributes.”
Those attributes could be the key to pushing the green home furnishings story through to the consumer. The good news from this year’s survey is that consumers are familiar with the lexicon of sustainability and furniture.
When asked about familiarity with green options in furniture, consumer recognition was quite impressive for some. Energy Star rated generated the top rating with nearly 71 percent saying they were familiar with the phrase. While not associated with furniture, the Energy Star rating phrase likely got a boost from the promotion by the home appliance retailers and manufacturers who tag it in all relevant advertising.
Recycled content, reclaimed wood and organic fabrics each were familiar to at least 38 percent of the consumers.
The conversation is ready for the starting; those who interact with the consumer must have the vernacular and the know-how to subtly educate.
“In most retail operations, its hard to get a lot of time in front of the consumer,” said Room & Board’s Freeman. “You want to answer their questions, but it’s not always easy to bring up these topics without confusing things.”
That’s where Inglis said smart, thought-provoking training can make a difference. The SFC offers training for retail sales associates to educate them on key words that can make an impact in selling eco-friendly furnishings. The training is free for members.
If all things were about equal—style, function and PRICE—consumers would be mostly interested in eco-friendly home furnishings. Nearly 74 percent (73.8 percent) would be somewhat interested, possibly and definitely interested in buying green home furnishings if they were priced about equal to other products.Table 5 breaks down how the consumer respondents view green home furnishings
Consumers have a perception that environmentally friendly home furnishings cost an exorbitant amount more than those not dubbed eco-friendly could be hindering sales of the goods.
That’s a misperception, say retailers who sell greener products.
“There are a lot of companies that make things sustainable that are not expensive,” said Circle’s Burns. “We, as an industry, don’t promote it properly.”
When the survey drilled down into pricing specifics and product certifications, consumers dug in their heels.
More than 42 percent say they would pay nothing more for home furnishings that were certified green. Only 29 percent said they’d pay up to 5 percent more for such certification, as shown in Table 6. Fewer than 2 percent of the consumers said they’d pay more than 20 percent for a green certification on home furnishings.
Freeman wasn’t surprised by that data at all. He agreed that consumers are willing to pay a little bit more, but that threshold is slim.
“Sometimes it comes down to the fact that it’s just too much,” he said. “When it comes to organic food, they are willing to pay more. So why aren’t they willing to pay more for sustainable furniture? It’s about education and making consumers aware that there are practices that go into it to make it more friendly.”
Freeman said third-party certifications that ensure product is made from FSC-certified woods could up the price of chest of drawers by 10 percent to 15 percent.
“In the grand scheme of things, it might not sound like a lot, but it could be,” he said, adding that Room & Board doesn’t always have its product certified. “The woods are being harvested sustainably and we could get the product certified, but we’re conscious of whether or not the consumer will want to pay more. Right now, the consumer isn’t clamoring for it.”
Certifications come into play at Room & Board with the few foreign suppliers the retailer stocks. Freeman said the company insists on certifications from offshore vendors.
“We can’t go there as frequently, and we can’t be in every factory,” he said. “We do spend more time investigating our foreign supply as to where the wood comes from.”
Back in Colorado at HW Home, consumers say the same thing. It’s nice, but don’t charge more for it.
“Consumers just don’t want to pay for it,” Werner said. “They do appreciate it when they hear that a dining rom is made from sustainably forested wood. But if you say you can buy this completely green sofa for $3,200 instead of $2,200 … they don’t want to go there.”
MADE IN THE U.S.A.
In the most recent survey of consumers, slightly fewer said they’d be willing to American-made products to lower emissions and the impact on global warming. Last year, 87.1 percent said they’d lean toward domestic produced product. In 2015, that percentage had slipped to 85 percent. (See Table 7.)
Still a hefty number that shows promise for domestic-made goods.
More than 93 percent of Room & Board’s product mix is made in the U.S.A. Freeman said it’s easier to do business with domestic suppliers. There are some product areas, like high-thread count sheets, that require off-shore sourcing.
Although consumers may not be completely in love with the idea of U.S.-made home furnishings, Freeman is bullish on them, telling domestic manufacturers speed-to-market offers them a competitive advantage.
Pricing, as seen in Table 8, becomes an issue for consumers looking to buy domestic-made home furnishings. Like last year’s survey, a chunk of consumers—34.8 percent—said they wouldn’t be willing to pay anything more for furniture made in the U.S. Last year, that figure was 36.1 percent. This year, another 28 percent said they’d pay up to 5 percent more for U.S.-made home furnishings. Last year, 31 percent slid into that segment.
