From Home Furnishing Business
Editor's Letter: Innovate or React?
As a president, CEO, and owner, the most difficult decisions may be not to make a decision at all. All eyes are upon the one in charge to do something. Often the best course is to stay the course.
Currently, the industry is doing well. Last quarter the industry was up 4.42% compared to the 1st quarter of 2017. The 2nd quarter appears to be better. Of course, better assurance is if you can drill this down to your specific market. In that, growth for Midland, Texas was 14.4% for Q1 while growth for Peoria was 0%. See if your market was listed below. Therefore, if your business grew accordingly, hold the till steady.
I know traffic is down. It is for the industry as a whole because the consumer is shopping less stores. What is your close rate? It should be going up along with your average ticket. The consumer coming through the door is ready to buy and confident in what they want. A loss of 7% of traffic can be offset by increasing close rate by 2 points or average ticket of 8% or a combination of both. Don’t overreact. Know all sales management key performance indicators.
The consumer is changing. Yes, we are in the midst of a generation shift. 2017 was the first year that Generation X (65.72M) purchased more than the Baby Boomers (75.5M). What is your Consumer Segmentation (% sold by units and dollars)? Understand your trends.
There is a lot of noise around the future of traditional furniture retailing. This month, the feature Innovation or Disruption makes the point that the industry is competing for the same dollars. Price has become the major competitive element. Is the furniture product such a commodity that design or functionality innovation will not capture the imagination of the consumer?
Has creating beautiful homes for the consumer by knowledgeable retail sales associates been lost to more efficient ways to create a transaction?
The musical chairs we play every day for every decreasing share of the consumers’ disposable income needs to stop.
Your question is, “How?” The answer lies within ourselves, both manufacturers and retailers.
President, CEO, owners set a new course. Call if you want new coordinates.