Monthly Issue
From Home Furnishing Business
November 13,
2015 by in Business Strategy, Industry 
Consumers regard furniture shopping in a variety of manners. The approach to furnishing their homes varies widely.
Like anything in this world, people come in all shapes and sizes, and of course, shopping preferences.
All consumers are not created equally; nor do they approach furniture shopping in the same manner. Impact Consulting Services, parent company of Home Furnishings Business, has created a proprietary model dubbed Lifestyle Clusters. The clusters provide furniture retailers a look at how consumers in different lifestyles tend to shop for their homes.
While psychographic profiles combine demographics of age and income with geo-demographic attributes, the Lifestyle Clusters add another layer. Lifestyle Clusters dig into the buying attitudes of specific consumers, the beliefs or expectations that cause consumers to choose products to buy.
The clusters are developed by giving consumers are list of statements that deal with internal attributes focused on consumers’ overall lifestyle, how consumers feel about the home, including concerns with decorating, how formal or informal a home is, and feelings about shopping for furniture.
The ratings are then tallied and the lifestyle profiles are assigned to the surveyed consumer.
Style Aware
These consumers are motivated by how things look. They read style magazines—fashion and home—and spend a good part of their leisure time shopping and surveying what is in the market place.
The consumers pride themselves on knowing the latest trends and want to be perceived as reflecting them. They have a heightened sense of style and are as comfortable with their decisions as they would be with those of a professional advisor.
If they do not have the income to allow purchasing as much as they would like, they will buy what they can afford and postpone further spending until they have the money to buy what they want. To this group, presentation is extremely important.
Frequently, but not always, consumers in this segment are among the population’s more affluent.
Here’s how to spot them:
· They have a sense of purpose and are at ease in furniture stores.
· They are stylish or trendy in appearance.
· They pay close attention to room vignettes and accessories.
· They may come in the store with fabric swatches, paint chips and pictures of rooms.
· They are well versed in furniture and interior design.
Prestige Seeker
Consumers in this cluster are often seen as status seekers. Image is all-important. Their fashion styling—whether clothing or home related—is a direct reflection on who they are, and they judge themselves by how others perceive them.
Prestige Seekers are not always the most confident about their sense of style and are often insecure about their ability to buy the right thing. It is not uncommon for them to seek advise from friends and professionals.
This group reads magazines, watches television programs and visits Internet sites with decorating and fashion advice. They are not trendsetters, rather trend adopters.
They are more likely than Style Awares to rely on a retail sales person for advice and to buy those items shown in a store display, whether it’s an outfit on a mannequin or a collection in a room vignette.
Here’s how to spot them:
· Stylish personal appearance
· They are less assured in their manner than Style Awares.
· They may carry fabric swatches, paint chips, pictures of rooms and rarely shop alone.
· They are very interested in store display, but more as a guide to purchase. This group studies vignettes for ideas and guidance.
Self Possessed
This consumer group reflects a sense of well-being and self-confidence, and members take great pride in their surroundings and their lives.
They have a high sense of style, but couple it with an adherence to the belief that function is as important as style. Members of the Self Possessed group tend to be are very creative, but it is a creativity that is intuitive. They gain as much personal satisfaction from the creative process as they do from the object produced.
Regarding the home, these consumers want beauty, but not at the expense of function and comfort.
Here’s how to spot them:
· These consumers may travel quickly through stores’ room displays editing in their mind.
· They may be dressed stylishly offbeat or stylishly upbeat or in a casual manner.
· Like Style Awares, these consumers are confident and at ease in furniture stores.
Follower
This consumer is a paradox. On one hand, we see a consumer who is somewhat disorganized in their daily habits. Members of this group tend to be forgetful, don’t adhere to schedules, and often are doubtful of personal choices.
In the area of home furnishings, they don’t enjoy shopping, care nothing for decorating, and think furniture is only functional. On the other hand, they would like to have a nice house, not necessarily a beautiful, wonderfully decorated one, but a tidy house.
Followers will use a decorator or the advice of a friend since they lack confidence in their choices.
Here’s how to spot them:
· They want a well-decorated home, but are often intimidated in furniture stores.
