July 15,
2020 by HFBusiness Staff in Business Strategy, Industry 
The purpose was to reduce the public’s inter-personal contact and slow the spread of this dangerous virus. Many furniture retailers continued to do business online or through limited contact personal appointments in the showroom. By late May, and through the middle of June, most stores were allowed to reopen to customers with many rules and restrictions in place. I am not here to debate the effectiveness of what was done. Indeed, given the warnings of the potential for a second wave of cases this fall, it will be some time before we know when and if we will ever get past this threat to the world’s physical and economic health.
We have only gone through what is probably just the first phase of this crisis, with many more challenges and learning curves yet to be encountered. After going through an experience like this my recommendation would be to look back and see what we can learn from it. They say hindsight is twenty twenty, and I certainly do not claim to have all the answers, but I think it would be a valuable exercise to review some of what happened as we came out of the lockdown and then present some thoughts about what we might want to consider doing going forward to survive and hopefully prosper in the “new normal” that is sure to follow.
Here are a few observations from the retail clients we serve pertaining to their experiences in May and June followed by some recommendations for things to consider going forward.
Observations
Many of the retailers we spoke with at the beginning of the pandemic felt that the year would be ruined, and it would take a very long time for business to rebound. I personally felt that would not necessarily be the case because we heard the same comments after 9/11. Yes, stores were empty for a month or so while people hunkered down and recovered from the shock of that disaster, but then our industry had the best quarter we had ever seen. Why? People want comfortable and attractive homes and when they end up stuck inside, they realize things could be better so home furnishings and home improvement businesses tend to do well as they come out of hibernation. Here are some of the comments we heard:
- Many home furnishings retailers had near record or better numbers for May, even if their stores were closed for the entire month. One retailer said, “I’m happy to report that May was a record month for us. We were 34.9% above last May.”
- This was achieved with almost no advertising other than online. n We also heard from many that limited hours and appointments worked very well. One owner said, “We had the largest two weeks in our history even though we were still only handling appointments during the last two weeks of May. From May 15-June 14th we did the largest volume in any 30-day period in our history.”
- Another group of retailers told us that traffic was down, but business was up. The stores were able to set appointments for the first half of the month and then opened-up to the public for the second half of the month. Traffic was down from last year, but sales ended up 24%, due to a big increase in Revenue per Up driven primarily by the appointments.
- Others saw increased traffic saying, “Traffic was up 20.7%, Sales Volume was up 45.2%, and Revenue per Up was up 20.3%. It was a record month!”
- One store that could not open until later in May, reported that their online sales grew tremendously—over 800%. The first half of June was still strong. Here’s what we heard from retailers:
- June is up about 35% so far, traffic continues to be good and Close Rate and Average Sale are way up.
- June MTD is 107% up, traffic is up 66%,
- 20% increase written sales from June 2019, traffic 10% down from June 2019
- Up 100% in written sales over last June same week
- Up over 40% in written business, even after being closed for first seven days. Conclusion: The world has not ended, and there is plenty of business to be done. However, the big question is how long it will last, and what can we do to make the best of it in the future?
Going Forward
- Appointments will be more important than ever! Traffic may shrink again after the initial lockdown needs are filled. With less people likely to visit stores, appointments must be part of salespeople’s business plan – they cannot just live off the door traffic like they are used to doing. The crazy thing is that for the last thirty years every great sales trainer and all the best programs have stressed how critical making appointments is to maximize your business. Every business professional, from real estate to medical, sets up appointments to prepare the client and themselves for the best outcome possible. Literally every salesperson that has ever had any training has been told this, but very few do it and those who do are always the top writers on the fl oor. Perhaps one outcome of this crisis will be that more of your staff will increase their eff orts to make appointments and build their client base. It may be necessary to survive.
- Virtual house calls will be the new norm because in-home visits will be less desirable! We have watched the growth of in-home business in most furniture stores, even those not traditionally known for design work. I believe that the market for this and personal shopping services, like we reported on in the May/ June issue will grow even more as a result of the pandemic. However, a large segment of the population may not want in-person visits to their house to get it done. Therefore, every store must develop a Virtual House Call Program that delivers the same results without an actual visit. Here are a few items that will need to be addressed in order to develop a Virtual House Call Program in your store. It is by no means complete, but it will get you thinking in the right direction.
- Sketching skills will be vital. Just like selling on the fl oor, the ability to create a working drawing of the room being developed is critical. It is the center point of your eff ort and the major note taking/ record keeping vehicle you will use. Since you will be exchanging ideas and developing plans remotely, it is even more important to be able to put your design thoughts into a picture the client can see and understand.
