Delivering the Sale

March 7, 2016  by in Business Strategy, Industry   

Sometimes making the sale in the showroom is the simplest part of the furniture retail business.

After the consumer is sold on the product and the money exchanges hands, things in the business really start to get interesting. Delivering the sale into the consumer’s home can be the most intimate part of the process. She is inviting you into her home—her retreat if you will—where she hides away from the stresses of life.

Botch that process, and well, that $4,500 worth of furniture may just find its way back on the delivery truck headed for a return to the store’s discount room.

Everyone in the retail business knows things happen. Every delivery doesn’t go as planned without a glitch. The key is to be ready, willing and able to handle problems when they arise.

Picture this.

A two-piece sectional was sold to a consumer living the eighth floor of a New York City’s Bronx apartment. Home Inspirations Thomasville with its four stores in New Jersey is adept at maneuvering through the city for deliveries. However, this one was tricky.

Edward Massood, owner of the retailer, said the delivery crew arrived at the address to find an elevator too small to accommodate the sectional. That meant, the delivery had to be rescheduled because it required a walk-up, which requires additional time and preparation.

“We chalk it up to a miscommunication between the sales person and the customer,” Massood said. “The customer failed to tell us and we never asked about delivery challenges at the home.”

Fast forward to the new delivery day. The crew arrives prepared to haul the sectional up eight flights of stairs.

“They walk up the stairs, get the sectional into the home and they can’t make the turn out of the foyer and into the room,” Massood said. From there, the team had to carry the sectional back down the eight floors, reload it on the truck and reschedule yet another delivery day requiring disassembly of the sectional.

The third time was the charm, and the sectional made it into the apartment. Whether it will ever make it out remains a mystery; however, gathering all of the needed information early can net a much smoother delivery process.

“Thankfully, those stories are few and far between, but when they happen, they are real doozies,” Massood said. “It’s part of the scars that you get along the way. As good as we are, something will always get through the cracks. You live and learn.”

Furniture retailers can do everything right and still leave customers with a bad taste if they botch the delivery. Even as Massood said the screw-ups are rare, but when they do happen the key is correcting the problem and figuring out how to prevent the scenario from happening in the future. Those simple steps can go a long way in creating goodwill and retaining customers for life.

A satisfactory delivery means an efficient delivery, and smart retailers are always evaluating how to improve the process and maintain customer satisfaction. On average, a seamless delivery operation can account for about 2 percent of a retailer’s bottom line.

 

Keep it Clean

Miskelly Furniture in Jackson, Miss., offers same-day and next-day delivery on its sales. To ensure a clean, smooth delivery, the retailer has increased its efficiencies and limit damage to furniture by deluxing and prepping products in a staging area prior to loading it for delivery.

By examining all returns, frequency of same pieces and reasons for returns, the retailer determined about 15 percent of damaged items had been unpackaged prior to delivery. Now, the process calls for leaving those items—mostly dining tables, curios and paneled beds—in the original cartons for delivery. The shift shaved about 1 percent of daily damages and return deliveries.

The opposite was true for leather upholstery. Unpacking those pieces and inspecting them for damage sliced returns from surprises uncovered once an item was opened in the consumer’s home.

Home Inspirations Thomasville, which manages all aspects of its delivery until the moment the product lands in the back the delivery truck, takes the prep and deluxing process seriously.

“We preassemble everything in the store in lineup,” Massood said. “We preassemble beds, tables and occasional pieces. Our thinking is that if the delivery personnel can take something apart, they can put it back together in the customer’s house.”

Massood said the extra step also ensures all the parts—bolts, screws, legs—are included in the order. Mishaps happen, he said, and this extra step prevents an extra trip to the customer’s house for repairs or redeliveries.

Both of which lower the efficiency quotient, not to mention the annoyance to consumers who have high expectations for their entire furniture buying experience, including the delivery and in-home set up of their purchase.

 

Set Ground Rules

A lot of delivery problems track back to the point of sale. A detailed discussion during the sale can not only manage consumer expectations, but also uncover any potential challenges of maneuvering furniture into the home.

