Coach's Corner: Welcome to the New Normal What Can We Learn from the Lockdown?

July 15, 2020  by HFBusiness Staff in Business Strategy, Industry   

The purpose was to reduce the public’s inter-personal contact and slow the spread of this dangerous virus. Many furniture retailers continued to do business online or through limited contact personal appointments in the showroom. By late May, and through the middle of June, most stores were allowed to reopen to customers with many rules and restrictions in place. I am not here to debate the effectiveness of what was done. Indeed, given the warnings of the potential for a second wave of cases this fall, it will be some time before we know when and if we will ever get past this threat to the world’s physical and economic health.

We have only gone through what is probably just the first phase of this crisis, with many more challenges and learning curves yet to be encountered. After going through an experience like this my recommendation would be to look back and see what we can learn from it. They say hindsight is twenty twenty, and I certainly do not claim to have all the answers, but I think it would be a valuable exercise to review some of what happened as we came out of the lockdown and then present some thoughts about what we might want to consider doing going forward to survive and hopefully prosper in the “new normal” that is sure to follow.

Here are a few observations from the retail clients we serve pertaining to their experiences in May and June followed by some recommendations for things to consider going forward.

Observations
Many of the retailers we spoke with at the beginning of the pandemic felt that the year would be ruined, and it would take a very long time for business to rebound. I personally felt that would not necessarily be the case because we heard the same comments after 9/11. Yes, stores were empty for a month or so while people hunkered down and recovered from the shock of that disaster, but then our industry had the best quarter we had ever seen. Why? People want comfortable and attractive homes and when they end up stuck inside, they realize things could be better so home furnishings and home improvement businesses tend to do well as they come out of hibernation. Here are some of the comments we heard:

• Many home furnishings retailers had near record or better numbers for May, even if their stores were closed for the entire month. One retailer said, “I’m happy to report that May was a record month for us. We were 34.9% above last May.”
• This was achieved with almost no advertising other than online. n We also heard from many that limited hours and appointments worked very well. One owner said, “We had the largest two weeks in our history even though we were still only handling appointments during the last two weeks of May. From May 15-June 14th we did the largest volume in any 30-day period in our history.”
• Another group of retailers told us that traffic was down, but business was up. The stores were able to set appointments for the first half of the month and then opened-up to the public for the second half of the month. Traffic was down from last year, but sales ended up 24%, due to a big increase in Revenue per Up driven primarily by the appointments.
• Others saw increased traffic saying, “Traffic was up 20.7%, Sales Volume was up 45.2%, and Revenue per Up was up 20.3%. It was a record month!”
• One store that could not open until later in May, reported that their online sales grew tremendously—over 800%. The first half of June was still strong. Here’s what we heard from retailers:
• June is up about 35% so far, traffic continues to be good and Close Rate and Average Sale are way up.
• June MTD is 107% up, traffic is up 66%,
• 20% increase written sales from June 2019, traffic 10% down from June 2019
• Up 100% in written sales over last June same week
• Up over 40% in written business, even after being closed for first seven days. Conclusion: The world has not ended, and there is plenty of business to be done. However, the big question is how long it will last, and what can we do to make the best of it in the future?
  
  Going Forward


• Appointments will be more important than ever! Traffic may shrink again after the initial lockdown needs are filled. With less people likely to visit stores, appointments must be part of salespeople’s business plan – they cannot just live off the door traffic like they are used to doing. The crazy thing is that for the last thirty years every great sales trainer and all the best programs have stressed how critical making appointments is to maximize your business. Every business professional, from real estate to medical, sets up appointments to prepare the client and themselves for the best outcome possible. Literally every salesperson that has ever had any training has been told this, but very few do it and those who do are always the top writers on the fl oor. Perhaps one outcome of this crisis will be that more of your staff will increase their eff orts to make appointments and build their client base. It may be necessary to survive.
• Virtual house calls will be the new norm because in-home visits will be less desirable! We have watched the growth of in-home business in most furniture stores, even those not traditionally known for design work. I believe that the market for this and personal shopping services, like we reported on in the May/ June issue will grow even more as a result of the pandemic. However, a large segment of the population may not want in-person visits to their house to get it done. Therefore, every store must develop a Virtual House Call Program that delivers the same results without an actual visit. Here are a few items that will need to be addressed in order to develop a Virtual House Call Program in your store. It is by no means complete, but it will get you thinking in the right direction.
• Sketching skills will be vital. Just like selling on the fl oor, the ability to create a working drawing of the room being developed is critical. It is the center point of your eff ort and the major note taking/ record keeping vehicle you will use. Since you will be exchanging ideas and developing plans remotely, it is even more important to be able to put your design thoughts into a picture the client can see and understand.
• Online room planning apps will be critical to sharing ideas. While sketching is still the best way to develop and present ideas on the fl y, to be successful doing virtual house calls, it will be necessary to use a quality online room planning app or other such software that can create PDF fi les or pictures that can be exchanged with the client as the project progresses. Find one that is easy to use, provides all the functionality you want and has a good training/support function included.
• Learn to work from pictures of rooms. Since you will not actually be visiting the room you will be working on, you must become profi cient at using pictures to develop your design recommendations. This will include advising the client how to take the shots you need, and also the best ways to provide measurements needed for the project. There is also software becoming available that will enable you to actually show a piece you are considering in the room, which would certainly be a big plus for you to use.
• Enhanced e-mail skills will be vital. The main communications vehicle that will likely be used to exchange ideas and images will be e-mail. It will be vital that you become comfortable with all if its functionality. You should also make sure your writing technique and terminology are as professional and precise as they can be.
• Romancing the product on the phone and via e-mail will be critical. Since the client may not come to the store to actually see, feel and touch the products you recommend, you will need to be able to describe them in terms they will not only understand but can also easily visualize. This is important in the store too, but even more so when selling on the phone or online. Parting Thoughts Here are a few additional things you may want to consider:
• Social media will be even more important. People who are spending more time at home will rely more on social media for inspiration, reviews, communication and shopping.
• Know where your audience hangs out online (Facebook, Pinterest, Instagram, Houzz, etc.) and consider using those channels to make contact. Be visible in the online community and pay att ention to the analytics; watch what gets likes, comments, etc. Remember to use lots of photos and videos and share exciting ideas.
• Brands, magazines, and design shows will be very important as more and more people get their ideas from them – refocus some of your advertising dollars to give them ideas, not just prices.
• Online auctions, design seminars and other outreach eff orts will be more meaningful to the home-bound consumer.
• Join Facebook follower groups for the most popular home reno and decorating TV shows. Read the fans’ comments to gain insight into current trends by studying what they like and do not like.
• Stay away from political discussions this election year. However tempting it will be, it is never a good idea to share political views with a potential client. We have made it through the fi rst phase in our fi ght against COVID-19 and the havoc it has wreaked, but there will be more to come. Hopefully these ideas help you survive and prosper in the second half of 2020.