What Sells: Heating Up: Product Innovation, Expanded Distribution Drive Outdoor Furniture

September 4, 2017  by Jane Chero in Business Strategy, Industry   

No, we’re not talking about indoor upholstered furniture – although we could be. Those same ingredients are also the keys to selling outdoor furniture – a category that’s embarking on another selling season poised for growth amid expanding distribution channels and continuing product innovation.

After all, what’s not to like about a relaxing summer evening enjoying steaks hot off the grill and your favorite beverages with family and friends? And what better place to do it than the outdoor space at your own home?

“If you care about how your house looks on the inside, it’s natural to care about the outside,” said Lyle Ecoff, director of outdoor products at Emerald Home Furnishings.  “It’s the place where relaxation and memories occur.”

And in the view of Ecoff and other executives in the category, those things can’t be fully achieved without comfortable outdoor seating, a dining table or two, and perhaps an umbrella or fire pit.

“It’s great to be comfortable in cool outdoor furniture. It’s what drives out business,” Ecoff said. “The consumer is lucky because there is more great product out there than ever before.”

Ecoff might have added that retailers also are fortunate because there are more outdoor furniture resources than ever before. Well-established indoor furniture vendors such as Lexington, Klaussner, Century, Emerald, A.R.T., Zuo Modern, and most recently Ashley, have added outdoor furniture in recent years, and that list is likely to grow.

Not surprisingly, those well-established indoor vendors have had their greatest success selling outdoor furniture through furniture stores – a distribution channel many casual furniture specialists have had difficulty penetrating. The indoor vendors have a built-in advantage because they’ve already established relationships with key furniture stores around the country, and they often use the same sales force as their indoor line.

“If nothing else, it raises the profile of the category,” said Gary McCray, president of Klaussner Outdoor. “And the business doesn’t have to be as complicated as it was in years past. It’s becoming an easier business for retailers.”

McCray was one of several executives who said Ashley’s recent entry would raise the profile even more because of the company’s extensive retail distribution network.

“They’re going to drive furniture stores into the category – and not just theirs,” McCray said. “Stores that aren’t in the category now will have to consider it.”

A survey by Impact Consulting Services, parent company of Home Furnishings Business, showed that a plurality of consumers who recently purchased outdoor furniture (30.8%) said it was purchased at a mass merchant such as Wal-Mart or Target.  Another 23.1% said they used a home improvement store such as Lowe’s or Home Depot, and 18% said the purchase was made at an outdoor furniture specialty store.

Traditional furniture stores were mentioned the least (10.3%) of the five available options, even losing out to the internet, which is where 18% of respondents made their purchase.

To outdoor furniture veterans such as McCray and Ecoff, that relatively poor showing by furniture stores screams opportunity – primarily by selling outdoor to their existing customers

“If you’re not in the category, it’s certainly something you need to look at,” said Ecoff. “How do you not leverage your current customer base? You spent a lot of time and effort converting an indoor sale, so you now have a customer that trusts you and wants to do business with you.”

The survey indicated plenty of purchase opportunities are available, especially for consumers willing to spend $1,000 or more for an outdoor furniture purchase. It showed that a whopping 71.8% spent $999 or less, but just 20.5% spent $2,000 or more. And less than 10% were between $1,000 and $1,999.

Reflecting the concentration of purchases below $1,000, some 41% said the furniture they purchased was metal, while 35.9% said it was wicker, 12.8% said wood, and 10.3% bought plastic.

Among other survey findings, nearly two-thirds (61.5%) said they bought outdoor furniture because they were replacing or adding to existing outdoor furniture, while 18% said they had recently moved to a new house with a deck or patio, and 23.1% said they had recently added a deck or patio.

Plastic, which manufacturers prefer to call resin or polymer, appears to be one of the faster-growing outdoor furniture materials, thanks to the recent popularity of synthetic wood and wicker products that require far less maintenance than traditional wood or wicker.

McCray noted that a collection of synthetic teak products rolled out last year by Klaussner was one of the stars of the just-concluded 2017 selling season.

“It did really well this year, and based on the initial orders we’re getting for placement next year, it looks like it’s going to grow dramatically as we go forward,” McCray said.

 

At high-end producer Century, the star of the most recent season was a lineup of outdoor upholstery pieces that mirrored some of the company’s best-selling indoor seating. Haynes King, director of outdoor products, said the company re-engineered the indoor pieces by, among other things, switching to marine grade frames, using stainless steel staples (which don’t rust), and using plastic to reinforce the corners of the frame. That’s in addition to switching to outdoor performance fabrics designed to withstand just about any type of weather.

“People are starting to treat and decorate the outdoor space more like an indoor room,” King said. “So we created a collection of outdoor upholstery using popular styles from indoor upholstery. We’ve been pleasantly surprised just how quickly it has ramped up.”

The company was so pleased that an extensive collection by designer Thomas O’Brien being introduced in October will include the designer’s first-ever outdoor pieces.

King said the ability to blend indoor and outdoor is one of the many innovations that are driving the category – an observation echoed by McCray, who has been merchandising and selling outdoor furniture for more than three decades.

“Unlike the indoor side, there is just so much push to do new and innovative things (in outdoor),” said McCray, noting that innovations in fabric and cushion construction head the list.

However, McCray may be most excited about an innovation Klaussner quietly introduced at the most recent Las Vegas Market – power motion.

He says the lineup currently includes the industry’s first power lounge chair and power chaise, and based on the success of power motion in indoor furniture, he’s looking for big things from power outdoor motion.

“It’s a natural for outdoor. It turns a chair into a chaise,” McCray said.

He said all the chair’s electrical components are sealed and the mechanism is powder coated. The unit is powered by a lithium ion battery that can easily be removed and taken indoors for recharging, but a full charge should last 200 to 300 cycles. (A cycle is opening and closing the mechanism one time.)

“We’re pretty excited about this,” he said. “For us, it’s all about comfort and innovation. You’ve got to be able to do that.”