Monthly Issue
From Home Furnishing Business
January 17,
2014 by in Business Strategy, Industry 
By Powell Slaughter
SALARY OR COMMISSION? NO ONE SIZE FITS ALL FOR HOW FURNITURE STORES PAY SALESPEOPLE.
Salary or commission, or some combination thereof? How you pay your salespeople is a question of your store environment, traffic and how your sales approach fits your business goals. Home Furnishings Business asked retailers and sales trainers for their thoughts on the topic—the former on what makes sense in their business model; and the latter on which compensation approach works for different sorts of retailers.
Short story: Commission is the best motivator for go-getters who want to hoe their own row; and salary—or some sort of guaranteed income—helps create a friendlier, less high-pressure environment for customers.
Which model, or combination of sure compensation and incentive, is a call you have to make on your own. Following are thoughts to consider when making that call.
Salary Vs. Commission
Home Furnishings Business asked several retailers which sales compensation they prefer—salary or commission. Read their responses throughout the following pages, starting here.
Commission
“To me, it’s the lesser of evils – in a perfect world, I’d love to have people work on salary, but the truth is we have a wide range of performance among our salespeople.
If I put everyone on salary, I’d have to pay my best people less. We do push in the element of a blend because we have a bonus system based on how well the store does.”
Richard Tubman
Circle Furniture
Acton, Mass.
Salary
“In my opinion, paying commission many times brings out the worst in an individual. When someone walks in the store, they know if someone’s working on commission.”
Bob Mills
Bob Mills Furniture
Oklahoma City
Base plus Commission
“The base is to compensate for the administrative tasks I hold them responsible for – we’re are fairly small and everyone has to do a lot of things.
“The sales commission is based on a minimum requirement of $30,000, when they get 6 percent. Once you $70,000 it goes up and so on. We pay 3 percent on closeouts – I gave up margin, so they give up margin.”
David King
DoMa Home Furnishings
St. Petersburg, Fla.
Commission
“We do a weekly draw and pay commission monthly. It keeps them hungry. It’s better for us and for them to have a sales force on the floor that’s motivated for high performance.”
Rick Howard
Sklar Furnishings
Boca Raton, Fla.
Commission
“We are commission. In sales, you are not paid to finish a job, the sky should be the limit. We want to keep the possibility of unlimited potential income out there for them. “The more you put into it, the more you get out of it.”
Jeff Selik
Hillside Furniture
Bloomfields Hills, Mich.
Base plus Commission
“We do a base and a draw against commission. The designers get more commission than the salespeople because they do the house calls and the big sales, and longer-term projects. “The sales team gets a base because they sometimes have to turn a customer over to the designers when it becomes obvious it’s a larger scale project that needs the extra service.”
Rosie Lebewitz
Rosenthal Furniture
Minneapolis
Salary
“We are a little bit of mutant in that regard. Everyone is basically salaried. In our operation people have lots of different jobs, and we don’t have straight salespeople. It can be difficult being focused on making the sale, but they have a lot of ownership in the business, and we tend to have very strong employees. We do have bonuses that are performance and sales-based, so we aren’t devoid of the incentive of getting a higher income.”
Jacob Harlow
The Century House
Madison, Wis
Commission
“We had been doing salary with a bonus, but our CFO has convinced us to switch to a commission-based plan as of January. We weren’t meeting our sales goals, and our sales expenses were high compared with the rest of the industry.
We needed to inject a degree of hunger into the equation, while retaining the quality of a friendly, helpful sales associate.”
Mark Binkhorst
Burlington Furniture
Burlington, Vt.
“We’re looking for the people to be entrepreneurs who rely not only on people walking through the door, but also on their own personal business development. Commission fits our culture and our goals in the organization.” – Garry Ikola, City Furniture.
ENTREPRENEURIAL SPIRIT
Salespeople at Tamarac, Fla.-based City Furniture work on straight commission supplemented with bonuses.
“We’re looking for people to be entrepreneurs who rely not only on people walking through the door, but also on their own personal business development,” said Garry Ikola, vice president of sales. “Commission fits our culture and our goals in the organization.”
At City, salespeople are expected to essentially run their own business within a business, and the retailer goes to great lengths to attract talent who gravitate toward that model.
