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From Home Furnishing Business

Is Your Sales Manager Leading Performance Growth or Merely Providing Adult Day-Care?

This month’s issue is dedicated to Sales Management, which is of course the focus of this column. Over the last few years we have presented many aspects of this critical function within your retail organization, touching on things like recruiting, training, performance measurement and coaching. Interestingly, I don’t believe that we have ever truly defined some of the basic principles, beliefs and understandings that are the basis of every successful sales management effort. So, this column will pull some information from the beginning of our Sales Management Training Guide that is intended to set up the proper foundation for any program a client implements in their store. Sometimes going back to review the basics is a valuable way to assess where you are and where you need to go with your current efforts.

The question the title of this article presents, is based on what is meant to be a humorous commentary about what a sales manager ends up doing much of the time in most retail stores. Unfortunately, it is often a more accurate depiction of the situation than any business owner would want it to be. The reason is that many mangers get so wrapped-up in solving the daily issues of their staff, that they lose sight of their real role which is to provide performance leadership that consistently improves the team’s results and actually makes all of their lives better. 

There are many reasons this happens, but the biggest one is that most managers are normal human beings that just want to be liked by others, and a lot of what it takes to be a great manager and leader, might be perceived as running contrary to that goal. I am talking about setting up and maintaining two of the most important principles of performance management: accountability and discipline. It takes dedication and courage to take a stand on very important issues. Most of us tend to negotiate and give in more than we should which dilutes our management efforts and reduces our impact as a leader. In the end, we allow our sales floors to become “Democracies” where everyone has a vote and we do whatever the majority (or in many cases just the strongest personalities) wants. 

While that might be a good way to run a country, it is a terrible way to manage a performance team. Yes, you most certainly want to listen and take input from your players. They, along with your customers, are indeed your most valuable source for feedback to improve how you do things. Getting your staff’s “buy-in” for what you do is extremely important. But, in the end, it is not absolutely necessary. I have always thought that most businesses need to be Benevolent Dictatorships in order to maximize their results and be as effective as possible at whatever they do. Your sales floor is no different. Jack Welch said, you need three people to run any business: a visionary to set the course, a business person to run it and oversee how things work, and lastly an SOB to make it all happen! If you are in business for yourself you must at times be all three. Your sales manager is certainly someone who has to make things happen and therefore will be called upon at times to make some tough decisions and do the “dirty work”. That is what you pay them to do. 

In order to make the right decisions and run your sales effort properly, management has to have the right basis to make these judgements. They must be principle based and everyone on the team needs to understand and believe in the same things in order to build a strong culture that delivers great customer experiences and develops solid client relationships consistently. Here is the foundation we give our managers to help them be successful leading a performance based, selling effort at their stores.

All members of the Management team must understand that they share accountability for the continued growth and health of the company.  No company can survive without growth for very long.  Staying still usually means going backwards as competitors gain a greater share of the market.  Growth can be achieved in several ways.

Share of market can be increased through aggressive advertising.  This method is costly and involves risk as we seek to find the right combination of media, message and budget.  We can also increase our share of market by adding additional facilities -- opening new stores or expanding existing ones.  This involves capital expenditures and generally high risk.

Alternately, we can increase our share of customer by instituting sales strategies, practices and methods that concentrate on increasing the amount each customer buys from us today and in the future.  Share of customer requires better management of the customers who already shop our store.  

There are only three ways to increase sales in an existing furniture store:  increase traffic, increase the percentage of customers sold from that traffic, and increase the amount sold to each customer.  Increasing any one of these factors will increase total volume.  Improving any combination of them will compound the effect even further.  

Agents of Change

The sales manager as a key agent of change in any organization.  In order to achieve increases in average sale and close ratio, changes are required to many of the methods in use by salespeople.  Change is never achieved easily in any organization for many reasons.  These reasons are often cultural, with new methods and ideas coming into conflict with long-standing and accepted company or individual practices and policies.  It is the responsibility of the sales manager to champion new paradigms in the selling culture.

The principles of sales management below are aimed at aligning the sales manager’s own paradigm so that it will be possible for him or her to bring about changes within the sales force.

 High-Performance Organizations

Well-managed organizations with clear visions of the future who have understandable missions that are reflected in the day-to-day work of employees and management, and who share common goals with employees, are usually high-performance organizations.

In such companies, employees can experience a high level of satisfaction and, in many cases, enjoy a high quality of life at work and at home.  Owners and stockholders also share in the benefits of such organizations and provide a high quality of support and leadership in return.

