From Home Furnishing Business
IS THIS THE SUMMER DOLDRUMS?
By Bob George
It is somewhat comforting to rely on the fact that Second Quarter is typically the slowest quarter of the year. However, when June is complete we may find that this is going to be the worst performing quarter in three years. For most, the President’s Day sale period was the bright spot in Quarter One. April was all right, but the wheels came off in May and, as I am writing, June hasn’t been much to write about either.
Furniture retailing is not the only lackluster area in retailing with major retailers reporting a decline in sales and profit. Overall, the mood of the consumer is one of uncertainty. When that happens, the urge to purchase consumer durables is replaced with the attitude “if it’s not broken, we will wait.”
However, this is the rest of the story in furniture retailing. When looking at the performance for those traditional retailers that are dominant in their markets, sales are up 10%+. Like many areas of the nation, there is a widening gap between the top and the middle. A major factor is that the buying habits of the consumer have changed. This has resulted in fewer stores being shopped. Once retailers find themselves in a third or fourth position in a market it is difficult to make a move. This is much like passing on a mountain road when you are three cars back.
What is the answer? The importance of maintaining a loyal customer base is at the top of the priority list. Traditional retailers focus on attracting new customers rather than maintaining the repeat business for a lifetime customer. This revenue potential could be $75,000 for middle income households.
This points the way to a more relationship-oriented approach to attracting the consumer. What do we mean by relational selling? There will has always need to be a sales transaction. However, if the path to the sale is based upon assisting, providing information, and truly being helpful in creating that great environment, then a long-term relationship will be possible.
The smaller retailer has the advantage over the larger retailer and both have distinct advantages over the national chains where furniture is hidden among all of the other housewares. For the Internet, relational selling implies a one-to-one contact. Need I say more?
It is becoming increasingly difficult to attract the consumer to the store. We are updating our annual Advertising Report for the upcoming issue in order to understand better the consumer’s perspective of the industry’s efforts. However, one thing is clear. The focus is on making the consumer “drink the water”, i.e. best price, free delivery, etc. and not very much on making the consumer thirst for the product, “I can’t live without it.” Let’s put vacations behind and move forward to the Fall.
See you in Las Vegas.