From Home Furnishing Business
After a decent year in 2017, most producers are looking for at least modest growth this year. But they realize they must continue to focus on the blocking and tackling basics of the rug game, such as product design, logistics and customer relationships.
“I’m sure there are macro factors that influence the industry, but we still need to develop great product, build relationships with our customers and build our brand,” said Cyrus Loloi, a principal at Loloi Rugs. “You have to look at the areas of the industry that are growing and those that are diminishing, and focus your business accordingly.”
Like most of his competitors, Loloi said e-commerce is the company’s fastest-growing distribution channel, but said he’s also seeing growth from traditional furniture stores and national chains.
What distinguished rugs from other home furnishings categories is the seasonal nature of the product introduction cycle and the many trade shows in which vendors feel obligated to participate in order to remain relevant. Most now have product introductions four times a year – January, April, July and October – to accommodate the different segments of buyers they see at each show.
January and July have major shows for the category in Atlanta, Dallas and Las Vegas, while April and October, of course, are the months for the High Point Market. And vendors say the fast-changing nature of consumer tastes require new product in each of those four “seasons.”
“Monitoring consumer buying patterns has enabled us to see what is truly relevant to our (retail) customer’s customer,” said Satya Tiwari, president of Surya. “Our product development team has done a great job of predicting those trends early in order for us to bring to market the best quality products when demand is at its highest.”
Research by Impact Consulting Services, parent company of Home Furnishings Business, showed there was no dominant design element favored by consumers who purchased a rug in 2017. Solids were picked by 20 percent of respondents, but floral, geometric prints and traditional prints were each chosen by 17.8 percent.
Next was stripes at 11.1 percent, followed by contemporary prints at 8.9 percent and zig-zag at 6.7 percent.
When he came to color, however, neutrals such as black, white and beige were clearly dominant, being picked by 51.1 percent of respondents. Red was a distant second at 17.8 percent and blue was an even more distant third at 15.6 percent.
All other color choices offered on the survey – green, orange, pink and purple – were each purchased by less than 10 percent of those surveyed.
One aspect of rug sales not covered by the survey that has been very successful for many rug vendors is licensing programs.
Loloi, for example, has no fewer than three licensed collections that are doing well – Magnolia Home by Joanna Gaines, Ellen DeGeneres and Justina Blakeney – while Nourison debuted its Christopher Guy collection at the January markets and expanded its successful Calvin Klein lineup. And those are on top of Nourison’s existing licensed collections from Kathy Ireland, Barclay Butera, Joseph Abboud, and the Peanuts gang. In addition, Kas launched their Libby Langdon licensed collection last fall.
“Our licensed collections are pulling very strong numbers, but you can’t solely count on the name or the brand,” said Loloi. “But the brand gives it a boost, and adds an element of credibility.”
The Impact Consulting research showed that the internet was, indeed, the most popular place of purchase. Some 31.1 percent said they purchased their rug online, easily beating out furniture stores (22.2 percent), mass merchants (17.8 percent) and home improvement stores (15.6 percent). Rug specialty stores and floor covering stores were each cited by less than 10 percent of purchasers.
The survey also clearly showed there’s an opportunity to educate rug shoppers, as a significant percentage of buyers didn’t know basic facts about the product before they bought it.
For example, a whopping 71.1 percent of buyers said they did not know the country of origin of their new rug (India was cited by 13.3 percent), and 44.4 percent did know if their new rug was machine-made or hand-made.
And when asked what material their new rug was made of, “don’t know” was cited by the largest percentage of respondents at 28.9 percent. Another 22.2 percent said it was made of wool, and 20 percent each said natural fibers and synthetic fibers.
The research also showed that rugs costing $799 or less were purchase by the vast majority of participants. Price points of $100 to $399 led the way at 35.6 percent, followed by less than $100 at 26.7 percent, and $499 to $799 with 22.2 percent. No other price range was cited by more than 7 percent of respondents.
Phoenix-based Trendwood, now a major player in youth furniture, got its start in 1985 in an entirely different furniture category – waterbed furniture.