Circle Furniture also has a domestic-made philosophy, and as mentioned earlier, the retailer strives to work with vendors with a tight circle of its operations. Many of its suppliers operate in New Hampshire, Vermont, Massachusetts and Maine.
Burns is adamant that it makes good business sense to stick to that approach. Well aware of consumers tightly locked purses, she’s fiercely defensive with her consumers about her prices and the reason things cost what they cost.
“If we, as an industry, don’t stop driving business only by price, we’re going funnel down the offering,” she said. “Good quality furniture isn’t going to have much of an impact with consumers. We must compare apples to apples and stop comparing the good furnishing with the lower-end stuff. It’s not the same, and for the most part, quality furniture cost more to make because of its craftsmanship.”
On the optimistic front, retailers see a growing future for eco-friendly home furnishings. Despite the consumers’ apparent lackadaisical attitude toward the industry’s segment, retailers and manufacturers are committed to making and selling furniture that is good for the environment and those that help create healthy homes.
The shift will come when a mass number of consumers start walking through retail stores demanding environmentally friendly home furnishings.
“Retailers and manufacturers have to continue to push and talk about and make it,” Freeman said. “I think we have to remember that people are doing a better job than they were 20 years ago.
For Room & Board, it’s part of who they are. All the same, things are always changing and the retailer continues to strive to be better at selling the value in sustainable furniture.
Circle Furniture is tracking on the same path, and the future, according to Burns, is brighter than what the current survey may indicate.
“We have some hope,” Burns said. “The younger generation is much more aware of the environment. It’s part of being who they are. As they come up through the industry, we’ll see significant changes made because they care. They’ve been doing it all their lives, and they’ll be the ones to make a difference.”
10 Greenest States
Online financial news and opinion service 24/7 Wall St. LLC recently ranked the top 10 greenest states in the U.S., based on energy consumption, pollution problems and state energy policies. We thought it was interesting to see which states are putting their money where the environment is.
Here’s how it shakes out.
More than 6 percent of the state’s total energy output is from alternative resources, the eighth best rating in the country.
Oregon does well both in policy and alternative energy. The state produces the second-most hydroelectric energy, and the eighth most non-hydroelectric alternative energy, mostly from state wind farms.
Idaho generates the greatest relative amount of renewable energy in the country, with 84.5 percent of all energy coming from alternative sources.
The Big Sky Country has one of the lowest rates of ozone particulates in the nation, according to the American Lung Association.
6. South Dakota
South Dakota has the fifth-lowest population in the country, and generated the second-lowest amount of hazardous waste, behind only Hawaii.
Hawaii produces the least amount of toxic waste and received the highest score for two air quality measurements: the EPA's Risk-Screening Environmental Indicators toxic exposure and the ALA’s ozone pollution index.
The Silver State scores well in alternative energy production, with the second-highest production of solar photovoltaic and geothermal energy.
3. New Hampshire
The state has extremely low pollution, relatively strong air quality and the fourth lowest level of developmental toxins releases into its waterways.
Nearly half of the state’s electricity is generated by renewable sources. More than 23 percent of its energy comes from non-hydroelectric renewable sources.
In addition to producing less pollution than other states, the Green Mountain State has a number of policies to promote efficiency, alternative energy and to reduce pollution.
10 Brownest States
So it’s only fair that we call out the states that could use some improvement in the environmentally friendly approach to air quality, energy consumption and policy. The same group—24/7 Wall St.— shared the 10 least green states, too.
Here’s what that list looks like using the same criteria.
Illinois uses the third greatest amount of energy out of all 50 states, and only 1.6 percent of it comes from renewable sources.
The Show Me State falls flat in all the criteria used for the ranking. It ranks 37th in policy initiatives and 48th in non-hydroelectric alternative energy.
Kentucky has a poor showing in releasing cancer-causing chemicals, developmental toxins and reproductive toxins. The CO2 emissions from fossil fuels is also high.
While the state excels at wind energy, it fall short in a number of the pollution categories because of its high industry rate. Texas also produces the greatest amount of hazardous waste.
The Keystone State’s ranking is due in part to its expansive and polluting industries—coal, steel and natural gas.
5. New Jersey
High air particle and ozone pollution do the Garden State a disservice. The state scores well in energy conservation and alternative energy policy, but thus far it’s not impacted results.
The state ranks poorly in overall water pollution and chemicals that can cause birth defects. It also produces the third most toxic waste each year.
3. West Virginia
Despite its showing in wind energy, West Virginia flunks in nearly every category—alternative energy, air and water pollution, policy and carbon footprint.
The state’s main source of power production is coal ranking it low on the renewable energy score. It also suffers from significant air and water pollution.
High-energy consumption with little use of alternative sources. Coal is the main source of energy, and the state ranks high in pollution and hazardous waste violations.