Zeroing in on details of where the furniture will go in the home can start to paint the picture of what the delivery process will look like once the truck arrives in the driveway. Ensuring sales associates are well-versed in which questions to ask, what information to share and other details will have a huge impact in ensuring success.

Whether the furniture is going on the first floor or in a basement or the second floor can impact the entire process. Stairs and turns can be tricky. Make sure the delivery person knows the landscape before they arrive.

Inquiring as to whether old furniture needs to be relocated or removed from the home is another key point to cover. Consumers may think nothing of asking delivery personnel to relocate an old bedroom suite to another room to make room for the new one purchased form a retailer. However, time is money on the delivery route, and staying on schedule is key.

Not explaining the process properly and what role delivery personnel will do and won’t do can net big problems. Specificity is imperative, and may require a checklist that sales associates can review with consumers.

Outlining the rules and expectations from the store’s standpoint and the consumer’s responsibilities in the process can save time, money and a lot of customer service nightmares.

 

 

To Outsource or Not?

In today’s fast-paced world, consumers are eager for product as soon as they make the transaction. They’ve likely put the purchase off for sometime, and most are ready to have it in their home immediately.

The hurry-up model set by Amazon and other retailers have set the standard for same-day delivery relatively high. In some markets, some products can be delivered within a few hours. Now, furniture is a bit different due to size and other features, but the expectation is there for immediate gratification.

Many retailers in the industry offer same-day delivery on purchases made before a certain time and sometimes there are limitations on product offered for the service. Of course, special orders are off the table.

Whatever the delivery time frame offered, managing the logistics of delivery can become overwhelming. Hence, some retailers opt to outsource the service to a third-party supplier like Cory 1^st Choice Home Delivery, Zenith Global or Diakon Logistics. A number of vendors operate within the home furnishings industry, but the key for retailers is finding the right partner for your operation. 

Rob Davis, vice president of client solutions for Diakon Logistics, said its imperative for retailers to partner with a delivery company who shares a similar culture and approach to customer service. Otherwise, the partnership isn’t likely to last.

“We like to work with retailers that have a similar way of working,” Davis said. “The partnership has to be a good match for them and for us. A lot of that comes down to understanding their processes before we ever take over. We have to have a good grasp of how they do things so that we can build on their successes and improve on their shortfalls.”

By understanding a retailer’s culture and customer service approach, a third-party company’s team can meld more seamlessly into the delivery operation and work hand in hand to service the consumer.

Davis said many furniture retailers started in the business with a passion for the industry and have included delivery as part of that service to their customers. Most of today’s larger furniture retailers outsource the delivery function, he said.

The economies of scale can help determine whether outsourcing is practical. Davis said a good rule of thumb is that if a retailer is running less than three trucks in its delivery fleet, it makes the most sense for them to continue the management of the process.

“Once they get into three to five trucks, there becomes a break even point when it makes sense for them to outsource the process,” Davis said. “A lot of retailers love selling furniture and building those customer relationships. Managing the back shop becomes a necessary evil. That’s when we see retailers consider outsourcing. Once they’re above five trucks, a dealer will see a big difference from outsourcing.”

Davis said Diakon Logistics works really hard to retain the hometown, local feel when they begin working with a retail partner, noting that trucks can be branded with the store logo and drivers and delivery personnel can wear branded uniforms.

“It really goes back to understanding the store’s culture,” he said, adding that often Diakon will take over a retailer’s existing delivery team. “We become a seamless extension of the retail brand.”

Outsourcing takes the burden of staying abreast of the rules and regulations (See companion story) governing drivers away from the retailer and places it on the logistics company. Hours on the road and other rules tend to change frequently, as do the requirements for background checks in hiring.

The finding and hiring of drivers can be a long, drawn-out process. Davis said finding quality, delivery teams can be challenging.

“We’re looking for an interesting group of people,” he said. “We want them to have customer service skills; we want them to look good; we want them to be kind; and we want them to be creative problem solvers. They have to be willing to move furniture, have a clean background check, be really strong, pass a drug screen and have a clean driving record. That can be tricky.”

