Monthly Issue
From Home Furnishing Business
November 19,
2014 by in Economic News, Industry 
90% — American adults have a cell phone
58% — American adults have a smartphone
Pew Research
45 — Number of times a day millennials check their smartphones
MarketingLand.com
74% — Online adults using social networking sites
Pew Research
78.8 years
Life expectancy in the U.S.
81.2 for women; 76.4 for men
Centers for Disease Control and Prevention
Small businesses created 63% of the new jobs between mid-2009 and the beginning of this year
U.S. Small Business Administration
28% of the U.S. population lives alone
Euromonitor International
6,500 — Number of languages in the world
Infoplease
1.2 Billion — Number of people who speak Mandarin Chinese, the world’s most popular language
Infoplease
7 years — Length of autumn on Saturn
NASA
$3,800 — average American family savings account balance
Federal Reserve
40% — Americans NOT saving for retirement
42% — Smartphone users who have redeemed a mobile coupon
Nielsen Co.
November 13,
2014 by in Industry, Internet
By: Powell Slaughter
Consumer awareness of home furnishings’ online presence might be at its highest point ever, and retailers who haven’t done so already should take a hard look at the story they tell in the digital sphere.
Thank the huge amount of press generated by online home furnishings giant Wayfair’s initial public offering last month. Consumers already are using the Internet—via computer or smart phone—to do their homework before hitting your store; and the information you present, how well your digital presence matches your brick-and-mortar experience, and the ease of use can go a long way toward getting you on shoppers’ short list. They want to know as much as they can about your products and services before they even start a conversation.
“All of a sudden there’s a focus on furniture online” said MicroD CEO Manoj Nigam in the wake of the Wayfair IPO. “And the digital age is about being relevant to consumers. What television did in the 1950s (for retailers) the Internet is doing now.
“Your Web site has become your biggest advertising vehicle—it’s your front entrance now; and 25 percent of traffic is now mobile. People expect a consistent experience across multiple sites” no matter what device they use.
DIGITAL RELEVANCE
If you don’t provide the information they seek, an interactive approach to fielding questions, and an online presence friendly to multiple devices, consumers aren’t going to find your store relevant to the way they research and shop for product these days.
It’s more important than ever, for example, to make your online presence mobile-friendly.
“Mobile is overtaking desktops as the primary product-search method,” noted Jesse Akre, senior vice president for e-commerce at MicroD. (See sidebar, “Digital Responsiveness.”) “And the consumer is more and more wanting an experience online that they would get in the store. It’s not just about displaying products, digital is becoming the driver of the consumer experience.”
He suggests retailers looking to relate to consumers online adopt a “Web first” mentality. He identified four keys: pricing products online; merchandising your Web site; ease of communication with the customer; and understanding the impact of reviews.
Some retailers remain reluctant to put prices on their Web site, but Akre said that’s what consumers are demanding. You don’t need to be in e-commerce to show prices on line. The practice of “Web-rooming” practice has made it easier for shoppers to compare prices and do comprehensive research on an important purchase; and retailers must adapt to that highly informed consumer.
The majority of consumers shopping for home furnishings still go into a store to buy—but they want to be armed with as much information as possible before they cross the threshold, Akre said.
“You've been printing prices for years in your advertising,” he said. “Why won't you treat the online marketing opportunity the same?”
Those insistent on holding back on actual pricing might consider offering a range—i.e., “These sofas retail from $400-$500.”
The bottom line for a Web site is getting people into the store, said Dianne Ray, owner, Garden City Furniture in Garden City, S.C.
“We're going to have to stay current with upgrading our Web site, the look, the ease of use. If they have to flounder around on the site, they're out of there and gone,” she said. “We've discussed e-commerce, and if we're going to attract that Millennial customer we're going to have to move on that. Actually, the Web site is important for all generations.”
MERCHANDISING ONLINE
Shoppers will likely see a store’s Web site before they see the store, and retailers should pay close attention to merchandising issues online.
