Monthly Issue
From Home Furnishing Business
November 13,
2014 by in Furniture Retailing, Industry 
By: Sheila Long O'Mara
Over the last several Years, the team here at Home Furnishings Business has written much about the consumer and her hot-and-cold relationship with shopping for furniture. We’ve delved into her psyche; we’ve explored her disposable income; we’ve looked at how and where she likes to shop; and, how she wants her home to look, feel and smell.
We’ve dug into how retailers communicate with the consumer, and how manufacturers try to connect and help her create the perfect environment for her family and friends through beautiful home furnishings. We’ve connected with her through surveys to find out how she’ll use her newly purchased sofa or dining table or bedroom furniture. We’ve shared in family celebrations of babies and vacation homes.
We’ve gathered intelligence into her way of thinking and her way of shopping. We’ve examined her social media preferences and her exploration of furniture on the Internet.
We’ve watched the life stage shift from a one-person, single household to a double-income-no-kids home to a busy working mother of 2.1 to an empty nester ready to downsize into a zero-lot-line home.
We’ve seen her adapt with technology and use it to her advantage in uncovering the best deal on a Surya rug or Restonic mattress or Cresent bedroom.
The gist is that she (or he — it’s just much less complicated to use one pronoun) is constantly evolving. The life stages are not stagnant; they never have been, and they never will be.
The furniture she needs for her first apartment is — and should be — different than what she needs in her late 20s or early 30s. And, that furniture is different than she needs in her 40s and 50s and beyond.
That folks, is what we should all continue to hope for. That our target consumer continues to evolve and her tastes and needs change along with her. For that is what keeps this industry churning.
Inside this month’s issue, you’ll find detailed information about how retailers are connecting with consumers, data on income shifts and a look at retail models and which ones are faring well.
November 13,
2014 by in Economic News, Industry
By: Bob George
A common lament today is the rapid pace of our lives. In our 24/7 world with the multiple ways we have to communicate and keep in touch, life becomes a blur.
Today, a text message substitutes for a phone call; an e-mail, for a conversation; a PowerPoint presentation, for a detailed study. And the pace continues to accelerate. A recent news clip presented research that Millennials are rejecting voice mails, refusing to listen to them, much less return the call.
Our paradigm in the traditional furniture channel is centered on the concept of an up. In this scenario, consumers visit a store excited about the prospect of redecorating their home. They establish a relationship with an experienced sales associate who provides them with decorating ideas taking into account style preferences and current home furnishings trends. The relationship strengthens as consumers make subsequent return visits to create an amazing room. Thus a satisfied consumer becomes a long-term store customer who will return for future home furnishings purchases.
Unfortunately, that model is disappearing. Seventy-six percent of consumers are doing research on the Internet before visiting the store or simply buying from the Internet. We now find a significantly shorter shopping period. For 45 percent of consumers the shopping process is completed in two weeks or less. What constitutes an up today is like a conversation I have with my kids. We exchange words via text or e-mail, but is it really a conversation?
So what’s the problem with the pace of today’s purchasing process?
Simply put, it changes our product into a commodity. One can drink a glass of wine in a gulp or leisurely savor the experience appreciating the bouquet. How do we slow down the consumer enough to appreciate our product?
I can go back to a memory of conducting focus groups for Henredon with Mike Dugan, who was president at the time. As we led consumers through the product groupings, we watched their reactions. We knew the product was a winner within the first minutes by observing how they caressed the products. Later they shared statements like “I enjoy my furniture every day when I walk through my room.” We find these consumer sentiments not only in upper-end brands, but also for brands like Broyhill and Hooker.
What can we do to slow down the process?
Give the consumer something to read – not an e-mail or a 20-second TV spot that flickers quickly by only to disappear from the surface of their minds. You may counter with “no one ever reads”. That may be so, but have we stopped giving them the opportunity to dream about their homes? Look at the latest 600 plus-page Restoration Hardware catalog or Art Van’s inspiring fall catalog or even the magalogs that retailers are producing with our sister company, FurnitureCore.
