Servant Mentality

April 11, 2014   by in Business Strategy, Industry, Retail Snapshot   

Community commitment, faith in action help Miskelly Furniture ‘Own Its Backyard.’

Beautiful stores, a family friendly environment, strong in-stock position and faith in action have made Miskelly Furniture a go-to destination for home furnishings in Mississippi’s largest urban area.

The family owned business chalked up almost $50 million in sales last year, and an unabashed positioning as a faith-based company—backed up by action— coupled with big showrooms and a wide selection of home furnishings have made Miskelly a powerful local brand in central Mississippi.

Growing Up in Retail
Brothers Oscar, Chip and Tommy Miskelly founded the business in 1978. While the others retain ownership in the store, Oscar is the only one still active in day-to-day business. The brothers grew up in a retail environment and a region dominated by furniture manufacturing.

“Our dad was in the retail clothing business in northern Mississippi,” CEO Oscar Miskelly said. “There’s so much furniture manufactured in Okolona, (Miss.) where we’re from, that we were around that business all our lives, too.”

The brothers had a friend whose family ran a furniture store in Okolona, and they noticed that people came to that location from 150 miles around.

“We wanted to take that concept to a larger metro market,” he said. That market was Jackson, Miss. (See sidebar “A Look at the Market”)

The Miskellys opened their first store, a 10,000-square-foot operation in Jackson, in 1978. The new retailer got a boost the next year when a huge flood had a lot of people looking for new furniture, but the company didn’t expand its footprint much until 1980, when the brothers opened a new 25,000-square-foot—including warehouse—location at the site of the present Roomstore in Pearl, Miss.

“We’d seen double-digit growth every year, and we outgrew our old store,” Miskelly recalled. “We had 12 parking spaces when we started—we couldn’t envision taking care of more people than that at a time—and we ended up with people parking up and down a four-lane highway on weekends.”

The retailer’s current flagship store went up in 1995 in what was then an 80,000-square-foot space in Pearl with attached warehouse. Miskelly added another 40,000 square feet to the showroom in 2004. A previous location had converted to a clearance store in 1996. The retailer’s original Pearl location became Miskellys Roomstore in 2007, offering savings on room packages.

Showroom Experience

The Miskelly shopping experience starts with a sales staff that has a service mentality. “We have a family friendly environment—if it’s bad weather, we’ll have our staff outside with umbrellas,” Miskelly said. “We have automated doors so they aren’t struggling to get in with a baby carriage, no curbs. We have an area when you first come in and can decompress before getting approached by a salesperson.

“People form an opinion when they drive on your lot and walk through your door.”

That location, the “tower area,” is sacrosanct for arriving shoppers. There’s a display of furniture, and they have a chance to orient themselves, and look about the store. The area also features Bible verses—Miskelly is front-and-center about being a faithbased operation—and gives newcomers a sense of what they’ll find as they go deeper into the store.

When the customer makes a move, Miskelly Furniture takes a service-oriented approach to the sales process. “Once we have that initial greeting, that customer is aligned with a salesperson—and that salesperson is a servant,” said Alan VonderHaar, senior retail analyst and mattress buyer. When it comes to merchandising, Miskelly Furniture likes to offer a big selection by category.

“We’ll have upholstery laid out by lifestyle, kids furniture in one area,” Miskelly said. “We had a big re-model in 2011 when we did an area called ‘The Marketplace.’ It’s eclectic, one of a kind items, and the salespeople love it because there’s always color, new items, reclaimed looks that give them a lot to talk about.”

The Marketplace offers shoppers unique upholstery, wood pieces in surprising finishes, goods from countries ranging from Mexico to India, and interesting pottery. There’s more fun to be had with the “Caring Carousel.” The merry-go-round, which Miskelly found in Argentina, offers kids a place to enjoy themselves while their parents shop. It’s also part of Miskelly’s commitment to improving the community where it does business.

“We ask people to donate a dollar to ride it, which goes to a children’s charity we select on an annual basis,” Miskelly said. “Over the past 12 years we’ve raised $500,000 in money and furniture. It’s the right thing to do, and it’s one of the most rewarding things we do in our business.”