Commission works best in high-volume, high-traffic stores, according to Jeff Hiller, director of training for Chicago-based JB Training Solutions.
“If you’re a mid-size to big retailer you’re probably running pure commission, with a draw against commission,” he said. “That’s harder for smaller stores since the traffic potential isn’t enough.
“The big stores count on salespeople to sell maybe $800,000 a year, which (with typical commission) gives an income of $40,000 to $50,000 a year. If you’re awesome, you make 80 to 100 thousand.” At a retailer running $2.5 to $7 million dollars in sales a year, salespeople might be targeting $500,000 to $600,000 in sales, and Hiller worries that might not generate enough commission on a consistent basis to keep top people on hand.
“If I’m looking for a good person to work my floor, can they really survive or be inspired by making $30,000 a year?” he said. “What I like, is if you’re in that middle range, have a base that is covered, not a draw, say $26,000 to $30,000 a year. Add on a bonus system based on a graduated scale for monthly performance.
“That way, if I’m a salesperson hitting $800,000 in sales for the year and hitting bonuses two out of three months, I’m making $60,000. The balancing act on compensation is urgency versus complacency.”
Commission’s Incentive
Tom Zollar, practice manager of retail operations for Impact Consulting of Atlanta, is a proponent of commission since it ties sales team performance so strongly to compensation. “I believe that sales staff should be paid directly based on performance using some sort of commission structure and when possible, bonuses for hitting set goals,” Zollar said. “In some situations this may be on top of a salary or draw, but the greatest portion of their package should come from commission on sales.” He added that it’s not an all-or-nothing prospect between straight commission and some sort of guaranteed income.
“Here you have the options of straight fixed flat rate, variable sliding scale, or set step-based commission programs,” Zollar said. “All of which work great if they are properly administered and communicated. The key is finding the best one for your store culture and your client base.”
Atmospheric Conditions
Commission-based compensation is a definite motivator for salespeople looking to make their mortgage, but there is a downside. “If salespeople get behind on their draw, they get crazed, and customers pick up on that,” Hiller said. “What you want on the sales floor is gentle persuasion. My sense of customers is that they’re like horses. They can read a nervous rider, and if they sense a desperate, hungry salesperson they shy away. “The balancing act on compensation is urgency versus complacency.”
And whichever route you go on sales compensation, don’t forget that the sales manager— whether that’s you or another individual— also should be held accountable for what happens on your floor.
“My strong feeling is that anyone who is responsible for performance results within an organization needs to have a compensation program that includes some sort of ingredient that is tied to improving the results they deliver,” Zollar said. “It can be tied to actual performance numbers—i.e. commission—or the achievement of set goals and criteria—i.e. bonus—and can be in conjunction with a salary based on the total responsibilities the role includes.”
For sales managers, Zollar suggested they need a salary to carry their responsibility over staff members.
“However, a substantial part of their total package should be tied to how the people under them perform, based on history and goals set by upper management,” he said. “This additional component could be a small commission on sales above certain levels, a bonus based on hitting set volume targets and/or key performance index goals (i.e. gross margin or average sales) or a combination of these.
“The main thing is that those responsible for the performance of others understand that a meaningful part of their compensation is directly tied to how their team performs on a monthly or at least quarterly basis.”
The Conundrum
While Zollar is a big believer in the power of commission, he does understand why some retailers think a non-commission sales staffs create a better, less intimidating floor culture for their customers.
“That is certainly the case in most stores I have seen that use a salaried sales force, and as long as their total income is somehow tied to how they perform, I am not opposed to it,” he said. “From a psychological standpoint, in order for their compensation program to have any motivational impact on how they behave on a retail sales floor, most adults need to understand the WIIFME Principle (What’s In It For Me). “So if you tied their salary increases to performance results or gave them additional bonuses for sales achievement on a monthly basis, that would help fulfill this need in a noncommission sales environment.”
Basically, you want your staff to realize that the more they sell, the more they will make.
“All that said, I do believe that in most store situations the sales manager would have a far stronger motivational tool with a commission based sales force versus one using a salary-based compensation program,” Zollar said. “Both can work, but the innate motivation of tying a person’s income directly to what they sale is hard to beat.