The consumer still appreciates a well-designed environment. Just go on a delivery and watch the excitement the customer has about the new furniture. At one time, sales associates took the time to visit after the delivery to share in the consumer’s excitement.
Are we too busy to do anything more than send an e-mail, much less a hand-written note? Our challenge at retail is to do something in the store that consumers cannot do online. And what is the manufacturer’s role in this? It is to create product the consumer can appreciate, product based on design, not on bargain pricing.
October 8,
2014 by in Bedding, Product
Las Vegas Furniture Market’s summer edition doesn’t attract the buyer traffic of the winter show, but as a major bedding venue, vendors in the category there didn’t skimp when it came to offering customers something new.
Following is a run-down on introductions and line enhancements among bedding and related exhibitors at the July show.
Customatic Adjustable Bedz unveiled a new patent-pending mattress retainer system, Custom Clips.
The system aims to offer an easier, faster and more stylish alternative to the standard U-shaped retainer bar used on most adjustable bed bases
The Custom Clips system, which includes corner “L-shaped” brackets, side brackets, head brackets and foot brackets, is designed to reduce set-up time for delivery handlers, eliminate the need for tools and, most importantly, create a cradle for the mattress allowing it to contour to the bed base as it adjusts.
Like most Customatic Bedz products, the system is completely customizable and available in a variety of designs, colors and shapes, including “n-shaped”, semi-circle and a number of other options.
“We saw an opportunity to provide a solution to the clumsy and obtrusive standard brackets,” said Customatic Adjustable Bedz Partner Phil Sherman. “Our advanced system provides superior mattress retention that assists in helping maintain position when adjusting the base. We believe it is a revolutionary design that will dramatically change the way adjustable bases are presented in the future.”
Customatic also had private showings of its new, patent-pending Edge-to-Edge Lumbar feature, created to avoid the “tipping effect” in adjustable bed bases with lumbar-support designs.
Edge-to-Edge spans the width of the whole mattress, providing lumbar support across the entire sleep surface.
Buyers visiting Dormeo saw the vendor’s first “U.P.S.-able” foundation.
Designed to offer a product made with top-of-the-line materials, yet lighter and more durable than its standard base, the new foundation can be assembled and reassembled easily from the showroom floor to the customer’s bedroom. Potential benefits include cost-savings and secure, convenient and direct delivery.
Dormeo dealers wanted an easier way to ship bases. Before the new foundation, the only option was a traditional model that required “white glove” delivery to set-up. The new model’s lightweight, sleek design is aimed at online retailers, big box stores and stores that want to display a foundation for carry-away or “curbside” shipment.
The new can fit into a 14-by-14-by-81-inch box and features a sleek black and grey pattern, designed to match the company’s contemporary style.
“The convenience of a shippable product will be a great selling point for our customers, allowing them to better close the deal at the end of the sale and can increase the sales ticket as well as an added bonus,” said Jon Stowe, North American CEO.
Suggested retail price for the foundation starts $500.
FXI
Foam products producer FXI introduced what it called the specialty sleep industry’s first system to rank temperature regulation in foam products.
The Temperature Regulation Factor (TRF) will be used to communicate the performance level of each of the company’s foam offerings in its new TRF product lineup.
The TRF system consists of three ranking levels for foam products: TRF 2.0, 3.0 and 4.0. Products that fall in the TRF 2.0 range have open-cell foam with high levels of airflow for good temperature management, such as FXI’s Aerus and MemGel Swirl products. At the TRF 3.0 level, foam offerings are open-cell, have high airflow and include added heat dissipation properties, like FXI’s Gel-Trix. Products at the top-level TRF 4.0 category have extreme open-cell foam, providing the highest level of airflow of any foam product available on the market, as well as the added benefits of heat and moisture dissipation, encompassing the Maxperm, SilkLux, Aerus Max and MemGel Max offerings.
“Airflow and breathability has always been at the forefront of the discussion about foam products,” said FXI Chief Marketing Officer Diane Adams. “ … We developed a full product portfolio of temperature-regulating foams based on a consumer need—the need to sleep more comfortably throughout the night.”