Most important, customers who interact with such companies also enjoy the high-quality care and attention to their needs that they seek, developing strong loyalties to both the company and to the individuals with whom they interact.  This is true customer satisfaction.

The management principles spelled out here are the basis for a high-performance organization.  They are aimed at enhancing the quality of life for all parties.

Underlying Principles

In sales management as in all disciplines, it is as important to be doing the right things as it is to be doing things right.  Experience with hundreds of successful furniture stores show that these are the right things for sales managers to be doing.

The following principles underlie all aspects of a solid sales management program:

  • Our business is driven by the needs our customers have to create beautiful home environments. We don’t just “sell furniture”, we make people happier in their homes which is a much higher calling.
  • Our universal industry mission is to help our customers discover how to use our products to enhance their quality of life instead of just how to buy our products. We turn houses into homes.
  • The needs of the customer must always take precedence over the needs of the salesperson. Sales people do not own customers, customers own sales people.
  • Sales managers need to manage the right things. Accountability and agreed upon goals are a key element to this.
  • People want to be part of a high performing work team. This is universally true, but particularly so for those that will be most successful on your team.
  • People have personal goals but lack any structured, organized way of achieving them. It would be great if our schools taught our kids to do this, but they don’t, so you need to help them learn how to create a plan and execute it.
  • It is better to be fair, supportive and demanding than to just be nice and allow people to fail. It is like being a parent, do you really want to let your kids fail? 
  • People require and deserve dedicated, principle-based leadership. Good to great people in particular will only work in this type of environment or culture.
  • What is not measured cannot be changed. The best way to show that something is important is to measure it, track it, report it and coach improvement of it.
  • Managers manage individual people not groups. Only when each player performs at their peak does a team truly maximize its success. 

It really boils down to using these principles to build a selling and service centered culture within your store. Without them you will end up making the wrong decisions and not doing the right things to be successful. Once your culture is in place and you have developed the discipline to consistently do the right things for your clients, life for everyone concerned will be a positive experience.

IS IT JUST IN MY STORE THAT TRAFFIC IS DOWN? — MAYBE

This common refrain at the April High Point market was consistent with what is happening to traffic.  Obviously, the economic results (GDP) for Q1 reflected an anemic .7% increase when compared to 2.1% for the previous quarter and the same quarter last year at .8%.  While not a substantial decrease over last year, it was still the weakest quarter in three years.


 

The furniture industry, including bedding, struggled along at 3.0% (Q1 2017 to Q1 2016), a growth we should be content with reflecting on all retail at 3.6%.

So, what is all the noise about traffic?  Traffic has been declining for the past decade as the time-starved consumer relies more on internet research which can be done while multi-tasking late at night when the kids are finally down and there is some “me” time.  Statistically, the number is right at two stores shopped before purchasing.  This is significantly down from the four to five stores a decade ago.

 

Unfortunately, the changing consumer buying process has created a segregation of “have” and “have not” retailers, those with the traffic and those that are asking what happened to the traffic.  Unfortunately, the easiest thing to blame is the intrusion of the e-tailers into everyone’s marketplace.  It is true that this new channel has captured 15-17% of furniture and bedding sales.  But, this is not the reason for the decline in traffic.  For major furniture purchases, the consumer who purchased on the internet still visited a “brick and mortar” retailer.

On average, about 50% of the consumers that purchased furniture visited the furniture store first and then proceeded with research on the internet.  The other 50% do their research first and then visit the retailers whose site inspired them.  It should be stressed that when not an e-commerce site, the typical time spent on the site is 4-6 minutes, not the in-depth research, but more “this retailer has the style/brands and price points I want”.  Only later do they drill down to the specifics.  The graphic details the steps and priorities.

It should be stressed that this is not a drawn-out process.  In fact, over 50% of it is over and done in less than two weeks.

The fact is that the time-starved consumers do not have the inclination to extend the process and enjoy decorating their homes.  If we look at the percentage of consumers that consult a professional designer as the first stop, it is small.  In discussions with the ever expanding cadre of “designers” in the industry, it becomes obvious that there are more “personal shoppers” than certified designers.

We should stop berating ourselves about the “retail experience” that we provide consumers.  In fact, more than 85% rate their experience above average and 27% rate it as excellent.  This is much better than other consumer experience ratings in other retail sectors.

So, where is the traffic?  It may be in your competitor’s store.  With Impact Consulting’s monitoring of what they define as high performance retailers, the traffic has been constant.  The sample is national, including in proportion retailers with sales from $5M to $250M.  There has been little change in traffic until the fourth quarter.