- Online room planning apps will be critical to sharing ideas. While sketching is still the best way to develop and present ideas on the fl y, to be successful doing virtual house calls, it will be necessary to use a quality online room planning app or other such software that can create PDF fi les or pictures that can be exchanged with the client as the project progresses. Find one that is easy to use, provides all the functionality you want and has a good training/support function included.
- Learn to work from pictures of rooms. Since you will not actually be visiting the room you will be working on, you must become profi cient at using pictures to develop your design recommendations. This will include advising the client how to take the shots you need, and also the best ways to provide measurements needed for the project. There is also software becoming available that will enable you to actually show a piece you are considering in the room, which would certainly be a big plus for you to use.
- Enhanced e-mail skills will be vital. The main communications vehicle that will likely be used to exchange ideas and images will be e-mail. It will be vital that you become comfortable with all if its functionality. You should also make sure your writing technique and terminology are as professional and precise as they can be.
- Romancing the product on the phone and via e-mail will be critical. Since the client may not come to the store to actually see, feel and touch the products you recommend, you will need to be able to describe them in terms they will not only understand but can also easily visualize. This is important in the store too, but even more so when selling on the phone or online. Parting Thoughts Here are a few additional things you may want to consider:
- Social media will be even more important. People who are spending more time at home will rely more on social media for inspiration, reviews, communication and shopping.
- Know where your audience hangs out online (Facebook, Pinterest, Instagram, Houzz, etc.) and consider using those channels to make contact. Be visible in the online community and pay att ention to the analytics; watch what gets likes, comments, etc. Remember to use lots of photos and videos and share exciting ideas.
- Brands, magazines, and design shows will be very important as more and more people get their ideas from them – refocus some of your advertising dollars to give them ideas, not just prices.
- Online auctions, design seminars and other outreach eff orts will be more meaningful to the home-bound consumer.
- Join Facebook follower groups for the most popular home reno and decorating TV shows. Read the fans’ comments to gain insight into current trends by studying what they like and do not like.
- Stay away from political discussions this election year. However tempting it will be, it is never a good idea to share political views with a potential client. We have made it through the fi rst phase in our fi ght against COVID-19 and the havoc it has wreaked, but there will be more to come. Hopefully these ideas help you survive and prosper in the second half of 2020.
June 3,
2020 by HFBusiness Staff in Business Strategy, Industry
In my weekly conference calls with our Performance Groups, I have been amazed at the resilience of the furniture retailers, who discovered new ways to engage customers via phone and email, which resulted in appointments while stores are closed. The results refl ect signifi cant sales during these trying times. The importance of websites that produce inquiries from the engagement applications has led to chat sessions that result in sales, leading to my belief that as the stores reopen retailers will survive.
From this experience, the retailers will embrace new ways to do business. Ecommerce will become a must and not a “maybe”, left to the major players like Wayfair and Amazon.
The business model by necessity must change with the probability of less demand in the near future. ADVERTISING as a % of revenue will decline as the need for the block buster promotions transitions to a continuing relationship with their best customers. SALES EXPENSE could change as less retailer sales associates sell more. The importance of LONG TERM FINANCING will be challenged. Does the retailer need to expand 3-4% of revenue for fi nancing? The bright spot is the consumer demand as can be seen from the graphic below. After an initial blip, the consumer is back on the Internet researching how home furnishings can enhance what is becoming the new normal of being at home. The graphic from FurnitureCore, (the parent company of Home Furnishings Business), is a national sample of a balanced sample of INDEPENDENT furniture retailers. The consumer is waiting for the industry to open.
June 3,
2020 by HFBusiness Staff in Business Strategy, Industry
The many sales tactics that can be utilized, such as selling as part of a seating group or as an individual cash-and-carry sale, will help captivate your customer—but merchandising will be key. As the industry continues to see the growth of Generation X and Millennials as the target audience, retailers will need to shake up their merchandising assortment to reflect their style. Manufacturer Durham Furniture has developed thoughtful solutions for retailers in their bestselling, customizable collection.