Building on Bedding

Miskelly Furniture’s first sleep store opened in 2008, and its second came online in 2010. After puttering along at 10 percent for a long time, the bedding category now accounts for around 25 percent of business. “We’d always carried bedding,” Miskelly said. “We were growing with it, but not dominant around here. “We still have it in the other stores, and as you build a specialty in it, it helps the business at all locations. We’ve been able to capitalize on a lot of the new technology and memory foams. It’s really given us a boost.”

Health-conscious shoppers and aging baby boomers are driving a lot of bedding business Miskellys’ way. “Our attachment ratio in power (bed) bases is one of the best in the industry,” Miskelly noted. “Once you try one of those out, you’re likely to buy.”

Marketing and Advertising

Miskelly’s primary advertising vehicle for sales is television. “In all advertising, you put your best foot forward, and our furniture is our best foot,” said Betsy Tabor, marketing director. “Television is best, because you can’t really capture our atmosphere with still photography. “All other (media) are supporting vehicles. Our local newspaper has gone down drastically in circulation, and we’ve supplemented the loss of print with social media.” Right now, Miskelly has around 9,000 “likes” on Facebook. The retailer is active on Twitter and does a lot of strong e-mail blasts.

“We fragment the message to make sure we reach our customers where they’re looking,” Tabor said. “We do a lot of online advertising.” While the social media world has made her job more complicated, it’s also made it a lot more interesting. “You can find new ways to reach more people and spend less money,” she said.

“We’ve always said, ‘We have to own our backyard,’ and with that we not only try to serve the people coming into the store well, but give back to the community that’s done so much for us,” Tabor said. With advertising “we’re positioning selection, service and price. We do want them to know why we’re the best choice around.”

A lot of the advertising highlights brand attributes of selection, service and a lovely shopping environment.

“As I said, we like to put our best foot forward, and for me, those brand spots are my favorites, because they show how beautiful our stores are,” Tabor noted.

Beyond Furniture

Miskelly’s slogan is ‘beyond furniture’ and its ‘Sweet Dreams’ program with Tempur-Pedic is an example. “Tempur-Pedic approached us with a great deal of single mattresses they had available,” Tabor said. “We located the 501-3C’s for delivery. … It took us quite a while to find organizations that would qualify, and that would be able to use a single twin mattress. We then partnered with a local TV station to put together a campaign.

“Every week we’d deliver to another organization, and the station was great about giving coverage. Tempur-Pedic was extremely pleased, and they have taken our model to develop a campaign they’ll share with other dealers.”

 “It’s a feeling and a passion passed from the owners to the employees,” VonderHaar said. “When you talk about branding, you have to talk about the community.”

The Difference

Oscar Miskelly credits the size of Miskelly Furniture’s showrooms, economies of scale, depth of selection and same-day delivery for strong growth coming out of the recession.

“We aim to be in stock 85 percent of the time on everything we have to show, and certainly, the community service helps,” he said.

All that’s paying off at Miskelly Furniture, which ranked first on Home Furnishings Business’ Power 50 ratings of independent retailers. “We had some of our best months and days last year that we’ve seen in six or seven years; and in the first three months of 2014 we’re still tracking ahead,” Miskelly said. “We continued to be aggressive with our advertising even during the downturn, and I think people remembered us when things started turning around.

Miskelly Furniture at a Glance

Founded: 1978

Headquarters: Pearl, Miss.

Store Count: 6 stores around the Jackson, Miss., area, including its 120,000-square-foot flagship store in Pearl; a 40,000-square-foot namesake location in Madison, Miss.; a 40,000-square-foot Miskelly Roomstore in Pearl; two 6,000-square-foot Miskelly Sleepstore locations in Flowood, Miss., and Ridgeland, Miss.,; and a 15,000-square-foot clearance center in Pearl.

Key Management: Oscar Miskelly, CEO; Betsy Tabor, marketing director; Alan VonderHaar, senior retail analyst and mattress buyer; Deborah Watson, COO; Tracey Dillard, marketing assistant.

Annual Revenue: About $50 million in 2013.

Employment: 250 employees.

A Look at the Market

As a middle to upper-middle price-point retailer, Miskelly Furniture has a good home in the Jackson, Miss., area. Fifty-one percent of consumers there are looking for middle prices; and 23 percent are at upper-middle points, according to market analysis from Home Furnishings Business’ parent company Impact Consulting. Retail sales of home furnishings in the market are on the upswing, as well, with 2013 sales totaling $142.4 million, a 1.1 percent increase over 2012, when sales were up 7.2 percent from 2011.