The series includes three models—Xplore, Navigate and Grand—all featuring an upholstered, deck-on-deck design, and incorporating the latest technologies such zero-gravity positioning, wireless remotes, and USB ports. Retails start at $699 in queen.
The top model in the collection, the Grand, features a head-up/foot-up option with neck tilt capabilities. Its “Sleep Enhancement” technology provides Total Body Vibration, which helps lull a person to sleep and offers numerous health benefits. The base includes four USB ports, two on each side that act as a charging station for mobile devices. Other features include zero-gravity and anti-snore positioning, programmable memory settings, wireless remote with a flashlight, LED under-bed lighting and a wall hugging design that allows the body’s position to stay in place even if the base is moving.
“Through the years, we have seen the adjustable base category grow from being associated with hospital beds to becoming a true lifestyle product that consumers are embracing and demanding from our retailers,” said Vice President of National Sales Dan Baker. “With the addition of our Comfort Base Lifestyle Series, we can now offer our customers six different adjustable base options at all price points to satisfy their customer’s needs.”
KLUFT
E.S. Kluft updated its Aireloom Synchronized Support Collection with luxurious new ticking and border design featuring a dove gray Chinoiserie medallion; standard foundation or adjustable base option; and the addition of more natural Talalay Latex and plush memory foam in its comfort layers.
The six SKU line-up still features the same quality vertical and horizontal stitched side panels, outer tufting, materials and artisan handiwork for which Aireloom is known. Each model is hand-tufted and constructed using the highest quality organic cotton, Belgian damask fabric, silk, Joma wool, individually wrapped nested coils, and the company’s patented open-chamber design for maximum comfort and conformability; and Aireloom’s eight-way hand tied box springs.
“We wanted to up-the-ante and challenge ourselves to make (Synchronized Support) even more luxurious and comfortable than it was before,” said E.S. Kluft & Company President and CEO Earl Kluft.
The Synchronized Support Collection retails for $5,000 to $12,000.
MANTUA
Bed frame manufacturer Mantua introduced what it said is the industry’s first steel bed frame that a consumer can customize with multiple color, fabric and leg styles.
Mantua’s Express Yourself series, which includes the Express Yourself Frame and the Express Yourself Valance, features interchangeable inserts on the outer sides of the bed frame. The Express Yourself Frame is available with either wood or steel legs. The Express Yourself Valance, available in either contemporary or traditional styles, features frame inserts that can be individually purchased in 16 color options including black, white, off-white, chocolate brown, light blue and green, and wood grain and fabric-look styles.
Customized Point-of-Purchase designs are also available so a retailer or mattress manufacturer can print their logo or tag line on the bed frame.
“With our Express Yourself series, there is no longer a need to ‘hide’ the bed frame under a bed skirt,” said Mantua President David Jaffe. “The possibilities are also endless for retailers who can use the series to differentiate mattresses on their floors—whether it’s a green valance for organic bedding, a light blue valance to indicate latex, or another color to highlight a sale or promotion on particular models.”
The complete Express Yourself series retails for $149, with the individual valances available to purchase for $59 and the frames starting at $89
OMI
In addition to introducing new CEO Kurt Ling, Organic Mattresses Inc., launched five new organic mattress toppers.
The extension adds five new third-party certified organic pillowtop toppers to the already expansive collection.
The Verona topper features 2-inches of Global Organic Latex Standard-certified organic latex encased in certified organic cotton knit fabric. The Allura topper features 2-inches of GOLS-certified organic latex encased in OMI’s signature OrganicPedic knit quilting. The Wave model is the highest profile topper in the collection, featuring 3-inches of GOLS-certified organic latex encased in the company’s exclusive certified organic cotton knit fabric and a body-conforming sculpted surface to ease pressure points and increase air flow under the sleeper. The Wooly is made with 3-inches of hi-loft third-party certified organic wool encased in a hand tufted certified organic cotton cover. The Wooly Lite is made with 1.5-inches of hi-loft third-party certified-organic wool encased in a hand tufted 100 percent certified organic cotton cover. The line also will incorporate third party certified wool and cotton pillows.