· Followers may enter a store and wander around aimlessly.
· Store displays are important, but this consumer often has the feeling that it’s too big of a job to handle.
· Lack of confidence is evident in the consumer’s body language—hurried, tentative and indecisive. They are a bit anxious in furniture stores.
· Reluctant to make a purchase without advice so they are often accompanied by a spouse, other family member or friend.
Just Me
Armed with a what-you-see-is-what-you-get attitude, the Just Me consumer doesn’t feel it’s necessary to present an image. They are polar opposite of Prestige Seekers.
They don’t spend their free time on things that don’t interest them, and this approach extends to their homes. They have no interest in the style and fashion of furniture. Furniture is purely functional, and they make no apologies for this sentiment.
Shopping for furniture can be an intimidating experience, and they rely heavily on retail sales associates for advice.
Here’s how to spot them:
· They probably will be dressed casually. Remember, they have no need to impress.
· They have little interest in furniture and will likely find shopping for it intimidating.
· Because of the discomfort, this customer will appear in a hurry on the sales floor.
· Keep in mind, furniture shopping can be uncomfortable for this group that is usually very confident about his/her self image and ideas.
Comfort Seeker
Family, friends, social gatherings and home crafts are at the center of these consumers’ lifestyle. Comfort is more important than style or status, and they are content with the lifestyle they have.
Even though they do not derive status from their home, they feel confident about making furniture purchases and find shopping enjoyable. Furniture, however, is primarily functional rather than fashionable.
How to spot them:
· The Comfort Seeker will most likely be dressed comfortably and possibly informally.
· Furniture shopping is not a chore for this consumer. He or she will take time to wander a retail floor.
· This consumer is influenced by store display.
· Expect a relatively laid back approach to the purchase. This is the group that will likely shop the longest for their purchase.
November 13,
2015 by in Business Strategy, Industry
Has the disappearance of furniture brands left consumers confused when shopping for home furnishings?
by Bob George
From the perspective of my age viewing the current environment requires differentiating between nostalgia for the good old days and the current consumer trends. With that said, it is true that the simple decision regarding what to wear is a challenge.
Is it appropriate or will I be overdressed? A suit or a sport coat? Is anything OK as long as it portrays your personal brand? Clothing is only one of the traditional ways people portray their success, whether it be wealth or position in the community. One’s home, home furnishings, and transportation mode also communicate one’s position in society.
Our interest, however, is home furnishings. The first question is “When portraying one’s position in the community, where does home furnishings stand?”
In this month’s cover story, we discuss Style Aware consumers. These are consumers who use home furnishings as an important way of communicating who they are. Interestingly, they represent a significant percentage of our furniture purchasers at 44.75 percent.
Why are consumers confused?
Could it be because of the loss of consumer brands? This is a loss that is seen not only in the premium brands of Kittinger and Pennsylvania House, but also in what was once considered the more middle market of Cochrane and Virginia House. It is true that there are still brands that survived, for instance Harden and Stickley. I admire their commitment to the standards of quality and design even if they existed today. Where are retailers that prominently display and communicate the value that these premium brands represent?
Is it in the designs we produce that we have embraced the concept of the eclectic or transitional to the point that the consumer feels no need to ask what’s new? Home decorating television and shelter magazines are promoting the concept of treasure hunts as the way to shop for furniture even so far as collecting discards on the sidewalk. In this setting what is the future and where are the manufacturers’ brand advertising?
Is it the myopic focus on price? I won’t rant and rave on current prices of furniture when compared to other consumer products. If requested, I will send the Consumer Price Index for furniture compared to other consumer durables. However, why do we need to sell price? Trust me, the majority of consumers, if properly informed, will not let price be the No. 1 purchase factor.
Are there signs that the consumer will believe having the latest phone is not as important as what their guests see when they walk through the front door? Yes, I believe so; right after they get over the boom in the automobile sector.
Most important, however, is the most recent High Point Market with Thomasville producing the first 100-plus piece introduction in many years overcoming what I am sure were serious concerns of the supply chain guys. Another example is the new interpretation of traditional with A.R.T. Furniture’s Continental collection. It is cleaner with some exciting finishes. This, along with flashes of design in other lines, indicated the tendency to take the path of risk instead of the same old same old.