Free Time

Miskelly Furniture hung its hat in the Jackson, Miss., area, and that’s where CEO Oscar Miskelly spends most of his spare time. “I enjoy youth sports, and I’m very involved with that in our community, not just from a coaching, but promoting things to help kids, whether to advance to the point they get a scholarship or to provide an outlet,” he said. “I work on promoting that in our community.” Marketing Director Betsy Tabor also makes an effort to be involved with local high schools’ booster clubs. Miskelly Furniture is very upfront about being a faith-based business, and Oscar Miskelly and others in the organization are very involved in their church.

He also noted that he’s benefitted from traveling to see how other furniture stores operate. The store is a member of Impact Consulting’s Strivers performance group, but Miskelly said the family focus of so many retailers predates Miskelly Furniture benefitting from that association.

“We’ve been able to travel and visit with a lot of other retailers, and furniture retailing’s family orientation makes our business pretty special—you’re always taking with the principals,” he said. “Other people like Nebraska Furniture Mart are willing to spend time to talk about what they do. … I was just out in California to see Living Spaces.

“We try to stay on the cutting edge of what’s going on in furniture retailing across the country. That’s helped us a lot, the ability to travel and see how other people are doing things.”

Does Brand Matter?

April 11, 2014   by in Business Strategy, Industry   

Forget national reach: Branding is all about your market. 

The furniture industry is chock full of brands—La-Z-Boy, Ikea, Bassett, Ashley, Ethan Allen—we know them, and we love them ... sort of. Problem is, those “icons” mean way less when the people looking for furniture find that the name and the brand doesn’t add up to their expectation. If you’re an independent retailer, it’s up to you to make your name a brand. What do you bring to the table, what makes you the go-to destination for home furnishings in you marketplace?

This month, Home Furnishings Business takes a look at branding, and what you can do to plow your own ground when it comes to creating a brand.

WALKING A LINE

Bassett Furniture is a fairly well-recognized name among furniture companies, and it’s been making waves with its HGTV Home collection. Is there any sort of “push/pull” between the Bassett brand and HGTV, and how does Bassett manage that? “With any brand partnership it helps if there’s a congruence in values, at both the business and product level,” said Renee Loper, vice president of independent retail business development and marketing. “It’s why we have such a great working relationship with HGTV.”

The brand values Bassett wants to bring to the table include category leadership, teamwork and innovation. “There’s also the quality of people at the employee and corporate level, and there’s a log of similarity between the companies,” Loper said. Are there any brand-building lessons Bassett has learned in it relationship with HGTV? “The biggest lesson we’ve learned is to always be true to those core brand values and focus on those, to make sure those values are clear and defined; and that everyone on the team is working toward them,” Loper said. “You have to look at your brand from the consumer’s perspective. For HGTV, we have what we call ‘Essence,’ which is our brand mantra.(See accompanying grapic). Essence guides everything we do from a design perspective, photography, even the fabrics.

“We went through a repositioning of our own brand, going back to its purest form. What do HGTV’s fans and viewers get from its programming? What are the key triggers in it for our business, which is product design? As we select fabrics and finishes, they have to pass that litmus test. HGTV is about freedom of design, personal taste, and having fun with it. We had to flip our view from the manufacturer’s perspective to what HGTV viewers are seeing and getting from our brand, the HGTV Home Furniture Collection.” What are the opportunities, and challenges, of linking with a well-known brand? “The challenge is that especially with a brand as large and as loved as HGTV, and very broad-based—if you add in digital properties, the magazine and the programming it reaches more than 100 million people— is that we’re speaking to a lot of different people with a big range of incomes and style preferences,” Loper said. “The good thing for us is that people just light up when you mention HGTV. From a conversation and training standpoint, just mentioning HGTV opens up a lot of conversations. And they hear it’s from Bassett, which is an established brand. The doors open easily.

“The challenge is to stay focused on the core brand essence.”

A Retailer’s Brand

What defines brand for a retailer, and how do you measure it?