“Following the success of the Certified Organic Mattress collection, our retailers have been anxious for us to add a line of third party certified toppers to the mix,” said OMI Founder Walt Bader. The certified organic mattress and accessory segment, following strong growth of organic purchases in the U.S. organic market last year, is continuing to experience sales growth significantly higher than overall industry performance.”
Toppers in the Certified Organic Mattress collection retail for $575 to $1,175 in Queen.
PURE LATEXBLISS
Pure Latexbliss debuted its new all-latex InteLa-Tec collection.
The collection has been designed to bring Talalay Process all-latex mattresses at lower price points to consumers that like the feel and muscle relaxing benefits of Talalay Latex but are indifferent to the “natural characteristics.” The Talalay Latex used in each InteLa-Tec collection mattress is created through a special formulation repurposed from the same virgin high-grade synthetic latex used in 100 percent latex medical gloves.
The three mattresses in the Oeko-Tex Certified InteLa-Tec collection feature synthetic Talalay Latex pressure relief layers, synthetic Talalay Latex support cores and are available in 8-inch, 10-inch and 12-inch profiles. The InteLa-Tec collection is priced below the company’s core Pure Latexbliss line.
“Our goal with the InteLa-Tec collection was to round out the latex category and provide a range of pricing options for consumers,” said Latex International President and Chief Executive Officer David Fisher. “We recognized that consumers interested in latex mattresses come from different points of entry—some buyers are natural-oriented, whereas others have different lifestyle and environmental concerns. “
REVERIE
In addition to the Sweet Slumber pillow collection—a down alternative without the price and allergy issues—Reverie introduced the Elation surround sound system for use by retailers as an accessory up-sell.
The four-speaker plus sub-woofer surround-sound system, is offered as an accessory for any foundation on the market.
Each of the four speakers attaches to the foundation legs with a universal mount that can be easily attached to the legs of an adjustable base or standard foundation to achieve surround sound for any bed. The subwoofer is specially designed to sit underneath most beds. The mounts eliminate the need for holes in the walls and can be easily disguised so as not to interfere with the bedroom décor.
The system features Bluetooth 3.0 technology, allowing consumers to experience high-quality sound streamed wirelessly from their iPhone, iPad, or other smart device from the comfort of their beds.
Reverie brought in tuning experts to tune the speakers’ acoustics and optimize the sound coming from underneath a bed to provide the best sound experience to users on top of the bed.
“The surround sound speaker system we developed was such a big hit at the last Las Vegas Market we decided to refine it and give retailers the option to sell the system as an accessory item, allowing them to grow their tickets sales,” said Reverie President and CEO Martin Rawls-Meehan. “It also gives consumers a chance to upgrade easily by just attaching the speakers rather than having to buy a whole new foundation.”
Suggested retail price for the Elation surround sound system is $400.
SEAHAWK DESIGNS
Seahawk Designs debuted a new headboard design for its popular Synergy System.
The Pecan and Espresso wood-finish headboards now feature an interchangeable, upholstered panel option that will be offered in a variety of colors and patterns, adding a unique, personalized design element.
The insert panels, which slide into place in the center of the headboard, feature a plain, tufted or box stitch design, available in an array of popular hues and fabrics, allowing the ultimate in customization.
“There is a practical element to our design as consumers will be able to change their bedroom décor without worrying about having to buy a new headboard to match, adding to the life of the product and upping the value to consumers,” said Seahawk Designs CEO William Jahn.
SENSORPEDIC
Sensorpedic introduced the “Super Cool” collection, five pillows, two toppers, and a mattress pad.
Each offering is covered with a unique, cool-to-the-touch fabric that allows a sleeper to rest at as much as 10 degrees lower than the ambient temperature of a bedroom.
The collection uses a natural mineral woven into the fabric to make it cool on the surface. Providing additional airflow, breathability and therapeutic pressure-relief, the cores of each pillow, topper, and protector will feature Sensopedic’s SensorFoam with Gel gel-infused, ventilated memory foam which uses gel support beads for a slightly firmer and more supportive memory foam feel.
“We recognize that cooling and airflow is still a major issue within the industry and so we are doing our part to develop products that incorporate the latest technologies into our top-of-bed offerings,” said Senior Vice President of Sales and Business Development Jeff Chilton.
