From Home Furnishing Business
Editors Note: Hey, I thought you were a loyal customer!
The impact of being declared “non-essential” retailing was a shock to traditional furniture retailers. Just like our customers, furniture retailers were urged to “shelter in place” and most complied. Some that followed the directive continued to operate under the classifi cation of “essential” because of their appliance categories. Others expanded their merchandise to include appliances, or at least lift chairs. It was a period of confusion with law suits challenging local government’s authority to regulate. The result was furniture stores dropping 28% in April.
I understand “essential” when it comes to groceries and maybe a washer/dryer in a household of multiple kids, but a new sofa? Furniture retailers have been begging consumers to redecorate their homes for years, luring them with major discounts and long term fi nancing, and now they decide to fi nally buy in the midst of a pandemic? Don’t misunderstand – I am glad the consumer’s att ention is now directed to the home. And, many retailers believe this will be a long term trend. Consumer research has yet to bear that out. As you can see from the forecast, 2020 will end up growing only 3.7%, signifi cantly down from the previous year. What was disturbing was who the consumers went to when the local furniture store was closed. The e-commerce channel was the benefi ciary along with the home improvement stores and general retailers, such as Big Lots. As has been reported, Wayfair’s sales increased 86% from the same period last year, adding 46,000 new customers. The graphic below presents some statistics.
I realize it has been a while since consumers qualifi ed their purchase with a testimonial like, “My parents and grandparents bought their furniture here.” I know today we look to social media for our feedback. But, how real is a 4.5 ranking when the consumer easily goes to another distribution channel for a postponable purchase? In every market, furniture retailers have their local charitable events that have been repeated for years; Jordan’s, Bernie & Phyl’s, Morris Home, Walker Furniture & Matt ress LV, and so on, for pages. As an industry, each year we provide City of Hope millions in support. I know charity should be without expectation of return, but it should be recognized.
As an industry, we must redefi ne loyalty and recognize our most loyal customers in a proactive way with tangible rewards. For those that still have access to the older generation, ask what they did to instill loyalty. And then we could look at newcomers, such as RH, formerly Restoration Hardware. We are all envious of their growth and profi tability. They charge an annual membership fee to be a prime customer – just a thought.