May 13,
2014 by in Business Strategy, Industry 
Midtown Furniture Superstore & Mattress Center has run some “wild and crazy” advertising over the years. The ads were attention getting, but Woody Whichard, president of the Madison, N.C., retailer, decided to try some new approaches over the past year. One, cutting back on the advertising budget, did not work. “Another is we called some of our customers and asked if they would like to come in and give a testimonial for a TV advertisement,” Whichard said. “We had quite a few to come in and do so. Instead of blasting price, wearing crazy costumes, and flying around on the TV, we let our customers speak for us.” Those ads generated positive comments from both new and existing customers at Midtown. “We shot the testimonials over 18 months ago and are still using them as we speak,” Whichard said. “They do not create the sense of urgency you look for in advertising, but it does plant a seed that we are the place to purchase furniture.”
INSPIRING A PURCHASE
Is a promotion the only way to get customers to a furniture store? How do retailers measure the effectiveness of their advertising? An effective way is to ask consumers if they considered the retailer and whether they shopped that retailer. Impact Consulting took a look at where consumers are shopping. (The results of this inquiry are shown by distribution channel in the accompanying graphic, “Most Recent Furniture Buys by Retail Channel.”) Another issue: Retailers must create a promotion that the consumer believes, and the graphic, also based on Impact’s research, “Believability Scale” indicates this is an area that needs a lot of work. And while Price (which is influenced by financing in terms of affordability) is important, Impact’s research indicates it is not the top factor in the furniture purchasing
process. (See accompanying graphic, “Purchase Motivators.”)
GAME TIME
One way more retailers are building excitement at their stores without highlighting price is through sports- related promotions, that offer refunds on purchases made during a certain time frame should a team win a pennant, return a kickoff for a touchdown, or score a specified number of points. Gallery Furniture in Houston ran two NFL-related promotions this year. Pig Skin Promotion No. 1 offered a full refund to customers buying $5,000 or more of furniture during the contest period. Those correctly picking the winners of the National Football League Conference Championship games received refunds.
That event led to around $800,000 in refunds after all was said and done, according to Jim McIngvale, Gallery owner. That was just a start, though. Pig Skin Promotion No. 2 promised free furniture to customers who bought $6,000 or more and picked the winner of the Super Bowl game between the Denver Broncos and Seattle Seahawks, won by the latter. Denver might be closer to Houston geographically, but apparently there wasn’t much loyalty in that regard: “80 percent of the people who participated picked the right team,” McIngvale said. That second promotion paid out around $7.2 million in free furniture, he noted. “After that first promotion, we said, what the heck let’s do it for the big games this year. Baseball Promotion No. 1 will fully refund the first 500 customers who spend $6,300 or more at Gallery Furniture if the Astros win 63 games in the regular season.
The magic number, 63, honors McIngvale, who turned 63 years old in February.“Some might think this promotion isover the top, and they are right,” he said.“We want to give our customers another reason to get excited about our Houston Astros this season and even more excited about coming in to Gallery Furniture.” Customers across the continental United States also can buy mattresses online at GalleryFurniture.com at a $6300 value or more, and have it delivered to their home within seven days. Boston-area retailer Jordan’s Furniture is no stranger to sports-related promotions. Boston is a fanatical sports town, and the store has run programs promising free furniture for titles from the National Hockey League Bruins and American League Red Sox. The retailer has insured each of the sports promotions.
This year, “The Monster Repeat” promotion commits to free furniture—of any purchase amount—starting April 2 if the Red Sox bring home another World Series title. There is no limit on the amount of furniture or the selection of furniture. With the Red Sox winning it all in 2004, 2007 and 2013, it’s a safe bet the promotion will generate no small activity on Jordan’s floors. To build interest, the retailer will display the Red Sox trophies in stores. It’s the 8th year Jordan’s has run the promotion. The 2007 title ended up with customers getting $30 million in furniture. “We bought insurance so we are rooting for the Red Sox to do a repeat performance of 2013 and hope that we can give away $50 million dollars’ worth of furniture this year,” said President Eliot Tatelman. Television, radio and online ads are promoting the offer at Jordan’s. We’ve been talking the big leagues so far, but the fact is sports-related promotions are a possibility for a huge number of retailers—how many stores aren’t in a market area served by a minor league baseball team? Still, retailers need to make sure such a promotion fits their image and customer base. “I am a huge fan of my Lions and Tigers, but it’s still a fact that my customer is a woman age 35 to 65,” noted Jeff Selik, president of highend contemporary furniture store Hillside Furniture in Bloomfield Hills, Mich. Not only that, such a promotion has to offer a fighting chance for a favorable team outcome: “For it to seem like an opportunity, there has to be a feasibility they’ll win a championship.”