The Super Cool collection’s suggested retail price for pillows is $49-$99 and for toppers is $249-$399.
SPRINGTIME
Spring Time Bedding added a three-model, high-end tufted hybrid collection to its Medicci & Saville brand.
The collection features top quality materials at value price points, offering its retail partners the potential for high sales margins.
All three models in the Tufted Hybrid line incorporate a hand-tufted design that anchors the top quilt panel to the bottom of the mattress to keep all components solidly in place, prolonging the life of the mattress and improving full body support. The beds also feature a tufted pocket coil support system, which reduces motion transfer and improves comfort, with heavier gauge coils at each end of the sleep surface to prevent a roll-off sensation.
“Hybrids are what the industry is looking for right now—it’s become a buzzword for retailers and consumers alike,” said Vice President Sarah Appleton. “What hasn’t been seen yet in the industry is a line of hybrid models that looks incredibly high end and incorporates the best materials available today while keeping price points at a value level
Beds in the collection retail from $1,499 to $1,999 in Queen.
THERAPEDIC
Therapedic addressed demand for products offering heightened airflow with the new AgilityAir collection.
The line, including three SKUs in visco, gel visco and latex options, is a new sub brand in Therapedic’s Agility collection that uses enhanced components that significantly boost airflow and comfort.
AgilityAir is made of a combination of high-density foams, cooling gel memory foam, latex, pocketed coils and varying combinations of mini-pocket and micro-mini pocket coils.
Each SKU in the collection is made with a convoluted reticulated foam support layer, which is 100 percent air-permeable and enhances airflow by 43-percent over regular, flat foams. One enhancements is the use of mini and micro-mini pocket coils that are wrapped in a perforated, three-way stretch encased fabric, allowing for even better airflow and increased comfort throughout the bed. The mattresses also include perforations in the side support rails to increase air circulation.
“The addition of perforations in multiple levels within these mattresses is really a unique technology,” said President and CEO Gerry Borreggine. “The multiple airflow-increasing components are exactly what retailers need to stand out amongst the competition, and we believe we’ve created the right airflow-fix for the bedding industry.”
KING KOIL
King Koil reported its “best ever” market response to a new product with its new Duck Dynasty mattress line.
“We saw tremendous traffic from many quality retailers and experienced the greatest response we’ve ever had at any show to a single product introduction, the King Koil Duck Dynasty line,” noted company president and COO Dave Roberts.
The company designed the Duck Dynasty presentation—on which a new Duck Dynasty environment for retail stores is based—to simulate the typical grassy fields and marshland that attract ducks in the wild.
The Duck Dynasty beds, accented with the TV show’s trademarked duck camouflage, featured headboards with familiar sayings from the reality series like “Work hard. Nap hard.”
The presentation also included standing life-size images of the four key Robertson family members, plus a giant TV screen at the showroom entrance that presented new Duck Dynasty retail TV spots.
Also near the entryway was a Duck Dynasty-themed video game.
“Our objective in Las Vegas was to provide retailers with a reasonably priced line that had the brand excitement and pulling power to attract the millions of loyal Duck Dynasty fans,” Roberts said. “We came away from the market very confident that an RSA can easily open an entertaining conversation with a consumer about this product line. And the marketing support package, which includes traditional and online advertising plus dramatic in-store display elements, only make the process of engaging mattress shoppers that much easier.”
WRIGHT GLOBAL GRAPHICS
Wright Global Graphics highlighted DomeTec, a cost effective and visually dynamic alternative to embroidered point-of-purchase materials.
DomeTec can be applied to almost any surface, and features an embossed metallic look while maintaining a soft, flexible feel.
DomeTec can be developed as a brand label or an enhancement to any top-of-bed product. It also can be a replacement to an embroidered border. With an unlimited color palette DomeTec helps product stand out in a crowded showroom.
“From displays to top-of-bed to border branding, the DomeTec application draws consumers to a product with its dimensional qualities and ability to capture and reflect light in the showroom, creating a strong visual impact for customers,” said Senior Vice President of Business Development & Chairman of the Board Don Wright.