But, this volume of traffic is reflecting the growth in industry sales.  However, it should be noted that the high performing retailers’ performance was to increase close rate and average ticket.

The lesson learned is to treasure each of those opportunities (Ups) and to transform them to a sale.  Unfortunately, the focus on sales management decreases as the retailer’s revenues increase because the owner is further away from the selling floor. 

For well-managed retailers, the cost of attracting the consumer into the store is averaging $23/opportunity which translates into $70-$100 for each sale at a 30% close rate, a significant percentage of the gross profit generated on each sale.  Visualizing each consumer through the door as a potential loss will focus an owner on the importance of sales management.

So what do we do about it? Read on.

Sales Management: 

The Proper Mix of Coaching and Number-Crunching to Keep Business Humming

Sales management is a key function in any wholesale or retail organization that has products or services to sell to a consumer – the elixir in any effort to maximize the business. Most products do not sell themselves, so some sort of sales interaction is necessary. 

Managing what, when and how that process happens is an important element of the success or failure of the business. The more competitive an industry and marketplace is, the more critical it becomes. Therefore, since retail home furnishings is often one of the most competitive big ticket arenas in every market, it can be argued that managing the productivity of a retail furniture store’s sales staff is one of the most vital tasks on manager’s ‘to do’ list.

It also appears to be one of the most difficult, since it involves managing people and their behaviors when they work with consumers. Much like creating and leading a highly successful sports team, there are many parts of the process that demand a constant, consistent effort in order to win games. 

The retail furniture store’s “playing field” is the selling floor and the “players” are the sales people who are hired, trained and coached to provide the level of service retailers want their customers to receive.

The person responsible for this process in most retail organizations is called the “sales manager” and that person carries the burden of delivering the sales revenue that drives businesses. Since their focus is on the performance results of the sales staff, their function is very much like a coach or manager of a professional sports team, and their primary goal is to deliver as many “wins” or sales as possible.

In many stores, particularly smaller ones, this involves the entire range of management functions from recruiting, hiring and training new people, and managing what happens on the floor, to helping make sales and providing customer service support for the sales team. But in all cases, the most important task should be, as the title says, sales management. This mainly involves training, coaching, motivating and leading the sales team’s effort daily to make certain the store gets the maximum return from the traffic its advertising and marketing programs deliver to the sales floor.

And for countless furniture retailers such as Steve Nye, general manager of Engles Furniture in North Bend, Ore., those skills have become even more critical in recent years as store traffic counts have fallen. 

“With lower traffic counts trending each year, we have to sell the consumer more and more often,” said Nye. “I can confidently say customers want the nicer leather sofa with articulating headrests, instead of the one they saw for $499 in your advertisement, and they want the functional adjustable base to go with their new mattress, along with new pillows and sheets. It’s our sales people’s challenge to show them why.”

That puts pressure on sales associates to increase close rates and average ticket, but Nye and other sales managers said those aren’t the only performance measures they look at when evaluating performance.

“I believe in looking at close rate, average ticket, revenue per up, sales volume, fabric protection, and mattress performance to evaluate performance,” said Nye. “They are all individual indicators to focus on improving. If someone else on your team can close at 40% -- the coach-speak is ‘How and what can we do to get you there?’

“When it comes to weak performing situations, I put the most weight on performance index – it tells you everything about a salesperson’s situation when combined with traffic.”  

Sara Lawson, sales manager at Infinger Furniture in Goose Creek, S.C., said she closely monitors the close rate and revenue per up for her eight-person sales staff since her store caters to a higher-income clientele and focuses on upper-middle to upper-end merchandise. 

“If you can get the revenue and you can get the close rate, everything else kind of falls into place,” Lawson said.

She said it’s not unusual for an Infinger customer to make three or four visits to the store before making a purchase decision, so in this era of lower store traffic, it’s critical to at least convince the customer to pay a return visit if the sale can’t be closed right away.

“I try to encourage them to be aware of their close rate, especially the close rate compared to the return customer rate,” Lawson explained. “The faster you can close them means you won’t have as many return customers. But customer return rate (by itself) is not a good measure.”

And since the counting of those ‘ups’ that are so critical to performance has undoubtedly caused more than a few internal disputes, both Lawson and Nye said it’s essential to have a reliable and accurate system of measuring them.

Lawson said Infinger’s kept a door count manually until last summer, when the retailer installed a DoorCounts camera system that takes a picture of everyone entering the store. She said the photos serve as a cross-referencing tool that help the store’s greeter (known as the concierge) keep track of the sales team’s rotation.