Circle’s Solar Mission
For Circle Furniture, sustainability is at the forefront of its corporate mission.
The retailer stocks its floors with product sourced as close to its Acton, Mass., base as possible without sacrificing style. The company seeks out vendors that pay attention to the green side of their business, and Circle looks at how those vendors build their product.
So it made perfect sense to investigate installing solar panels to power the company. Jessica Tubman, director of business development and third-generation Tubman, led the retailer’s mission to head off the power grid to a more eco-friendly way of keeping the lights on.
The panels went live late last year—Dec. 19 to be exact—and they are expected to generate enough power for the company’s warehouse and office, as well as one other store. That’s two of Circle’s seven locations.
“Installing the panels greatly aligns with Circle Furniture’s brand,” Tubman said. “We strive to offer our customers eco-friendly and sustainable options. Additionally, many of our vendor partners are also locally based. Choosing to install solar panels aligns with all of these aspects.”
Prior to installation, Tubman consulted with a number of solar installers to get a complete understanding of Circle’s options. She also leaned on a number of classmates from Cambridge, Mass.-based Massachusetts Institute of Technology (MIT) Sloan School of Management.
Through that networking, Circle became connected with Nexamp, a solar energy solutions company with offices in Boston. Tubman said the company was a great partner and made the process “from design to construction to going live” understandable.
While not an inexpensive undertaking, installing solar panels often deliver big dividends, and many municipalities offer tax credits and rebates that are worth exploring.
“With electric costs continually on the rise, fiscally, (the panels) should really help reduce our energy costs for many decades to come,” Tubman said.
Start a Movement
While solar panel installation is great and filling a store with nothing but domestically, sustainably produced furniture is super, sometimes those tasks make being, or turning, green seem daunting.
Don’t be so overwhelmed by the thought that you do nothing to support the movement. Instead, know that even the smallest of acts can have a big impact.
Here are some ideas to help you get started in creating a more eco-friendly operation, and many of them will cost you very little, if anything at all, other than brain power and some time in implementation. Some of the tips will also create community buzz and create an abundance of goodwill with your target customer.
· Most, if not every thing, in a retail store is recyclable—office paper, cardboard, soda cans, used furniture from consumers. Anywhere in your store where customers and associates throw things away, be sure the recycle bin is larger than the trash can. Subtle, but it works.
· Check the lighting in your store. At a bare minimum ditch incandescent bulbs and switch to compact fluorescent. One step beyond that: Go LED. It will pay off in energy usage, and many states offer tax advantages. Check with your government officials.
· Work with the local officials to increase recycling in all areas. Nothing should be tossed in the trash. Shrink wrap, cardboard and other packaging can be recycled.
· Instead of giving bottled water to customers while they shop, opt for a cooler with recycled paper cups with your logo. If a customer makes a purchase, give them a reusable water bottle with the store logo emblazoned on it.
· Coordinate with your local government to host an electronics recycling day at your store. You’ll get the buzz, and the landfill is spared the goods.
· Partner with a local furniture bank to help put used furniture in the hands of those who need it. Tell your customers who they can call to come pick up the old stuff. Or, offer to take it out of their house and deliver it to the furniture bank for them.
· Plan a river or park cleanup day in your area. Work with local officials and media to spread word of the event.
Ideas from Susan Inglis and Steve Freeman
Consumers are kind of picky when it comes to how their green products are described.
Ensure retail sales associates turn to these phrases when explaining the sustainable benefits of various home furnishings offerings to make an emotional connection.
The top three phrases consumers say they prefer are:
1. Environmentally Friendly
Labeling Changes in Effect
While the industry was ringing in the New Year, new upholstery flammability labeling requirements were going into effect.
All upholstery sold in California must comply with the state’s flammability standard, also known as Technical Bulletin 117-2013. The regulation was amended in September to require an updated labeling requirement. The label is now required to include a statement informing consumers if an upholstered piece contains added flame retardant chemicals.
In addition, the law requires upholstery producers to acquire and maintain documentation that establishes the FR chemical statement. If the documentation isn’t available to California officials within 30 days or if the statement on the label is deemed inaccurate, fines can be assessed.
Room & Board’s Steve Freeman said it’s imperative for retailers to communicate with their fabric suppliers and upholstery producers so that they are aware of any flame retardant chemicals used in the manufacturing process.
The American Home Furnishings Alliance participated in discussions with California officials leading up to the passage of the amendment (SB 1019) that required the FR labeling. Bill Perdue, AHFA’s vice president of regulatory affairs, the label applies to all components that fall under the flammability standard—cover fabrics, barrier materials, resilient filling materials and decking materials.