October 8,
2014 by in Industry, Internet
By Powell Slaughter
The growth of online home furnishings sales has more vendors looking to partner with e-retailers to service that business through drop shipping to consumers’ homes.
While many of those emphasize that they’re only helping to fulfill orders—it’s in their interest to support a channel that will only grow in the future.
Not surprisingly, we found that some vendors currently serving a drop-ship model for online retailers didn’t want to talk about the subject. If you are a sharp retailer and they’re part of your supply chain, you know who they are. If you don’t, good luck.
OBJECT LESSON It ain’t breaking news, but e-commerce is a channel more vendors are finding they can’t ignore. Take Cymax. In 2004, Cymax started as a small audio video furniture e-tailer. Today, the Burnaby, British Columbia-based company is among the fastest growing online furniture retailers with 2014 sales projected at above $140 million, more than 35 percent compared with last year. With more than 50,000 furniture SKUs, Cymax sells products to consumers across North America.
Cymax recently launched a more responsive, fully optimized Web site and expanded into new categories. That takes advantage of the multiple ways customers access information and buy online.
“Mobile and tablet traffic has grown to nearly 50 percent of all Web site visitors, putting the ever-growing Cymax catalog of over 50,000 product SKUs in the hands of every consumer in the U.S.,” said Scott Fullerton, director of marketing at Cymax on the company’s growth. “Further sales have been driven by Cymax’s advances in consumer payment options, including the addition of Amazon Payments and Visa Checkout.”
Pure-play Internet retailers like Cymax, Wayfair and Hayneedle, are making it easier for shoppers to buy, whichever screen they’re using. They’re also investing in telling vendors’ stories online with detailed product information that is breaking down consumers’ perceived reluctance for big-ticket purchases via the Internet. And vendors are supporting those efforts.
Brick-and-mortar retailers like Nebraska Furniture Mart also are doing growing business online beyond their traditional markets.
PARTICULAR CHALLENGES Vendors serving retail customers via drop ship often find themselves using a third-party carrier of the retailer’s choosing, and that can create challenges.
Cresent Fine Furniture started sending goods to delivery companies for drop shipment to customers’ homes about five years ago, at first with brick-and-mortar retailers who also sold merchandise online.
“We were very selective with those dealers because we wanted to make sure they’d provide the customer service necessary to support Internet sales,” said Taylor Condra, vice president of operations. “We’re very protective of our brand—whoever sells the product, it’s our name on the box.
“In our case, we are adamant that white glove service is the standard of delivery service. Case goods do not lend themselves to traditional drop shipping.”
The action picked up two years ago when Cresent began selling larger Internet retailers.
The devil is in the details of setting up the SKUs and product descriptions in the retailers’ system.
“That helps us protect our pricing,” Condra said. “Retailers don’t like showrooming, and vendors don’t either. You can’t underestimate the importance of enforcing your minimum pricing, we work to keep the playing field level.”
Pricing is also important to Magnussen’s e-commerce.
“We have a strict IMAP policy and work hard to ensure this is being met and we only partner with those that hold to the IMAP pricing,” said Christa Albrecht, senior vice president of sales at Magnussen. “Magnussen Home selects their e-commerce partners that have infrastructure to truly service the end consumer and are not just operating a business out of their home.”
Magnussen Home also leaves ultimate responsibility for fulfillment in the hands of its retail customers when it comes to home delivery.
“We do not get involved with white glove delivery or drop ship to consumers,” said Albrecht. “We service our retail partners and work closely with them to maintain high levels of on-time, on-quality delivery so that they can meet the consumers needs.”
DEDICATED DIVISION Home Meridian is into drop shipping in a more direct way than many vendors. After leaving the crib business a couple of years ago, the company turned to freed-up resources to launch Right2Home.com, the full-line vendor’s e-commerce drop-ship division. Right2Home started in October 2012 with 1,500 items available for white glove delivery, including goods from Home Meridian divisions Samuel Lawrence Furniture, Prime Resources International and Pulaski Furniture—all with a strict IMAP policy.
