Counter-Punching

August 6, 2013  by in Business Strategy, Industry   

With 13 stores, Spiller Furniture has buying power for a big selection at competitive pricing.

While most furniture stores were recovering from a recession that left cyclone-like devastation in its wake, Tuscaloosa, Ala.-based Spiller Furniture had a real tornado to deal with.
The April 27, 2011, storm left 52 dead
in the area and destroyed 12 percent of the city. It also wrecked the 13-store promotional furniture, appliance and electronics retailer’s nearby Alberta City location.
The retailer decided not to reopen that store. The tough
economy of 2008 to 2010 had forced Spiller to analyze all expenses and operations, and it already had closed some under-performing locations, trimming employment from a high of 175 to the 115 it has today.
Business is pointing in the right direction now.
“The past two years have been a steady growth of 5 to 8 percent in sales,” said Shane Spiller, the company’s third-generation president. “We are a much leaner operation now that operates with a core group of hard working employees.”
With 13 stores, the company has good buying power, and the ability to deliver quickly across a market that includes east central Alabama and eastern Mississippi. That, plus its own in-house credit terms, allows Spiller to make popular-price furniture accessible to a lot of people.
It’s turned out to be a strong niche.
“The customer has the ability to purchase using our relaxed in-house credit terms,” Spiller said. “We report the customer payment history to the credit bureaus, and it allows the customer to build their credit.
“Renting or leasing furniture does not allow the customer the ability to establish a credit history, and therefore they have nothing to show others their ability to pay their debts.”
As a regional chain, he added, Spiller Furniture has the purchasing power to provide a larger selection of merchandise to those customers; and a 60,000-square-foot warehouse to back quick delivery from any of its locations.    
THREE GENERATIONS & COUNTING
Spiller Furniture was founded 1948 by Shane’s grandfather, James E. Spiller  Jr., when he took a local moving company and slowly transitioned into a retail furniture store.
Spiller’s in-house installment credit was a fixture from the start, with most customers buying their furniture on credit.
“That business began to grow with route salespeople that would travel to local towns selling furniture and collecting on their accounts,” Spiller said. “New Spiller Furniture stores would be opened in towns where customer accounts were established.”

Currently, 75 percent of Spiller’s customers still rely on the retailer’s in-house installment credit.
The founder’s son, Mike Spiller, and his sisters, Jimmie, Nedra, and Joan all played a part in growing the business during the ‘60s and ‘70s. 
Mike Spiller, Shane’s father, became president in 1982 shortly before James Spiller passed.  He continued to lead the company until Shane was named president in 2004. 
Like many younger-generation retailers, Shane Spiller got an early start in the business.
“I started pushing a broom when I was 12, and worked summers and any time I was on break from school,” he said.
During those years, Spiller worked in a variety of areas in the business, in the warehouse, stocking, and then the sales floor. After graduating from the University of Alabama in 1995, he moved into inventory control, where he worked until succeeding his father as president in 2004.

FAMILY FRIENDLY TOUCH
Spiller Furniture strives for a consistent atmosphere at all stores, one that focuses on value-priced home furnishings and that’s welcoming to families shopping together.
Advertising promotes a friendly, family atmosphere for customers and employees, and the retailer makes that part of the store experience.
“When someone comes in the door, the person who greets them is representing the Spiller name, so I want a relationship with employees that will roll over to the customer,” Spiller said. “We have a children’s section in the stores where they can play while their parents shop, and where the parents can be comfortable leaving their kids.”
Television advertising and social media reinforce that family friendly message.
“We personally promote the business with me and my three sons (10-year-old twins Mike and Mac, and 5-year-old Major) telling about the current sales event,” Spiller said. “Our tag line is ‘Big Selection, Friendly Service, and Credit, Credit, Credit!’”
Television is one important vehicle. Another is the circular program, which Spiller Furniture does through “married mailings,” that is, combined with other pieces to get the cost down.

FOCUS ON VALUES
The recession forced Spiller Furniture to take a hard look at its business. Part of that process included hiring an interim CFO who introduced the retailer to the Entrepreneurial Operating System, a concept based on the book “Traction” by Gino Wickman.
EOS led to the establishment of Spiller’s Core Values, which provide a basic road map for everyone in the company.
Spiller’s six Core Values are: Dedicated and Committed; Is Accountable; Takes initiative; Does the Right Thing; Open and Honest; and Good Attitude.
“All organizations have their core values,” Spiller said. “These core values just need to be uncovered and communicated to all.”
The company started EOS at the beginning of 2012, so it’s been in place for 18 months.
“We have quarterly meetings where we set our 90-day goals—we call them ‘rocks,’ you know, ‘move the big rocks first’—and we have weekly management meetings,” Spiller said. “Right now we’re instituting weekly meetings at the store level, so the stores will all be on the same agenda. It makes sure we have the issues on the table.”
The values also have given the retailer consistent guidelines for hiring, firing and evaluating employees; and a framework for keeping everyone moving in the right direction. That’s especially important moving forward since Spiller Furniture runs a lot leaner than before, and if someone’s not pulling their weight, problems come up in a hurry.
The values are an all-or-nothing proposition for everyone at Spiller Furniture.
“If a particular employee doesn’t have one of the core values, we can do something,” Spiller said. “You get judged on those values three ways—you have it, you’re on the fence, or you don’t have it.
“If you don’t have it, we’ll counsel—there might be something going on at home and we’ll work with you—but you have to understand this is a business, and we need you to get on the bus.” HFB