“Brand is what the community thinks of you,” said Lee Goodman, CEO of Jerome’s Furniture in San Diego. “It takes into account every encounter the consumer has with you—in person, on TV, charity involvement, billboards, what their neighbors say, what their mama told them, social media, what your trucks look like, your signage—and wraps it up into one big ball. That big ball is our brand. “We measure it in many ways but where the rubber hits the road is, are people coming into your store and shopping you? If they are, then your brand resonates appropriately. If they don’t come in, then you’ve got a problem. We work with FurnitureCore to understand the metrics on how often we are being shopped. That information is invaluable.” Last year, Jerome’s opened its first store in the Los Angeles market, and Goodman had some thoughts on establishing a brand in a new territory.

“It’s a whole new ball game—we have to think differently and have a different type of messaging depending on which market we are speaking to,” he said.

Sixty years of serving the San Diego community, running hundreds of spots a week, billboards, print ads “virtually means nothing when you move to a new media market,” Goodman said. “Sure there are transplants who know us, but for the most part we have to say hello to a whole group of people that have never heard of Jerome’s. “Of course, we don’t forget to inform them we’ve been in business for 60 years. That really resonates in a town like L.A. that has had so many furniture retailers go bust. We can assure the marketplace that we are experts and are here to stay. There’s comfort in that to the consumer.” The goal is to tell the Jerome’s story from the beginning at the appropriate pace, so that the community stays engaged. “We talk about being in business for 60 years,” Goodman said. “We talk about Jerry’s dad’s business philosophies. We talk about how the third generation is involved in the business today. We talk about

Jerry’s price and why we believe that is a fundamentally superior way for us to price our products. We have things to talk about, we have the selection people want at a great value. And we give the customer a positive experience at all touch points. “It’s not, come buy this sofa on sale this weekend.

It’s not, ‘Oh look, we have a $299 table.’ We don’t say come in and you don’t have to pay until 2019. We explain who we are as a company and how we evolved, and we find that people really respond to that. We have a good story to tell, we just have to tell it.” Measure how your message resonates in your market.

“We look at reach and frequency to determine how our messaging is getting out into the community and we listen to feedback from our locations, and social media,” Goodman said. “And hey, we look at sales. When the cash register is ringing you’re doing something right.

“There’s no silver bullet, but our mattress business, which is mostly house branded, gives us real insights into how our brand is faring, because if people buy our mattresses they are buying into the Jerome’s brand.”

Were there any particular challenges in bringing the Jerome’s brand to the LA market?

“In LA, most have never heard of us so clearly we need to really shake the bushes to get attention in a cluttered world,” Goodman said. “The good thing is, we actually have a good story to tell. Consumers are still interested in a good story, and frankly the market needed a store like Jerome’s. So it’s not like we were one more voice shouting about an upcoming sale or financing. We are truly different from our competitors, we have a 60-year history that establishes us as experts, and our location in South Bay is spot on.”

“If I had to pinpoint a challenge for LA, it’s the traffic. Of course, all that traffic is people in cars who need to buy furniture, so we’re going to look at that as a blessing instead of a curse.”

CHANGING LANES

High-end motion vendor Ekornes has been stressing its Stressless line of chairs as a brand for several years.

“Our mission is to build the Stressless brand here in North America,” said Ekornes Marketing Manager Beverly Kastel. “Without brand awareness our consumers don’t know about our company or products and they certainly are not going to walk in a store and ask for Stressless by name. We estimate that we have approximately 30 million consumers in our target market that we want to reach. Of course our goal is to get them familiar with the brand enough to go their nearest retailer to learn more and eventually purchase Stressless.

“We’ve done several brand awareness surveys throughout the past seven years and we know we have very low brand awareness levels which is a huge opportunity here in the (United States) in particular. In Norway and Germany, for example the Stressless name is a practically a household term and we’ve seen an increase in brand awareness correlate strongly with an increase in sales in these markets.

We are out to do the same here. Do brands matter to furniture shoppers, in terms of retail and vendor names? “Yes, we think brands matter in all categories,” Kastel said. “Not everyone is shopping based on price alone, especially once you get into the luxury product arena and at the price point we compete at.

“We want to create brand awareness, preference and eventually a Stressless community. There is not a lot of brand building going on in the furniture industry, and we feel like we have a unique story and proposition not only for our consumers but for our retail customers as well. “

The Stressless marketing program is built on 3 pillars: advertising, retail display/merchandising and training.