“I’m very fortunate, because I’ve never had an issue where people are either missing a customer coming in the door or they’re cherry-picking,” said Lawson. “The person that they get is the person that they get, and they should try to maximize that.”

She said the DoorCounts system is especially effective during busy periods, and helps the concierge get a returning customer in touch with their sales person more quickly. “It works especially well when you have multiple sales people working with multiple customers. And that happens every single weekend,” she noted.

Lawson is a big believer in using a concierge, and said her store has one on duty seven days a week. Not only does that person greet customers and keep track of traffic, he or she answers the phone and calls sales people for their ups. 

“Sales people can be doing other things without having to constantly watch the door,” she said. “But the really great thing with the concierge is that when somebody comes in and specifically asks for (a specific salesperson), they’re able to catch it before it goes too far. You’ve got somebody there who is managing the front door. You’re not missing out or getting mixed up in your rotation.”

Practices such as that keep tensions and employee turnover down, which both Lawson and Nye believe is another critical factor in today’s lower-traffic world.

“The first and most important element to retention is proper training to begin with and ensuring all salespeople have every tool needed to do their job without obstacles,” Nye said. “I think after that, the company culture of growth and success in combination with goals and communication keeps everyone working in the same positive direction.  The practices driving that would be consistent training in furniture and selling practices, sales games to keep things fun, comradery and competition between sales people, and individual one-on-one meetings between the sales manager and sales people at least once a month.”

And interestingly, when they’re looking for new sales people, neither specifically targets candidates with furniture industry experience.

“If they had a successful employment experience with a furniture company similar to ours with a customer driven selling system -- I definitely look at that as a big positive,” said Nye, “but I don’t believe in putting too much value on just any previous furniture experience. I’m more interested in learning if they have a strong potential to stick with me through time.”

Nye said he begins evaluating potential sales people as soon as they walk in the front door – literally.

“The characteristics I look for with a salesperson begin with the way they carry themselves when they are greeted at the door by a salesperson and taken to the office to fill out the application,” he said. “Witnessing those interactions tell me quite a bit about an applicant’s connection skills and ability to work well with others.”

Lawson agreed that working well with others is critical, and can be the determining factor in many hiring decisions.

“Seeing them in action is always the best way. I want to see how they communicate, how articulate they are, and how well they know their product,” said Lawson. “And it’s especially important how they interact with their colleagues.”

Although two current members of staff used to work for Bassett, the store’s largest vendor, she also doesn’t put a lot of stock in previous furniture industry experience. 

“I used to strive to find someone who had furniture experience, but now I realize it’s more about just being able to handle the floor,” she explained. “I’m looking for someone who can walk in and feel confident enough to be on their own…learn on their own…and is willing to be coached by me and their peers.”

“It’s more of an interest in furniture and an interest in interior design. If you don’t have the interest, then you can’t be effective. You can be the best sales person in the world, but if you have a passion for cars and you’re selling furniture, it’s not going to translate that well. I think people trust you more when you’re passionate about something.”

Instead of looking for furniture experience, Lawson said she frequently recruits sales people from nearby restaurants.

“Because most of the restaurants (near the store) are higher-end, they’re dealing with the same clientele, so it’s not that difficult to transition from being a server or bartender into this type of work. They’re commission-based, essentially, with tips, so it’s not as scary for someone who knows they have to put their best foot forward in order to make money,” she said.

Lawson and Nye also said old-fashioned word of mouth is an effective recruiting tool, although Nye said he’s happy he has needed recruiting tools only sparingly in recent years due to extremely low turnover.

“We provide an environment where people are consistently challenged and learning.  This produces personal growth in both abilities and income with accountability and with goal setting to continuously improve – so they don’t want to leave,” he said.

And while Millennials may present special challenges as customers, Lawson said they also present special challenges when they’re applying for sales positions because they often have multiple tattoos and piercings.

“There are so many people who have piercings through their face, and tattoos all over the place,” she said. “There’s totally nothing wrong with it, but we try to … have a little more wholesome look. We’re a family-owned business and we try to maintain a family environment.”

Mobility in America Continues to Decline

This is the first in a two-part series on Mobility in America. Part 1 featured on the following pages, focuses on the profile of “who” is moving.  Part 2 in the upcoming June issue will detail where people and moving and what motivates them to move.