Capitalizing on the flotation frenzy of the 1970s and 1980s, the company did a brisk business making waterbed frames and headboards for waterbed specialty stores. The furniture was made of Ponderosa pine, a wood known for its strength and durability that could support the heavy bags of water that made up waterbed mattresses.
Scott Coor, Trendwood’s vice president of marketing, recalled that many in the waterbed business were convinced the frenzy would last forever, but by 1990, he said the company began to see indications the industry was peaking.
“What we did best was cut long pieces of pine, so when waterbed sales began to stall out, I started looking for other applications for that process, and we settled on bunk beds,” he said. “There were a ton of guys making little cheap bunk beds, and there were some real expensive ones out there, but nothing in between. So I thought if we could make a really strong, durable bed … we might have something.”
So, in 1992, Trendwood secured a small, temporary exhibit space at the now-defunct San Francisco furniture market to show its first three bunk beds – while still making its line of waterbed furniture.
Coor said it took a couple of years for Trendwood to establish credibility as a bunk bed producer – after all, the waterbed business had more than its share of questionable operators – but the program finally started humming.
The timing couldn’t have been better. Waterbed sales began a breathtaking decline in 1992, and by 1996, the once booming industry – not to mention Trendwood’s waterbed furniture business – had all but disappeared.
Parents and grandparents often recoil at the notion of spending hundreds and hundreds of dollars on furniture that a child may outgrow in a few years.
They face a similar dilemma with clothes, shoes and toys, but at least those items can be passed along to a sibling, sold at a yard sale, or donated to charity. It’s not as easy to do that with a captain’s bed.
That makes youth furniture a much tougher sell at retail – so tough that some furniture retailers have abandoned the category.
But many youth furniture suppliers, for obvious reasons, think that’s the wrong approach. They say youth bedroom, just like master bedroom furniture for adults, is transitioning into an item business. That means retailers should focus on the items consumers want most – and de-emphasize the 20-sku collections that once were a staple of the category.
“Gone are the times when Mom and Dad went into the big box store and bought bed, dresser, mirror, nightstand and chest for the new little girl,” said Fran Scheller, vice president of merchandising and product development at full-line furniture resource Bernard’s. “That has definitely impacted the dollar volume of the youth business.”
But Scheller and other executives say the category is still quite vibrant – as long as manufacturers and retailers can deliver what the consumer really wants. That usually means a sturdy, safe bed and something that has lots of storage.
“If you look at the demographics there are still a lot of kids out there who need a place to sleep and a place to put their stuff,” said Scot Coor, vice president of marketing at Trendwood, a Phoenix-based youth furniture producer. “Most people want to buy something that’s a durable, safe product, but bottom line, they don’t want to spend a whole lot on it because they know the kid is going to outgrow it or tear it up.”
That’s why Coor and Scheller said their companies are now focusing on beds -- in many cases designing them with storage space that’s either under the bed or part of the headboard.
One of Bernard’s best-sellers, for example, is a design called a lounge bed that features a bookcase storage unit built onto one side of the bed. That allows it to be placed against a wall, which saves space in the center of the child’s room. Plus, it has storage drawers underneath the bed.
“People are still buying functional pieces that give them a variety of uses and lots of storage options,” Scheller said.
Don Essenberg, president of full-line resource Legacy Classic, said his company’s Legacy Classic Kids line is still experiencing growth, but acknowledged youth furniture is “a tough category” because products typically occupy a small footprint and separate, distinct section of a retail sales floor. That makes it essential for a retailer to promote the category heavily in order to be successful, he said.
“People who do the best with kids’ furniture are the ones who advertise it,” said Essenberg. “You have to let that mother whose out shopping for youth furniture know that you have it.”
“You had better be really good if you’re going to do youth, because the competition is fierce,” Scheller added. “It’s not like master bedroom, which is a fashion statement. It’s more like mattresses and recliners. It’s price driven and it’s need driven.”
Essenberg said his company’s line, which is at the upper end of the market, also is seeing less interest in purchases of multiple pieces, and said desk sales, in particular, have weakened.
“Desks aren’t an automatic. It’s not the essential SKU in the kids’ bedroom anymore,” he said. “It about sleep and storage now.”
