Selling WITH the Internet Instead of AGAINST It

September 3, 2019   by HFBusiness Staff in Business Strategy, Industry   

As a result, the Internet has become a central part of most people’s lives and many of us, particularly those that have grown up with it, would have a very hard time adjusting to life without it. We quickly learned to turn to it for all our information, entertainment and communication needs, so it was only a matter of time before it took over providing for our physical needs too.

Indeed, over the past decade or two we have watched with amazement how fast the Internet has become a leading sales channel for most products and services U.S. consumers are looking for. From cars to homes to medical care, most shopping trips begin on the Web with an ever-increasing number also ending there. As proof of the Web’s growing retail dominance, in May of this year, Forbes announced that Amazon had surpassed Walmart as the largest retailer in the world. When you consider that all the largest retailers following behind them do a substantial chunk of their volume on the internet, it becomes apparent that online purchases represent a huge share of total retail sales.

Our focus here at Home Furnishings Business of course is only the Home Furnishings industry, therefore the question we need to address is “How does this affect us and what can we do about it?” The answer as usual is not that simple, since the Web has impacted various elements and product categories of our business differently. As an example, stores that sell flat pack, ready to assemble products for the home, which are a main part of internet sales, have a much harder battle to fight than high end stores that provide design services and custom ordered goods. So, while the online monsters are a threat to everyone, the severity of danger involved differs from store to store. As a result, while click only retailers have put many brick and mortar companies in other industries out of business, they have not really done that to us – wounded us yes, but not mortally in most cases.

When we look at market share for a client, we normally do not consider them to be a “dominant” player until they get to roughly 25% or 30%. The most recent Furniture and Bedding sales share I have seen for the internet distribution channel is somewhere between 16% to 18% and its growth has slowed substantially from what it was in the first decade of this century. In fact, it is quite possible that a large part of its most recent growth was driven by one product - Mattresses. Therefore, while online business has certainly become an important, perhaps even a major channel very quickly, it cannot yet be considered a dominant one, like it is in so many other product categories for the home like Consumer Electronics, Small Appliances and Kitchen/Dining Accessories.

In my opinion, the potential share of US furniture purchases for online businesses is limited and will peak somewhere between 20% to 25%. This is only a hunch, but it might be a good one. The slowing of this channel’s growth over the past few years is a sign, but we have long discussed the fact that many consumers just do not want to buy larger ticket merchandise without seeing, feeling and touching it. This is particularly true for items whose selection is based on style, color and comfort. When the look and feel of a desired product is critical to the purchase decision, brick and mortar stores will be the winner. A recent study concluded that most consumers looking for a large furniture product began their search online, with the ultimate goal of testing out the furniture in a physical location before buying. It has also been estimated that as many as 23% of these shoppers begin their search on Amazon.

Of course, we have all heard the term “showrooming” which describes how consumers often visit a physical store to interact with a product, then go online to make the purchase. While I am certain that happens in our stores, I do not see it as being a dominant purchase method for the majority of our shoppers. If we get a chance to meet the customer in our store and help them solve their furniture problem, I think we will win most of the time.

There has also been some consumer research done that supports this conclusion. A March 2018 survey by Morning Consult, indicated that only 11% of US Internet users polled preferred to buy furniture digitally. Another report by Bizrate Insights in May of 2018 determined that only about 18% of its respondents preferred shopping for home goods via digital channels. Either way that means that somewhere between 72% and almost 90% of consumers felt they want to buy their furniture in a physical location. Interestingly, younger respondents like Millennials where more likely to choose the in-store purchase path than older ones. Given these numbers, a very large majority of people looking for furniture will visit our stores, so we still have a huge potential to do business, if we play our cards right.

Basically, the three ways the Internet has impacted our industry are: eliminated roughly 20% of our available sales; lowered our potential traffic by reducing the number of stores consumers visit; and completely changing how most people shop for and purchase furniture. We can’t do too much about the first two, but if we study the consumer’s new shopping/buying process, then adapt our marketing and selling processes to their needs, we should be able to do a much better job at pleasing those that do choose to visit our stores.

Much of what we need to do has been discussed in this and other publications over the past few years. My focus has been mainly on the selling process and what we can do to better connect with the new, better educated, more confident shoppers we are seeing in our stores. Most of our recommendations have dealt with making sure your staff is properly welcoming potential customers to the store and making a concerted, professional effort to connect with them instead of merely greeting them and letting them browse.

I strongly believe that the turning point in any sales associate interaction comes when the customer develops enough trust in the person they are talking with, to tell them what they are looking for and why they came to the store. Without reaching that point and getting that information, the relationship is that of a salesperson trying to sell something that may or may not create the desired results for a customer. With that information it becomes possible for a “salesperson” to become a “person” who is there to help the customer find what they are looking for and solve whatever problem it was that brought them to the store. Therefore, the initial goal of your selling process is to make the customer feel comfortable enough to share the reason they came in, the product they seek or the room they want to redo.

It hit me recently that we might be missing a great opportunity to improve this process in our stores by creating a better connection with how our consumers are now shopping. Consider this: if most consumers are shopping and doing research on the Web before visiting our store, chances are they have seen something they are interested in testing out in our store. While it may be difficult for them to describe it to us in words, if we made it easy for them to show it to us and trained our staff how to make that happen, how many more customers could we satisfy?

My recommendation is that we need to equip our sales staff with tablets, give them easy access to Internet connected PCs on the floor and let them use their smart phones to help customers show them what they found on the Internet that brought them into your store. This sounds so simple, but it is something that I have not seen being done in the majority of stores I visited over the past few years. In fact, I have seen many that do not want salespeople or customers accessing the internet in the store, which is crazy! At the very least you need to provide quality Wi-Fi in your store so that your salespeople can have potential clients show them what they are seeking on their phones. Trust me, most customers can and will if they trust the person they are working with enough. They want to finish the process and move on; we need to be better at helping them do that.

This also means you need to adjust your selling process to include an effort to get each visitor to go online and share what they have found. As an example, instead of the widely used question “So where have you been shopping?”, I would change it to “So have you visited our Website? What did you see that interested you? Could you please show me, so I can help you find it in the store?” Most will have visited your Website and found something of interest that spurred them to visit the store. Make sure your staff is intimately aware of what is on your site and how to use it to look for goods, so they can work with the customer and guide them through the process. Obviously if they haven’t been on your site you can ask them which ones they have visited and bring them up. Chances are that Amazon and Wayfair will come up often, along with your main local competition. Keep a record of who your customers are looking at so you know who to be watching yourself.

I know this sounds so basic and if you have been doing it, congratulations to you! However, my experience has been that many furniture retailers are running from the Internet on the sales floor instead of embracing it and using it to help customers find what they are looking for. After all, that is the main reason consumers used it at home, why not make them comfortable using it in your store with your salespeople?

