From Home Furnishing Business
The Hottest Retailers
By Bob George
Revealing 2013’s Sexiest Furniture Retailers!
Relax. We’re not really going to do that even though that the issue for many consumer magazines is the one most often read. Nonetheless, people DO love lists and they DO love to compare. Therefore, in this issue we present Home Furnishings Business’ Power 50. This is the third year we’ve analyzed this topic and believe it is evolving as a mechanism to identify outstanding performance beyond revenue.
The question becomes, “What are the variables?” First, we must remember the ultimate arbiter of who an “Outstanding Retailer” is the consumer. As a consulting firm, we measure how the consumers perceive each retailer in their markets in terms of 11 retail experience factors that influence consumers’ purchase decisions. If we consider the national ranking of these 11 factors by importance, we see the following. Price of the product is the most important factor. Following in order of importance are Reputation of Retailer and Product Selection sharing the position of second most important factors. The other factors follow in this order: Customer Service, Ease of Shopping, Store Interior, Effectiveness of Sales Personnel, Store Display, Advertising, Financing Options, and Store Exterior. This approach is difficult to do on a national basis, but we continue to work on it.
Next, we must recognize there are varying business models that have emerged in the last 30 years emphasizing different experience factors to better engage the consumer. Therefore, we analyzed several of these models and the performance of the participants.
And finally, we looked at the rationale for each of the Power 50 factors. Figure A graphically presents the rationale for each of these factors.
The Klout Score measures the social media presence of a retailer. It is a surrogate for Brand Awareness. The Alexa Score is a relative ranking of visitors to a retailer’s Web site. This is a measure of both brand awareness and the effectiveness of a retailer’s Advertising and Promotions. The Market Share measures a retailer’s performance in securing the sale when compared to a retailer’s opportunity for a sale in the markets that retailer serves.
There are many areas to be challenged not only in the weighting of the factor, but also in the factors themselves. While everyone wants to be No. 1, the point really is to measure current performance and to determine how to improve that performance. I welcome your comments as we make the Power 50 a benchmark to be considered.