STARS & STRIPES
Some retailers push the fact that they carry products made in America. If you’re one of those, that might be a natural for any Fourth of July promotions. Atlanta-based Imagine Advertising has developed a turn-key program to promote “Made in the U.S.A.” “The concept behind the promotion is for the dealer to be able to promote that they buy products from American manufacturers,” said Flora Stopher, Imagine Advertising owner. The circular Imagine developed for this event features augmented reality.“The customer will receive the ad in the mailbox, download an app on their phone and hover over the pictures on the circular to bring them to life,” she said. Customers can see other product features, other colors, view a store video and more. Stopher suggested American-themed BBQ aprons, BBQ utensils and flags, as instore giveaways to generate activity.
May 12,
2014 by in Business Strategy, Industry
Sometimes a myth is just a myth—a widely held but false belief or idea. Folks understand
it as such, and so it is. Other times, that long-held belief becomes so intertwined in a culture, community or business that it becomes a group’s reality. Over the last 20 years I’ve spent covering the furniture industry, there’s always been a story on the summer slump or the summer doldrums. The story is typically published after the Memorial Day sales have wrapped up. Retailers and vendors alike have always espoused the lack of furniture sales during the summer and more often than not attributed it to vacation season, kids being out of school and other activities
(and expenses) taking over consumers’ disposable income. The story line has become so intertwined into our vernacular that we’ve come to expect the drop in business. It’s part of who, we as an industry, have become. Remember, a big chunk of factories shutter during the first and sometimes the second weeks of July to account for the “slump”. That’s been going on forever, and this summer as it rolls in quickly, isn’t likely to be much different.
Instead of setting out at the end of May to encourage and entice consumers to come in and redecorate, we’ve taken to treading water until the big fall selling season returns just in time for the holidays. Everyone knows that’s when everyone is entertaining and wants to prep their homes for the influx of family and friends.
Could it be that we’ve created the summer slump myth to soothe our fears? Perhaps, it has become an easy fall back. Our sales are off, but oh wait, look at the calendar, it’s July. Now it makes sense. Seem a little silly and thin? Hmmmmm, given that the impending slump has become our perceived reality, let’s take a look at the statistics behind the curtain. Figures from the U.S. Department of Commerce tracking furniture store sales month to month tell a different story than the one the furniture industry has been groomed to believe.
Take into consideration that in an eight-year period between 2005and 2013, the month to-month change in furniture sales is barely enough to register. It’s a pretty steady line graph, and surprise, in the months of June, July and August sales don’t fall into the pit of despair. Instead, sales for those months over the eight-year span actually creep up. If there’s a slump to be seen, it shows up in the month of April (blame it on Market), but even that stumble shouldn’t be too noticeable.
What does this non-myth mean for you? Well, if you’re seeing a significant drop in your summer sales, perhaps you need to look elsewhere for the cause. Maybe your promotions and advertising and marketing plans need an overhaul. Give her a reason to come shop your store. Trust me, she’s looking for something to do other than referee the latest argument over whose turn it is on the computer. The summer myth has been debunked, so now is the time to develop a new line. The summer slump story isn’t going to cut it anymore. Get ready, and take advantage of this time to arm your arsenal with smart, creative, effective messaging to pull the consumer into your store.
May 12,
2014 by in Business Strategy, Industry
For the past decade or longer furniture retailing has been focused on promotions and, more specifically, finance promotions. Often referred to as “No, No, No” financing, the tone has decreased, but the message remains the same—Furniture is a deal! I won’t despair about the fact that the Consumer Price Index for furniture has been flat for the past five years while all other consumer products have increased nine points. Nor will I dwell on the fact that only about 30 percent to 35 percent of consumers take advantage of these promotions. However, I will discuss customer loyalty.
As an industry, many of us are stuck in a paradigm that believes on average, consumers purchase furniture every seven years and the purchases are influenced by different life stages—new household formations, first homes, downsizing seniors, birth of children and the list goes on. The fact is that people are continuously decorating their homes whether in major or minor ways. This destroys the myth that by the time they purchase furniture again, they will have forgotten their last shopping experience. The challenge for retailers is to become the consumers “retailer of choice” as they continue to furnish their homes. To meet this challenge the retailer must satisfy the returning customer through the buying process from the selection to the needs analysis by the sales associate to the successful closing and, finally, a great delivery experience.