Whats Sell: Escape To The Great Outdoors

September 3, 2019   by HFBusiness Staff in Business Strategy, Industry   

Though the growth of outdoor furniture has slowed from the avalanche of sales in the first two quarters of 2018, don’t be disheartened - it has grown 2.5% year to date - in line with overall furniture sales as we come into the category’s prime purchasing season.

According to Rory Rehmert, senior VP of sales for Castelle, “The importance of outdoor living nationwide continues to expand year after year. The options for outdoor living areas including furnishings and accessories subsequently continues to grow. This growth is exhibited in the fact that outdoor living areas are being included in a greater percentage of new home constructions than ever before. As an extension of the home, outdoor areas also are considered the largest room in the home; often encompassing multiple rooms in one including kitchens, dining and lounge areas. With this, for retailers, the furnishings for the outdoor room can often result in a much higher ticket than that of an interior project.”

And research proves he’s right! Based on a FurnitureCore, Inc. industry model developed by Impact Consulting Services, parent company to Home Furnishings Business, of consumers polled on why they made their most recent outdoor purchase, 21.05% added a new outdoor area to an existing home, and 19.30% moved to a new home with an outdoor area. 35.09% of those polled were simply replacing old, worn, or outdated outdoor furniture and 9.82% did so to add to existing outdoor furniture.

The same consumers reported a high usage of their outdoor spaces, proving the area to be a true extension of the home. 35.09% of consumers report using these spaces daily! Another 45.61% utilize the space on a weekly basis, followed by 2-3 times per month at 14.04%, and less than once a month at 5.26%.

Consumer confidence in product durability is high based on the same FurnitureCore study. When asked how long shoppers plan to use their outdoor furniture, a surprising 36.84% reported plans to utilize products for 8 years or more. This expectation is made possible by key product innovations in performance fabrics and simulated wood looks.

Take Polywood for example, whose story began 30 years ago when the flood of plastics became problematic. “From the recycled milk jug, the first Adirondack was born using genuine Polywood lumber,” states Lindsay Schleis, VP of business development. “We manufacture all categories of outdoor furniture, from dining to deep seating, with the Adirondack chair being most iconic for our company. The durability is second to none with a 20 year residential warranty and 3 year commercial warranty.”

With confidence in quality purchases comes purchases in quantity as consumers are looking to add more than just a couple seats to an outdoor area and call it complete. Instead, they want to curate a room by adding season-extending features with lighting and temperature control aids. When asked which additional pieces they would like to add to their outdoor room, lighting lead the way with consumers at 28.07%, followed by fire pits at 24.56%, and umbrellas at 15.79%. Accessories, a great way to complete any room, were also high on the list at 15.8%. If you have not already, consider adding this category to your merchandise mix on your sales floor. The opportunity to increase your average ticket and close rate is on the horizon.

Charting the Progress of Survival: Furniture and Home Furnishings Stores

September 3, 2019   by HFBusiness Staff in Business Strategy, Industry   

This month’s Statistically Speaking studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business. Although data collected ends in 2016, the report shines the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.

As shown in Table A, the disparity between furniture store openings and closings was the highest from 2007 to 2012. The ratio of furniture store closings as a percent of total stores averaged 11% in the five years during and immediately following the recession. Despite a boom of store openings from 2011 to 2012, the ratio of furniture store openings averaged only 8.3% in the same five years. From 2012 to 2016, the net change in stores has stayed relatively flat – never showing a positive net change for furniture store openings.

The disparity between store openings and closings has reached even wider for home furnishings stores – closing an average of 11.6% of stores per year from 2007 to 2012 and only opening a yearly average of 6.5% (Table B). Since 2012, the number of store closings has exceeded openings with the net change a negative 1.4%.

The heaviest decline in both furniture and home furnishings stores occurred between 2007 and 2012 (Table C). Furniture store locations dropped 18.8% during that period from 27,386 stores to 22,201. Meanwhile home furnishings stores fell 22.5% from 33,787 stores in 2007 to 26,184 in 2012. Furniture stores declined another 0.9% from 2012 to 2016, while home furnishings stores lost 5.3% more stores. Overall, from 2007 to 2016, the number of furniture store locations decreased by 19.6% and 26.5% for home furnishings stores.

Partnered with store closings is loss of store employees. For both furniture and home furnishings stores, the largest decline in the number of employees occurred in 2009 – a drop of 13.1% and 17.9%, respectively. Decreasing the number of employees steadily from 2007 to 2012, employees in furniture stores diminished by 28.4%, while home furnishings stores cut employees by 29.8%. Both furniture and home furnishings stores had employee growth from 2012 to 2016 as furniture stores increased employees by 7.9% and home furnishings stores by 5.7% (Table D). And though employment continues to slowly increase, it is still well below 2007 levels, 20% less than for furniture stores and almost 24% less for home furnishings stores.

Although hit hard by the Great Recession, furniture and home furnishings stores had a surge in new store openings from 2011 to 2012 (Table E). New furniture store openings jumped by 64.6%, while new home furnishings store openings increased by 20.9%. Unfortunately, as shown in Table F, 2012 also had the highest number of new furniture and home furnishings store clos-ings – new stores dropping by 75.6% and 33.8% respectively.

Between 2007 and 2011, the rate of loss of store employees was higher than the decline in store locations as shown in Figure 1. In 2007 furniture stores averaged 9.9 employees per store and home furnishings stores 9.6. By 2011 this ratio had fallen over a full person per store. There are many reasons for the decline in store employees and the fact that the number has not yet entirely recovered. During the recession the decline in sales was the driving force for employee losses. But since that time, especially for furniture stores, many stores have downsized store size and outsourced functions, especially warehouse and delivery. Of equal importance is the loss of store traffic. According to studies by Impact Consulting Services, the parent of Home Furnishings Business, where once a customer shopped several brick and mortar stores, online research prior to entering a store has helped reduce the average number of stores shopped per purchase to two.

As shown in Table G, small independent stores with under 10 employees make up the greatest share of total furniture stores in the U.S., roughly 44% in 2016. That share has diminished since 2006 – falling 5.7 percentage points from 49.7%. The largest furniture stores (corporate) with the highest number of employees (500+) grew their share of furniture store locations from 18.1% to 27.4% in nine years – a jump of 9.3 percentage points. Overall furniture retailers with less than 100 employees all lost share to larger corporate furniture stores.

The majority of furniture store employees (52.4%) worked in stores owned by corporations with more than 100 employees in 2016 and 41.3% of those were employed in furniture stores with 500+ employees. The largest retailers (500+) were the only employee range to gain a greater percentage share 2017 to 2016 – increasing by 9.5 percentage points. The shifts in store percentage and employee size were not as great for home furnishings stores (Table H). While home furnishings stores with 500+ employees did increase as a percent of total stores by 1.9%, stores with under 10 employees remained just under 60% of total home furnishings stores. Home furnishings stores with the most employees were also the only employee range to gain in size – increasing 4.2 percentage points to 55.7% in 2016.