“If one of those pieces is missing we are not going to be as successful as we can be,” Kastel said. “We ask our retailers to support and advertise the Stressless brand locally and we pick up the national and in some cases, the regional advertising as well. That way we are working on all cylinders, reaching consumers at all levels with the same message.

“For example, if our national television advertising attracts a consumer to check out our Web site and potentially connect with us on social media, then when that same consumer sees a local TV spot or a newspaper flyer or ad for their local retailer there will hopefully be some connection.”

The goal with all Stressless communications is to drive consumers to Web site so that they will find out where to purchase in their local area, educate themselves more about the local store and then when they do make it in to the store they are predisposed on our brand, the products and what the local retailer has to offer.

While Ekornes is the company, Stressless is the brand it wants to push.

“It’s not translated into anything else but ‘Stressless’ around the world, and it’s definitely the name we want consumers to remember,” Kastel said. “Ekornes is the company name but Stressless is the brand we are building. There are some retailers that still know us by Ekornes but for the most part I think they are all aware of what we are trying to accomplish with ‘Stressless’ in the marketplace.” In it’s re-branding efforts, Ekornes/Stressless is targeting some 30 million consumers.

“That is why we are reaching outside the traditional TV and print box to communicate with these folks,” Kastel said. “Digital advertising and social media are excellent and extremely efficient ways to reach them but we do not leave TV and print out of the mix. Our target market is older and these traditional channels still resonate with them.

“Also, for the past four years we have very strategically gone into seven markets with a comprehensive campaign to the build the brand in a certain region to see what kind of impact we could have. Instead of spreading our dollars so thin and not making much progress, we saturated these particular areas with a strong mix of traditional and non-traditional marketing and saw some great success in terms of building brand awareness.

It also helped us in other ways like increasing sales, opening up new retailers and solidifying relationships with some of our existing retailers. In 2014 we are going back to a national brand building approach with a very strong mix of traditional and non-traditional media along with a solid focus on building distribution in certain areas.” HFB

Lessons in Rebranding

Steve Blue, president and CEO of Miller Ingenuity, helped his 60-year old company successfully implement a corporate rebranding effort.

Here are some lessons from that experience.

·         Don’t Fix What’s Not Broken

Coca-Cola learned not to tamper with a beloved brand in 1985 when it decided to re-stage its iconic brand with “New Coke.” The public was outraged and let Coca- Cola know they didn’t want a “new” Coke. They wanted their old Coke, literally a quintessential icon in American popular culture. Coke responded within a few months and brought back “Classic Coke.” Classic Coke sales rebounded. Although New Coke remained on the shelves, it eventually faded from store shelves. Some commentators felt the move to New Coke was a marketing gimmick to regenerate interest and sales in the brand after sales erosion due to the

“Pepsi Challenge” taste test campaign. Don Keough, company President, responded to the charge saying “We’re not that dumb, and we’re not that smart”.

·         Expansion may require a bigger umbrella.

International Harvester changed its name to Navistar International in 1986 when it sold its farm equipment business and entered the truck, diesel engine, and bus markets.

Although the name is “made up,” it broadened the brand and has strong connotations of movement and direction. As a 2013 company report stated, Navistar was selected as a name with a strong sound, a resonance to Harvester, and a connection to its root words “navigate” and “star.” It does all of those things and has since become the name of the holding company over multiple Navistar divisions, International Trucks, and MaxxForce Diesel engines.

·         Respect your heritage but don’t let it get in the way of making your brand relevant and compelling

Miller Felpax had been family owned since its inception more than 60 years ago. The Miller heritage could not be lost, particularly because its founding products were innovative for their time. However, the full name didn’t have the same meaning as it once did, so the company changed one word that encapsulates aspects of its culture, its operating philosophy, and its service to customers: “Ingenuity.” At the same time, this name placed the company smack in the middle of the position we wanted to occupy in its current and future customers’ minds, an ingenuous company

·         Names have to be understandable, accessible, or at least intuitive in meaning.

In the beginning it was unclear why Jeff Bezos would name a bookseller Web site, “Amazon.” The story is told that he named it after the river, of course, because of its size. An early logo consisted of a large “A” shape with a river-like line running down the middle of it. And the tagline was:“Earth’s biggest bookstore.” Bezos’ ambitions were as large as the company name, and he eventually developed a business model that would include far more than books.Amazon continues to fit this e-commerce giant now, doesn’t it? No wonder there’s a smile on the box. Other names can be just plain difficult to figure out. When Kraft split off its snack division in 2012, they named it Mondelez.