“Of course, it also creates a variable versus a fixed ‘cost-of-sales’ financial consideration for the business, and we all know which one the accountants would prefer.”
While City Furniture is committed to commission, Ikola noted there is no single best compensation structure. “You have to find one that fits your goals, and commission has served us very well,” he said.
HFB
January 17,
2014 by in Business Strategy, Industry
By Powell Slaughter
GET MORE OUT OF YOUR SALES TRAINING PROGRAM. YOU DO HAVE ONE. DON’T YOU?
It’s a rare athlete who’s at the top of his or her game every time the clock starts or the first pitch is thrown. The reason all-stars maintain and even succeed on “down” days is the training they do between contests and in the off-season—they’ve drilled on fundamentals to the point that good habits are second nature even if they aren’t feeling at their best. Furniture retailers should look at sales training in a similar way—what you want your sales team to project to your customers must be ingrained at a deep enough level to ensure they’re doing the right things all the time.
IT STARTS WITH PEOPLE
At City Furniture, sales training starts with finding the right people for the Tamarac, Fla.-based retailer’s culture. Vice President of Sales Garry Ikola said City’s approach is that sales is a real profession, and for the right person, a job on the retailer’s floor is entry into a rewarding career path. “What we do is a little different from a lot of stores,” he said. “Besides the traditional method of finding people online, we also do a lot of college recruiting.
“We’re fortunate to have a great university system both locally and in the state of Florida. We participate in (the schools’) specialized training programs.” For instance, Florida State University offers a degree in sales and sales management. City also is working to improve its use of online recruiting channels and the quality of new-hires through those sources. “There are some challenges there, because that pool is skewed toward males, and we’re trying to achieve a female proportion of 50 percent,” Ikola said. “We’re focused on improving that process. We’ve implemented video interviews, along with additional screening. “With the college pool, it’s easier to meet with and interview them, and it’s much easier to get a feel for if they’re a good fit, and if this is the path they want to take.”
City also has an internship program that gets students into its stores during their sophomore or junior year. “The goal is to get the right ones to join us after they graduate,” Ikola noted.
DON’T MAKE TRAINING AN AFTERTHOUGHT
One problem with furniture retailers’ sales training is that many don’t make it a priority—or assume that sales are something that can be learned through osmosis. “There’s a huge spectrum from zero to 100 in how much value retailers put on training,” said Mark Lacy, president of Furniture Training Co., North Logan, Utah. “I talk to hundreds of retailers a month, and it’s surprising how low a priority training in this industry is.” Lacy’s guess for why that is: So many furniture retailers come out of a family tradition.
“Dad, or Mom, ran the store, and the children or cousins worked in the store, learned the business, sweeping floors, working in different departments,” he said. “Learning is the permanent acquisition of knowledge, skills and attitudes. The acquisition of that knowledge was passed working side-by-side. On-the-job training would occur over decades in a family business.” He noted that even new stores are largely started by perhaps a husband-and-wife team: “We have a lot of individual entrepreneurs.”
In some cases, sales training might amount to “You’ve shopped in stores, and you know what you’ve experienced,” so the salesperson replicates what they saw elsewhere.
“Those new salespeople are expected to sell based on what they’ve experienced, and that wasn’t always good,” Lacy said. “Even a couple of years ago, in the midst of the economic crisis, we know how many family businesses closed. The short-term future right now for home furnishings is pretty good. We’re expanding again … but a lot of retailers have run out of family and we’re hiring total strangers.”
If there’s no history of formal sales training, that can make problems for retailers looking to open second or third stores. City Furniture’s no mom-and-pop, but as it expanded from serving the Miami area to opening stores on the Gulf Coast and now in central Florida, it’s moved from a centralized training format to a more individual-oriented program; and as with any organization, training depends upon the logistics of bringing people together.
“In the past, we did a lot of classroom training at our corporate facilities, but as we grew (geographically) we moved to online training, self-paced, in the showroom,” Ikola said. “We have a standard program online combined with exercises at the store level with managers and training specialists.”
Those “floor exercises” in the store help gauge how well salespeople are absorbing the online training. And all that’s not to say the classroom format doesn’t have a place.
