Take 5: Bob Price

June 14, 2018  by HFBusiness Staff in Business Strategy, Industry   

The company has a history of providing value to the customer, and Price is continuing that value by adding new product categories and recognizing the importance of e-commerce in today’s marketplace.

Price recently spoke with Home Furnishings Business about growth strategies, the challenges faced by home furnishings retailers, and what consumers are looking for.

Home Furnishings Business: The Houston market represents $825 million in the upper/premium price point, or about 33 percent of the total market. While the Houston market is more affluent than the rest of the nation, pressure still exists on the better segment. What is a possible strategy for Star Furniture?

Bob Price: Our merchandise strategy is simple and straightforward—build assortments that are balanced by style and price point. Price points cover good, better, and best pricing. Additionally, the products represent the best value at each price point.  

Today, there is pressure and competition in each pricing category. The strategy also places the highest priority on quality, as well as being in-stock on the items that are in the assortment. Our goal is that every customer who appreciates style, regardless of income or type of home, can find furniture they want at Star Furniture.

HFB: Your background is in providing significant value for the consumer. Will elements of that strategy appear in the Star game plan?

Price: Yes, certainly. But, to be fair, providing value for the consumer has been a key strategy at Star Furniture for over 100 years.

Many in our industry concentrate on value at certain price points. We believe the objective is to provide value in every item, regardless of price point. Price is certainly a component of the value equation, but value also includes quality, scale, style, and service.

HFB: Out of the gate, you were challenged with the hurricane. For a seasoned management team, this was a challenge. As a new leader, was it a time to bond?

Price: Bonding may not be the right word to describe what happened with the challenges Star Furniture experienced from Hurricane Harvey. I can tell you that as a company, there was a single focused effort to do the right thing for the community, the customers, and our associates. If working together as a team is bonding, then yes it was.

HFB: There are several retailers in your market, some local (Gallery Furniture); others regional (Rooms To Go). Is the strategy for everyone to stay in their lanes?

Price: Our strategy is a growth strategy. While we are always respectfully aware of the competitive realities in all markets, our number one objective is to better serve the customer.

The fact is that we must focus on the customer, while at the same time, be aware of the strategies of other furniture retailers. We need to grow our sales and grow our brand. If we constantly strive to improve our assortment, improve the delivery of furniture, and most importantly, improve the customer’s experience in our stores and on our website, we can achieve our strategy of growth.

HFB: While the home furnishings sector is growing nicely compared to other retail sectors, furniture stores are not achieving the same growth. Are there any plans to add other product categories (i.e. top of the bed) to the store assortment?

Price: Yes. We plan to add more style categories, as well as new merchandise categories. The first new merchandise category we are planning to add is a complete assortment of window product. This assortment will include hard window and soft window. There are several other new product categories that are in the planning stages.

HFB: E-commerce is obviously a future consideration. With Star’s sister companies a significant demographic presence would be possible. What is Star’s forward look on e-commerce?

Price: E-commerce most certainly plays a huge role in our growth strategy. Our website is one of the ways we can tell the customer who we are and what merchandise we carry.  A viable, competitive website also provides the customer with options.  We realize some customers want to buy from a store, others want to buy online and perhaps most important, a lot of customers want to pre-shop online and then come to a store.  We face the same challenge online as we do in stores and that’s to address improving the customer experience. As the customer continues to change, we have to change our strategies, including how we present our assortment online.

HFB: What do you think are some of the biggest challenges faced by home furnishings retailers today?

Price: People—recruiting, hiring, and maintaining a best-in-class management team, buying team, selling team, and support team; in-stock/inventory levels—having the merchandise the customers want to buy on hand and ready to deliver; logistics—flowing the inventory needed; having the right amount on hand/not too much and not too little; differentiation—what will insure that when the customer is deciding where to shop, they choose Star Furniture; vendor partnerships—we have developed some great partnerships with our vendors. Even with that, there is still opportunity in having a mutually beneficial relationship that boils down to simply listening to what each other’s needs are.

HFB: How has your past experience in merchandising helped in your role as a CEO?

Price: Personally, I know I have been blessed to have worked for some exceptional CEOs and many great merchants during my life. I have also been blessed to have learned from a lot of people I have worked with. Many of these people have served as role models, whether they are aware they were or not. Today, not one day goes by when I don’t learn something from someone who I work with at Star Furniture. 

HFB: What attracted you to the job at Star Furniture?

Price: The opportunity to significantly help grow a business, the opportunity to be a part of the Berkshire Hathaway company, and maybe most important, the opportunity to spend my day with some very talented and special people who come to work with the same one single mission—to grow Star Furniture.

HFB: What opportunities for growth do you see for the home furnishings retailers?

Price: All retailers, including home furniture retailers, have the same number one opportunity—to better serve the customer. This opportunity never goes away in retail. The customer experience gets a lot of conversation. But more times than not, that’s about all.

Improving the customer experience is a mission that is never complete.  It’s something we have do every day for the rest of our life. It’s interesting to see how the results differ when a retailer builds a business that addresses what the customer wants and needs as opposed to a more selfish motive that addresses how the company places the priority on doing what the company wants to do.

Other opportunities for growth include:

• Respecting the customer’s time—how do we help them purchase what they want faster
• One-stop shopping for the home—how many products that the customer uses in their home can be purchased in one location; this opportunity is both for a store and certainly for online
• Training—qualified and knowledgeable selling associates and websites that have all the product information the customer wants
• Excitement—a store environment that is colorful, fun, easy to shop, and [up to date]

HFB: Are you seeing any trends in what consumers are looking for, such as sustainability, customization, etc.?

Price: Number one is customization. Customization has been a consistent and evolving trend over the last decade. I think customization will continue to be even more important. For example, offering a sofa in only one color is really a merchandise decision made with the retailer in mind. A sofa that gives the customer the option, at the same price, to choose from three other stocked colors, is a merchandise decision made with the customer in mind. This would be good example of customization. Another example that supports customization is offering custom order options. The custom order category continues to grow, particularly when the product is available domestically.

Casualization is another trend. It supports having furniture you live in, not just look at. Store presentations are more casual today, dress codes are more casual today, and with a possible exception of bedroom, casual continues to grow and formal continues to decline.

One more trend that seems to continue to grow is in the mattress category. Comfort and better health are the drivers for this growth area. Selling systems and floor presentations continue to be more focused on comfort level rather than price. Demand for related product such as adjustable beds and bed pillows are also growing and seems to get more important every day.