Once a nation of movers, Americans are increasingly less likely to sell their homes or leave their apartments and move across the country or even down the street.  With only 11.2 percent of people moving from 2015 to 2016, American mobility is at an all-time record low. Since the 1950’s, mobility has plummeted almost 50 percent – from 21.2 percent of the population changing residence – down to 11.2 percent in 2015 to 2016 (Table A). While the previous decade’s stagnant change in residence can be owed partly to the economy, this downturn has been steady for over forty years. 

Because a move often spurs a furniture or home furnishings purchase, the question for the industry then becomes, who is moving? According to the Census Bureau, many of the movers are non-married, under 35 renters, many with children. The closer to the poverty level, the more likely a person changes residence. This article is a snapshot of current movers and what factors might determine mobility at this time in America – age, marital status, owning versus renting, and poverty status.

Age of Movers

By far, younger adults moved the most from 2015 to 2016. Twenty-three percent of 20 to 24 year olds and 20.1 percent of 25 to 34 year olds moved last year – double that of 35 to 44 year olds (11.1 percent) (Table B). With increasing age, the percentage of an age group’s mobility declined significantly.

For example, less than 4 percent of adults over age 55 moved between 2015 and 2016. 

Fifty percent of all persons changing residence 2015 to 2016 were split evenly between children (24.9 percent) and young adults 25 to 34 (25 percent) (Table C). Of the 35.1 million movers, 23.7 million (67.3 percent of all movers) were under the age of 35.

Marital Status

Marital Status plays a major role in a person’s desire, ability and necessity to move (Table D). Not surprisingly, 17.2 percent of separated people moved in 2016 with never-married people following close behind at 15.8 percent. Eleven percent of divorced individuals moved last year, while only 7.4 percent of married individuals changed residence. Widowed individuals tend to stay put with only 5.1 percent in the category moving.

Table E shows that at 37.4 percent, single, never married people were the highest category of movers from 2015 to 2016. In the same time span, married individuals were the greatest portion of nonmovers at 41.5 percent. 

Owners vs. Renters

Just over one-third of the population lives in renter-occupied units. As expected, renters of housing units change residence much more often than owners of housing units (Table F).

Of the 108.2 million renters from 2015 to 2016, 24.8 million were movers (22.9 percent), compared to just 5 percent of owners. Only 10.3 million people in owner-occupied units moved last year, while 196.4 million homeowners remained in the same residence. 

Renters accounted for more than two thirds (70.6 percent) of movers from 2015 to 2016 (Table G). 

Poverty Status

 Although 13.5 percent of the population is below 100% of poverty (Figure 1 and Table H), 22.6 percent of movers were these lowest income households.  

Americans at 150% of poverty (incomes over $36,450 for a family of four) accounted for 66.4 percent of movers from 2015 and 2016 and 79 percent of nonmovers. 

 

Americans with higher household incomes (above $36,450 for a family of four) are choosing to stay in place – only 9.6% moving in 2016. As Table I shows, the poverty category with the lowest income had the highest percentage of Americans move over 2015 to 2016, 18.6 percent of those below 100% of poverty moved over last year. 

The series continues in the next issue.

Take Five: Greg Harden

- Larry Thomas

Founded in 1844, high-end case goods and upholstery producer Harden Furniture is believed to be the oldest furniture manufacturer in the United States, and the company’s current CEO, Greg Harden, is the fifth generation of the Harden family to run the company. 

Harden oversees a campus in McConnellsville, N.Y., that employs about 225 people and includes a log yard, sawmill and kiln, in addition to the customary assembly, finishing, packing and shipping lines.

He recently spoke with Larry Thomas, senior business editor of Home Furnishings Business, about the challenges facing the solid wood category, in particular, and the residential furniture industry, in general. He also discussed the company’s decision to remain independent, despite the constant pressure on the top and bottom lines. 

Home Furnishings Business: Do you still see a lot of growth potential for the solid wood category? 

Greg Harden: We think there’s a lot of potential for it. The percentage of consumers who prefer solid wood is significantly higher than the amount of solid wood sold in the industry, and that suggests we should be realizing some opportunities that we haven’t taken advantage of. I think solid wood is a little underrepresented at retail. 

HFB: What will it take to increase the category’s presence at retail? 

GH: I don’t know that consumers, at the point of sale, know what is solid and what isn’t. When I do retail sales training … they don’t talk about solid wood. They talk about wood. In a lot of people’s minds, when they hear the word ‘wood,’ that suggests solid. Our business is about two-thirds residential and one-third commercial, and we actually get a lot better traction with solid wood on the commercial side.  They really want solid wood because they understand the advantages and the durability.