“We just added Bernhardt last year, which was a big move—we’d never sold high-end goods before,” Ikola noted. “We brought people in for classroom training with Alex Bernhardt. For major initiatives like that we like to bring people together in groups.” City arranged separate Bernhardt sessions in southeast Florida and for Gulf Coast stores, plus another session for City’s new Orlando-area stores.
TRAINING THE TRAINER
When training your sales force, one thing to consider is whether they know exactly what you’re looking for beyond the no-brainer of more sales. And that responsibility lies with your sales manager, or whoever is conducting the sales training.
Tom Zollar, practice manager of retail operations, Impact Consulting, Atlanta, Ga.—called the Performance Index (Revenue devided by Ups) “the ultimate measurement for the efficiency of your selling rate.”
“When your traffic is up and your revenue per up is slow, that means you’re not staffing the floor properly,” he said. “I’m more interested in consistency when it comes to closing. … The performance index is the red flag. It tells you the efficiency of the store and the efficiency of the individual. It’s the first number that tells you where you need to look. It separates the strong from the weak, the way GMROI does with product.” Is your sales manager a coach who can pinpoint who needs more counseling?
“When you decide whom you need to work with, look at closing rate and average sales,” Zollar said. They might be underperforming “because they’re not connecting with enough people, or if they are, they aren’t pleasing enough of them, getting them the product and options they’re looking for.
“It’s a matter of drilling down like you would in a financial report, looking at each account individually. Am I giving them too many ups?” Coaching is a fine line.
“The numbers are the objective, but you can’t do anything with numbers,” Zollar said. “You do everything with your eyes, your ears and your mouth—that’s observation, feedback and coaching. … Numbers are a management function; observation is a training function.
“The key to the numbers is knowing whom to look at and what to look for. The key, once you’re studying and observing a person, is to find out what’s impeding their rates. Performance is a function of knowledge, behaviors to apply that knowledge, and practice.”
Tiger Woods couldn’t have changed his golf swing when he was at the top of his game without tens of thousands of shots on the driving range—or without a coach. Even your top performers can use some work.
“The manager has to watch that knowledge being applied and guiding on the sales floor,” Zollar said.
“You’re not going to be successful until doing the right thing becomes a habit.”
At City Furniture, sales training centers on four keys: selling skills; product and service information; what City calls “World Class Service”; and personal business development.
The first two are self-explanatory, but “World Class Service” refers to customer service standards City developed based on standards established by Ritz- Carlton, where the attitude is “everyone is a problem solver.”
“Personal business development” ties back in to City’s approach to sales as a true profession. It helps that the store has developed its own customer relationship management platform, which all sales personnel are required to use.
“We train salespeople to build their own business— register guests, contact customers for special events, telephone prospecting,” Ikola said. “They have a CRM tool they’re required to use. We have successful special events, but that’s because our salespeople are bringing the right customers in. Our internal CRM allows them to look for the customers they should call for these events.
“Retail sales operations have a lot of down time, and this puts that time to good use.” City gathers its key metric for sales performance is an electronically gathered door count compared with revenue, combinded with close rate and average ticket.
“If traffic grows 2, 3, 4 percent, we want to see that revenue growing at a faster rate, so we know we’re making the most of that traffic,” Ikola said.
“YOU DIDN’T BUILD THIS”
Lacy at Furniture Training Co. believes too many retailers don’t hold their salespeople accountable for the opportunities they’re afforded. Retailers provide the location, the inventory, the advertising and promotion,” he said. “If someone’s selling $1 million a year, they might not want to be trained, but the reason people do as well as they do is the retailer hands them the business.”
Owners should recognize that they’re providing the business opportunity.
“You have the right and responsibility to help them be better,” Lacy said. “Management’s job is to make the best use of assets, and the job of sales management is to make the best use of salespeople, that asset. Set standards, train to hit those standards, and then raise those standards.”
Look beyond numbers such as close rate and average ticket to the behaviors that influence the numbers: quality of greeting; engagement in conversation. “And if they get the conversation going, are they asking the questions that open the mind of the customer to something beyond their immediate need,” Lacy said. “Do they know the product they carry will be enough to match those needs? The most magic phrase in sales is: ‘Based on what you’ve told me, let me show you what we have.’ When the customer hears that, she breathes a sigh of relief.”