There are many opportunities to disappoint the customer or to wow her with excellent service. The fact is even with the best retailers, only about 35 percent of the consumers make it to the closing. However, the chances for closing to a prior customer are more than twice that of a new customer. You do the math. The returning customer represents a substantial part of a retailer’s sales. In our quest to discover the factors that identify the characteristics of high performance retailers we find one of the top five factors that identify these retailers is the percent of customers purchasing each quarter that purchased in the preceding eight quarters. This graphic illustrates. The challenge to maintaining the customer’s loyalty requires an ongoing commitment to making every customer a customer for life. This is not as easy as planning that one-time “blow-out” event. Just a thought.
April 11,
2014 by in Business Strategy, Industry
Area rugs are to a room like jewelry is to a well-put-together outfit. They’re great at pulling other items into a coherent space. Rugs are an anchor for the area. They’re nearly magical in their ability to transform a room.
According to a Home Furnishings Business consumer survey last month, area rugs are gaining in momentum as the go-to accessory for dressing up a space. Sales in the category climbed more than 6.6 percent from 2012 to 2013, and the category is poised to make similar gains this year. No surprise, more than half of the rug purchases— 57.6 percent—were bought for either the living room or den. The bedroom followed at a distant 11.9 percent and the dining room at 8.5 percent.
Shape was a deciding factor for our consumer panel in rug selection. Nearly 73 percent chose rectangular shaped rugs, while at a distant second, 11.8 percent opted for the “other” shape. Beyond that, runners and square rugs were each chosen by 6.8 percent of the sample.
A wide range of sizes were bought by our panel of consumers ranging from the smallest 2x3 to the much larger 12x18 and every size in between. Consumers most often opted for either 5x7 foot rugs (18.6 percent) or 8x10 foot rugs (17 percent).
Nearly 65 percent spent between $100 and $1,499 on their most recent rug purchase. The largest cluster of rug purchases (45.8 percent) fell within the $100 to $399 price range. Much like the rug arena, our consumers bought a broad array of color and style families, but didn’t stray far from the strong neutral family. Neutrals led the color parade with more than 69 percent choosing black, white, beige or the like. Green, a strong player in the upholstery arena, followed with a distant 13.6 percent. Other colors that got a mention, include blue, pink, red and yellow.
Our consumers appear to like to play it safe when it comes to rugs. While the design elements were quite varied, the largest cluster of consumers (28.8 percent) played it safe and bought a solid rug. Florals and geometrics tied at 17 percent; traditional motifs, 13.8 percent; contemporary designs, 10.2 percent; and stripes, 6.8 percent. Zig-zag patterns and animal prints rounded out the balance.
Not surprisingly, most of our consumers (76.3 percent) bought their rug after making their furniture purchase. Only 8.5 percent bought the rug with their furniture purchase.
Our group of shoppers showed a penchant for buying their rugs from mass merchants, like Target or Walmart, (30.5 percent) or home improvement stores, Lowe’s or Home Depot. (25.4 percent). Traditional furniture stores (11.9 percent) ran neck and neck with rug only stores (11.9 percent) and the Internet (11.8 percent) as the channel consumers chose for their rug purchase.
What Retailers Say
Nourison’s Luster Wash CK10
“Because of the beautiful copper color, it works well in many of our contemporary desert living homes. Because of it’s subtle abstract design, it can be mixed with other patterned rugs. It’s also available in other colorways and sizes.” It’s part of the Calvin Klein collection.
Retails at $1,099 for a 5.6’x8’
Carol Bell
Contents Interiors
Tuscon, Ariz.
Retails at $699.99 for an 8x10.
Rizzy’s Napa Merlot
“An overall great value and style. This rug is hand-tufted in a New Zealand wool blend and features a heavy 10 millimeter loop pile.”
Vanessa Hunt
Jerome’s Furniture
San Diego
Company C’s Sheffield Stripes
“Company C is a very good vendor for us, and we do very well with the line. It’s not inexpensive and comes with an MRP so it doesn’t get kicked around for price.”
Retails at $2,055 for an 8x10.
Peggy Burns
Circle Furniture
Acton, Mass.
What Suppliers Say
Surya’s 3300 From the Banshee Collection
This rug offers a soft, plush texture with a lustrous sheen. Hand-tufted in India of 100 percent New Zealand wool with viscos accents, the organic design combines with earthy and deeply saturated hues of copper and slate for a sophisticated style.
Loloi’s Nyla
Nyla is designed and created to look like an antique, hand-made rug. It’s popularity lies in the design, and its affordable, power-loom price. Nyla is also available in a number of different colors.