“Our contemporary-styled Milestone Collection was designed to reach the next generation of consumers and the interior design community,” said Luke Simpson, president and chief executive officer of Durham Furniture. “The style and design is more in-tune with what the younger generation of consumers are looking for and the mixed media look gives our design partners the diversity in texture and materials that they often seek when designing more contemporary spaces. The group is available in any of Durham’s more than 50 finishes, allowing our customers to express their individual style, a key selling point and benefit of our products on the retail sales floor.” Durham Furniture is not the only manufacturer that embraces the power of customization. Especially in our current climate that is grappling with the realities of newly implemented tariffs compounded by the ongoing Coronavirus wreaking havoc on manufacturing and shipping, American made furniture has found additional momentum. “Simply Amish makes a lot of occasionals, and on our Standard Order end tables, most can be raised or lowered up to 6” without a custom quote,” says Charles Curry, vice president of sales and strategy of Simply Amish. “American made occasional pieces, especially with custom options, are as hard to find as a white buffalo.”
When consumers walk onto the retail sales floor, what are they anticipating for their occasional furniture purchase? While the fastest growing section of occasional furniture is accent furniture, which includes bars, breakfronts, and the like growing 7.1% and exceeding the overall growth of the occasional category at 5.6%, we analyzed the general style that consumers are searching for. According to the same FurnitureCore, Inc. study, when consumers were asked what the style of their most recent occasional table purchase was, a tie was found between traditional and contemporary at 32.47%, followed at 15.58% by country/rustic. The remaining responses where European at 9.10%, mission/shaker at 5.19%, and transitional at 5.19%.
June 3,
2020 by HFBusiness Staff in Business Strategy, Industry
It is absolutely critical we understand that in most cases, we will be faced with a customer that has a much different approach to shopping for her home. It will require us to rethink how we work with them and find creative ways to provide the buying experience they now desire. This is not a completely new problem for us, since our consumer’s needs have been changing dramatically over the past two decades, causing smart retailers to adjust how they sell and service their customers.
The crazy thing for me is that the article that follows was actually written for our March issue and submitted in mid-February. This was before the pandemic hit hard and was in response to the changes we saw happening with the consumer over the last year or so. The impact of the virus and the way it has affected how the consumers returning to the marketplace want to shop, actually makes it a much more relevant and realistic idea. Read what I wrote back in February and see if you agree.
Most consumer research over the last two decades has indicated that for various reasons, many people do not want to spend a great deal of time shopping, even for traditional big-ticket items. While much of the initial search and information gathering is taking place on the Internet, the amount of time they actually spend in stores has been curtailed dramatically. They now go to just over two, instead of the five that were visited in the past. This has reduced traffic in most stores. However, there has also been a growing number that simply choose not to visit any stores and either buy online or through someone else.
In our May 2017 issue, our cover story offered some insight in the feature entitled, “Is It Just In My Store That Traffic Is Down? – Maybe”. Here is an excerpt from the article: The fact is that the time-starved consumers do not have the inclination to extend the process and enjoy decorating their homes. If we look at the percentage of consumers that consult a professional designer as the first stop, it is small. In discussions with the ever-expanding cadre of “designers” in the industry, it becomes obvious that they are more “personal shoppers” than certified designers.
Indeed, one of the faster growing distribution channels for home furnishings in the last decade has been the independent interior designer. However, as mentioned in the article, the main service many seek from these professionals may be changing from providing design direction to actually doing the shopping, so the client does not have to invest the time in shopping for the right pieces. Certainly, this has always been an attractive aspect of using a designer to assist in the process, but today it seems to have become a more important element.
Last month I presented some ideas about selling and marketing the important problem-solving services we provide our customers. While I did not make the specific point that working with our sales staff also saved consumers time, that would be a benefit they would receive, because someone else would be helping them find what they desire. Unfortunately, I am not convinced that the majority of consumers actually look at it that way. Perhaps thinking that the time spent at the store or communicating back and forth with a salesperson would be time added instead of time spent making their search more efficient.
My point is that we already can provide time saving assistance for a customer. Add to that our ability to handle every other aspect of the process as a one-stop solution provider and the total package should be very attractive to these consumers, IF we could get them to look at it that way. So, one of the key things we can do is fi nd a way to package this and market it. I think that the concept of providing a “Personal Shopper” or “Furniture Concierge” service for our potential clients may be worth considering.
This idea came from a recent story in the Detroit Free Press newspaper about a car salesperson that did exactly that. The service he had provided clients literally became his product, which launched a successful new career for him, basically doing much of what he had done before only packaged in a much diff erent way. Obviously, the goal of presenting this information is for the reader to use it as a launching point for the consideration of new ways to package and promote the services your store already provides. It is NOT intended to encourage salespeople to leave and try to do this on their own, although that could happen!