Keep in mind that more customers walk into the store having done a fair amount of research into what they’re looking for, and salespeople must offer intelligent, informed information to maintain their value to those shoppers.
“For home furnishings salespeople I have two keys: First, maybe a customer has looked on the Internet, even printed off a sofa from the manufacturer or another competing retailer,” Lacy said. “We’ve done the research to know there are 15 basic styles of sofas—with variations— on a sales floor, and your salespeople need to know those. Sales staff should be able to say: I see what you’re interested in—that’s a kidney-style sofa—tell me more about the room it’s going in, so we can show you some sofas that might work in that room.
“Second—and this is the saddest part of our industry—the home furnishings industry is a fashion business, but the salesperson on the floor so often acts as if they’re selling the customer a toothbrush they like,” Lacy said. “Every salesperson doesn’t need to be an interior designer, but they need to know something about creating a room environment. The job of the salesperson is to know what it’s going to do for the room, so they should have an understanding of basic room design.
“Don’t show a book of swatches and ask what the customer likes. ‘Let me show you colors that would work in that room.’ The customer is about to drop a significant amount of income on a purchase that will last a significant number of years. They’re all buyers—they wouldn’t come to the store if they weren’t—but they walk out because they don’t know what to buy. That’s why product knowledge and room design go hand-in-hand.”
REAL LEADERSHIP
Zollar once saw General Norman Schwarzkopf give a presentation on the subject of leadership.
“His point was that leaders lead and managers manage,” he said. “Leaders get people to do things they wouldn’t do on their own. It’s about knowing your people, developing common goals and a desire to succeed, and a lot of it has to do with hiring the right people.
“You can’t lead from an office. When times are tough or when times are good, the best leaders are coaching in the game, on the floor.”
To properly service a customer and help them solve a problem they have in their home, it’s less about how many people a salesperson approaches than it is about getting the customer to talk about the problem and provide a solution.
“The goal of sales management is each customer getting the most out of every sales interaction,” Zollar said. “Always look at that from the customer’s point of view. Teach your salespeople to really connect with more people versus giving them more ups.
“Sales managers have to remember they manage individuals more than groups, and they must manage each individual’s strengths and weaknesses.”
Independents should know that the big boys aren’t standing pat on training.
“The Top 100 retailers are going after this, it’s amazing how many are making training a priority,” Lacy at FTC said.
To whit, the approach at City Furniture: “I believe selling is a profession, and the way you approach it is critical,” Ikola said. “I’m a big advocate of adding more professionalism to the job, and it can be a very professional position if you manage it properly.
“There’s been an image perpetuated of sales as a game.” HFB
January 17,
2014 by in Business Strategy, Industry
By Bob George
This adage has been a constant admonishment to me during the course of my career. Those for whom I have had the pleasure to work know that we are constantly exploring ways to approach the home furnishings business. The foundation of that exploration is always based on the question, “Will it allow the retailer or manufacturer to sell not only more today but also, equally as important, more in the future?”
From my perspective, improving the selling function is out of vogue. It was a hot topic 15 years ago when the retail store was populated with an army of sales consultants, each with a “unique” program of five steps or 12 steps, or some other method of selling, a list that goes on and on. Yes, there are still consultants, including my firm, Impact Consulting. However, the eyes of retailers and sales associates begin to glaze over when the suggestion of sales training comes into the conversation. Why is that? Perhaps the fault lies in a case of over-promising and under-delivering. Could it be a situation akin to binge dieting? Positive results may have been swift. Unfortunately, however, they were short-lived.
This does not mean that training doesn’t work. We can look at other retail sectors and find them spending millions in this area. Why? The answer is simple. The incremental gains put millions of dollars to a company’s bottom line. Consider a typical salesperson taking 150 opportunities each month with an average ticket of $1,500 and a close rate of 25 percent. This person is a great asset. He or she will sell $675,000 each year earning $30,000 to $35,000 in commission while contributing $145,000 to $150,000 to your fixed cost and ultimately enhancing the retailer’s profit picture.