There has never been a time in my 36-year career where we’ve spent a much time trying to understand what’s happening at retail. To put it mildly, it seems like it’s a God-awful mess out there. We constantly hear from dealers that their traffic is terrible or their business isn’t very good. And then you look at national statistics that show that sales of home furnishings are up. The industry should be doing a lot better. I know that the (Millennial) generation doesn’t place as much value on home furnishings as prior generations, but at the same time, the research suggests that our products should be a pretty good fit for them.

I recently read about a demographic group called Henrys – High Earners, Not Rich Yet. That demographic wants products made in America, and they want products that have been touched by the hands of a craftsman. They really relate to that. But in our industry’s case, we’ve been advertising nothing but price for my whole 36 years in this business. If all you can talk about is price, that is probably what the consumer is going to respond to.

If you look at other categories of durable goods -- take automobiles, for example -- the better-quality brands like BMW, Audi and Cadillac have a much bigger market share in their industry than better quality goods in our industry. It shows that we’re really doing something wrong in this industry. 

HFB: Since consumers are shopping in fewer stores than they did a decade ago, isn’t it also critical to reach them through the internet?

GH: Absolutely. The internet is still a very important source of information for consumers. Even though consumers don’t really feel comfortable buying furniture on the internet, they’re certainly using it to get all the information they need on home furnishings.  So, we’ve got to be better internet marketers. Consumers are spending just as much time researching the information they want. They’re just doing less of it at the store.

HFB: In 2014, the proposed sale of Harden Furniture to a Chinese company fell through at the last minute, and you opted to remain independent. Is that still your goal?

GH: Yes, but we have an equity partner now, who has a modest stake in the company. In fact, we probably will close on one and possibly two acquisitions by year-end. One of the realities I face is that … nobody wants to lend money to a furniture manufacturer. In our industry, if you’re going to grow, you’re probably going to have to do it as much through acquisitions as you do organically. Organic growth is really tough to come by.

HFB: Is organic growth especially tough at your price points? 

GH: I think so, because we’ve been running up the down escalator for years. (laughs). This industry must gain a little more confidence in itself and start talking more about features and benefits, and the value of wonderful things for the home, and less about price, price, price. We’ve got to move people up in price. We’ve got to move them up to better quality goods.

HFB: You recently began a modernization of your factory. How’s that going? 

GH: We’ve got about two-thirds of it complete. We’ve held off on the other third, primarily due to funding, but also because of (our pending acquisition). The acquisition will probably close during the third quarter, and all of their production is going to come into our facility. They’ve got a good deal of the equipment that we have on our wish list. 

HFB: Does it present any special challenges being in a region that’s not a furniture manufacturing hub? 

GH: There’s a disadvantage in that we don’t have anybody in our local community who knows how to manufacture furniture. It’s particularly tough on the upholstery side. But there’s also an advantage to it because we don’t have any competition for that labor. I know down in Hickory (N.C.) and places like that, the labor market is very tight.

I’m on the New York State Business Council, and we’ve been pushing the state to do more vocational training, which would really help companies like ours.

HFB: How is business so far this year?  

GH: I’d say it’s okay. January and February were not particularly good months, but we had a good March. By (April or May), we’re going to be right around last year’s number. We’re not jumping up and down and breaking records … but it should be a good year. One thing that’s holding our industry back is that home sales are down a little and the supply of new homes is well below where it needs to be. But overall, the fundamentals point to us having a pretty good year. 

Our business was great last year until about the middle of September. (The slowdown in the fourth quarter) had to be due to the election. Retail in general was pretty soft around the election, and it just took awhile afterwards for it to pick up. Maybe all the folks who were Hillary supporters were in a bit of a funk for a few months (laughs). 

HFB: Has the popularity of custom upholstery had a positive impact on your business? 

GH: Absolutely. Our upholstery has grown significantly in the last four or five years -- at the expense of case goods. Partially, that’s because we’ve put more emphasis on product development in upholstery, but that’s also what is working at retail. I would say the average retailer has committed a third more slots to upholstery, relative to case goods, than they had at the end of the financial crisis.

Solid Wood Finding Solid Ground

By Larry Thomas

As wood furniture manufacturing began moving offshore in earnest in the early 2000s and the industry became more price-driven, producers of solid wood furniture probably felt like Clara Peller, the snarky senior citizen who starred in ads for Wendy’s in the early 1980s.