If the consumer is confused, it is our fault. I see advertising from across the country. The sameness of this advertising is frightening. If you can, find on YouTube the video message the CEO of Restoration Hardware sent to shareholders. E-mail me and I will send this to you. We should consider this as we reflect on the fact that traditional furniture channels’ market share is now below 40 percent.
Let’s excite the consumer.
June 24,
2014 by in Business Strategy, Industry
More than a third of retail CIOs surveyed in a study from the National Retail Federation are considering a single consumer platform to manage transactions across channels.
The study, released earlier this year and titled “Digitizing the Store—the Next Wave of Online and Offline Convergence,” found that integrating store and online operations is a key focus for retailers as e-commerce capable solutions increasingly supplant traditional point-of-sale and mobile technologies.
NRF teamed with research partner University of Arizona and industry partner Demandware, a leader in digital commerce, to survey more than 200 retail business and technology executives in the United States and Europe to quantify the convergence of POS and e-commerce technology, and its impact on digitizing the store.
Some 35.8 percent of retailers surveyed said they’re thinking of using one platform to manage all consumer interactions and transactions, whether online or in the store.
“The future of retail will envelope business platforms that enhance the endless opportunities that new technologies offer, such as systems that allow retailers to provide seamless, relevant and personalized interactions for all of their customers,” said Tom Litchford, NRF vice president of retail technologies in the report. “In this consumer-led industry, retailers are working overtime to keep up with the expectations and demands of their savvy customers, and are intent on integrating the digital shopping experience like never before.”
Specifically, a single platform would consolidate and manage key data elements and functionalities that historically have lived in multiple disparate systems to provide customers with consistent, on-brand shopping experiences no matter how or where they choose to interact with a retailer.
A WORLD OF DIFFERENCE The study found that customer expectations are driving retailers to carefully examine their technology spend and investments. Over the next three years, 80 percent of retailers surveyed expect to maintain or increase store technology investments, and 70 percent say their organization is currently deploying or planning to refresh its existing software.
Additionally, while traditional point-of-sale software has been a mainstay for physical stores for decades, many retailers recognize e-commerce software as an emerging and logical approach to evolve and establish the sought-after single platform. According to the survey, nearly four in 10 (38 percent) surveyed plan to leverage an e-commerce software platform for their next generation store software—twice the number that plan to use traditional point-of-sale software.
“It’s no surprise that retailers are increasingly looking to leverage e-commerce technology as the single platform for all commerce,” said Rob Garf, Demandware vice president of industry strategy and insights. “This provides retailers a great opportunity to reduce costs, improve operational efficiencies, and enhance the overall customer shopping experience in a dynamic consumer environment.”
The retailers defined four priorities technology vendors should heed: improving efficiency; attracting and retaining new customers; reducing costs; and increasing enterprise growth.
IMPROVEMENT NEEDED Mobile-enabled consumers are dictating and controlling the shopping process, and the study found that existing technological infrastructure, architecture and applications are straining to keep up with shoppers’ expectations for instant gratification; and that legacy systems were implemented originally to solve specific problems for specific channels.
The number of channels through which consumers interact with retailers has therefore resulted in:
· Redundant data that increases the total cost of ownership from system maintenance and operations inefficiencies.
· Inaccurate customer information that shows up in order, payment and service miscues.
· Siloed systems (i.e., insulated management systems that don’t interact with other, related information systems) that stifle retailers’ ability to respond to market dynamics and execute growth initiatives.
Those barriers slow innovation, particularly at brick-and-mortar stores. Just 26 percent of surveyed retailers have capabilities to allow shoppers to interact and transact with their brand within the stores via their mobile devices. They’re farther ahead in Europe with such capabilities (31 percent of respondents there) than in the U.S. (22 percent).
The inefficiency of disparate technological environments within the same store risk customer dissatisfaction and lost revenue. That’s why so many retailers are considering a consolidated approach to their systems architecture to more effectively manage consumer engagement and transactions across all channels.