However, what would make this good sales person reach that mythical level of the million dollar sales person? Simply put, it would be a close rate of 33 percent and an average ticket of $1,750 or some combination of these two metrics. For those who want to simplify even further—the sales associate would need to sell three more customers per week with a lamp or area rug added to each ticket. On the one hand, this is simple to calculate; on the other hand, difficult to execute.
Let’s address the “how” of doing this. Every weekend we watch sports, sometimes in person, often on television. We observe the coach actively involved in the game maybe running up and down the sideline or shouting from courtside or the sideline. We see this coach yelling at his “charges”, making suggestions after every play.
Let’s take that approach into your store. Is your sales manager on the floor, observing, coaching, motivating the “players” or is that office door closed with his or her attention focused on paperwork? Ask yourself—which is more important?
Using a final sports analogy, we know that, in preparation for a game, the participants may spend hours studying the problems encountered in the last game and readying themselves for the next opponent. Relating this to your store, the sales associates should be assessing their sales techniques used earlier. Approaching this analytically, they can place the positive tactics in their “re-use” baskets and either rework or retire the unsuccessful methods.
Before you get the idea that the retail management is blame free, evaluate your investment in training methods. For less than $2,000 annually per sales associate, you can train a million dollar writer. You entrust that sales associate with 150 Ups per month—1,800 each year. Is it not worth slightly more than a dollar per Up to provide the training? After all, you have spent $23 to create the opportunity. The return is an additional $180 per customer per year for an investment of $1 per customer.
Initially, I said that “nothing happens until you sell something.” In essence, the “happening” is that you will increase your bottom line by 30 percent to 50 percent.
January 17,
2014 by in Business Strategy, Industry
By Sheila Long O’Mara
No doubt about it, home furnishings markets are big around our industry. It’s a biannual marathon that keeps every one of us in planes, trains and automobiles skirting bouncing from Atlanta to Dallas to Las Vegas to Tupelo. Toss in a few of the international markets like Cologne, Toronto and Shanghai, and the road warriors among us are in full force schlepping from place to place.
Right or wrong, the rituals of semi-annual markets carry a great bit of cachet. They’ve become—dare I say it—a necessary evil in the cycle of the furniture supply chain. No retailer “wants” to miss market and miss seeing the hottest introductions. No supplier “wants” to miss out on the opportunity to capture more retail floor slots. However, getting away from the office or store can make for tricky time and business management issues.
Markets are exciting and invigorating. We, as a collective group, come together to share, learn and seek out the new. The events are like a huge brainstorming meeting where great ideas blossom.
Here, at Home Furnishings Business, we jump into the market fray, too, and eagerly plan out market issues, interview schedules and showroom visits. It’s a big darn deal.
As part of our planning, we look at the best, most efficient way in which to cover the Markets and to provide our valuable readers the most useful information possible. Our goal is to arm you with valuable tools and knowledge that can be used to better your business strategies back at the storefront.
As part of our strategy, we deliver to you this, our first-ever double issue. We’ve doubled up on some of our most popular features to give you a jumpstart on the New Year and the new Market cycle. Inside, you’ll find two times the cover stories— one on sales management and the other on sustainability in the home furnishings realm.
You’ll also find two consumer surveys in which shoppers who have recently bought furniture share their tales from the retail floor. What Sells zeroes in on the dining—both casual and formal—category. Our expanded On Bedding explores consumers and their mattress buying preferences and features top-selling frames from the supply viewpoint.
We’ve also included a look at products being showcased at the Las Vegas Market to whet your buying appetite for the show. Here’s to doubling down in Vegas and kicking off the New Year in home furnishings in fine fashion. Our entire team will be at the Market; give us a shout across the courtyard or in the hallways. We’d love to catch up. Happy 2014! Here’s to a great year filled with new adventures.
December 18,
2013 by in Business Strategy, Industry
By Sheila Long O’Mara
Big screen televisions and other consumer electronics are holding a tight grip on the top of the holiday wish lists this year. Why not? The category is sexy and bright and is a source of in-home entertainment. Furniture retailers are holding out hope that consumers hold on to enough dough to cover the cost of a home entertainment console or wall unit to accommodate those electronic purchases. Quality and design of home entertainment products top the list—even above price consideration—of purchase influencers for consumers of the category. That’s according to the most recent consumer survey conducted by Home Furnishings Business, in which more than 160 consumers participated. Those consumers had recently made home entertainment purchases and shared insight into the product and their likes and dislikes.