“Have you walked through your store the past week sprucing things up, maybe moving product or working on a display? Sure you did,” Akre said.
A furniture store’s Web site deserves the same attention. Ensure the site gives consumers the same first impression online as they get in your store.
Shoppers entering your store see a layout that you built with your own business considerations in mind. Steer your Web visitors the same way. Think about ranking products online by perhaps best sellers, leading brands or inventory turns.
Take a seasonal approach the way you would in the store: “Company coming for the holidays? Create a dining room to remember.”
Consider the designs and trends you’re focusing on at the store, as well as products with the highest gross margins. Those are the products that you should feature online to entice consumers into the store.
Retailers know how to do this in the store; it’s a matter of translating the same techniques to an online presentation.
Take a look at in-store signage, graphics and logos to ensure they sync with your online presence.
“If a digital impression is made, it has to carry through in the store,” Akre said, pointing to Dick’s Sporting Goods Web site as a good example. “You see the same banner on the Web site that you see in the store.”
Merchandising the site the way you do the store might seem like a big task, but Akre suggested retailers start small.
“Impact one category, say your top five sellers,” he said. “Next week, do your top 10. Just starting will get the wheels spinning as to how you want to do it. Start with the products you want to lead with online.”
EASY TO ASK
How easy is it for consumers to communicate with you online? Do you use live chat, provide a contact number or e-mail? Whichever method you use, fast response is vital.
“People are not going to wait three days for you to get back to them,” Akre said, adding that some shoppers in the store would rather use their phone to ask a question rather than a store employee. If you use QR codes, make sure it goes to a site that will build expectations for the product, not just provide dimensions and such.
“QR is about driving people to information you control,” Akre said.
David Gardner, co-owner at Warrenton Furniture Exchange in Warrenton, N.C., found a way to engage customers looking at information on their mobile by installing a large screen on the sales floor where the retailer can call up products for easier viewing.
“We can do bring all this information to a larger picture so they aren’t squinting at their smartphone,” he said. “Online is bigger than my warehouse, but we’ve found a way to humanize it.”
The best thing about a good online presence is it provides a 24/7 storefront, but that can create communication problems for something like a live chat function.
If a consumer is browsing at home at 10 p.m. and has a question, it’s better to take live chat off-line during non-business hours than to have “nobody at home” to respond to a question.
A strong FAQ section on a retailer’s site can take care of many customer questions with a simple click. Store policies for issues such as credit, delivery, returns, hours of operation and such should be easily available.
Social media, of course, is an area where furniture retailers can interact with customers. But if you are on Facebook, Twitter or other social vehicles, it’s better not to be there than to not stay engaged.
“One large retailer I know hadn’t engaged on Facebook in 30 days,” Akre noted. “But guess who had? A woman was moving to town and wanted a houseful of furniture.”
THE REVIEWS ARE IN
If you were shopping for products on your own part, which would you trust more? A testimonial from a previous customer, or an advertisement? Never underestimate the power of customer reviews. Check out sites such as powerreviews.com or shopperapproved.com to get an idea of what can happen.
“Good and bad reviews are expected,” Akre said. “And they like to see volume as well as a range of comment. It doesn’t happen overnight. That log of reviews has to build one at a time.”
Retailers can solicit reviews, he added. Incentivize along the lines of a percentage off on their next ticket for an honest review, good or bad. Ask customers in the store.
And don’t forget engagement when it comes to reviews. Respond to problem reviews with an apology and a solution.
“Shoppers eat that up,” Akre said.
November 13,
2014 by in Furniture Retailing, Industry
By: Powell Slaughter
Sometimes retailers are surprised at what strikes a chord with customers in the communities they serve—the sort of thing that makes a business a local institution.
In Knight Furniture’s case, it was a scale—an antique in front of the retailer’s main store in Sherman, Texas.