Although the shakeout continues, the stores left standing (existing stores) are showing signs of some stabilization. Tables I and J track employment growth for a full year comparing 2007 to 2016. Progress is tracked in terms of whether existing stores grew employment, lost workers, had stable employment, or closed their doors by yearend. There are two important positive outcomes from this comparison. First, the number of stores increasing employees or with stable employment increased from 54.7% of the total existing stores at the beginning of 2007 to 70.9% by 2016. Also, the percent of existing stores that closed was almost cut in half in 2016 versus 2007, 6.6% closed (2016) compared to 12.8% (2007) (Table I).

The percentage of existing home furnishings stores that closed by year-end has decreased from 11.5% in 2007 to 7.7% in 2016 (Table J). While the percent of existing home furnishings stores open at year-end decreasing in employee size has fallen 5.2 points to 25.6% in 2016, the percent of existing stores open at year-end increasing in employee size has grown slightly by 0.6 points to 24.8%.

The percentage of existing home furnishings stores that closed by year-end has decreased from 11.5% in 2007 to 7.7% in 2016 (Table J). While the percent of existing home furnishings stores open at year-end decreasing in employee size has fallen 5.2 points to 25.6% in 2016, the percent of existing stores open at year-end increasing in employee size has grown slightly by 0.6 points to 24.8%.

Big-name store closings, like Mattress Firm, make the headlines, but the stark reality of the furniture industry is in the smaller headlines in hometown newspapers. These are seasoned retailers closing after decades of successful operation. Here are a few excerpts from local stories in 2017 that gave us pause. We selected a cross section from around the country: n Dearden’s, serving Southern California shoppers for 108 years, closing all eight of its stores n Montclair will bid farewell to one of its oldest-running businesses when Hampton House Furniture closes (NJ)

• All six Rothman Furniture stores closing – serving St. Louis homes since 1927
• Louis Shanks cites ‘dramatic’ retail shift in departure from Houston
• After 112 years in business, doors closed for the final time at Lee’s Furniture in Montrose (PA)
• Gray’s Furniture closing doors after 57 years on Broad Street (Selma, AL)

Whose Foot Is On the Brakes?

July 31, 2019   by HFBusiness Staff in Business Strategy, Industry   

But that increase of only 1.8% in Q1 / 2019 compared to Q1/2018. Made me ‘gulp’ a bit, but I quickly regained my composure, blaming the government shut down that made consumers delay major purchases. Since March, with the exception of certain markets, it has been lackluster. Everyone has begun blaming it on consumer confusion, that because of the 25% tariffs, furniture has increased by the same amount and they should postpone their purchase until they are removed- they will, won’t they?

I wait with bated breath until the end of July when Impact Consulting’s Market Model is released. However, it doesn’t look good with preliminary furniture store sales up only about .5% and preliminary indications that the industry will be up quarter to quarter 2.5-3.0%. Better than quarter one (1.8%), but no cigars.

What is causing the lack of performance can be related to our most basic influencer- housing. The table below provides some basic comparisons.

Yes, housing starts in Q1 / 2019 growth was a negative 1% after a weak growth rate of 3.8% last year (2017 – 2018) which was substantially below the previous three years.

Even with housing inventories falling (<8.6%>) in the quarter and household formations increasing 1.1% up from .8% for the previous three years. Housing starts are down, available rental units are up, however.

Unfortunately, this does bode well for the traditional furniture retailer, but is good for the more disposable product at Target, Wal-Mart, and Amazon. Should we reconsidered our merchandise strategy?

This month’s Statistically Speaking dives into the detail. However, someone definitely has the foot on the brake.

Innovation or Disruption

July 31, 2019   by HFBusiness Staff in Business Strategy, Industry   

Some business scholars measure an industry’s health by the innovation that comes from the inside. Fueling innovation by individuals from inside the industry is often facilitated by individuals from outside the industry introducing knowledge from their past experience. This requires an industry open to change and resists the reaction of “that won’t work in our industry”.

Every industry has a continuous process of expansion and contraction. With the objective of decreasing cost and improving profitability while complying with the contractions imposed by the community in which they operate. In the seventies, the furniture manufacturing segment began to move offshore, breaking the manufacturing process into three segments: design/marketing; production; and finally, transportation. While the time cycle was extended, it is thought that overall landed product cost has decreased. This innovation has resulted in disruption. The benefits of this change could be the subject of another feature.

In the same way, ecommerce has split the retailing process into product selection (buying)/advertising, product display (brick and mortar), and delivery, removing the geographic component of retailing. With longer time for delivery to the consumer, but more convenient for the consumer and lower costs. Maybe.

The point is that companies that drive these innovations are evaluating the impact on cost, success of concluding sale, and to some extent, doing something different.

It costs money to make significant changes in an industry process. Fueling many of these changes are venture capitalists. The significant investment made by venture capitalists to fund the major innovator/disruptor is a shift in the process of innovation. Wayfair start-up investment is well known ($450M). Also well-known is the significant disruption in retailing. Most business owners do not understand the concept that venture capitalists only have to succeed once in twenty tries to be successful: if the retailer had the same success ratio in buying merchandise they would have been out of business a long time ago.

Innovations are not explosions that occur but ideas that evolve, building momentum that will ultimately change the directions of an industry. Often, innovations are borrowed from other industries and adapt to the requirements of the market, sometimes taking years to emerge. Others, a matter of a year. Some innovations run their course and then become footnotes. Realize that not all ideas are innovations, but rather whims aggressively pushed by individuals and companies that are soon relegated to the dust bin. With this inaugural Innovations Issue, our editor’s attempted to identify the major innovation origins and trace them to how they are continuing to influence the industry. We apologize in advance for mistakes we may make in the genealogy or timelines. We also called for innovations from the industry and scoured through many to come up with fifteen that we thought were noteworthy for the purpose of this article. You’ll read about each of them below. Looking ahead we welcome your input, for 2020, to help us identify trends that you believe will impact the industry.

The first challenge was to create categories for innovations. The list we chose can be expanded or subdivided further. In fact, the category of ideas included improvement, without a doubt, but the lack thereof specifically resulted in the classifications. Many improvements in product were eliminated because that is what manufacturers do with every market cycle. The following are our categories: Product Functionality; Product Materials; Retail Concepts; Digital Marketing; Manufacturing; Marketing. Let’s now discuss the areas of innovation.

PRODUCT FUNCTIONALITY

Product functionality had its origin when cousins Edward M. Knabusch and Edwin J. Shoemakers tinkered with orange crates to create a wood slat porch chair with a reclining mechanism. What started in 1928 evolved with the upholstery of their innovation with a name resulting from a contest. The product and brand became synonymous with the product: recliner. By 1969, with many competitors, the variation of the mechanism had been incorporated into sofas and sectionals to become a staple in the living rooms of the emerging Baby Boomers.