Coor said Trendwood’s desk sales also have been sluggish, but said he has seen a slight uptick in sales of models that have a power supply and a charging station.
“For a desk in a kid’s room today, you better have a charging station. If you don’t, you’re selling an antique,” Essenberg quipped.
Research by Impact Consulting Services, parent company of Home Furnishings Business, showed that only 13.4% of consumers who recently purchased youth furniture were interested in adding a desk. But 26.5% of those surveyed were interested in buying a second bed – often a bunk bed or loft bed.
And interestingly, a majority of those surveyed were hoping their youth furniture would last a lot longer than the youth for whom it was purchased. Some 29.2% of respondents said they hoped to use the furniture in a spare bedroom some day, while another 36% said they hope the child can use it as an adult in their first apartment or at college.
In addition, the survey said 26.2% of respondents purchased their furniture for a child who was over age 13, while 17.9% bought it for a child age 10 to 13, and 17.6% bought for a child age 6 to 9. The highest percentage of purchases, however, were made for a child age 3 to 5, who was the recipient of 29.5% of the purchases.
Essenberg and Scheller said the majority of product from their companies are purchased for girls, which is not surprising because white remains the most popular youth furniture color.
“We still do well with the classic white girls’ groups in our line, whether they’re a little more transitional or the typical ornate Victorian look,” Essenberg said. “But the last couple of years, we’re also starting to do well with girls’ groups that are not in pure white. Some of the taupe and putty colors are doing well.”
Coor said Trendwood’s furniture is made of solid Ponderosa pine and has more of a unisex look, and noted that his company doesn’t keep track of whether the user is a boy or girl.
“Most of our product is developed around a youth’s need, be it a boy or a girl,” Coor said. “Neutral colors are not going out of style. They seem to be the most popular.”
This may come as a shock, but you are likely to see the words “motion furniture” and “technology” in the same sentence throughout this story.
Yes, we’re talking about the same motion furniture that, not all that long ago, was limited to basements, man caves, and other areas of the house that were largely out of public view and used only by guys named Bubba.
But today’s motion furniture user just wants a comfortable place to relax after he – or she – comes home from work. And the relaxation begins with the press of a button to open the ottoman, adjust the head rest and even provide lumbar support for that aching back.
And since most people can’t go more than 30 seconds without checking email on their smartphone or tablet, they’re constantly needing a place to charge the device. So a USB charging port is conveniently located in the arm of that same piece of motorized motion furniture, so the user can relax, surf the internet, check email and charge the device – all at the same time.
It’s all about motion furniture for today’s technology-laden, always-on culture. There’s an app for it, too, but more on that later.
“The bridge is being built between our everyday tech lives and our everyday relaxing lives,” said Bobby Jones, director of motion and import upholstery at Klaussner. “The technology is the overall driving force for growth in the category.”
Jones and other executives believe the motion category still has plenty of growing room left. The growth may not be as rapid as it was in the early 2000s when it was being driven by flat-screen television sales, but our rapidly changing technology needs will be a force for years to come.
“That’s where we’re seeing the innovations,” Jones said of the motion category. “You can’t really update too much on the stationary side, so I think motion is where we will continue to see the innovations.”
But stationary upholstery is having a major influence on motion upholstery because producers are designing their motion products to, well, look more like stationary products.
“Our product is much different today that it was just a few years ago,” said Chuck Tidwell, vice president of merchandising and product development at Franklin. “It has the look of stationary, and oh, by the way, it’s got reclining action.”
One way Franklin has achieved that “stationary look” is by adding legs to its motion furniture, a process that Tidwell said isn’t as easy as it sounds. That’s because the product must be designed, in effect, around the mechanism. And with many of today’s motion pieces having as many as three motors (for the ottoman, head rest and lumbar), it presents some significant challenges. But the result makes it well worth the trouble, he said.
“As the styling improves, it’s just going to continue to grow,” Tidwell said of the motion category. “People today usually buy recliners and motion furniture because they want to be comfortable. It’s the stationary look, but has reclining comfort”
A survey of recent motion furniture purchasers by Impact Consulting Services, parent company of Home Furnishings Business, indicates producers are achieving the proper blend of style and comfort. On a scale of 1 to 7, with 7 being the highest on the satisfaction meter, 27.6% rated their purchase a 7, and another 31% gave it a 6.