The article, “Fired salesman disrupts car-buying industry with word-of-mouth ‘concierge’ business” appeared on January 23, 2020. You can find it at https://www. freep.com/story/money/cars/2020/01/23/ fi red-car-salesman-brian-carroll-dealership/4533934002/. Basically, it tells the story of Brian Carroll, a guy who had never been fi red or let go from a job, who after eight years of loyal service and steady sales at the same dealership, was let go as part of a cost saving move. Needless to say, he was devastated and drove home not knowing what he was going to do or how he would support his wife and three sons. He loved selling cars and had worked at several dealerships over the years but knew starting over at a new one, if he could even fi nd an opening, would be very tough.
Then something happened. A guy called wanting a car. Carroll explained to the buyer that he didn’t work at the dealership anymore, but the buyer said he didn’t care. It was at that point Carroll decided he would go solo, however, not as the usual car “broker,” who charges a direct fee to shoppers, but as a car “concierge” who would work on commission. After all, he fi gured, fewer people have time to go to dealerships and many people like the idea of enhanced personal service. So, he decided he would ride a trend of changing consumer expectations in the automotive industry, all by word of mouth.
The rest of the article includes extensive quotes from his clients about how they do not have the time to shop and compare cars. They know for the most part what they want from the start and Carroll is enough of an expert on all brands to give them good guidance if they have questions. The process begins with a call, text or email. After that Carroll conducts a needs analysis and once he is confi dent that he knows what the client is seeking, he begins his search. When he locates some options that fi t the profi le, he can contact the client and set up a time for him to bring the vehicle to them for review. When they buy, the paperwork is often done at the kitchen table instead of having to make a trip to the dealership. Again, saving the client time and eff ort. As one client, a member of a local fi re department said, “For somebody like me who works 24-hour shifts and has an active lifestyle outside the job, with young kids active in sports and school, I don’t always have a day to look at vehicles or another day to sign paperwork, I start at 8 a.m. and I get off work at 8 a.m. If we’re running fi re calls or medical calls all night, I’m not going to want to sit in dealerships. I want to go home and go to bed.”
Carroll is now selling 30 to 35 cars a month with a peak of 52. I am not sure, but I think that is prett y darn good, even for a salesman at a good dealership. He has changed the buying experience for all of his clients and according to published research from the industry itself, he is answering the exact needs and wants the consumer has voiced to them. According to Jessica Stafford, senior vice president and general manager of Autotrader and Kelley Blue Book, “Consumers are looking for personalized experiences tailored to their specifi c needs and preferences. Their expectations and demands are gett ing higher.”
That certainly sounds a lot like what all of the research for our industry is telling us. In Carrolls case he had to leave the retail environment in order to provide this type of service for customers. Basically, his clients are all potential clients of the dealerships at which he fi nds them cars. Since he earns a commission from the dealership for each sale, it was not a big issue for anyone involved, as it is a win-win situation for the client, the dealer and him.
The big question is how can we as furniture retailers who already provide all of the services a shopper needs, create a process that develops, supports and markets Furniture Concierges or Personal Shoppers on our staff ? Perhaps for some it will be an enhancement to their existing design and in-home business. For others it may be a designated special team. In my view, this is a way to appeal to customers you are not gett ing and maximize those you are. I believe this is an idea that is certainly worth thinking about. I believe that this is certainly worth thinking about, given the fact that many potential customers do not even want to visit a store now because of the COVID–19 pandemic.
February 17,
2020 by HFBusiness Staff in Business Strategy, Industry
As a marketing executive, it is time to focus on the next opportunity — those consumers that are “thinking about buying furniture.” Currently, that equals 30%+ of the population that you can infl uence. The decision on how to proceed with engaging these consumers is the question. The media mix varies signifi cantly by the demographics. The message is totally infl uenced by the lifestyle (psychographics). No matt er the strategy, a feedback loop to measure the results is essential.
Most retailers cannot aff ord an advertising expense as a percentage of revenue at 33% as reported by Casper. Financially, 6% is the target. In other words, every message must count. The details around this discussion are contained in the feature. Call to discuss your experience.
And fi nally, to you, the owner or representatives of the owner — the chief executive offi cer: your challenge is more long term, especially in that your company is competing for the consumer’s discretionary spending. Today there are many competing ways for the consumer to spend money. For some discretionary spending is perceived as a necessity. The following recent research presents your challenge.
You can find hope in the emerging generation of furniture purchasers – now make it happen.
