Summer Sizzle

May 13, 2014  by in Business Strategy, Industry   

The summer doldrums for furniture sales: We’ve all heard how business slows in summer as families concentrate on hitting the beach and find ways to keep the kids busy while they’re out of school. Malarkey. Take a look at the accompanying graphic of an 8-year analysis of furniture sales by month from the U.S. Department of Commerce. Comparing month-to-month furniture store sales as tracked by the U.S. Department of Commerce from 2005 through 2013, there’s little variance. The data shows a low of 7.9 percent for the months of January and April, and a high of 8.8 percent in December. Drill down further into the summer months of June through August, and we find 8.1 percent in June; 8.4 percent in July, and 8.7 percent in August. Mere blips, and an ever-slight increase through the summer. Rest assured, if you buy into the idea that summer is a down time for home furnishings retailers, your competitors are eating your lunch during those months.

Don’t blame the heat. Blame yourself for not giving potential customers a reason to come to your store. This month, Home Furnishings Business examines solutions for home furnishings retailers to break through the summer doldrums—whether myth or reality—and make their stores exciting places to get out of the heat.

 

REGIONAL, SEASONAL MENTALITY

It’s easy to develop a mindset that the weather, the season, is going to impact your sales. Has any retailer working on the southern Atlantic seaboard who bemoans the heat of summer keeping customers at home in the air conditioning ever thought about what it must be like during winter months in the upper Midwest? You never hear about the “winter doldrums.” “You get a forecast for eight inches of snow, stay home if you can, and that’s not good for any retail business,” said Jeff Selik, president of Hillside Furniture in Bloomfield Hills, Mich. “But we’re used to the snow. If we have a couple of inches and the roads are clear, that’s fine selling weather for us. “You have to have a promotion mix to bring people in at all times of the year. We don’t sell outdoor furniture, because it applies to such a small part of the year around here.”

Summer sales rest on three things, according to Britt Beemer, chairman of Charleston, S.C.-based America’s Research Group: Memorial Day, the Fourth of July and Labor Day. “If you miss out on that, it’s a long dry spell,” he said, adding that there are ways to build business outside those traditional high-traffic weekends. “A lot of people do a tent sale in the summer, and that’s one of the most successful that I’ve seen,” Beemer said. “Use it to clean out old, dead inventory. It gets the bargain hunter out to the store. “If you’re store’s in the right location, you don’t need to spend a lot on advertising, because that tent is your advertisement.” Try flipping the seasons.

“For a lot of retailers, Christmas in July is a big event,” Beemer said. “Decorate the store for Christmas, and run it for three weeks, following up to the Fourth of July. “If you’re having a warehouse sale, actually hold it in the warehouse. It creates a bargain atmosphere, and you’ll grab that same customer who shops tent sales."

 

GIVE A REASON TO SHOP

Generating business during the summer—or any season—is not rocket science. “Give the customer a good reason to shop,” said Alejandro Macias, vice president of Del Sol Furniture in Phoenix, Ariz. If any retailers have an excuse for dismal summer sales, it would be those in places such as the Sun Valley, where daily temperatures during those months regularly exceed 100 degrees. “I have come to the conclusion that there are no such things as (seasonal) slumps,” Macias said. “There are times when people naturally buy more, but we should be working just as hard those months, as the slower ones, working to give the customer a reason to shop.” July had traditionally been Del Sol’s worst month of the year for sales, but the retailer countered that with a “Midnight Madness Sale” to bring customers in after the sun went down. “After we did this sale, it became our No. 1 or No. 2 month of the year,” Macias said. “It became so good that we moved it to Tax Season.” After that move, the challenge became what to do in July to get people to buy. “Before this, we never did a 4th of July sale,” Macias said, since the thought was that holiday would not connect with Del Sol’s traditional Hispanic customer. “Well we focus on it now, make an event of it, advertise and we have a great weekend every time. “Last year we did the Smurferrific Sales Event with Ashley after the 4th (of July), and that also did well. It was a back to school/smurf-themed sale … during the time the “Smurfs 2” movie was being released. That event did great, too.

 

 A PLACE TO BE

This summer, sometimes characterized as slower by a lot of furniture retailers, Gallery Furniture Owner Jim McIngvale said the retailer will work hard to make the furniture store an exciting place to be for Houston-area consumers. “It’s all about making the store topical, making the store relevant,” he said. “During the summer, we’ll come out with lots of experiential events for customers so they don’t feel like they’re in a funeral home when they’re here.” Gallery paid out a pile of money on a sports-related promotion for this year’s NFL playoffs and Super Bowl (see accompanying story), and it’s betting again this summer with a free furniture promotion if the Houston Astros win 63 games this baseball season.