Retail customers using Right2Home’s services include Macy’s, Bed, Bath & Beyond, Nebraska Furniture Mart, Wayfair, Cymax, Hayneedle, Costco and Sam’s.
Drop-shipped goods should represent around 10 percent of Home Meridian’s business this year, according to Kevin Walker, president the Right2Home division.
“In 2014 it grew 124 percent, and we expect it will grow another 100 percent next year,” Walker said.
Sixty percent of Right2Home’s goods travelson specialized furniture carriers with the balance on Fedex or UPS.
“Right2Home wants customers to use a specialized furniture carrier on larger items,” Walker said. “Fedex and UPS shipments are constrained by those services’ requirements on sizes, dimensions and weights.
“We have a few customers still trying to chase a (low) freight rate, but we are showing them that it’s worth it” to have the product handled correctly, Walker said.
FURNITURE ISN’T EASY Whether or not they’re responsible for lining up the “last mile” of delivering furniture to consumers, vendors still have to do everything they can to make sure their brand doesn’t get associated with problems.
Large furniture pieces like case goods are inherently subject to snags when it comes to drop shipments: they are not palletized, they’re heavy and they can be difficult to handle.
Cresent started putting V-boards for extra cushioning on every furniture edge for drop shipment about a year ago.
“It also helps that big retailers doing business on the Web are using more specialized furniture carriers than in the past,” Condra said. “Drop shipping (for large pieces) only works when the retailer uses a specialized furniture carrier. We’ve seen good results with that.”
Quality issues with delivered merchandised are handled on Cresent’s end.
“That’s because my people looked at it before it went out,” Condra said. “If it’s damaged (in shipping), it’s more the retailer’s problem, since they’re telling us which carrier to use.
“We also add extra padding on all our merchandise that’s scheduled for drop shipping.”
Magnussen’s drop-ship support for e-commerce accounts is limited to items that meet the weight and size restrictions of FedEx direct shipments to consumers.
“These items are have an external second pack that is completed by item at our North American distribution center,” Albrecht said. “Items that exceed the FedEx standards ship to specialty delivery services that special in white glove delivery as specified by our e-commerce partner.”
The keys for fulfillment at Right2Home are International Safe Transit Association 3a-certified packaging, shipping within 24 hours from receipt of order, and a strong IT department.
“For larger items that must ship via LTL it is imperative to work closely with the e-tailer and a well-run white glove furniture freight carrier,” Walker said. “The product must arrive to the consumer’s home in excellent condition.”
He added that retailers looking to drop ship goods at consumers’ door should not chase the lowest freight rates because they will pay far more in high damages and free replacements.
Walker believes inventory and data management are the biggest challenges to supporting drop shipments.
“This business is a heavy inventory driven business,” he noted. “HMI/Right2Home has made and will continue to make substantial investments into inventory and new product development. You cannot be successful in the e-commerce space if you are not in stock all the time with the correct products that turn fast.”
Technology systems are challenging. Right2 Home invested in systems that communicate with retailers in real time for functions such as receiving purchase orders, providing inventory feeds to the retailer and invoicing, with the ability to automate the process to receive, ship and invoice within 24 hours.
“Every retailer is different in what they require for onboarding and launching our brands, so we have to be flexible, fast and accurate,” Walker said. “Data is challenging. Housing, organizing and updating all the data necessary to offer you product line online can feel overwhelming. HMI runs on SAP and within this powerhouse of an operating system we have developed a customized setup process that easily and quickly delivers all the necessary data to the retailer with every image, specification, dimension, romance copy, weights, cubes, preferred shipping method, etc.”
THE PLUSES FOR VENDORS The positive aspect for vendors of working with Internet retailers is that they don’t have to fight for floor space with an online retailer.
“It costs nothing to list four bedrooms on their site instead of one,” said Condra at Cresent. “We can also serve areas of the country not serviced by our dealer base. We’ve determined that we want a very small group of very capable Internet retailers. They must have the infrastructure in place to deal with failed deliveries, and in our experience most of those are shipping damage. It’s the age-old question—is it damage, or is it a defect?”
That is an area where vendors are able to leverage domestic warehousing.