The next cycle of innovation in upholstery product functionality occurred with the introduction of the power mechanism. The power functionality existed in Europe for 10 to 20 years before being successfully launched in the States when Catnapper did so in the early 2000s. The result was an increase in the average unit selling price at retail of more than $300.

Where to next? During the last market, several manufacturers added voice activations. According to Anthony Teague, vice president, Catnapper, “Catnapper’s new Paloma Collection features our most exciting functional innovation with the launching of our voice command feature. This allows the consumer to control the reclining, headrest and lumbar features with the sound of their voice. While there are a few other versions of voice-activated motion in the marketplace, our design has some clear advantages. First, the Catnapper Voice Command system is a simple “plug, push and play” concept, requiring no Alexa, no internet connection, nor Bluetooth communication…just simply plug the unit in a common electrical outlet, press a “wake” button and your sofa is immediately ready to listen to your commands.”

Barcalounger also added voice-activation. The company’s new voice-activation is unlike features currently available in residential furniture that functions as part of an APP or via an iPad or computer link. When owners of the new Barcalounger chairs command “Coco” to recline, stop, or go to home, TV or sleep position, a female voice repeats the command and then carries it out. The command of “head’s up” activates the power headrest function.

While the massage functionality has been a part of the motion menu for several years, Cozzia, the major supplier in massage chairs has teamed with Southern Motion and launched Cozzia’s air cell technology in Southern Motion’s recliners and reclining upholstery. The project is branded SoCozi. This was the first time that air cell technology simulating robotics massage was introduced to the furniture industry.

In the bedding category, the introduction of adjustable mechanisms have increased the average ticket at retail for bedding by $400.

The casegoods product has not experienced, in recent years, the degree of functionality innovation as in upholstery. Since the self-storage dining table leaves in the eighties by Richardson Brothers of Sherborne, there has been a dry spell until Magnussen’s introduction of its IFunction night stands and headboards along with addressing electronic storage capability. Touch lighting is available on headboards to light up consumer’s sleeping space. For their master bedrooms nightstands, plug any lamp into the concealed outlet on the back of the iFunction nightstand, then touch the metal bar on the back to turn lamp lighting on or off. Demand for occasional tables has increased thanks to electronic storage functionality.

Robotic functions are on the horizon. Many companies, such as ORI Living, are addressing the small space living need. As Millennials are delaying the purchase of their first house instead opting for urban living in small apartments, ORI Living is partnering with Ikea to develop innovative product.

Sometime in 2020, consumers in Hong Kong and Japan will have an opportunity to be among the first purchasers of Rognan, a new robotic furniture for small living spaces developed through a collaboration between IKEA and Boston-based start-up Ori. The product has the potential to enable maximum use of precious space in cramped urban apartments and homes.

Spinning out of research at MIT, Ori seeks to make robotic living a reality for those living in cramped spaces, particularly in large city apartments. The fledgling company is positioning itself as a solution to the acceleration of mass urbanization.

Ori built Rognan on its robotic platform with system thinking in mind, pairing with IKEA’s Platsa storage solution. This means, according to Ori, that people can easily change the function and look of Rognan, or move Platsa to another place. This allows prolongation of the life of the product and lets it adapt to customers’ life changes.

Ori introduced its first commercial product about two years ago. The company says instead of making the furniture smaller, it can be transformed to various functions as needed. Ori developed Rognan after extensive research in extreme small-space living areas in Hong Kong and Japan.

Seana Strawn, product design developer for IKEA, says with Rognan, customers get eight extra square meters of living space, using robotics to transform the product from bedroom, to walk-in closet, to work space, to living room. She describes it as an all-in-one solution activated through an interface touchpad.

Cozzia USA moved into the components space in April 2018. The company partnered with a major motion upholstery manufacturer, Southern Motion, and launched Cozzia’s air cell technology in Southern Motion’s recliners and reclining upholstery. The project is branded SoCozi. This was the first time that air cell technology simulating robotics massage was introduced to the furniture industry. Cozzia said the introduction created a new style and performance segmentation between motion and massage.

This technology enables the consumer to experience the feeling of deep tissue massage in traditional reclining seating. Cozzia has taken similar positioning in massage chairs, where a steady stream of technological enhancements, both in chair performance and user interface, have significantly raised average unit selling price and helped grow the category across the furniture channel.

SoCozi uses the latest in Cozzia air cell design featuring multiple air chambers that inflate and deflate to displace body pressure by distributing pressure across the entire lumbar region. SoCozi is equipped with soothing heat regions that aid in relaxation, pain relief and stimulation of blood flow.

Willem Smith FurnitureWorks, manufacturer of the ErgoRide Comfort System describe it as a “deceptively simple yet highly effective solution” to the gap that can exist between the seat and back cushion of loose-cushion seating architectures. Willem Smith says the ErgoRide Comfort System solves a real problem. Not all loose cushions seating frames result in a gap for the occupant, but many do. The company, after fine-tuning the design, offers the ErgoRide Comfort System as a no-cost option to all of its clients. Since launching in its final form, well more than 95 percent of clients who have ‘test-sat’ the ErgoRide choose to have it integrated into their sofa or chair.

 “We noted in our press release that we frequently hear, verbatim, from many of the experienced furniture engineers in product development departments – ‘I wish I’d thought of that,’” the company said. “Given who we hear uttering that phrase, it is encouraging and gratifying. We believe as well in the eventual propagation of the ErgoRide: because it doesn’t detract from the status quo and yields so much comfort upside to so many, outwardly it sounds presumptuous but the ErgoRide has an inevitability to its nature.”

PRODUCT MATERIALS

Beyond the style of the product is the material in which it is made. Many remember when the Mediterranean style was enhanced with extruded plastic ornamentation — an innovation that was short lived except for the product that is still deteriorating in landfills — only 50 years to go.

There have been many innovations that did change the industry. In the late nineties with the improvement in producing leather “splits,” leather upholstery escaped from the studies of the rich to invade the living rooms of the middle class. Led by Benchcraft, significantly lower price points captured the imaginations of the consumer and added $300-600 to the average unit selling price at retail. Currently, leather controls 18.9 percent of all upholstery sales. However, improvement in synthetic leather is making headway into this market.

The most innovative trend today is performance fabric. While Sunbrella has led in establishing awareness with the consumer, others have entered the space, such as Crypton, Milken, and Culp. Performance fabric is becoming more important to the consumer’s purchasing decision. According to recent research, more than 67 percent rank it as important or very important.

The next major material innovation was by Tempur-Pedic in the bedding industry. The Tempur material was originally based upon NASA’s research to develop a material that would cushion aircraft seats. The first Tempur-Pedic mattress was introduced by Fagerdala World Foams, a Swedish firm. The brand was brought to the United States in 1992 and the company Tempur-Pedic was formed. The introduction of memory foam began the premium bedding category that drove the bedding industry sales for the last decade. The graphic below presents the growth of the premium bedding company to premium furniture.

