Pop Stars

October 10, 2013  by in Business Strategy, Industry   

Pop up locations show potential as a model for home furnishings.

By Powell Slaughter

So-called pop-up locations, temporary installations in high-traffic shopping areas such as malls, have proven highly effective in various consumer goods categories. Sometimes they work as actual retail shops, whether seasonal—think gifts during the holidays—or to build excitement and sales for athletic equipment or clothing lines. They also can serve as a lure to a permanent store with enticing displays or promotion of new merchandise. “It gets people to think about you,” said John Egger, CEO of furniture retail management consultancy Profitability Consulting Group.

“It’s a representation of your store in a high-traffic area—it’s like an interactive billboard.” The technique represents a huge opportunity that most of the furniture industry has yet to understand, said Connie Post, CEO of retail and trade showroom design specialist Affordable Design Solutions.

“Retailers could go into malls and drive holiday traffic to their stores,” she said. “People like Nike and other athletic equipment brands have put out shipping containers and turned them into a retail space. Other parts of retail worldwide are doing it. We in the furniture industry are very slow with new ideas.”

She pointed to West Virginia and Kentucky retailer Big Sandy as an example of a furniture retailer employing a pop-up.

“They had a kiosk for the holidays that did quite well,” Post said. “You can use those as a model to sell specific categories.”

Now you sell it

The pop-up model is central to promoting the HGTV Home Furniture Collection, produced by Bassett Furniture for the network’s consumer products segment. By the end of the year, six pop-up stores around the country will have promoted the HGTV Home Furniture brand to customer in locations outside traditional furniture store fronts. “It’s an HGTV initiative to create consumer awareness about the home line of products,” said Renee Loper, vice president of independent retail development and marketing for Bassett. “Because this is a new endeavor, consumers weren’t aware HGTV even has these products.”

The HGTV Home Pop-Up Shop was a way to increase consumer awareness about the home line of products. “The goals are engagement and consumer awareness,” she said. A pop-up location was in downtown Chicago through Sept. 22. This month, a location opened in Tyson’s Corner, Va ., on the seventh and will run through Nov. 10.Later that month, a pop-up is set to open in Santa Monica Place in Los Angeles on Nov. 25. Next year, HGTV Home Pop-Up Shop are scheduled for the King of Prussia Mall in the Philadelphia area; Atlanta; and the Mall of America in Bloomington, Minn.“Chicago is the first location where we’ve had a retailer carrying the line (Darvin’s Furniture) in very close proximity,” Loper said. “We are doing a coupon that’s handed out in the pop-up shop for the store. Anecdotally, I hear Darvin’s has seen some additional traffic. Traffic at the pop-ups has ranged from 5,000to 6,000 per location.”

Robin Ulrich, senior vice president of consumer products at HGTV, said the HGTV Pop Up Shops are designed to inspire ideas with categories to match the biggest projects. “By bringing all our partners together in one space, we can show how it all works together,” she said, adding that tying in with local stores carrying the goods is a priority—goods on display in the pop ups are not for sale, but for display and inspiration only. Belfort Furniture in Dulles, Va., for example, is counting on the HGTV pop-up location in Tyson’s Corner, a suburb of Washington, D.C., to build excitement for its launch of the HGTV Home Furniture Collection.

“They’re launching at the store, Nov. 9, and Genevieve Gorder will be there,” said Robin Ulrich, senior vice president of consumer products, HGTV. “We make sure when consumers come to the store we have a retailer in the area for all of our product categories listed on a take-away.” Those range from lighting to flooring to HGTV’s paint line with Sherwin-Williams in addition to furniture. “It’s important that if we’re in that market, we want to make sure visitors know they can buy the products they see (in the pop-up) locally,” Ulrich said. With the furniture line, “we’ll really push our local retailers, be it a local independent or a Bassett store.” HFB

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Inset Story

A Take on Other Models Furniture’s getting sold in all sorts of ways, and traditional furniture stores could learn from some of those models. Profitability Consulting Group CEO John Egger offered his take on several.

DEDICATED STORES

“The advantage is that your design, floor display, marketing and merchandising are pretty much taken care of,” Egger said. “And you have name recognition. Some have leeway, some don’t.”

A disadvantage is that retailers are locked in since they don’t carry other brands. “Some of these brands don’t have bedding, and that’s something retailers need to carry,” he said. “Plus, some of the manufacturers aren’t great retailers. …You’re relying on one company.”

WEEKEND ONLY STORES

“I’ve worked with some of those,” Egger said. “Friday, Saturday and Sunday, that’s the core of our business, 80 to 90 percent of furniture retail takes place then.” There are some lower overhead and labor costs, especially if the operation takes a warehouse approach where the employees are more order takers than full-service sales associates. “There’s a perceived advantage among the public that they’ll have lower prices,” Egger said. “But even if you’re open three days a week, you still have to pay your rent and taxes; most and salespeople are on straight commission, so I’m not sure how much money you save. “It’s gimmicky, I think, but it’s a good advertising approach.”

RETAIL VERTICALS

The West Elms, the Crate & Barrels are where furniture stores can learn some lessons, according to Egger. “They’re in high-traffic areas, and they get great visibility,” he said.

“They’re always cutting edge, and they’ve got that young, upwardly mobile customer’s attention—It’s perceived as cool to be at West Elm.” In addition to great locations, appealing design and strong floor presentation, they offer lots of product that moves quickly. “They’re wide when it comes to product—towels, bath, candles,” Egger noted. “They are every appealing to shoppers in malls.

“We can learn from things they’re doing—some of their displays onto-go items are fabulous. That sort of thing can help build cash flow. I’d recommend that all furniture retailers spend time in those stores and look at what they’re doing with gift and other smaller items.”

ONLINE RETAILERS

Egger noted that the online model is making inroads even in what one might think are very “high touch” categories. “The thing that surprises me is bedding sales” online, he said. “How do you try out a QVC mattress unless it’s something you can find in a store?