 

 

Davis said consumers are welcoming a delivery team into their homes, and that’s a big deal.

“We’re usually met by a female who either bought the item or picked it out,” he said. “We don’t know anything else about her. Don’t know if there’s been a life changes, like a divorce or whatever. This is the only time we’re walking into her personal space, and spending a good deal of time in her home. We have to get it right and she has to feel at ease. It’s completely different than someone coming into a showroom.”

Home Inspirations uses a hybrid approach to its delivery operations. The retailer controls everything until the product lands on the delivery truck. From there, the home delivery portion is contracted with Cory.

“We manage the receipt, the scheduling, the product preparation, and then we have a dedicated team we contract with to deliver into our customers’ homes,” Massood said. “The piece from the dock to the home is the only part we don’t do. It gives us an accountability trail as well. The signed signature from the customer gives us the completion, and if anything happens, we can tell where the process went wrong.”

Massood recommends retailers considering outsourcing to do their homework to uncover the right partner for their operation. Every good retailer should compare internal costs to an outsource provider, he said.

“A key indicator and good question when they’re looking for a partner is which other companies they deliver for,” Massood said. “If you’re selling higher-end goods, you’d want a delivery company that works with other higher-end retailers. Their personnel, the way they manage receipt of goods and the like should be up to the standard of the product you’re selling. You want them to have the same ilk of customer.”

He emphasized the importance that the home delivery team needs to be similar in nature to the customer to whom they deliver.

“Our partners are an extension of our store and our brand,” Massood said. “Because they are extensions of our team, if there is a delivery concern, we’re immediately dealing with the customer to calm them and make the problem better.”

 

 

 

City Furniture’s Fleet Goes Green

 

City Furniture has invested big in its delivery fleet as it pursues its aggressive, multi-year expansion throughout Florida.

The Tamarac, Fla.-based retailer with its 16 City Furniture and 11 Ashley HomeStore locations has invested $4.5 million in creating and running a green delivery fleet. The retailer has built its own compressed natural gas (CNG) station and converted most of its 100-truck fleet to run on the fuel. City Furniture sees the strategy as essential to its growth plans. The firm plans to have its entire fleet converted to CNG-powered vehicles by end of this year.

“We’re ready to expand our brand,” said Keith Koenig, City Furniture president, when he announced plans for two Orlando-area stores. Construction on the stores will begin this year. Plans for either two or three showrooms in Miami-Dade County are on the books for 2017, and the retailer plans to open its first Tampa-area store in 2018.

Koenig estimates that in the next three years, the new stores will add about 175 jobs to the company’s current workforce of more than 1,300 associates.

“We’re seeing double-digit same store sales growth for 2015 and remain confident in Florida’s long-term economic future,” he said. “That confidence led us to make a well researched bet in the last few years that clean, U.S.-produced CNG would be the best approach to the millions of delivery miles we log annually. We’ve recouped the investment in less than two years through fuel savings. That helps us live our ongoing environmental commitment, while continuing to provide customers with exceptional value at a great price.”

City Furniture already travels about 5 million miles a year to deliver online orders and serve its current showrooms in Southeast and Southwest Florida and The Villages. The $1.5 million CNG service station is located at the company’s 909,000-square-foot corporate headquarters and distribution facility.

“We’ve converted the majority of our fleet to bi-fuel trucks that run on CNG or gas, and we covered about 3 million miles this year using CNG,” said Andrew Koenig, vice president of operations for the retailer. “With just half the emissions, those CNG miles ran far cleaner, and at 60 percent lower fuel cost, than gasoline.”

The bi-fuel trucks allow the company to take advantage of lower prices for the miles run on gasoline. 

“As we expand in Central Florida and Tampa Bay, CNG use is a key infrastructure strategy,” he said. “CNG fleets are still unusual for Florida retailers, based on the up-front investment and need for easy access to fueling stations. Clean Cities Coalitions throughout Florida are helping to simplify the fleet conversion process, and with the number of CNG filling stations in Florida at 21 and growing, other retailers may want to consider a switch.”