Only 6% rated their purchase a 1, meaning they were not at all satisfied, while 9.5% gave it a rating of 2, the survey results said.
Interestingly, some 52.7% of respondents said the style of reclining furniture was not an inhibitor to their purchase, but 47.3% said it was. Plus, a surprising 52.6% said they preferred a manual reclining mechanism, and another 16.4% preferred a “push-back” mechanism activated by body pressure. A more modest 31% said they preferred a power mechanism.
Tidwell said around 41% of Franklin’s motion and recliner sales are units that include power mechanisms, while Jones noted that Klaussner’s “fully loaded” motion sofas, which are equipped with a power ottoman, power headrest and power lumbar support, are outselling units with manual mechanisms by an incredible 9-to-1 margin.
“Getting our retailers to commit to flooring at least one piece fully loaded is the key,” said Jones. “It offers a great in-store experience (for consumers). It’s one thing to be comfortable with the power headrest, but once you experience that with the lumbar support, it makes a powerful sales tool.”
And the Impact Consulting survey showed that consumers are willing to pay a little more for these features. The survey said 52.1% of respondents would pay an additional $50 for a power recliner, and another 25.8% would pay an extra $100. And surprisingly, 11.2% said they would pay more than $200 extra for that feature.
So what’s the next hot innovation in motion furniture?
At Franklin, it’s a radically re-designed seating system that makes the product more comfortable and easier to deliver – a win for the retailer and the consumer -- while Klaussner recently unveiled a Bluetooth-based app that allows the user to control the motion sofa through a smartphone or tablet.
Tidwell said Franklin’s new seating system was a huge hit at the High Point Market in April, and its popularity has caused the company to start converting its product line to the new system much faster than originally planned.
“It has really turned our factory upside down. But that’s one of those high-class problems,” he said.
Not only does the new system make its seats more comfortable, the re-design allows the backs of sofas to be removed, which Tidwell said makes it easier to get them through small doorways and stairwells. Plus, if a mechanism ever needs repair or replacement, the service can be done in the consumer’s home. It’s no longer necessary to haul the sofa back to the factory.
“We originally were going to put the new system (only) in our new products, but because everybody wanted it, it’s now going into our new products and best-sellers,” said Tidwell. “And soon, it will be in our entire line.”
Jones said Klaussner’s Bluetooth-based app, called Complete Comfort Control, also was a huge hit at the April market. The free app allows the user to synchronize the seat to a smartphone or tablet and then operate the power mechanisms – all three of them – from the device. Such apps previously were available only with high-tech massage chairs costing thousands of dollars more.
The app includes a memory function that moves the seat to the user’s favorite position, as well as a reset button that takes the seat back to its upright position. Jones said the app is available at no upcharge with Klaussner’s motion sofas, sectionals, free-standing recliners and high-leg recliners.
“It was extremely well received. We’re looking forward to a lot of good retail action from it,” he said.
By Larry Thomas
Whatever the occasion, occasional furniture is continuing to move steadily from manufacturers’ warehouses to consumers’ homes as the Millennial generation increasingly drives the category’s style and design directions.
Vendors say sales have remained strong despite weaker demand in the second half of last year, noting that occasional pieces can be popular even in the toughest of business conditions because they represent an easy and inexpensive redecorating option. Plus, it’s a low-risk way for consumers to experiment with a style change. If they decide they don’t like the new look, they aren’t stuck with a complete room makeover that may have cost thousands.
“By replacing an occasional chair or coffee table and updating the pillows and rugs, a consumer can get a brand-new look with the same core pieces and hasn’t made a huge investment,” said Rodd Rafieha, senior vice president at Abbyson Living.
That can make occasional pieces trendy stand-alone purchases, given that consumers increasingly are turning away from buying large numbers of items from matched collections.
“We don’t do short collections … everything is very eclectic,” said John Michaelides, senior vice president of sales at Linon Furniture. “But if a consumer wants to build a room around them, they certainly can.”
