Monthly Issue
From Home Furnishing Business
June 24,
2014 by in Business Strategy, Industry 
The youth category of home furnishings is in a bit of turmoil of late with two leading vendors either exiting or looking to exit the business.
Stanley Furniture Co. announced plans in April to shutter its Young America line, and about a month later, La-Z-Boy said it was seeking a buyer for its Lea Inds. youth business.
Those two business decisions have other youth suppliers feeling optimistic about future business for that segment of their portfolios, as the landscape continues to change. Based on Home Furnishings Business’ latest consumer survey, the category continues to resonate with parents looking to outfit their kids’ rooms with furniture. After all, the little people in the house need a place to sleep, study and play.
Our panel consisted of 125 furniture-buying consumers who had all purchased furnishings for a child’s room within the last 18 months. Most of those buyers—76.2 percent—bought furniture for children who were older than 3. In other words, they were out of the crib and into a twin or perhaps, a full bed.
The kids who were old enough were given some input into how their rooms were furnished. Almost 43 percent of the consumers said the children were “moderately influential” in choosing the type and style of product bought. Another 23.8 percent said their children were “extremely influential” in the purchase decision.
The takeaway here? Designing—and buying—somewhat from a kid’s point of view could help sway purchase decisions, as long as the designs aren’t too over the top for Mom’s taste.
From our survey, it appears that parents (and to somewhat the kids) were swayed mostly by product in the traditional vein. Almost 48 percent bought traditionally styled goods, followed by 34.9 percent with contemporary designs. While those two style genres led the parade, mission (9.5 percent), rustic (4.8 percent) and cottage (3.2 percent) all made it on the board.
When it comes to paying for the goods, our consumers were pretty certain on the amount they wanted to (and did) spend. Nearly 78 percent said they paid between $500 and $2,500. Breaking it down a bit further, 20.6 percent said they paid between $1,501 and $2,000 for a complete room; and 19 percent paid between $751 and $1,000.
Parents have their eye set on future use when acquiring furniture for use in kids’ rooms. Longevity is key when it comes to purchasing.
Only 29 percent said the purchase would only be for use during childhood. Almost 32 percent said they made the purchase in hopes that one day the furniture could be used in a guest room. Another 32 percent said they hoped the child could use the furniture either during college or in a first apartment.
Along with future use plans, our consumers didn’t skimp on furnishings the space. Almost 78 percent said they furnished the room with “stylish, good quality furniture.” That holds in line with the plan to repurpose the furnishings. Only 14.8 percent said they had given other rooms in the house higher priority for furnishings.
June 24,
2014 by in Business Strategy, Furniture Retailing, Industry
Brick and mortar locations are obsessed with making Amazon their problem. The real problem is that we do not understand how to leverage the technology in front of us (or the resources) to help us sell more stuff.
OK, here it is … Amazon did $67.9 BILLION in 2013 in retail sales ($49.6 billion more than the next closest online retailer, according to Internet Retailer. If you ask Best Buy executives or Barnes & Noble executives they would tell you their showrooms act as the No. 1 sales vehicle for their good friends at Amazon. What if we told you that they are 100 percent wrong?
We utilize other’s access to technology as a crutch to make up for the fact that we do not want to leverage it to help us close the sale. The customer wants ease of purchase but that doesn’t always equate to purchasing directly online. She wants to have her questions answered, to understand why the sofa is $499 verses $199 or why the cost for delivery is $79 verses free from AnyoneRetailer.com.
If we are going to stay in business today we need to stop pointing the finger outward and start looking inward. Here are four sure fire ways we can equip ourselves to be successful and give Ms. Jones what she really wants today: a great shopping experience that keeps her coming back.
1. Use Social Media
The only way for us to understand the impact social media can have on our business is for us to empower our entire store and ourselves to understand it, digest it and implement it personally. Follow your friends—and your competitors. They won’t tell the world what they ate for lunch, but they need to understand how Ms. Jones buys today.
2. Buy Online
Empower your key people (operations, sales, buying, finances) to make one personal purchase a quarter from various industries and online sellers. Have them study the strengths and weaknesses of their personal shopping experience, from the product catalog, ease of checkout, delivery options, follow up and customer service. This will allow you to understand how you can make the customers experience better—plus find the loopholes to give you a leg up.
3. Get Ready for Y (and the millennial?)
Generation Y is coming of age. Born between 1982 and 2000, this is the largest generation of consumers ever (bigger than the Baby Boomers) and they will be the dominant consumer force for your future. Find someone at a local university or a local consultant to come in and educate your staff on what Gen Y is looking for. Just making conclusions based on their own experience (or yours) will only lead to the wrong sales approach happening.