Do you have a remodeling project in the works? Build a sales event around it.

“Two years ago we had a huge liquidation event in July when we did three months business in one—it was our biggest sales month ever,” said Hillside’s Selik. “We had validation behind it because we were repainting the whole showroom. We were going to have to stick that furniture somewhere, so why not sell it off.” Think about “off the wall” promotions that generate excitement. Hillside played upon its multi-generational ownership with “Shh… Don’t Tell My Dad”—a play on the retailer’s father-son team of Jeff and Bruce Selik. “We do that every other year,” Jeff Selik said. “People I’ve never seen before but who recognize me from the commercials mention that to me at least every other week.

 

BEATING THE HEAT

The summer slump is a reality for Midtown Furniture Superstore & Mattress Center in Madison, N.C., said Woody Whichard, president. He’s dubious of the Commerce Department’s statistics regarding furniture sales over the last several years. “I do not trust the government or any of the figures they come up with, he said. “It is like an advertising salesman trying to sell me their product over their competition. Metrics can be changed to fit any situation. If you change the way you measure something

to your advantage, what is the real truth? Take unemployment rates today verses 10 years ago. This is the way I look at the government’s numbers. All markets and stores are different, but most of us would measure our sales the same, total sold for the month.” Whichard said Midtown’s month-to-month performance over the past five years has been unpredictable at best. “In 2008, we lost 40 percent in sales from May to June. In 2009 we gained 30 percent; 2010 we lost 50 percent; 2011 we lost 40 percent; 2012 we lost 50 percent, and 2013 we gained 3 percent,” he said.

 “I feel the doldrums. Unfortunately, the way we used to measure and budget has completely changed under the current administration. I feel that the consumers are just as confused as us retailers as to when to have confidence again.” It’s hard to depend on monthly historic patterns. “When I set our annual budget I lower the numbers for the summer months and budget for higher numbers in the spring and fall,” Whichard said. “So, yes, I do believe there are summer doldrums.”

That’s not to say Midtown doesn’t stand pat in summer. “We have tried to do our very best advertising to generate sales during this time,” Whichard said. “One of our most successful sales is the trade-in sale. We will take any furniture in any condition and donate it to a local charity. Not only does the consumer receive a discount for their worn out furniture, but they also leave with the feeling of helping someone less fortunate. We take any category, including mattresses, for trade in.” Make sure that any sort of promotion that brings a community benefit lives up to its promise. “As it says on the front page, ‘All furniture traded in will be donated to the Salvation Army’ and it was,” Whichard noted. “As in many things we do we look for a win-win. In this case it is a win-win win. The customer wins, getting rid of furniture they were wanting to throw away and getting a discount for doing so. The charity wins because they get so much to offer their customers, and we win with an increase in sales and goodwill in the community. “We also offer a partial discount to those that do not have anything to trade in. We have tried this sale at different times of the year and it seems to get the best response in May, June and July.” Whichard wasn’t the only retailer questioning the so-called summer furniture doldrums as a myth.

There’s “no real differentiation between what works in the summer versus other times,” said

Ronny Bensimon, president of Dearden’s in Los Angles. “Regardless of the promotion, the lift will be less in the summer. “You need to find out who is reporting those statistics, find out what they’re doing, and let me (and other furniture retailers in my circle) know what they are doing. Are you sure the retailers being queried are not south of the equator where the seasons are flipped?”

 

THINK SEASONAL

When considering summer promotions, think about what your consumers are doing during the season. Think they might be playing golf? Atlanta-based Imagine advertising showed up in Ashley’s showroom at the recent High Point Furniture Market with a full-on presentation for its “Sink Fore Savings” promotion, which included signage and a putting green. The promotion is scheduled to run Father’s Day through the U.S. Open, and is designed to create an exciting, fun event for sales people and your customers. Retailers would set up a putting green in-store and offer the customer discounts for every putt made. Creative will show men, women and family/kids golfing. For example: Make one 13-foot putt, get 10 percent off; make two 13-foot putts, get 20 percent off, etc. Retailers set the number of putts and discounts that work for their store. They can reinforce your message online and with in-store signage. “People out there in the market are ready to buy furniture at all times of the year. It’s a matter of reaching them,” said Hillside’s Selik. “I always hope they’re coming to Hillside because they’ll see furniture they won’t find anywhere else around here, but you still need to give them a reason.”