“We had a scale in front of our store that’s apparently become a community fixture,” said Joey Gunn, director of advertising and buyer at Knight, who represents the company’s fourth generation of family management. “It’s an old scale from the 1920s or ‘30s. It broke, so we pulled it inside until we could get the part.
“It’s so old that you can’t just go out and find parts for it anywhere, so we had it in back for a while until we could get it replaced.”
Gunn found himself inundated with messages asking where the scale was—apparently a lot of folks liked to stop and check their weight.
“I flirted with the idea of running a ‘save the scale’ sale,” he joked.
It might not have been a bad idea. Knight Furniture indeed is a local institution—dating back to 1912, when the store was founded. Knight operates two namesake stores in Sherman and Gainesville, Texas, on the outer fringe of the greater Dallas area; and an Ashley Furniture HomeStore it opened in Sherman two years ago.
CHANGING TIMES, CHANGING MARKET
Knight Furniture was founded 112 years ago by Joey Gunn’s great uncle, J.B. Knight. Back then Dallas was a lot farther away than it is now. While Knight Furniture competes today in a bigger world—metro Dallas—than its founder did, the store still has a “hometown” approach to dealing with customers that works.
“We’re about quality and value, and while that sounds old, you have to remember we’ve been serving this area for over a hundred years,” Gunn said. “We hear about customers buying things here that have become family heirlooms. We’re not going to be the place that sells the $100 sofa they’ll throw away in a year.”
Pretty soon, Knight and every other furniture retailer in metro Dallas will face a well-financed competitor that’s about to make a cannonball into the local pool—Nebraska Furniture Mart’s half-million-plus-square-foot showroom set to open next year.
Gunn actually looks forward to that challenge, since it will put a spotlight on furniture for miles around.
“They have a great organization, and I’ve been to their Kansas City store,” Gunn said. “They will make furniture popular in Dallas, and that’s a good thing, they’re going to make furniture cool—but if furniture’s going to be cool again, you have to be relevant and be part of the conversation.”
That kind of completion had better make retailers in the area pay attention to what they’re doing.
“You can’t get lazy—no matter what you’re telling your customer, they deserve more than that,” Gunn said. “Competition brings everyone up.”
Not only that, Gunn doesn’t think other furniture stores are Knight’s real competition as long as it takes care of its own business.
“The home furnishings industry competes with movie theaters, with maybe buying another car or a boat,” he said.
It’s all about what people have to spend, and with all the options out there, Gunn welcomes anything that puts furniture front-and-center in consumers’ minds.
STEPPING UP
All of which is not to say Knight Furniture is just waiting for a rising tide of furniture awareness. The retailer is in the midst of a remerchandising effort at the main Sherman store that will put key categories front and center in the three-story facility.
While bedding sales have run a respectable 18 to 21 percent of revenue, Knight was worried it was losing sales in the category. Right now, it’s moving its bedding department from the third to the first floor in an area designed by Connie Post.
“There were customers who came in here, purchased product and loved us, but never made it to the third floor,” Gunn said. “One of my worst fears is that people buy their furniture here but don’t even know we have bedding. And the Mattress Firm fraternity makes sure those people know they can get it at their stores.”
The Sherman store is on a square in town that gets a lot of foot traffic—and attention, remember the scale?—and Knight is big on window merchandising.
“We’re always changing what’s in our front window,” Gunn said. “Since we’re on a square, we have a lot of people walking by, so we pay a lot of attention to those front windows.
“We create what we call ‘lifestyle pods’ where we offer a complete look. We change a lot, because all of a sudden that look can get stale, and we aren’t relevant.”
Knight Furniture’s window clings also capitalize on the retailer’s foot-traffic curb appeal.
“We have those themed along lifestyles like ‘Relax’ or ‘Comfort,’” Gunn said. “One of our tag lines for advertising is ‘We’ll make you feel at home,’ so we play to that.”
REACHING THE AUDIENCE
Figuring out the new advertising landscape is a challenge.