What is the next material innovation that will drive the industry?

RETAIL CONCEPTS

How did we get here? It was only 130 years ago that the Sears and Roebuck Company began to sell furniture from its catalog, challenging the general store. It took 35 years before they pursued a brick and mortar strategy and twenty years ago that the catalog was discontinued. The brick and mortar is still around but struggling. Maybe Wayfair has a few more years. They just opened their first pop-up store.

There have been many innovations in retail concepts in the last 25 years that threaten the traditional brick and mortar, but retailers continued to adapt to the changing consumer demands.

In 1960, Levitz introduced the warehouse concept with vignette below a stock above, conveying a sense of bargain prices and instant availability. Levitz became a national chain until its demise in the early 2000s — a victim of the changing consumer and poor management.

In the mid 80s, several entrepreneurs founded a concept of selling direct to consumers from their North Carolina warehouses. Names such as Blackwelders, Edgar B, Roses, and Furnitureland South sent chills of fear down the spine of many retailers. Commonly referred to as 1-800 Retailers who combine brand names with low fixed costs, a sophisticated database (for the time), and dramatically low prices. Eventually, this new retail achieved a market penetration of about 12 percent before retailers match their pricing and interestingly, their service/selection. Today, the only one remaining is Furnitureland South, still recognized as a price leader but conforming to state laws on sales tax. Sound familiar with the new laws for etailers and states sales tax? However, Furnitureland South is still a Top 100 retailer, providing selection and service from their base in High Point.

Another disruptor retail concept emerged in the early 2000s with renegade retailers such as Carolina Rustica in Charlotte and Bari Leather in Orlando. Following the same strategy as the 1-800-Number of brand names and perceived low prices, the next generation of consumers was targeted. Initially, manufacturers resisted sales to this emerging channel, but gradually relinquished under cover of MRP pricing guidelines. This new retail concept has captured 18 percent of the furniture/bedding industry.

While the lack of profitability by the largest etailer continues to amaze traditional brick and mortar retailers, the concept continues to expand.

The emerging retail concept that could play havoc on both suppliers and retailers is the emanufacturers that are producing product and shipping directly to the consumer. A good example of this is Maiden Home. The founder of Birchbox is cutting out the middleman, mark ups, excess inventions, and showroom costs and selling North Carolina made sofas on demand and online. Sofas start at $1,975. Their concept is Restoration shoppers willing to spend more for longer lasting pieces. The CEO Nidhi Kapur of Birchbox is bootstrapping the new startup.

Industry disrupter and retail strategist Connie Post created a new retail format—RP Outlet—for The Roomplace in Peoria, Ill. Located one floor beneath the mall-based Roomplace store (also designed by Post), RP Outlet attracts customers with a fresh, modern vibe aimed squarely at outlet shoppers and women in search of a new shopping experience. Entered via a glass-fronted garage door, the flexible, industrial chic space is punctuated with cool graphics, colorful, oversized murals and movable, slat walls on wheels.

Overhead, shoppers are greeted by brightly colored banners touting messages like “Trend Without Spend” and “Simply Stylish Value.” Post says while the initial prototype is connected to The Roomplace, where demographics and location warrant, the concept can also function as a stand-alone store format. In keeping with the outlet atmosphere (differing from The Roomplace upstairs), there are no build-outs (other than sales stations), window grids, decorative accessories, wall art or wallpaper in use.

 Instead, shoppers encounter simply displayed upholstery, bedroom sets, dinettes and a limited selection of mattresses. “We’re leading with upholstery now, but because the entire space is designed to be fluid, that could easily change to bedroom,” Post notes.

 Merchandise is purchased specifically for RP Outlet, and price points are lower than The Roomplace. The concept’s objective is to capture value-driven customers, who range from 20-year-olds furnishing their first apartments to downsizing seniors.

The Connie Post team designed the prototype, mall-based, 65,000-square-foot Roomplace store, which opened in May 2018, in a former Macy’s space, as part of the retailer’s strategy to capitalize on the lower dollars-per-square-foot and high traffic offered by mall-based real estate. The additional 20,000 square foot RP Outlet on the floor below the main store enables customers to shop both formats seamlessly.   

This project opened in June to huge customer turnout and a very positive response to the new value equation and retail format.

Online design firms began to proliferate just a few years ago and now there is a wide array of options for consumers wanting some design help with a room or rooms. There is also an assortment of platforms and price levels available.

One of those companies in this burgeoning area is Decorist. As the company described it, customers begin by selecting the room they need help with. After choosing a design package, users provide details about their room and budget and what appeals to them and what does not. They can then upload room and inspiration photos. 

Decorist touts its designers as being selected from among the best in the industry. They are available at three levels of experience. Decorist matches customers with an online interior designer based on the customer’s preferred style and budget. Clients can also select their own designer.

Designers create two initial concepts based on the client’s project details. After the client provides feeback, the designer works with them to finalize the design. The final design includes a complete room design, custom floor plan, set-up instructions, and shopping list. Prices vary, but start at $299.

Other online design firms include Stuccco, Havenly, Decorilla, Modsy, Décor Aid and Homepolish.

DIGITAL MARKETING

Consumers have increasingly turned to the internet for their initial search for furniture. This offers flexibility as consumers can choose when and how they want to communicate with a particular company.

Digital marketing is simply marketing aided by technology, allowing companies to quickly put their message in front of consumers. It is far more than a website presence, encompassing targeted email, blogs and social media, effectively putting a company front and center when a consumer searches for their particular product. The ultimate goal is establishing a relationship with consumers by providing information and building trust.

Early adopters (early 90s) included Minneapolis-based Schneiderman’s, but in the early years of the Internet, most retailers viewed it as an electronic Yellow Pages acting as a place save to secure their name. Service providers such as FurnitureDealer.net, Furniture Fan and MicroD helped facilitate that first web presence.        

In recent years, there has been a great evolution from those first “template” sites to today’s sophisticated websites that communicate extensive product information. Research reveals that about 76 percent of consumers visit the internet during their initial shopping experience. The average consumer visits about five different retail sites during the research phase. As a result of their internet research, consumers now visit on average just over two brick-and-mortar stores before making a purchase. Unfortunately sometimes the consumer purchases online—18 percent of furniture and bedding—avoiding traditional stores altogether.

 A direct correlation to brand awareness is the percentage of unique direct traffic to the site. Search engine optimization (SEO) has become increasingly important as companies compete for web traffic. Paid traffic from Google and other vendors based upon keywords provides a steady stream of visitors. Today an average cost of $1.50 per click is required for furniture and bedding.