“In our Tennessee warehouse, we run a full quality control center,” Condra said. “We’re opening and inspecting furniture every day prior to shipment. This helps us prevent defective product getting to all of our customers, not just Internet retailers.”
It also helps that specialized furniture carriers have adapted quickly and are now offering white glove delivery options.
“Drop shipping works best when the retailer uses a specialized furniture carrier for both the line haul and the final mile delivery,” Condra said. “We are glad to see the carriers get that infrastructure in place.”
Along with increased use of specialized carriers, Condra credits several Internet retailers with effective use of analytics to improve drop shipping outcomes.
“They have so many analytics that they track, and they use and share their data with us to analyze the business and make improvements,” he said.
A GROWING BUSINESS Drop shipping furniture items will only continue to grow.
Vendors such as Cresent are tied into their Internet retailers’ systems, so they know when a product is ordered as soon as the retailer. Preparation for shipment begins immediately.
“We’ve determined that we just want a very small group of very capable Internet retailers,” Condra said. Drop shipping “is only growing. We all have to make sure the procedures are in place to provide the consumer with the product they want quickly. We’re usually ready to ship the same day.”
He expects more specialists in third-party drop-shipping fulfillment. Overstock.com, for example, developed an entire third-party logistics division.
“If I want to service my Internet business, they’ll rent me space for same-day fulfillment,” Condra said.
Walker expects HMI’s drop ship portion of business to grow significantly as e-commerce retailers hone their merchandising chops.
“Time was, e-retailing was about making masses of product available,” he said. “Now they’ve become curators and merchandisers of product.”
The number of ways and places for shoppers to find goods online will continue to bolster the drop shipping business.
“The consumer today is shopping for goods that meet their personal style using Internet searches, Pinterest, Houzz, etc., that they cannot buy at their local brick and mortar store,” Albrecht noted.
October 8,
2014 by in Industry
The growth in e-commerce has given the ready to assemble furniture category a boost of late as the flat packing allows for easier shipping than traditional furniture.
And no one can argue with the success of Swedish retailer Ikea—multiple floors of modular, ready-to-build furniture in a variety of categories.
Traditional retailers say the channel of distribution has shifted of late away from mainstream furniture retailers. They lament that many suppliers of RTA have turned to big box discounters, successful e-tailers and office superstores as alternative partners.
Some traditional retailers, who typically had been selling ready-to-assemble goods with the service of assembly, say the race to the bottom in pricing and lower overhead for online retailers makes it too hard to compete in the category.
Factoids
$2.77 billion
2014 YTD RTA sales
2.4%
Sales increase through first half of 2014 over same period last year
7.6%
RTA’s percentage of total industry sales through 2Q 2014
Retailers Say
Sauder's 411897 bookcase
"It is a great basic bookcase with flexibility on storage." Retail is $74.99.
Irv Blumkin
Nebraska Furniture Mart
Omaha, Neb.
Jesper’s Expandos
“Designed to offer a smaller footprint for multiple work settings, the Expandos shelves are available in three finish options.” Retail is $250 per L-shaped unit.
Andy Thornton
LaDIFF
Richmond, Va.
Suppliers Say
Naia by Tvilum
Tvilum’s Naia bedroom collection includes beds, nightstands, chests, sideboards and double dressers. Drawer fronts and doors are handle-free creating a stylish, timeless dimension.
The Cabot Collection from Bush Inds.
With a focus on function, durability and style, the Cabot collection is available in two finishes. The group offers storage with technology integration—both important features in the home office category. The L-shaped desk retails at around $400.
The Carson Forge Gourmet Cart from Sauder
As one of Sauder’s top sellers, the Gourmet Cart provides a versatile kitchen and dining piece. Crisscross storage, hanging hooks and wrought iron hardware offer sophisticated Mission styling. The piece is versatile enough to live in a variety of rooms.
Walker Edison’s Soreno L-shaped Desk
The Soreno L-shaped desk is a space-saving desk that can be used separately as two desks. The glass and metal construction blends with a variety of décors. A functional sliding tray allows for easy storage of bulky keyboards. Suggested retail is $119.