“Before 2008, you could get your advertising on TV and make sure the whole region saw you,” Gunn said. “Now, a lot of people have Dallas channels, Sherman channels, then you throw in cable and U-Verse.
“We’re still promoting a family feeling, and that it’s about the relationship and not necessarily making the sale. Sometimes we’re so busy selling something that we forgot to make a friend.”
Knight also is latching onto the days that get shoppers shopping. An event like Black Friday wasn’t important to Knight Furniture even a couple of years ago.
“I don’t know if it was because we didn’t have our message out there or that we’re just now catching up with what shoppers are doing in other categories,” Gunn said. “The amount of business we do on non-holidays versus holidays? There’s a lot of water flowing downhill out there, and you can tell when you’re hot and when you’re not.”
UP AND COMERS
Joey Gunn, 31, is heavily involved in an industry effort to build bridges among the rising generation of retail and vendor leaders—Next Generation Now.
After working in his family’s business since his warehouse days at age 14, he was very glad to encounter other young folk that wanted to carry on a tradition.
“Five or six years ago, that kind of thing wasn’t important to me, and I wasn’t important to them, but then I got to where I was making decisions here,” Gunn said. “I walked into a room and found a bunch of people with the same problems.”
By dint of age, Gunn and his fellow generation members find their elders looking to them for answers to breaking ground in areas such as e-commerce and social media as it relates to furniture retailing.
“They want us to solve the ‘technology crisis,’ and we’re front and center on that,” Gunn said. “That’s good, but even though I started working in our warehouse when I was 14, as far as being in a decision making role, it’s only been about five years.”
He said his focus is finding out who Knight’s customers are and who’ll they be in the next few decades.
“We’re at a very tricky stage,” Gunn said. “We want new customers, but we can’t lose our base. If we don’t get hold of the ones who are coming, we won’t do well.”
November 13,
2014 by in Leather Upholstery, Product
By Sheila Long O’Mara
Leather upholstery may just be one of the most technical categories on a retailer’s floor.
The varying grades of leather, as well as the growth in bonded product, leave consumers seeking the comfort and luxury of fine leather in a maze of confusion. The Internet — where most consumers start the shopping experience — is filled with information, and sometimes misinformation, on the ins and outs of buying leather upholstery. All of which require retail sales associates be given category specific training, have in-depth product knowledge and the dexterity to cut through any uncertainty consumers may have regarding leather upholstery.
A recent survey by Furniturecore of 535 consumers who had bought upholstery in the last 12 months showed that 71.3 percent of them embarked on their shopping journey by exploring online. Not only can consumers uncover styles and specific products, but the category gets extensive attention on what consumers should look for and consider when buying leather.
Shopping for leather upholstery tends to be a lengthy process. Nearly 33 percent of the consumers surveyed shopped between 2 weeks and a month before making their purchase. That’s significantly more than the 27 percent of consumers in the market for fabric-covered upholstery who shopped for that length of time. Another 18 percent of our surveyed consumers shopped between one and three months prior to buying.
Despite their diligence in uncovering the perfect leather upholstery, shopping for the category was not without its challenges. It seems the consumers surveyed wanted a larger selection of wares. Nearly 38 percent (37.8 percent) said the available selection of leather upholstery was too small.
Another sticking point — price.
While the industry understands the nuanced craftsmanship and detail required for top-quality leather upholstery, consumers aren’t quite as well versed in the matter. About 32 percent (32.1 percent) said prices of leather upholstery were higher than they expected.
When buying, the consumer pool was motivated by a number of things. On a scale of one to six with one being the most important and six being the least, product quality was at the top with a ranking of 2.8. Quality was followed closely by product design with a 3.1 ranking. Brand or manufacturer reputation was third with a 3.5 ranking.
No big surprise that most consumers were shopping for leather upholstery for their living rooms or family rooms. In fact, 81.5 percent — 47.3 percent for living room and 34.2 percent for family room — of them specified one of those two rooms at the location for their recent purchase.