The company’s eco-friendly fleet won honors in the national Green Fleet Awards this fall. Ranked 14th among the Top 50 Green Fleets, City Furniture was one of two private companies on the list of honorees that included the City of New York, the State of California and the U.S. Air Force Vehicle and Equipment Management Support Office.

City Furniture is achieving significant financial savings and environmental benefits, while sending a positive message to the public,” said Christine Heshmati, coordinator for Southeast Florida Clean Cities Coalition. “After intensive research to find the right alternative fuel for their specific needs, the company made a bold move that has already proved its value.”

Southeast Florida Clean Cities Coalition assisted City Furniture with the private and public sector networking to create its alternative fuel program, and is a starting point for companies considering a fleet conversion.

 

 

Tips to Consider

Seamless deliveries don’t just happen. The process requires planning, coordination and skill. Here’s a checklist to help get set deliveries on the path to success.

1. Educate the Customer

Make sure the delivery team explains the delivery process carefully. A brochure can be helpful to outline every step.

2. Educate your Team

Make sure the sales staff gets all needed information about the location the delivery team needs for a successful installation. Knowing things like entrance, mobility limits, stairs, even pets at home can go a long way in making for a smooth process.

3. Deluxe at the Store

Prep and deluxe the product prior to taking it away from the store. Identify products that typically need more care before delivery so that every detail is perfect.

4. Get in Shape

Think of ways to ensure the delivery teams are up to the demands of their job.

5. Flight Check

Before delivery, check products that will be assembled in the home to ensure all parts are available.

6. Right Equipment

Do drivers have the necessary equipment on hand to complete the installation? Create a checklist of tools and equipment that go out on every stop along with protectors like pads and mats.

7. Phone Early, Often

You may have verified a delivery time window the day prior, make a habit of calling again 30 minutes to an hour before arrival. People forget things.

8. Impressions Matter

Make sure the delivery team is mannerly, neatly dressed and well groomed.

9. Time Wisely

Analyze deliveries to make flexible scheduling slots instead of allotting specific number of minutes per stop.

 

 

Checklist for Outsourcing

Retailers trying to decide whether to continue managing their own delivery operations or farm it out to an external company, need to consider several things. Here’s a checklist recommended by Diakon Logistics’ Rob Davis that may make the exercise a bit easier.

 

1.      Analyze volume to determine if there’s enough to outsource.

2.      Consider expansion plans. Are you looking at new markets or a new distribution center? Important to figure out how you’ll fund the expansion. Outsourcing could be a way to free up capital.

3.      Identify companies that you’d feel comfortable working with. Find someone you can work with through challenges.

4.      Research the history of the delivery company, as well as the future of the company. Mergers and acquisitions happen frequently. Make sure you know about long-term plans.

5.      Ensure the delivery company is up to date on the latest regulations regarding sourcing teams, fleets, etc. Do they really doing background checks and play by the rules? Make sure they’re not cutting corners.

6.      Know what your delivery metrics are. How many incomplete deliveries are there? How many delivery miles are logged within a certain period? How many deliveries were missed because a customer wasn’t home? Those things can help determine if it’s time to outsource the service.

 

Keep Consumers Happy

 

When it comes to consumers and their happiness with a furniture purchase, deliveries lie at the root of complaints against furniture retailers.

While the Better Business Bureau doesn’t maintain statistics on furniture deliveries alone, the organization offers overall numbers for the retail furniture industry. Each year, between 13,000 and 14,000 complaints are filed against furniture retailers. The complaints vary from broken furniture, quality of goods, deposits taken and furniture not delivered, and damage done during delivery.

Overall, about 22 percent of consumer complaints to the Better Business Bureau regarding furniture stores are categorized under “delivery issues”. It’s possible that complaints filed under other categories were the result of a poor delivery. A wall was dinged when furniture was taken up the stairs or down a narrow hallway. Or, a delivery time was inordinately late.

The best advice from the Better Business Bureau in dealing with consumer issues is to be responsive and continue the conversation. Most of the time, responsiveness will abate the problem and consumers won’t turn to the Bureau or to the Internet to lambast a company.