4. Know your market
Market research is an expensive investment, not an expendable expense. The Ms. Jones that bought from you five years ago is gone, and a new woman has taken her place. To get the best out of your salespeople you need to invest in understanding who your customer is right now. Dig deep into why she buys, how she buys and where she might buy to equip your salespeople, delivery and customer service personnel with the script needed to sell her (and keep her) today.
Don’t use other resources as crutches to be the solution to your problems. Invest in your people to leverage today’s technology to ensure you are making money today … and tomorrow.
June 24,
2014 by in Business Strategy, Industry
If a retailer is losing market share it can be attributed to one or a combination of three things: merchandise, advertising or consumer experience. The last topic is, at best, vague.
In the past decade a new element in the buying process has emerged with more than 75 percent of all consumers doing research on the Web before visiting the stores. In other words, the consumer visits a retailer’s Internet store unannounced, wanders through the product selection and reads the statements stressing why the retailer is different from the competition, but has no real chance to engage directly with the retailer. More often now than in previous years, a certain number of shoppers buy online without ever visiting a physical, brick and mortar store. Unfortunately, the retailer the consumer purchases from may not have a physical store.
At least 85 percent of the consumers who initially visit a Web site will proceed to the store. However, the list of retailers that the consumer visits has declined to about 2.1 stores per purchase. As the industry is beginning to recognize, the traffic continues to decline regardless of the volume. It is crucial to understand the significant variance between what the new Millennials want and what the downsizing, but still-purchasing Baby Boomers prefer because it is at this point that the sales challenge begins.
This sales challenge can be addressed with retail technology. Time-starved consumers want to have reliable information unfettered by a sales pitch to aid them in arriving at the product that they desire.
How do they do this? They go online to begin and often complete their purchase. Internet advertising, store advertising and social media are means to direct them to the retail commerce site. Once there, a series of questions aid in profiling the consumer. Information gleaned will also lead to offered products. How focused is the consumer? Is he or she concentrating on one product category or wanting to see an overview of several products? Product presentation on the Web is critical. Retailers can romance that bedroom or sofa or dining room table so that the consumer can envision it in her home—a key to closing the sale.
After the consumer pinpoints one product or products, point-of-sale material becomes important whether online or in a physical store. It directly communicates with the shopper by offering additional product information that can secure the sale.
Once the shopper has made the decision to buy, the rest of the consumer experience is business. How this is handled online or in a store is important to capturing an ongoing customer, one who will return to your store for the next furniture purchase. At this point, consumers feel that they have managed the hard part and are ready to get the minutiae out of the way. Delivery scheduling, protection plans, and after-sale satisfaction now become the main focus. They want their order to be processed efficiently, and the delivery made at a convenient time that fits their schedule. To complete the consumers’ wish list is the expectation of a product that will never necessitate a return for any reason.
The main emphasis of this issue of Home Furnishings Business is to focus on the consumer experience and how technology can achieve the high standard that the consumer demands today for shopping and purchasing.
That standard is how products are shopped and purchased on Amazon.com. Amazon is an online retailing giant, but it is the giant to which millions of consumers have become accustomed. How does your business stack up in comparison?
June 6,
2014 by in Business Strategy, Industry
Mattresses Have Distinct Training Issues From Other Furniture Categories.
Imagine you’re a customer walking into your bedding department. No matter how well it’s lit, or relaxing the atmosphere, you’re looking at a selection of products with little visual difference. Getting customers to understand why there is a difference is a key to training staff for selling mattresses, whether you have dedicated associates for the department or not. Morris Furniture Co. in Fairborn, Ohio, has been busy opening Better Sleep locations dedicated to the mattress category. Vice President Rob Klaben said the retailer is fortunate to have the one of the best mattress manufacturer reps in the industry who makes sure Morris staff knows current sleep technology and represents its showrooms and their products well. “Since mattress customers make purchase decisions faster than furniture buyers, sales associates need to make sure prospects receive all the right information to buy on their first visit to our showrooms,” he said.
THE CITY WAY
At Florida retailer City Furniture, selling mattresses is all about comfort, support, value and brand. “If someone likes a dining room set, it’s because they like the style,” said President Keith Koenig. “With mattresses, it’s first about comfort, then value, not so much how it looks.” Art Hunt, product specialist at the Tamarac, Fla.-based retailer, handles advanced training for sales associates in all categories, including mattresses. He creates manuals and processes for City’s proprietary training programs. He said stores specializing in mattresses are at a distinct advantage when it comes to training: “That’s all they have to know.”