A frustrated Peller became famous for asking, “Where’s the beef” when she ordered a burger from Wendy’s competitors. And solid wood producers became frustrated as they lost market share to wood furniture companies using particle board, plywood, MDF and a variety of other engineered woods.

“The term ‘solid wood’ was stretched and pushed in so many directions that is simply meant that it wasn’t hollow,” said Gat Caperton, president of solid wood producer Gat Creek Furniture. “Almost anything qualified as solid wood.  It lost its cachet with consumers because the term wasn’t a very believable term.”

But after a decade in the doldrums, Caperton and other players in the category say solid wood is regaining its mojo.

“Clearly, there’s a consumer out there who not only appreciates, but is seeking out solid wood furniture,” said Max Dyer, vice president of marketing for La-Z-Boy Casegoods, which includes the solid wood Kincaid line. “The consumer is gravitating toward all things authentic and genuine … more than I’ve ever seen before.”

And Dyer said that desire for authenticity gives brands such as Kincaid an opportunity to shine.

“There’s an upside for the industry by telling the story and explaining the construction,” he said. “That would benefit not only the consumer, but also the retailers and the manufacturers. It’s an opportunity for our industry to offer better products and educate the consumer.”

Caperton agreed with that sentiment, but said education also is necessary for retailers. 

“Four or five years ago, if you told a retailer you were a solid wood manufacturer, they would say, ‘I don’t care. It’s wood.’ But we’ve come off that trend today,” Caperton said. “Solid wood is starting to be a nice point of differentiation to the consumer as a higher-quality product.”

So just how much room is there for solid wood furniture to grow?  That’s hard to quantify because no one seems certain of the size of the category.

Dyer, for example, said retailers typically devoted about 30% of their case goods slots to solid wood when he worked in furniture retailing in the 1990s, but he thinks it has dropped to around 5% today. Tom Inman, president of the trade group Appalachian Hardwood Manufacturers Inc., thinks it’s closer to 10% to 12%, but admits that’s an educated guess.

“But I can tell you that it’s growing,” Inman said of the category. “At the last four High Point Markets, there has been more solid wood in showrooms than we’ve seen in a long time, especially at the middle and upper-middle price points.”

But regardless of the category’s current size, Inman agreed that there’s still plenty of room for growth, which is music to the ears of the members of his organization.

And the customers of his members – furniture manufacturers – seem to agree. Caperton, for example, said Gat Creek’s business has improved to the point where the company has been adding workers at its West Virginia factory recently, while Virginia-based producers Bassett Furniture and Vaughan-Bassett have successfully launched solid wood lines to their product mix in the past two years.

Bassett’s solid wood success has come with its BenchMade line of custom dining tables, while Vaughan-Bassett has had noteworthy success with its Artisan & Post line of solid wood bedroom furniture.  And Vaughan-Bassett is hoping to build on that success with a solid wood dining line that was rolled out at the April High Point Market.

The April market also saw a major solid wood rollout from Tennessee-based Cresent Fine Furniture, whose solid wood line currently is made at two factories in Vietnam. But the latest addition, a custom dining program, will feature products assembled and finished in Tennessee using “whitewood” components made in Vietnam.

“We believe that our years of expertise in solid wood manufacturing, sourcing and environmentally-friendly finishing will show in the excellent quality and value of the BenchMark dining selections,” said Taylor Condra, Cresent’s president and chief operating officer, noting that the company produced its entire line in Tennessee until 2006. “We still have the spray booths in place, and many of our employees have been with us ten to 20 years or more.”

Although the exact size of the solid wood market remains unclear, research by Impact Consulting Services, parent company of Home Furnishings Business, bolsters the assertion that consumers are beginning to appreciate solid wood and are willing to pay for it.

In a recent survey, 62% of consumers said solid wood was either “important” or “very important” in the purchase decision, and fully one-third of them (33%) said they are willing to pay up to 10% more for their purchase if they know it’s solid wood.

Another 21% said they would be willing to pay 10% to 20% more, while 17% said they would be willing to pay 20% to 30% more for solid wood.

That didn’t surprise Greg Harden, president of upstate New York-based Harden Furniture. He said his company’s market research “shows that the percentage of consumers who prefer solid wood is significantly higher than the amount of solid wood sold in the industry. That suggests we should be realizing some opportunities.”

Harden, whose company targets the upper-end of the market, said a demographic group that should be targeted by solid wood producers is called Henrys – High Earners Not Rich Yet. 

“They want products made in America, and they want products that have been touched by the hands of craftsmen,” Harden said. “They can really relate to that.”