THE NEXT WAVE OF CONVERGENCE Forrester Research predicts e-commerce transactions will reach $371 billion—10 percent of all retail sales—by 2017 in the United States, an increase of 41.2 percent from 2013 levels. Forrester also estimates that the Internet already influences almost half, 49.5 percent, of total U.S. retail sales through some sort of shopping activity.
In addition, e-commerce functionality, architecture and extendibility designed for online shopping has surpassed in-store POS applications. The result is traditional POS, call center and mobile technologies touching the consumer are being supplanted by e-commerce to establish a single consumer transaction platform.
That’s why almost 40 percent of surveyed retailers are considering a single platform to manage all consumer interactions and transactions across all channels.
Because of its more modern and flexible architecture, the study found that e-commerce software is emerging as the most logical approach to establishing a single platform. They already are the backbone of many call centers and mobile-friendly sites.
The next frontier is traditional store-based POS, which while a longtime reliable and efficient tool in brick-and-mortar stores, is proving difficult to extend its functionality across multiple channels. Often, these systems are closed, require heavy customization and are designed for a single location.
Twice as many retailers surveyed plan to leverage e-commerce (38 percent) than traditional POS (19 percent) for their next-generation store software. Only 23 percent of U.S. retailers surveyed, 13 percent in Europe, are thinking about traditional POS for their next-generation POS software. While that trend varies by retail segment, it’s clear that something’s afoot in terms of direction.
THE GOOD NEWS Retailers already are extending e-commerce functionality into stores to give staff and customers the same product, order and customer data that’s used online for browsing purchasing and service.
Store associates armed with extensive customer intelligence are more effective ambassadors of the brands they represent. Retailers shouldn’t miss out on the opportunity to apply the sophisticated analytics found in the digital shopping experience in their physical locations.
Surveyed retailers also rated inventory search and store fulfillment as important digital functionality in stores—especially since consumers are browsing among channels during their shopping process and want access to the same information they found online once they’re inside the store. With that information ready to hand, a store’s sales associates can keep sales from walking by providing customers with inventory visibility across the enterprise and complete secure transactions on the sales floor.
The NRF report “Digitizing the Store” analyzed the next steps for retailers as they begin to take advantage of new technologies that help them understand and meet consumer demand.
· Understand the market and internal landscape.
Retailers should examine current technology solutions for both stores and e-commerce teams.
Two-thirds of retailers surveyed indicated that all of their district/regional managers and store managers will or already use mobile devices in the field over the next three years.
A key here is learning to navigate the vendor landscape. A third of retailers surveyed said they are hedging on a single platform playing a role in their technology strategy because of concerns about a nascent technology and risks related to organizational change. Their main worry about a single platform is that software vendors may not have a comprehensive, proven solution. Retailers should talk to vendors to understand their vision and make sure it aligns with their business model.
· Establish a technology roadmap.
This should define success, support business initiatives and identify a path with clear milestones.
This effort should include considering the cloud as a means to centrally manage consumer-facing systems. The survey found that three in 10 retail executives are currently considering cloud options for their point-of-sale software applications.
· Mobilize and empower store associates.
Even tech-savvy consumers still rely heavily on the physical store experience as part of the purchase process.
Retailers should arm store associates with the same information that consumers have, provide training and incentives, and empower them to leverage information capabilities as the store goes digital.
· Invest in wireless to leverage initiatives such as guided selling, “clientelling” and endless aisle.
While two-thirds of retailers surveyed indicated that management do use or will use mobile devices in the field over the next three years, only one-third said their sales associates had access to those devices.
Currently only half of retailers use smart phones and one-third use tablets to access POS software in the field. Adoption of such hardware, though, is pivotal in the transformation to a single consumer transaction platform.
· Drive continual innovation by creating a culture that allows employees to test and learn quickly.
Consumer demands are changing rapidly, so innovation and speed are not one-time events, but should be standard operating procedure.
· Extend capabilities to channels, devices and geographies so the business can innovate quickly.
Employees should have the chance to experiment quickly and extend capabilities without the traditional costs due to administrative and system complexity.
As part of this evolution, retail executives should drive speed into their business, accelerating the time from inception to delivery into live operation.