Many salespeople, Hunt believes, have an ingrained reluctance to get involved in the process of selling a bed. “There’s so much information, and it creates a natural barrier,” he said. “You have a gallery with 50 or 60 beds, and there’s a lot of information to remember, and that’s a mental challenge.” That’s one reason City, which expects all salespeople to sell the entire floor, is moving away from selling on product specifications to concentrating on highlighting support, comfort and better health. It’s a good match with so much of the bedding industry’s marketing the past couple of years, which touts the benefits of a good night’s sleep. “We’re trying to sell someone on the idea of how to improve their health,” Hunt said, adding that product knowledge is still important—just not a starting point for the conversation. “When a customer comes in and asks how many coils a bed has, you still need to know since it’s a relevant fact when building a mattress.” Still, the comfort approach toward selling mattresses has eliminated the challenge a lot of City’s salespeople faced with the category. The training certifies each salesperson on a proprietary two-pronged approach that combines product knowledge with a seven-step sales process. Even though a customer might not sit still for all seven steps, the salesperson has to be certified on each one so he or she can fit the process to individual customers. “We do the sale very conversationally,” Hunt said.
“Are they an all-foam customer, a hybrid coil shopper, etc.” City utilizes a bed-testing area where customers can check the feel, say, of a foam bed vs. a coil mattress. Customers also can check out which pillow they prefer. When it comes to product information, City recognizes that it’s hard to keep specs for 50 or 60 mattresses in one’s head. “We supply a tone of information in our online learning management system on our Intranet,” Hunt said. “Some customers want that information—say an engineer comes in and asks for the indentation load defection of the foam in a bed. The salespeople don’t memorize things like that, but they can access it via the computer in seconds.” While City Furniture sales staff are expected to sell mattresses, each store has a mattress specialist responsible for the overall department, as well as additional training at the store level. In recent months, City Furniture has taken its staff at all stores through off-site training blitzes for vendors including Serta, Sherwood Bedding, Simmons and Tempur Sealy.
“It puts the category front-and-center in everyone’s mind,” Hunt said.
DEDICATED OR NOT
One debate for training in bedding: Should a retailer have dedicated sales staff for the category or not? “It’s a touchy subject,” said Michael Kua, senior consultant for Impact Consulting Services. “It’s an employee-retention and happiness issue. You have people who’ve been with you for many years that might resent losing out on those sales.” sure anyone you have slated to sell mattresses has the ability and drive to do so. “A lot of salespeople at high-end stores don’t like to sell mattresses—it’s not ‘sexy,’” Kua said. Going with a dedicated staff also risks what he called a “sense of betrayal” from lost potential commissions; and dilution of sales in other categories, especially in small to medium-size stores. “If you have 10 people and put two of them selling mattresses, you’ve reduced your sales staff for everything else by 20 percent,” Kua said. “And when you move two of those 10 into bedding, they might be used to getting three or four ups a day, and now they’re down to one or two.
Their opportunity has been reduced financially, and calls for additional training, maybe even more advertising.” The other problem is with training. It’s not as costproductive for the rep to train a couple of dedicated sales people in a full-service store versus the entire sales staff.
“That’s different at a Mattress Firm, where they might sell hundreds of thousands a month with three people,” Kua said. Jerry Epperson, managing director, Mann Armistead & Epperson, Richmond, Va., said dedicated sales staff vs. generalists depends on the store. “If you look at Jordan’s, they have people in lab coats they call ‘sleep technicians’ that the other salespeople send customers to,” he said. “That’s not possible in a smaller store, though.” While City Furniture has “sleep specialists” in each store, the retailer’s business model relies upon salespeople having the knowledge to sell the entire floor. “We, like most furniture stores and good mattress specialists, have an ‘interview’ process,” said President Keith Koenig. “Most people are buying a mattress for themselves, and they’re concerned about getting a good night’s sleep. “People have a lot of sleep issues. The wrong pillow will exacerbate some problems; budge; brand preference; sleep surface preferences—always try several. The mattress customer is self-selecting, but the sales associate is critical to getting them to that point.” (For more on dedicated sales vs. generalists, see the accompanying sidebar, “Dedicated Mattress Staff: Yes or No?”)
IN-STORE DIAGNOSTICS
Bedding vendors such as Kingsdown have developed instore diagnostic systems to help consumers narrow down their mattress choices according to body size, sleep habits (back or side, for example) and other personal preferences. Kingsdown’s retail partners using its program include Art Van, Sleep Fit, Sit n Sleep, Baers Furniture and Mattress Warehouse. The key with such programs is to make sure your staff, first, knows how to use them; and second, can “process” customers on the floor. “Sometimes I think they don’t have enough machines available,” said Kua at Impact. “If you have three customers shopping for a bed, do you want them to be standing in line waiting to be tested? “It’s either part of your process or not. The old fashioned way still works if you don’t have the machine. It does work though, and retailers do need to hold salespeople accountable to use the machine. People do trust what a machine says more, sometimes, than what people are telling them.” City’s Koenig is more confident in the sales process the retailer developed over the years.