Emails to a retailer’s opt-in list are another effective way to get the consumer to the retailer’s site. Today most retailers have established sites, and innovation centers around how to improve their objective of getting consumers into their stores. Often, this becomes frustrating for retailers because although they are getting a strong number of web visitors, when compared to store visits, there can be an 80 percent differential.

This frustration has been addressed by Perq’s application of web intercept, while intruding into the consumer’s browsing of the retailer’s site, with offers of assistance, drawings for free furniture, or information with the objective of securing contact information. While controversial, it does provide contact information for 1.5 to 2 percent of unique visitors, which is forwarded to the retailer’s store for follow-up.

The importance of the retailer’s web presence has created a need for better romance copy for the product. While web-hosting companies such as FurnitureDealer.net have created a team of talented marketers to enhance copy, it is a time consuming process. ShopTelligence has created an artificial intelligence application to speed the process. Recently launched, it has been employed by several retailers.

While not as invasive as the web intercept, the offer of virtual product and layout by MicroD and Marxent has increased the consumer experience.

Innovative DesignCliq is less invasive and engages the consumer to answer their most pressing question: What is my style? Moving the consumer from “I know it when I see it” to “I like that” is the major challenge of the retailer in the store. Moving beyond the contact on the websites to a series of direct emails establishes that long-term connection.

The most basic challenge for retailers is to manage the massive amount of data and images of their merchandise selection. Amber Engine’s Assist has created an online application that combines vendor collateral with the retailer’s collateral database for editing and distribution to the website and point of sale.

Marxent says its patent-pending 3D Room Planner with Photo to Floorplan, which is now being adopted by furniture retailers is a fast, easy-to-use and realistic family of 2D and 3D room planner apps. 3D Room Planner with Photo to Floorplan pairs realistic, smart 3D products and environments with an intuitive user interface, according to the company.

3D Room Planner with Photo to Floorplan integrates with existing enterprise websites and applications to support inspiration and merchandising strategies. It also works in concert with Marxent’s Virtual Reality Retail Showroom to deliver convincing, custom visualizations that are proven to improve customer experience, increase buyer confidence, lift basket size and substantially reduce returns.

“Starting with a photo — this is how 20- and 30-somethings want to shop and how they want to design — Instagram, Pinterest, and Houzz know that millennials are acting on inspirational photos discovered through unbranded searches,” said Beck Besecker, Marxent’s CEO and co-founder. “E-commerce giants are all investing in photo-based inspiration, 3D design tools and visual search because that’s how Millennials start shopping. In a natural evolution, it’s now possible for retailers to embrace the visual discovery process within their own e-commerce ecosystems — bringing inspiration and the design process together into a single application.”

Marxent’s innovation is available through these retailers:

Macy’s partnership: In-Store 3D Room Planner + VR is now in 110 Macy’s stores (going up to 150 in the next 60 days)

 Bob’s Discount Furniture - Now piloting 3D Room Designer + VR

 Jerome’s Furniture - Online 3D Room Planner now available through the company’s website

Gallery Furniture - 3D Room Planning + VR in all three Houston, Texas locations

John Lewis & Partners – Marxent’s first major European client

Decod - Eurpoean CGI/3D shop. Marxent partnered with them to bring its software to their partners using Decod’s amazing 3D models.

FurnitureDealer.Net created a new checkout system for its premium website platform, the Two-Step Checkout shopping cart. The company says it built its new checkout system to give customers a seamless and easy online purchasing experience from start to finish. Mobile-first design is imperative for a successful ecommerce strategy, the company says, so it designed and tailored this checkout experience for the 60 percent of online customers that shop from a mobile device.

Here are some of the innovation’s attributes:

Designed specifically for mobile users, as mobile accounts for the majority of website traffic

Smooth and efficient UX design for a two-step process

Designed to create a sense of comfort, trust, and ease for the consumer

Research-based decisions throughout every step of the design process

The two-step checkout shopping cart is built directly into the website platform, which allows Furnituredealer.net to offer the new cart as a seamless and free high-impact upgrade for retailer partners.

After initial tests and data tracking, the company says it is already outperforming the previous cart with:

Higher number of total sales

percent increase in ecommerce conversion rate

Fewer cart abandonments

Approximately 5.5 percent increase in total revenue

“Two-Step Checkout is future-forward in its sleek, simplified design and seamless checkout experience,” says Mackenzie Miller, lead digital designer. “We designed the cart with a distinct personality and customer-friendly messaging that gives the consumer a sense of comfort, trust, and ease throughout their experience. The checkout process is only one part of the customer journey, but we designed ours with the entire journey in mind, and are excited to see how this new innovation will help our retailer partners grow their business by converting more opportunities into sales and creating repeat customers.”

Perq helps retailers with their data-driven sales and marketing strategy, along with a process to turn website traffic into in-store traffic. Powered by Artificial Intelligence, the Marketing Cloud is a full multichannel marketing solution that gives retailers the best innovative resources to meet the needs of today’s shopper, while offering training for management/sales teams to increase or surpass their revenue goals. Key elements include: 

Website conversion software to increase online engagement

Lead management to centralize lead data and empower teams with cadence and sales scripts to keep teams accountable 

Automated and personalized 90-day lead nurturing that allows retailers to follow up with leads easily and efficiently 

Intelligent digital advertising to drive the most ideal and budget-efficient traffic that provides complete transparency into digital spend and performance 

Intelligent reporting, data and metrics to give stores full visibility into in-store sales

Consumers have higher expectations when shopping for home furnishings, yet the industry has struggled with keeping up with the higher demands. Brands and websites get to know us and offer up relevant products. Consumers aren’t going back to the old method of shopping six furniture showrooms before they purchase, but instead shopping online and narrowing choices. However, at least 90 percent of the time, they are still making their home furnishing purchase in store. The auto industry had the exact same challenges as the home furnishings industry. Dealership visits dropped from 6 to 1.2, but they’re not complaining about fewer door swings or struggling to see which digital channels produce sales. Perq says it took what it learned working and creating digital retailing processes in the auto industry for 20 years and applied the same process to home furnishings with the goal of helping the industry evolve. Its website conversion software engages consumers online, and Perq helps clients learn how to manage those leads better.

 Perq’s solutions are turnkey, requiring a simple line of code applied to a website, and they’re personalized for each business. Perq helps to onboard home furnishing clients within 30 to 45 days of signing a contract, providing teams with the lead management resources to become successful, and the client success managers have 30-, 60-, 90-day business reviews with clients, and then quarterly meetings to ensure their success and help them to adjust their marketing strategy where necessary.   

 “Innovation begins by leveraging a data-driven sales and marketing strategy,” the company says. “To be successful today, you have to fully understand what website traffic is turning into showroom sales. You have to prepare your teams to follow-up with shoppers in a personalized way that incorporates the consumer information from your website to save time in-store. And, you need to review your processes and make adjustments regularly to ensure your success.”  