Kevin O’Brien Tuscan Sun Bu Capel
This award-winning rug has a unique ombré look created with different shading throughout. Its extra-dense construction utilizing cut and look construction and texture from different yarn systems make this one of our best sellers.
Jaipur’s Garden Party from the Blue Collection
A welcoming blue ground offers the blossoming vine a cozy background. The livable design makes Jaipur’s Garden Party a winner among consumers.
Roses Rug from Company C
A whimsical rug with a botanical motif in wine, berry, and purple. The imagery portrays the vibrancy of English roses in full bloom against an evergreen ground. Carefully crafted with mottled green and black yarns the roses are tufted while the background has a loop pile for textural appeal in 100 percent wool.
Revival from Oriental Weavers.
A staple, day-in day-out top seller, the Revival collection meets the huge demand for over-dyeing The collection is made in the U.S., giving retailers a home-spun story to tell consumers.
April 11,
2014 by in Business Strategy, Industry
Hints on staying on bad PR, enhancing your brand
Sometimes you just get surprised. Universal Furniture CEO Jeff Scheffer was working on the road—way on the road in the Middle East—when he got word last June of a headline-making controversy surrounding Paula Deen, the Southern chef who’d lent her name to a highly successful licensed collection at Universal. She was accused of making racial slurs in a lawsuit alleging racial and sexual discrimination.
“I was in Dubai, we’d just gotten in from Kuwait,” Scheffer recalled. “We were all tired, and we went downstairs for a late bite to eat. I went back to my room and was working on my tablet, and I got an e-mail from (Universal Vice President of Marketing) Kevin Miller saying I’d better take a look at this. The news was just breaking.
“It wasn’t what I expected to see at one in the morning,” he said.
NO SPIN
Robert Pritchard, a professor at Oklahoma University, served 25 years as public affairs officer for the U.S. Navy. He is a fellow of the Public Relations Society of America, and chairs PRSA’s educational affairs committee. During his years with the armed forces, he was no stranger to handling tough public relations situations. He had advice for companies facing negative publicity.
“Crisis management was the bulk of my experience,” Pritchard said. “The first thing to do is not hide. Analyze the situation—sometimes saying nothing is the best thing, but you always have to acknowledge the situation. “A good PR person can help avoid crises by recognizing a smoldering situation that could flare up,” he said.
Second, never lie. “Be truthful, and your message has to be consistent,” he said. “In my experience, 95 to 97 percent of the time if you present the right information, people make the right decision about you. “Sometimes you need to get poked in the eye and make changes. The Chinese word for crisis incorporates the word opportunity, and you should look at a crisis as a chance to improve. You need to be quick to respond, consistent, true and transparent.”
FIELDING THE BALL
When the Deen controversy hit the news, Universal tried to get out in front of it as quickly as possible. “I believe the news broke on a Thursday, and we talked with Paula over the weekend,” Scheffer said. “With everything moving so quickly, we felt it was important to take our time and not over-react or knee-jerk. We watched and listened on a number of fronts—the developing news, what our own people were saying. We did come out with a statement to our customers fairly quickly that we were examining the situation.
“The first thing we did was to bring our own folks together and explain what happened,” he said. “We don’t tolerate discrimination—we have a lot of diversity in our company, and we’re richer for it. We also talked with the other people in our building—Legacy Classic’s here, too.”
The company also held a conference call with its sales force and sent a letter to sales representatives to put in customers’ hands. “The other part of that conversation is that since things were moving so fast, a lot of people were rushing to judgment, and others were coming to her defense,” Scheffer said. “Wrapped around that was a recognition that we’re going to watch and listen, and take the time we need to make the best decision.”
THE DENOUEMENT
In the end, Universal stuck with Paula Deen, and Scheffer said the reaction to its decision was overwhelmingly positive.
“Our phones lit up the day we made the announcement,” Scheffer said of Universal’s decision to continue its association with Deen. “Our Facebook page got something like 2,500 likes in a 24-hour period.”
The good news of a PR flap is that in many cases, people’s attention wonders elsewhere in an era of 24-7 news and viral outbreaks on social media. “We saw a 20 percent dip in (Paula Deen) orders in the five weeks after the news broke, but by six weeks it was back to normal, and we resumed growing with the brand,” Scheffer noted. “I’m sure there may be something we should have done differently or could have done better, but at the end of the day
I think people gave us good marks for the way we handled a difficult decision. “I don’t profess to be an expert, but I think the biggest (lesson) is that in a 24-7 news cycle and what seems like an instant gratification world where someone wants an immediate answer, you have to remain calm and not knee-jerk. You gather as much information as you can. You watch, you listen, you look at the facts, but it’s your decision and you have to trust your gut—after looking at everything.”