Caperton agreed, but added that marketing a solid wood collection as “heirloom” probably won’t be effective with Millennials, despite their appreciation of quality and authenticity.

“Heirloom is a tough story today with Millennials,” he said. “We just have to communicate that solid wood is more durable and more resilient. It feels like it has a little more quality when it’s a solid wood piece versus something that’s made from MDF.”

And MDF is something that won’t be found anywhere near Gat Creek’s factory.

“We only know MDF by its initials,” Caperton quipped. “We wouldn’t know what it looks like.”

Borkholder Furniture’s Madera

Introduced less than a year ago, this poster bed quickly became a best seller. Shown here in an almond finish, the bed initially is sandblasted to open the grain pattern, and then taken through a 12-step finish process by Amish artisans. This complicated process captures the beauty of the grain and all the nuances of solid wood. 

Conrad Grebel’s New Haven

This contemporary solid ash bedroom group features a premium catalyzed varnish finish for ultimate wood protection. Dresser and nightstand drawers have full-extension drawer glides, fully-dovetailed drawers and drawer bottoms that are 3/8-inch thick. Made by hand by Amish and Mennonite craftsmen, it has an approximate retail price of $3,336 in queen.

Cresent Fine Furniture’s Gunnison

Featuring casual transitional styling, this solid poplar best-seller is highlighted by soft rounded corners on the clean-lined case pieces, and functional touches such as a drop-front media drawer in the dresser and a power strip with two USB connections in the nightstand. It is shown here with the optional cedar-lined storage drawers on the sleigh bed. 

Durham Furniture’s Cascata

With a nod to mid-century modern design, this solid cherry bedroom collection draws on a design balance between classic Italian elegance and modern creativity. The symmetrical curves of concave drawer fronts and sides are defining design elements. Accented by minimalist nickel hardware, the flowing curves showcase the cherry wood grains. 

Gat Creek Furniture’s Alison

This top-selling bed, which is available in twin, full, queen, king, and California king sizes, coordinates with the 13-piece Sabin bedroom collection. The bed and the case pieces are made-to-order and are available in 66 finishes in solid cherry or maple. 

Home Trends & Design’s Casablanca

Bringing a sense of timeless sophistication and old world charm to the dining area, this best-seller is made entirely from reclaimed Neem wood. Each exquisite piece features a durable frame-and-panel design with handcrafted details such as hand-turned pedestals and a hand-hewn inlay. This X-pattern inlay, combined with the solid wood construction and antique-rubbed lacquer finish, represents the master craftsmanship of this collection. Approximate retail price is $2,290.

Harden Furniture’s Live Edge

A sweeping V-shaped table leg highlights this best-seller from the Live Edge collection. Shown here in solid curly maple, it also is available in solid cherry, walnut or wormy maple. The starting retail price is about $8,599, but can vary depending on the customization options. 

Kincaid’s Weatherford

MacKenzie-Dow Fine Furniture’s Cascadia

Inspired by the Pacific Northwest, this end table, part of a three-table collection, is made of solid Appalachian black cherry and solid American steamed black walnut. Besides the organic look and feel, the design focus is the grain of the lumber "flowing over" the sides of the table, which is a tribute to the many waterways found in this area of the country. Approximate retail is $2,397.

Minnick Wood Products’ Luberon 

 

Named after a French province, this dining set is made of solid oak harvested in France and featuring classic Italian craftsmanship. Highlights include dove-tailed drawer construction, spring-loaded stoppers, and hinges made of iron in a vintage look. The table top is 3.75 inches thick, and the serving cart comes with an Italian marble top as a cutting board. 

New Ridge Home Goods’ Beaumont

Combining the quality of solid wood with the price points of RTA furniture, this solid birch shelf features modern cottage styling. Designed to fit into space-challenged spaces, it is available in six water-resistant color finishes. Approximate retail price is $100. 

Simply Amish’s Wildwood 

From the Modern Farmhouse collection, this canopy bed and nightstand highlights meticulously crafted mitered edges, refined scale, and a balance between modern and masculine design. Made of solid cherry, the bed retails for about $4,400 in queen, and the matching nightstand retails for about $1,410.

Vaughan Bassett’s American Maple

Part of the Appalachian Hardwood line, this hot-selling solid maple collection features French dovetail drawers and a smooth acrylic finish on the interior drawer sides and bottom. The collection includes two beds in natural maple, cherry, rustic white and grey finishes. The bed, dresser, mirror and nightstand retail for $2,199.

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