Not surprisingly; the bulk of home entertainment purchases landed in either the living room or family room. That’s where 93 percent of the pieces are housed. An interesting note —and one that retailers and manufacturers should keep in mind—10 percent found their way into bedrooms. Those bedrooms, smaller than family rooms, require smaller pieces that can still accommodate electronics.
Storage needs remain a priority for the home entertainment consumer. Many of them have accumulated a library of DVDs, video games and Blu-Rays over the years, as well as a variety of components. Eighty-eight percent rank disc storage as somewhat important to very important in their home entertainment unit. More than 56 percent own flat panel televisions and more than 18 percent have a satellite or cable box that needs to be housed.
Features and functions built into the furniture is an added, often required, benefit that consumers for which consumers are shopping. More than 42 percent want to be able to hide those components. Also ranking above the 35 percent thresh hold are display space for knickknacks; and built-in powerstrips. Another jewel could be docks for MP3 players and tablets. The majority of our panel bought their furniture from a bricks and mortar store, In fact, 62 percent bought from furniture stores, followed by 15 percent at other and eight percent at a warehouse price club. Must shunned the Internet as a shopping source, and most report that they’d likely follow that same protocol for future purchases. Only 18 percent said they’d be very likely to buy home entertainment online.
Compare that to consumer electronics where more than 43 percent said they’d be very likely to buy those products online. More than 76 percent of our consumers spent more less than $2,000 on their home entertainment purchase. The good news from our panel is that they are mostly satisfied with their purchases based on quality, style and functionality. More than 83 percent give their new furniture the thumbs up on style; 78 percent give high marks on function; and 68 percent give a passing grade on quality.
With the sleek, sexy design of televisions and other components these days, consumers are eager to show them off. Gone are the days of armoires where the doors could shutter and hide the fact that the great room was used as a viewing spot. Instead, 72 percent are looking for consoles that also accommodate component and media storage. When asked specifically how important it was to hide the television, 82 percent said not at all. Why spend all that money on a great-looking TV without being able to show it off to your friends and family, right?
Just so you’ll know. The second option, falling at a distant 18 percent, would be to hang the screen on a wall. And, when it comes to screens, size does matter. More than 88 percent of our panel have at minimum a 37-inch television as their primary viewing screen. More than 28 percent report having a 55 inch or larger television as their primary choice for viewing. So what does the future hold for our home entertainment consumer as far as purchases go? Well, more than 65 percent will be buying a 37-inch or larger television within the next six months to one year.
Here’s looking for an uptick in home entertainment sales as they fill the need for additional space to hold those TVs.
What Retailers Say
SUNNY DESIGNS 2733RO
“It’s vintage oak with mixed media. It’s a pretty big look in our market. When it goes in the family room, our customers like that mixed media.” Retail is $799.
Gene Stoltz, CEO
Wolf Furniture
Bellwood, Pa
Ashley Furniture’s W430-28 TV Stand
“It’s a great updated country style that gives a modern feel but works great in New England homes. It fits today’s most popular size flat screens and gives ample storage.” Retails for $398
Bill Abrams, vice president
Allen Wayside Furniture
Portsmouth, N.H.
THE CABANA COLLECTION (1) AND GRAND HACIENDA (2) BOTH FROM LONE STAR RUSTIC
“Both looks are rustic, but one is more refines rustic style. Both of these looks out through the sometimes sameness of traditional looks. The consumer seems to be looking for something unique and different that they can identify with for their living space.” The Grand Hacienda 60-inch console retails at $487.97; the Cabana 60- inch console is $467.97 and is available in 72 inches for $497.97.
Phyllis Zaepfel, COO
Furniture Market
Austin, Texas
Sunny Designs’ 3403DC
“The different colors of the slate make this wall unit suitable to match many collections that we carry. In addition, it has great dimensions and price point. It also has built-in media storage, pullout game drawer and wire management. These characteristics seem to be very important to our consumers.” $999 for complete wall unit.