THE UPSIDE
Public relations isn’t always about crisis management— there’s a big upside in using it to build your brand and tell about your participation in the communities you serve. San Diego-based Jerome’s Furniture expanded last year into the Los Angeles area, and good PR helps gain a foothold.
PR is a critical component in brand building,” said Jerome’s CEO Lee Goodman. “The third-party credibility aspect really goes a long way with the consumer who is tired of a world filled with advertising. “It’s critical to be relevant and interesting, or no one (media or consumer) will care about your message. It’s also important for your PR strategy to reflect who you are as a company. Do good things and let people know what you’re doing. It really comes down to that. We have long believed that as a furnisher of homes it is important for us to be good neighbors to our community. We are proud of how we give back. Sometimes, we get enough credit, some days we don’t, but we always rest well at night knowing we are working hard to do good things in the communities we serve.”
OPPORTUNITY KNOCKS
Got a funky promotion going on, something that really hooks up with your community? Make it an opportunity to toot your horn in the market you serve. When Harkness Furniture in Tacoma, Wash., offered customers free furniture if the Seattle Seahawks scored a touchdown on their first Super Bowl kick-off return, they figure it was a safe bet. Well, the Seahawks’ Percy Harvin did just that to open the first half in January.
Harkness’ initial promotion hadn’t gotten much ink, and there wasn’t a lot of hype even after Harvin’s return. The process of paying out to its customers, though, created an opportunity—for a party. “After the actual run back in the Super Bowl, we didn’t get quite as much publicity on the front side,” said Harkness Furniture Owner Dave Harkness. “It was when we held the party. We’d insured the promotion, and the insurance company required us to get signatures from all the winners that they’d purchased furniture on this day and for this amount. It would take about four weeks for the checks to process, and that gave us time to think about how we wanted to handle it.”
Harkness personally called all 65 winners to explain the process and to get them back to the store to sign the paperwork. “We got a lot of mileage out of that alone,” Harkness said. “We wanted to capitalize on this and make it a truly special event. When we came up with this idea, we didn’t dream they’d actually return their opening kickoff for a touchdown. We decided to throw a big party for all the winners.”
In addition to their reimbursement checks, customers who’d participate in the promotion got an 8-by-10 color photo of the run-back; and a chance at five reproductions of the local newspaper’s Super Bowl story. “I think there’ll be a big following if we do something like this again,” Harkness said. “We can show that we’ve had winners, and people shouldn’t miss out on the chance. We think we’ll have big participation.”
Among other coverage, Harkness Furniture ended up on the local front page with the party. “We were on the 5:30 and 6 o’clock news the night of the party, and the story got picked up by AP (The Associated Press),” Harkness said. “I’m not one much for Twitter, but our marketing guy made a Tweet that Percy Harvin re-Tweeted on his feed, and he has something like 200,000 followers. We got a ‘thank you’ signed by all 65 contest winners, and I’ll mail that to Percy Harvin … We want him to feel a part of it.” According to Harkness, who spoke in mid-APRIL, business has been booming ever since. “We had a record February and President’s Day, and APRIL is off to a great start, too,” he said. “Our business has just flourished since the Super Bowl, and I don’t think that’s a coincidence. “I think, too, that those 65 winners are customers for life who’ll talk to their friends about the store.”
LIPSTICK ON A PIG
Public relations by itself is not going to help a brand that doesn’t deliver on its promise and add value. “You can’t put lipstick on a pig,” Pritchard said. “Well, you can, but it’s still a pig. Public relations can help a brand in two ways. First, it helps an organization identify and understand its core values.
“Second, PR, if it’s done the way I teach it, is the bridge between the organization and its customers. It helps the organization’s values line up with its line of business. For example, furniture retailers may think they’re in the business of selling furniture. A public relations approach to that is that they help people lead better lives.”
PR should integrate your message across all platforms— online, marketing, in the store—and to help everyone who touches the customer articulate that promise.
“A brand is not a name or a logo, it’s a promise,” Pritchard said. “Take Motel 6. Motel 6’s promise is a comfortable place to stay that’s the lowest price of any national chain. The people they talk to are frugal people.
“The first thing to do is understand with whom you’re interacting, not just sending information, but receiving something. “The communication strategies must be integrated, and PR is the focus of this particular effort. Identify every point of communication, and explain the message to everyone who touches the consumer.” HFB