The name has been criticized on two counts. It’s hard to pronounce—what is the correct pronunciation? And, what does it mean? If you are a linguist you might understand the root words for “world” and “delicious.” Maybe. Similarly, Philip Morris renamed itself Altria when it was trying to position the company more as a food marketer and less as a tobacco company. What’s an “Altria”?

Not intuitively understandable. One thing is clear: customers or consumers will not work to understand your name.

·         Avoid initials unless you are a big player with an enormous marketing budget.

Avoid brand names that are merely initials. If your initials are well established in the market, still ensure your tagline delivers a branded proposition or benefit. Consider the case of SAP, which is dominant in the Enterprise market and compliments it’s small and midsized business targets with the lines: “The

Best Run Companies Run SAP” and “Run Better.” Of course, GE has the marketing muscle and marketplace presence to make big claims. Neither of these brands have restaged their names but have evolved their brands’ taglines multiple times to reflect marketing objective and market needs.

Elements of Marketing

What are the elements at Jerome’s Furniture for a great marketing program? What are the best ways retailers and vendors can tell their stories and get the word out about the company and its products?

“In today’s world, you have to be everywhere. It’s not easy like it was years ago and you buy some network and the local paper,” said Lee Goodman, CEO of Jerome’s Furniture in San Diego. “There’s a dizzying amount of places to reach the consumer today and no single place has the golden egg. It makes for a lot more work, different creative messaging, and spreading your budget across many different vendors. You have to be fast, you have to be relevant, and you have to be really smart to do it right.

“You cannot set it and forget it. Constant evaluation of how your efforts are working is another key component. Look at those metrics, study them, compare them against sales, have your sales floor communicate back to you what’s working, and hone your plan every minute of every day. If you are being successful right now, go buy your marketing department lunch. They are doing a whole lot more than they used to, I guarantee it—and they are going to have todo a whole lot more tomorrow.”

The Commodity Abyss

April 11, 2014   by in Business Strategy, Industry   

All the warning signs are flashing—Consumer Price Index —Furniture— flat when compared to all consumer products; Furniture Purchases as a percent of Disposable Income— declining, dwarfed by the increased expenditures in communication. Ignore them! We are lucky to have survived the “almost” depression. Slowly we are pulling out of the decline, but the lights keep flashing.

This issue deals with Brand, the most important element in the health of a product category. What are our brands? Let’s not “cop out” with that “retailer is the brand” scenario. Yes, the retailer has a brand. However, that brand is about service, value, experience, not product quality and style. That is the realm of the manufacturer. The question becomes, “What has happened to brand.” Yes, we have brands: Century, La-Z-Boy, Henkel Harris, Broyhill, Natuzzi, Lane, and more. Yet few of these would register with consumers under the age of 45. Why? Have we failed to maintain our brands?

A recent analysis of the leading consumer shelter magazines yielded an interesting landscape. As far as product goes, sink faucets and shower heads were comfortably out in front. And, when looking at how the consumer would acquire the product, there was heavy representation of the e-tailers and specialty retailers. It is not a surprise then that the consumer, when shopping, considers both of these retail channels on the same level as the traditional retailers who have been in the local community often for 50 years or more.

Has our lack of clarity failed to communicate to consumers that we have a difference? Are the words we are using factors? Does the term “mixed hardwoods” fail to excite in the way that “rich mahogany”, “hard rock maple”, and “elegant pecan” do? Do the often-used terms of “eclectic style” and/or “transitional” fail to communicate style trends we believe in? These terms can mean anything you want them to mean. The consumer is, in fact, searching for Brand. The rapid growth of Amish furniture is an example of this.

Amish furniture is not only about style. Rather it is more about quality, durability, value—all characteristics of a brand. Obviously, I have been addressing the furniture category rather than the bedding industry, an industry that is in direct contrast to furniture. Why has bedding outperformed furniture in the past decade? In short, it is because the bedding industry has excited the consumer with brands that promise the product will deliver something that is different, often something that will make the consumer’s life easier, happier, better. This becomes the challenge for the furniture category.