DesignCliq Internet Quizzes and software were conceived out of the needs of consumers for significant retailer help in shopping for furniture for their home. Internet technology has given consumers an entirely new way to gather information for an actual purchase. This means fewer store visits and greater distance between consumer and retailer.

DesignCliq Quizzes ask 10 questions, each with five image/answer choices. These are fun questions with interesting images, and none relate to home furnishings. Typically, it takes 5-7 minutes for customers to complete the quiz and then learn which style best represents them.  Main styles include traditional, transitional, contemporary, cottage, and eclectic.

DesignCliq Quizzes target the 78 percent of home furnishings shoppers who don’t understand styles and interior design and need help. The company knows high pressure selling is totally unfair and damaging to the customer relationship. The quizzes help consumers qualify themselves and buy what’s right with the help and guidance of the store. The results are significantly higher sales tickets and new customer trust and loyalty.

DesignCliq says knowing the style preference of customers is the most powerful marketing tool.  Style transcends age, gender, education, income, and drives sales. Behind the quizzes is proven research on style importance. First and foremost, consumers who have taken the DesignCliq say the quiz produces these results:

The retailer is seen as the expert in home furnishings

The customer is much more focused on product dimensions and design features

The consumer will be less demanding on pricing and deliveries

The sales tickets will average over 20-25 percent higher

Ultimately, the building of customer loyalty and trust        

The overall objective of the concept is to remove a huge marketing barrier with style over price.

Now, with the Internet supplying endless choices, the consumer has become even more confused and cautious. In fact, 78 percent of consumers do not understand styles as it applies to them.

Here is where the expertise of the retailer takes over. DesignCliq is a mind-probing, positive quiz, which quickly and pleasantly, turns pressure-packed shopping into positive interactive enjoyment. 

Shoptelligence is a design discovery platform empowering retailers with an AI assistant that helps shoppers discover and purchase home furnishings and accessories in interactive room assortments.

The company’s product suite delivers integrated style-based shopping experiences that blend the digital with the physical across every touch point in the shopper’s journey. Retailers can dynamically merchandise an assortment of coordinated merchandise at scale specific to the shopper’s objectives and personal style, making their website the one to remember and their store the one to visit.

Shoptelligence connects shoppers with the right merchandise online and then helps both the customer and sales associate use that online experience in-store to complete the purchase. Through Shoptelligence’s analytics, the retailer can remarket to that individual shopper based on where they are in the buying cycle, their personal style, and in the channel where the conversion is most likely to occur.

Shoppers receive a memorable shopping experience aligned with how they buy and use furniture, and it only requires basic product data. Integration is fast and plugs into any experience in any channel, transforming your basic product data into an interactive, shoppable room décor. Shoptelligence accounts for ever-changing inventory and is deployed at scale with National Top 100 furniture retailers and has proven to increase online engagement from seven minutes to 40 minutes, engaged buyer revenue by 25 percent, and positively impact customer lifetime value.

Amber Engine says its Assist product is the first catalog information management tool developed specifically for home furnishings dealers. Assist automatically imports vendor product information so you and your team can prepare it for your website and point of sale system.

 Assist is a web-based application. Users import data from vendors and use Assist to organize the information and check it for accuracy and completeness. Amber Engine describes it as a safe and centralized “master catalog” for all your catalog data, like images, SKUs, descriptions and dimensions.

Once you have all your vendor data uploaded, you can quickly and painlessly merchandise products by creating groups & kits tailored for your store, improving romance copy, or adding updated photos. Exporting your newly merchandised data is easy! Click one button, and Assist generates a file for easy upload.

 Soon, Assist will enable retailers to improve their local rankings on search engines and even merchandise products right into Google search results.

 Amber Engine says Assist allows users to give their salespeople complete information at their fingertips and never again lose a sale due to poor or missing information. Users can create the types of groups and kits their customers are interested in buying, and they can create great product stories that pull shoppers into stores. 

Increasing realism and interactivity in the product experience is a big reason for the continued growth in e-commerce. While the first wave of home furnishings e-commerce businesses grew out of convenience and lower pricing, now the Internet consumer demands a more sophisticated visual experience, from 2D to 3D. 

 “We’ve seen user acceptance of web-based technology leapfrog in the last few years as consumers have become acclimated to viewing realistic objects on a web page, spinning and customizing upholstered goods, for example, that results in a much higher intent to purchase,” says Richard Sexton, chief product officer at MicroD.   

 These visually-rich experiences allow retailers to create an endless-aisle scenario where all possibilities are available to consumers, either in-store or online, and supports the e-commerce growth that is powering the industry.

MARKETING

As the furniture industry has fragmented into multiple distribution channels, the traditional way to sell at wholesale using sales representatives has been challenged. The well-established ecommerce channel requires a different level of expertise. The company Brand Jump is providing a turnkey service.

Los Angeles-based BrandJump works with manufacturers in multiple categories, including furniture, decorative lighting, textiles, outdoor living and accessories, to improve their ecommerce strategies.

The company hires experts who bring years of experience working with some of the world’s leading internet retailers, to help its customers more successfully navigate those channels. They also partner directly with internal teams to design and implement an ecommerce strategy that maximizes a brand’s online opportunities and minimizes disruption to all their other channels. Beyond deep channel-knowledge, BrandJump’s team is also comprised of ecommerce experts and online marketing and merchandising experts that are solely dedicated to achieving the most successful online presence for the brands they manage.

BrandJump is set up to manage a brand’s ecommerce channel on a turnkey basis, which optimizes online performance and sales, while serving as an extension of a manufacturer’s own wholesale marketing team.

At the time the company was founded, BrandJump saw that internet retailers were emerging into a channel of their own. Yet in the home furnishings space, these relationships were still being managed by traditional brick-and-mortar sales reps who mostly did not have the background and experience to expertly navigate online channels.

The founders saw there was an opportunity to bring the knowledge of what internet retailers needed from the brands they sell to home furnishings manufacturers who wanted to expand their distribution channels.

BrandJump simplifies the distribution model by bringing together ecommerce sales and home furnishing industry expertise to create an optimal platform for selling product through online channels in a way that stabilizes costs for the brand and broadens their distribution.

“When we started BrandJump, we observed that most internet retailers were being fragmentally managed by manufacturer sales representatives and were not being serviced properly,” said Josh Walter, BrandJump co-founder and CEO. The opportunity for internet retailers to use technology to scale their efforts became apparent early on, and it quickly became clear to us that manufacturers needed to centralize the management of this emerging channel. What makes BrandJump most unique is our in-depth knowledge of the ecommerce channel derived from a team of experts who originally came from the likes of
Wayfair, Target, Amazon, YDesign Group, One Kings Lane, to name a few,” said
Walter.  “Our team has a deep understanding of how to align our clients.”