“My experience with diagnostic programs over the years is mixed,” he said. “I don’t think there’s anything better than trying out a number of mattresses.” If you do choose to use diagnostics, hold your salespeople accountable for putting them to work—and the reps from vendors with such programs. “If you have the diagnostics, reps need to know those stats and tell your sales staff,” Kua said. “What are different comfort levels they’re selling? Make sure they’re running reports on what’s selling in terms of firmness and price points. “Look at bad performers, and see how they can do better.”
WHAT ARE THEY LOOKING FOR?
Mattress sales training might demand more qualification than any other category. After all, the customer will be spending a third of her time on this product as long as she owns it. “If someone wanders into the sleep section, you know they’re qualified at the get go,” Kua said. “Ask qualifying questions. Incentivize with (compensation) for hand-holders who bring customers to the mattress department. “If they look at anything in the bedroom category, they’re more qualified.” Are you selling a bed, or are you selling the mystery of sleep? If either, make sure your associates are trained to keep tabs on the mattress department’s appearance. “Watch your floor,” Kua noted. “The most popular mattress might be the dingiest, footprints on the base protector. Change out the cover. Is it really clean compared with the rest of the bed?” Good training helps build tickets because salespeople are better equipped to help customers understand the difference between a $500 mattress and a $2,000 unit that might not look very different on the sales floor. “Anything you lie on in the store is going to feel better than your mattress at home,” Hunt said. “The question is what will it feel like six months
from now.”
June 6,
2014 by in Business Strategy, Industry
The new generation of mattress shoppers is accustomed to going to specialists for particular products. They see an Apple store, they think, “I’ll find what I need for smartphones and computers.” The proliferation of mattress-only retailers is right in line with their shopping habits. How do you, as a full-line furniture retailer, let them know you’re in the business of selling sleep? City Furniture President Keith Koenig believes his stores have a lot more to offer in terms of selection and price in bedding than the specialty stores in its markets. How does he get that message to consumers, and how is it reflected on City Furniture’s floors.
“We feel it all starts with the City Furniture and the Ashley Furniture Homestore brands,” he said. (City Furniture’s also a major Ashley dealer.) “We have the logistics, I think the best in the market; we have the product, from a $249 queen to a Tempur-Pedic, an edited selection of major brands; we have the accessories and top of bed. We have sleep specialists in all our departments and an enormous amount of training for the salespeople they support. “But to be really successful, you need shoppers to have that emotional connection with your brand and great customer service. We’re involved in the community, and people know we’re in it for the long haul.” That approach is reflected in Tamarac, Fla.-based City’s advertising. “Everyone else is screaming, ‘We’re number one, we have the lowest prices,’” Koenig said. “We’re talking about City Furniture and our people.
“I’m not saying we win every battle, but we’re the number one player in home furnishings in South Florida, and we’re a major player in the mattress space, even though the specialty stores have hundreds of locations in the market we serve.”
STAKING A CLAIM
The basis of retail buying group Furniture First’s Mattress 1st program is building consumer mind share for its member retailers when people shop for bedding. “Specialty stores are identified as having expertise, and they offer a specialty experience in the store,” said Andrew Kauffman, director of mattresses at Furniture First. He said retailers who want to do more bedding business should go outside their store and look at it as a customer sees it. “Would you know that you sell mattresses there?” he asked. “If your customer has to come into your store, go up the stairs and all the way to the back, that’s not convenient.” He suggested moving the bedding department to the front of the store or another high-visibility area. “Look for 10 tickets that were for bedroom furniture sales only,” Kauffman added. “Call those customers, and ask them if they know you sell mattresses.” Richard Andrews, president of Andrews Furniture in Abilene, Texas, is looking for ways to keep building mattress sales. “The visibility is something that needs to happen,” he said. “We’d always taken a closet-like approach to where we put bedding, since it seemed to be a very personal shopping and decision process, but maybe that’s not really that important anymore. We put it in a more public location in the store.”
A DISTINCT BUSINESS
Callan’s Furniture in Waite Park, Minn., recently opened a 3,500-square-foot “store within a store” for mattresses and bedding using Furniture First’s Mattress 1st concept as a template. “The biggest thing we’ve seen with the new department is that you put yourself on equal footing with the specialty sleep shops,” he said. “The consumer can tell there’s been an investment made and that you’re serious about the category.” One good thing about specialty stores moving into a market is that their advertising gets consumers thinking about making a mattress purchase. Do your ads inspire potential customers to do the same thing? Coconis Furniture, South Zanesville, Ohio, has re-thought its advertising approach with the bedding category. “Historically, every ad we ran mentioned mattresses, but with all those new mattress-only stores, our goal is to have a separate budget for the category,” said President Randy Coconis. “By midsummer we should be up and running with that.”