Traditional and contemporary designs rule the roost when it comes to leather upholstery. Who can blame them? A rich, button tufted, nail-head trim sofa or a clean, sweeping sectional both add a certain je ne sais quoi to a room. The two style genres, at 38.3 percent and 36.2 percent, respectively, carry the bulk of our consumer group’s affinity. Country/rustic leather designs fell a distant third at 15.8 percent.
When it comes to specifics and drilling down a bit more in the style category, it seems consumers prefer overstuffed, deep seating to sleeker, tight-back designs in leather upholstery. In fact, nearly two-thirds of those surveyed prefer the overstuffed designs.
Good news on the willing-to-wait front. While today’s consumers tend to prefer instant gratification on nearly everything they purchase, about 47 percent of those surveyed indicate a willingness to wait four to eight weeks for a custom-ordered leather sofa. Another 43 percent said they would wait two to four weeks for such.
November 13,
2014 by in High Point, Market
Tom Conley has been at the helm of the High Point Market Authority since 2011 when he was named president and CEO of the organization. During the past three years, Conley has steered the High Point Market through transition, funding battles with the state of North Carolina and continues to lead a continuing push to increase buyer attendance at the twice-a-year event.
Home Furnishings Business: How would you describe the changing dynamic between the High Point and Las Vegas markets in light of International Market Centers’ 2011 High Point real estate purchase?
Tom Conley: Extremely positive. Las Vegas has now positioned itself as a regional show. They’ve done a wonderful job with the bedding folks and the gift folks, as well as other niches, and been very successful at building those segments in Las Vegas.
We partner with them on a number of events here where their expertise makes sense.
In all reality, we compete with every market — Atlanta, Dallas, New York — that hosts exhibitors.
HFB: Has the Saturday opening had the desired impact on High Point Market weeks?
TC: The change to a Saturday opening was before my time, but it seems to be working.
There are some buyers who will always want to come ahead of an official opening, and there are some suppliers who will always accommodate them.
We don’t dictate when people can come to Market.
As long as the suppliers and the buyers get along and agree with each other on when they want to show the product and when they want to see the product, we’re OK.
HFB: What is the Market Authority’s primary focus for 2015?
TC: We have a couple of things we’ve set as priorities.
We’re diligently working on our telemarketing and cleaning up our contact lists. We’ve used an outside company to look for new retailers who have for whatever reason not been to Market. Our target list is in the best it’s ever been.
Outreach continues to be a strong thrust for us. We used three different marketing efforts. First, we partnered with Foundation Marketing Group out of Maryland, and they called folks who had not attended market in the past or had only attended intermittently. Then, we hired a full-time, part-time person to manage our internal call service so that callers to our office communicate with a professional team.
After market, we’ll follow up with first timers to see how their experience here was. We’re building one-to-one customer relationships.
We have to find creative ways to identify new segments. We continue to work with our exhibitor partners to bring in more buyers to the market. It’s a partnership.
The exhibitors are about 95 percent responsible for their success at a market. I’m continually amazed at the number of exhibitors who come to market and do no marketing prior to unlocking the showroom door.
HFB: Let’s talk Market cycles. Do we really need all of these markets?
TC: That is why Vegas is expanding into other categories and diversifying. Building owners are looking to other categories that make sense. It’s not for me to say whether we have too many markets or not. That’s for the buyers to determine and decide how many markets they’re willing to attend.
HFB: What will High Point Market look like in five years?
TC: The best: It will continue to grow and expand. We have to get smarter, like IMC with grouping like exhibitors in buildings to create better efficiencies for the buyer.
Some folks won’t want everything they have to offer. We’ll see growth in more areas to cover and buildings will fill up. We’ll spread out, which is good for the exhibitors, but bad for the buyers.
The bad: The economy struggles and the Market continues to contract even more. It would be great from a buyer’s standpoint in working the Market. From the aspect of getting to see the breadth of product it wouldn’t be good at all.
Our job is to cater to buyers and offer them the best product we have available.