The San Francisco-based company that found success selling direct-to-consumer mattress and rug brands such as Nectar, DreamCloud and Wovenly, hopes that success will translate into the broader homefurnishings market. It formed a new umbrella company, Resident, and it has launched its first furniture line, Bundle by Resident, a collection of flexible seating.

“After driving Nectar to unprecedented sales last year, our proven business model is poised to dominate within the broader home furnishings category,” said Craig Schmeizer, Resident co-founder. “Our approach is unique to the direct-to-consumer space because we offer multiple brands in any given category, like our four mattresses. This DTC “Brand-Building Model,” which we will replicate across Resident, lets us cater to specific consumer needs better than our competitors.”

Resident says it plans new collections, plus a boost of Nectar’s footprint in brick-and-mortar stores. The company also announced the expansion of retail partnerships to nearly 1,000 stores with outlets like: American Furniture Warehouse, Mathis Brothers, and Nebraska Furniture Mart. Resident also plans to introduce its brands to the U.K.

“Our core belief is that consumers are the channel, and wherever they are, is where we want to be,” said Eric Hutchinson, Resident co-founder. “That’s why we leverage data and deep analytics to cater to their precise needs, whether they are urban dwellers, rural homeowners or anyone in between. Understanding this important dynamic allows us to expand our solutions for customers in various facets of their lives.”

Resident will leverage its process as it moves into the broader home category with the introduction of Bundle, which provides flexible seating designed to bring people together. Offerings include affordable, premium seating options, from a custom sofa, starting at $1,195 to a portable beanbag, starting at $600.

Manufacturing

Fabric cutting technology specialist Lectra continues to develop products it says will enhance customization and productivity for forward-thinking furniture companies using smart factories, or Industry. 4.0. The company’s latest innovations are Furniture on Demand and Versalis 2019.

Furniture on Demand, Lectra’s furniture-specific Industry 4.0 technology, includes two packages: Made to Order and Made to Customize. Lectra says Furniture on Demand is the industry’s first end-to-end solution, from order processing to cutting. Using artificial intelligence, data, the Industrial Internet of Things and cloud technology, it enables furniture manufacturers to manage and optimize small series and customized order production.

With Made to Customize, Lectra says, companies wishing to expand their customization offer beyond just fabric choice can automatically combine the chosen product model, fabrics and components directly from an end-consumer’s order. It is then automatically transformed into a cutting order and transferred to the cutting room. This ‘click and cut’ process ensures faster time to market with a minimal risk of error.

For furniture companies producing leather-upholstered furniture, Lectra says the release of Versalis 2019, the latest generation of the France-based firm’s digital leather cutting solution, delivers evolutions that significantly improve  productivity, nesting efficiency, and operator ergonomics for increased throughput of the entire production cycle.

New application programming interfaces tighten integration between Versalis and a company’s enterprise resource planning (system to enable direct transfer of work orders for cutting. Companies also have greater access to production data for enhanced production supervision through key performance indicators.

Versalis 2019 and the Made to Order package are currently available. The Made to Customize package will be launched starting in September 2019.

Ideas are Where Most Successful Innovations Come From

Oftentimes, when people think of innovation, they think of product innovation, but innovation comes in many sizes and shapes. Innovation is a commitment to solving problems, to create new products that fill a need no matter how big or small. The companies below are using product and process innovation to fuel growth with speed, agility and focus. They are harnessing technologies to accelerate connectivity among and between people and devices. Take Classic Brands, for example. The specialty mattress producer came up with an innovative way to overcome the challenge of buyer’s remorse with the addition of “first scan” technology that instantly generates a tracking number for UPS and FedEx shipments from its two U.S. distribution centers. It lets the consumer know their mattress is on its way. “Our experience shows that consumers are more likely to cancel an order during the timeframe it takes for them to receive that critical tracking number. Sharing that number instantly seals the deal,” says Michael Zippelli, president and CEO. The technology is beneficial to brick-and-mortar retailers, who no longer need to receive Classic products at their warehouse. Cutting out that step enables them to grow their business without additional inventory or warehousing expenses.

While consumers are excited about technology in furniture, HMI noticed a gap between the innovation and the comprehension of the technology. They tried to bridge this gap with easy to understand icons, computer generated videos and a voice activated demo function that explains the product’s features and benefits. The assets can be used for training retailers, and for educating consumers on the retail floor or in product pages online. 

Raffel Systems continues to innovate with the patented ‘Drain Free’ TranquilCharge USB port. The drain free port has zero output when not engaged with a device, which allows for longer battery life and less wasted energy, thanks to “split shell” technology. The connection within the port is “split” thereby rendering it not usable at all times. The device is a desirable upgrade to any product that would want the inclusion of a USB port. “It’s a game changer,” says John Dudash, CEO of Raffel Systems. “The engineers at Raffel have brought something to the marketplace that everyone can value and appreciate — battery life— especially in the motion furniture industry where the battery provides power to multiple motors and devices, and is a valued commodity.” Not only is it a convenience for the user, it offers a significant aggregated energy savings provided by the millions of units in the field.

Retail software provider Storis keeps their eye on the future with their Next Generation initiative. To keep up with technology innovation, the software itself isn’t the only thing that is evolving. How the Storis team conceives, develops, and brings products to market is adapting as well. Storis embraces an Agile Development Strategy, which enables developers to efficiently develop software versus writing documentation. In traditional waterfall development, weeks are spent writing specifications as compared to an Agile Development Sprint where code is created and prototyped right away. Technology solutions get out the door and into the hands of retailers faster. Automated Quality Assurance tests the code for accuracy, combined with QA user experience testing by technicians for a practical, hands-on approach. Staying ahead of the curve means being active members of the Open Source community, says Shawn McKnight, director of production. “Our ears must be to the ground at all times.”

Twin Star Home is always focused on new innovations to enhance consumers’ lives. In addition to enjoying the year-round ambiance of realistic 3D Flame Effect, consumers can now adjust the temperature on their electric fireplace for warmth or cooling effects to match the season. CoolGlow features an integrated fan, with oscillation, to provide air circulation for year-round use, with or without heat. The positive response received made it a no brainer. “It’s always gratifying to launch new innovations that drive growth for our company, our partners and the category and even more gratifying to know we are creating products that will delight our consumers,” said Lisa Cody, VP of marketing.

Classy Art came up with a creative idea to help guide their product development process, removing the guess work out of what products to bring to their product line, by allowing consumers to vote on the product via social media platforms. “What your left with,” says Gabriel Cohen, CEO of the company, “is a product line that is proven to sell faster at the retail level. Since we implemented this idea our customers consistently tell us that our products just sell better.” The results are purely quantitative, but there are two other variables, price and size, which are also part of the decision. The item must first be one of the higher ranked items from the voting, which uses Facebook likes and comments. Then, the company assesses its size against its price to ensure it will bring a high value to their customers and ultimately to the consumer. Cohen says, “Our customers expect only the highest value products when shopping us, so that piece of the product development stage is essential.”