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From Home Furnishing Business

Publisher's Letter: Missing Merchants

By: Bob George

 In the furniture industry, we have a title that doesn’t appear on any organizational chart, but that title is understood in the daily course of business. That title is merchant. Everyone understands and respects that title. Often the success or failure of an organization is dependent upon the ability of this individual or team of individuals.

Just who is this person, and what do they do? Such a person exists at both retail and manufacturing and, simply put, this particular person sets the strategic direction of the company with regard to the product consumers expect from a company. Deviate from that expectation and declining sales creep in. Thus, merchandising not only drives the top line in terms of sales, but also impacts product discounts and markdowns. Current data shows our loss in markdowns and closeouts exceeds our industry profit by four times.

The question then becomes Where have all the merchants gone? When retailing was smaller, buyers actually envisioned who their customers were and bought goods to satisfy those tastes. It was a time when we saw merchant and customer more closely connected; much to the benefit of each side. Now, however, retailing is larger, and we’ve undergone an industrywide consolidation.

The consolidation has made it more difficult for merchants to stay in touch with consumers. In today’s business, management’s days are consumed with everything—except for knowing who their consumer is. Both merchant and customer may have felt some pain. A myriad of new technology and analytical tools are now available to allow us to connect with often-frustrated consumers. How do we use those new tools?

Why should we be concerned? Herein lies the strategic advantage non-traditional retailers are using to gain market share. It is not that the young product managers with fewer than five years of experience successfully selecting product are more talented. Rather it is that they have access to more analytical tools. In the future, the organization with the best data — or insight — wins.

While analytics will never replace interaction with consumers, it can provide valuable insight for the retailer and manufacturer. It can also be the first step to connecting or re-connecting with the shopper. The ability to segment your customer demographically and compare your information with the industry will provide insight into who you are selling, but more important those consumers you are not selling based on your merchandising price point. In addition, the ability to compare your sales to the industry in terms of product category and price points provides a benchmark against which to measure your product lineup.

Analytical tools will never make a person a merchant. However, if we give these tools to that person with talent, a great merchant is a possibility.

 



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Frank Gordon    6 years ago

Tom's comments are complete and accurate. I could not have written it better. He defined what a Merchant is. If you want to develop a merchant in your organization, you and your management will have to remember your roots and teach, coach, guide, and free (yes, free) that person.
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Tom Martinez    6 years ago

Unfortunately, merchants, buyers, and merchandise managers have slipped into a coma over the years. Having worked on both the retail and wholesale end of the furniture industry over the past 30 years, I fault the lack of true merchants on the owners and senior executives of Furniture Stores, Department Stores, Big Box Stores and numerous independent stores. It was mandatory for my buyers to go into our stores on a regular basis, not only to see the merchandise that they purchased (to make sure it was up to par) but to interact with our sales associates and at times with customers to get their feedback on new offerings that just hit the floors. They also provided us with valuable insight into what the consumer is looking for, which we might have overlooked. Yes we had our resources and worked diligently with them, but we also made it a point to see most vendors who called for an appointment. It made the buyers more knowledgeable, in so much as to what was available, what was selling in the marketplace from style, fabrics and identifying new trends. This enabled our buyers to further challenge our existing resources, and perhaps try a new one. Seeing and listening to people (vendors, sales associates and customers) is one of our greatest assets. Without using them and the analytical tools available we are nothing more than glorified order takers. We have forgotten that furniture is a fashion business. Whether it’s from a promotional standpoint or better end goods, the consumer still wants their home to look beautiful. It is our job to satisfy their needs. There is a vast array of product available to retailers, yet they all seem to buy the same thing. Why? Because they’re afraid of making a mistake, so they follow what everyone else does. The consumer is not the only loser here, the retailer also loses, because they failed to be a leader and try something different. As a merchant, one must also be a visionary. Proper advertising of new product, providing training and product knowledge to our sales associates can help us get out of this rut. Through proper guidance and training, I can only hope that this will change.

Thomas A. Martinez
Former SVP Seaman’s Furniture Company
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