Suen Capo
El Dorado Furniture
Miami Gardens, Fla
Hooker Furniture’s TELLURIDE CONSOLE
The Telluride’s console-hutch format has increased in importance for Hooker Furniture for some time now. Hank Long, senior vice president of merchandising and design, said it is a best-seller because it accommodates a 60-inch television, offers a lot of look for the money, and two major retailers are running it. Telluride is featured in hardwood solids and veneers in a black paint finish with rub-through and physical distressing with carved leather panels and nailhead trim for a masculine looking entertainment center furniture. Hutch and console as shown retail around $3,198.
RIATA BY RIVERSIDE FURNITURE
Part of the newly introduced 39-piece whole home collection, this entertainment console offers casual contemporary styling. Designed to target younger consumers, Riata offers clean lines with sophisticated, rugged hardware.
Stanley’s La Palma Media Wall
What makes is saleable: The La Palma media wall’s casual styling accommodates up to a 60-inch television and has plenty of room for media storage. The unit also can be repurposed as an etagere. Suggested retail is $3,600.
SLIGH DIVISION OF LEXINGTON HOME BRANDS’ 100SB-660 PACIFIC ISLE MEDIA CONSOLE
Phil Haney, president and CEO of Sligh’s parent company, Lexington Home Brands, credits the Pacific Isle media console’s striking design as a reason it sells so well. “It is a significant design statement in its own right, even before the electronics are considered,” he said. Other pluses include trademarked functional features such as Smart Eye, Strong Arm and Smart Fan. IMP is $2,929.
Sauder’s 412922 CARSON FORGE ENTERTAINMENT CREDENZA
The Carson Forge credenza accommodates up to a 60-inch television weighing up to 135 pounds. A flip-up panel reveals a digital dock for parking, recharging and synching mobile electronics and game controllers. The adjustable center shelf holds audio/video equipment. There are two adjustable shelves behind each framed, safety-tempered glass door. The drawer with metal runners and safety stops features a patented T-slot assembly system. This piece is inspired by recovered materials. The reproduction finish and riveted wrought iron hardware will add authentic craftsmanship to any modern home. Manufacturer’s suggested retail price is $299.
Twin-Star International’s Enterprise
A fresh white finish with smoke tempered glass doors and clean simple lines make the Enterprise one of Twin-Star International’s top selling home entertainment consoles. It can wireless stream audio from any Bluetooth enabled smartphone, and it has a built-in docking station that play’s audio and video from Apple mobile devices while simultaneously syncing and charging. An integrated sound bar has four main speakers, two tweeters, rear facing passive bass ports and a powered subwoofer. The added bonus – a realistic looking electric fireplace in the center to warm the room. Retail is $999.99.
Bush’s AERO 60-inch Television Stand
The Aero’s sleek design provides plenty of functional space, and it accommodates flat screen televisions up to 60 inches and 154 pounds. It has a durable gray tinted glass top shelf; open top compartment for components or a sound bar; cabinets with adjustable shelves and tinted glass doors; a solid back panel that hides wiring and provides stability; and wire management zip ties and pass through slots. The unit is tested to Bush standards for tip stability. Retail is around $249.
Jofran’s 087-60
This 60-inch media unit is finished in the company’s Urban Lodge Brown and features a unique rough-hewn style. The 087-60 is a versatile with sex drawers and three openings that can be used as a media unit, accent piece or in the dining room as a server. The media chest is also available in 42-inch and 50-inch units.
Martin’s Carlton CN360 Television Console and CN 970 Pier
Carlton boasts modern architectural flare with clean lines and clear bourbon finish; and compliments a variety of home decors. The piece is inspired by the Kathy Ireland Home Architectural Style Guide; and is manufactured in Mexico. Retail is $1,349.
Home Entertainment Snapshot
The home entertainment category has remained in lockstep with the industry as a whole. The category has remained relatively stable with little growth since 2012 when it jumped 6.73 percent. Some of the strong growth in 2012 can be attributed to the boom in consumer electronics and new technologies coming into the marketplace. After all, those wide screen televisions needed a place to rest. Through the third quarter of this year, home entertainment sales have slipped just 0.01 percent when compared with the same period last year. Sales through the third quarter in the category are $2.4 billion. Home entertainment accounts for 28 percent of the overall occasional category with sales of $3.19 billion in 2012.