I cannot end this article without extending my compliments to those CEO’s and presidents of manufacturing operations who have withstood the pressure to make their brands less by reducing quality, infringing on designs, and other short-term actions in pursuit of short term gains. And, finally not to let the retailers “off the hook,” demand that your suppliers create and maintain their brands, that they help you to sell to the consumers by delivering their part of the process. But be willing to allow your suppliers more margin to do so. When a strictly utilitarian product classification like women’s handbags can re-create itself into a category that has women, even those with modest incomes, purchasing a product that can represent a substantial portion of their salaries, this gives hope to our industry, one that is so intimately a part of the consumer’s daily lives.

What’s in a Brand?

April 9, 2014   by in Business Strategy, Industry   

The ideas of brand and branding are such broad, wide-reaching concepts that a slew of books—some worthy, some not—have been written espousing this, that and the other thing. Heck, if libraries still used physical card catalogs (remember those?) the topic of branding could completely fill at least one 42-drawer cube. Ideas and opinions of branding are ubiquitous. Shake the proverbial stick and you’ll uncover someone’s idea of brand.

You get the idea.

Here in furniture land, a handful of our brands still carry legacy cachet among older consumers. However, those Millennials and some Gen Ys are now stepping into the home furnishings buying cycle without much a clue about La-Z-Boy or Bassett or gasp, their parents’ Drexel Heritage or Ethan Allen. More likely than not, they’re thinking Ikea or West Elm; maybe Pottery Barn. I’m curious if the so-called traditional furniture brands have fumbled and lost their way in reaching these up-and-coming consumers. No doubt, we in the furniture business love the baby boomers, and have for some time, but let’s face facts. That generation won’t be around indefinitely feathering their nests. The cycle of life is just that—a cycle. The next question becomes who will replace their love of furnishing with wellknown, cultivated brands. AND, will there be companies the younger generation deems worthy of their hard-earned cash? These thoughts circle me back to a matter I see happen frequently. Few companies—furniture or otherwise— differentiate between the marketing and branding, and the two different things.

Marketing is promoting a product or service. Marketing revolves around pushing a message to generate sales or a following or something. Advertising falls under the marketing umbrella. Do it; advertising generates results. Branding or brand building should precede marketing efforts. A brand is the essential truth or values of a company or product or service. Brands tell consumers who a company (or product) is; what it stands for; why it exists. Brands, especially the strong ones out there, help encourage folks to buy a product, and a strong brand will help support any marketing efforts out there. Marketing is tactical; branding is more strategic.

An effective marketing plan roots out and encourages consumers to buy, while branding creates loyal customers and evangelists for your brand. Brand evangelists then encourage others to buy your product. How’s your brand? What is your marketing strategy that helps support your brand? Perhaps it’s time for a check up on both fronts.

Inside our cover story, you’ll find a great report that covers brand building and marketing strategies to put to work in your organization. Put together a plan that makes sense.

Happy reading, and I’ll see you at Market.

The Outside World

March 21, 2014   by in Business Strategy, Industry   

Despite what that pesky groundhog had to share last month, spring is just around the corner. With its return, spring will usher in the urge for consumers to shed winter coats, buds to push through warmer earth and garden parties filled with brightly colored tulips. Just one or two (let’s hope) residual snow storms left before dining al fresco under a pergola or relaxing by an outdoor fire pit makes their long-awaited return.

One sure sign of spring’s arrival—retail floors are filling with outdoor furnishings. Sofas with plush cushions; tables with brightly colored umbrellas and plenty of space for friends.

According to a Home Furnishings Business survey conducted in late January, consumers continue to spruce up their outdoor living spaces and make them true extensions of their homes’ interiors. Consumers participating in the survey had purchased outdoor furniture within the last year or so. More than 80 percent of those surveyed said they made their purchase to either replace an old outdoor furniture collection (50.8 percent) or to add to an existing collection (29.5 percent). Those purchases weren’t made without a bit of due diligence and Internet research by the consumers. Nearly 43 percent spent between two and seven hours digging into outdoor furnishings prior to making their purchase. Once the online research was completed, our panel took a bit of time to find just the right thing for their homes. More than 60 percent of our shoppers took between one and four weeks to close the deal.