Michaelides and other executives said that, while coffee tables, end tables and sofa tables still make up the vast majority of occasional furniture purchases, items such as serving carts, bar stools, magazine racks, jewelry armoires, and even small writing desks are now classified as occasional furniture on many retail sales floors.
“Each item stands alone,” Michaelides said. “The value and the look must resonate with the consumer.”
According to research by Impact Consulting Services, parent company of Home Furnishings Business, sales of occasional tables at retail grew slightly faster than overall retail furniture sales in 2016. The research estimated occasional sales at $14.95 billion last year, an increase of 4.06% from 2016. Total furniture sales, meanwhile, were an estimated $82.47 billion, up 3.65% from 2016.
The 2016 figures represented a reversal from 2015 and 2014, when the growth of overall retail furniture sales easily outdistanced the growth in occasional sales.
The research showed that occasional sales were up 5.19% in 2015, compared with a 6.22% jump in retail furniture sales. And the gap was even larger in 2014, when occasional grew only 2.53% while retail furniture sales jumped 6.37%.
Rafieha and John Lannertone, vice president of sales at Modus Furniture, attributed at least some of the most recent growth to Millennials, who increasingly are driving sales and steering style and design trends.
“The demographics that buy furniture are shifting from the Baby Boomers to the Millennials,” Rafieha said. “They love color and the clean lines of the mid-century style, and the glamorous metallic and opulence of modern glam. Metallics have been a huge trend in fashion for several years, and it is natural for these trends to migrate to the home furnishings world.”
Lannertone said the recent uptick has supported the timing of his company’s renewed emphasis on occasional.
“We’ve always had occasional to go with our bedroom furniture and other offerings, but we were not a big player,” said Lannertone. “We put more emphasis on occasional the last three years, and our larger program has been a great addition for us. We seem to be getting a lot of slots – a lot more than we thought we would get. It has been pretty wild.”
He said the company’s focus on solid wood construction – the same material used in its other wood furniture collections -- also has helped boost its occasional business. “We’re not using inexpensive materials, so we’re not competing against promotionally driven wholesalers,” said Lannertone. “That has gotten us a lot of attention from some very major retailers.”
Style-wise, he said rustic contemporary has been the leader, which is not surprising given Modus’ focus on solid wood and middle to upper-middle price points.
At Abbyson Living, Rafieha sees no slowdown in the mid-century and modern glam styles that are powering that company’s occasional sales.
“The mid-century trend, with its brighter upholstered pieces and clean lines appeal to a broad range of demographics,” he said. “Modern glam is characterized by metallic finishes, mirrored surfaces, tufting, and luxurious fabrics. We have seen great success here and continue to expand our assortment.”
A survey of consumers who recently purchased occasional tables showed that traditional and contemporary were the two most popular styles, by far, according to Impact Consulting. They were favored by 32.9% and 35.1% of those surveyed, respectively. Country/rustic was third at 16.2%, and no other style was favored by more than 7%.
Regarding price, the survey results were much more evenly divided. When asked what they would expect to pay for an occasional table grouping, 36.2% said $250 or less, while 32% said $250 to $499, and 28.5% said $500 to $999.
And not surprisingly, end tables and coffee tables were the most frequently purchased occasional tables. The survey showed that end tables were named by 41.5% of those who had made a recent purchase, while a coffee table was purchased by 31.9%. A sofa or console table was purchased by 17.9% of those surveyed, while nesting tables were purchased by only 8.6%.
Michaelides, for one, believes that the percentage of those buying a sofa or console table will increase significantly in the next few years, and noted that the item is now Linon’s fastest-growing occasional furniture piece.
“It’s really the hidden gem among occasional tables,” he said. “It can go in a hallway. It can go in a bedroom. You can put a flat-screen TV on top of it. You can put it in a game room to hold all the Xboxes and that kind of stuff. And you can even put it in a home office.”
And it’s that versatility, he said, that’s driving the product’s growth, noting that in several of Linon’s collections, the console table is outselling the coffee table.
“The more rooms where that item fits, the more opportunities we have to sell it,” he said.