Shopping Versus Buying

In the research stage, consumers shopped a variety of channels in their hunt for outdoor furnishings. More than 57 percent shopped the home improvement chains, like The Home Depot or Lowe’s, while only 21 percent shopped traditional furniture stores. That was the lowest score falling behind outdoor furniture specialty stores (36.1 percent), the Internet (37.7 percent) and mass merchants, like Walmart and Target (49.2 percent).

When it came to the buying, traditional furniture retailers fell farther behind. Only 6.6 percent of our consumers—the lowest percentage—bought their outdoor furniture from a traditional furniture retailer. Instead, they bought from home improvement stores (37.7 percent), mass merchants (23 percent), outdoor furniture specialty stores (19.7 percent) and the Internet (13.1 percent). Perhaps the reason for the high purchasing rates at mass merchants and home improvement stores is the fact that they stock what they sell. The immediacy factor allows consumers to shop in the morning, take it home and host a backyard barbecue all in the same day. More than 80 percent of our consumers purchased store stock for their outdoor areas, while the remaining ones opted to custom order their selections.

What Retailers Say

Northcape International’s Charleston Woven Sofa

This is a great value with domestic Sunbrella fabric cushions made in Chicago. It features an Aluminum frame with high-quality poly-resin. Sofa retails at $1199.99.

Kyle Johansen
HOM Furniture
Coon Rapids, Michigan

Tropitone’s Montreux Collection

 “This group has a great Tropitone story and offers

special orders in three weeks. It’s a great style.”

$2499.99 for a five-piece sling dining set with stone-works table.

Kyle Johansen
HOM Furniture
Coon Rapids, Michigan

Woodsource’s Sunset Cliffs Collection

This group is cast aluminum and powder coated. The group is in ‘safe’ color cover, brown and tan striped, and has a variety of pieces. We offer four different dining table options – a 52 inch round, rectangular, counter height and a dining table with a fire pit in the middle. We offer a standard cast aluminum chair with a seat cushion as well as a sling chair. Our seating options in the collection are expansive.” $999.99 for a five-piece grouping with a round table and four chairs.

Megann Handley
Jerome’s Furniture
San Diego

What Suppliers Say

The Cloud by Gloster

Reminiscent of contemporary interior upholstery, Gloster’s Cloud group continues to be a winner. Cloud is the epitome of functionality with its modular pieces based on five different style base frames. The collection gives consumers an endless amount of options and configurations to fit any available space.

Homecrest’s Lana with Lunar Fire Table

The Lana spring base chaise is the perfect fit conversation around a fire pit, paired up on a porch or as a dining option. The Lana spring base chaise is proportioned and positioned for relaxation. Designed with support to easily enter and exit the piece, and the chairs are perfect for a relaxing nap or a good book. The Lunar Fire Table offers an embossed leather aluminum top and can be customized in one or two color combinations on the top, frame and side panels.

Tropitone’s Montreux Urcomfort Collection

The Montreux collection with its adaptable design has been a winner for Tropitone. Here the company has paired it with its URComfort seating that moves with the body. “Whether you are sitting at a table in a dining chair or relaxing in a swivel action lounger with your feet on an ottoman, URconfort finds the most comfortable position for you,” said Mark Gorr, vice president of product managemen and consumer sales. “And it stays in that position unless you want to move. Then it moves with you. URComfort is an elegant fusion of design and engineering.”

English Garden Collection by Pride Family Brands

The collection offers lasting leisure in cast aluminum. The crescent share of the collection provides ease of conversation and also eliminates the appearance of straight lines. The Castelle fire pit coordinates with a number of Pride Family Brand collections, including English Garden. Cast aluminum top and leg elements, hand-woven base and a propane fire mechanism and warmth to outdoor rooms.

Century Furniture’s Andalusia Group

The Andalusia Collection designer by Richard Frinier reimagines what an outdoor space can be. The collection gives consumers the ability to create a casual, beautiful retreat in their own backyards.

Janus Et Cie’s Janus Living Collection

Available in multiple finishes and as a stocking program for quick delivery, the collection continues to be a winner for Janus et Cie and its retail partners. The Joe armchair shown here with a teak table, offers a classic bucket-style seating atop chrome polished, steel legs. The collection offers 21 items, eight finishes and four fabrics to offer a customized approach to living.