Monthly Issue
From Home Furnishing Business
June 14,
2018 by HFBusiness Staff in Business Strategy, Industry 
That got me thinking about my career, which leaders I followed and the impact they had on my growth. There were most certainly a lot of people that influenced my development, but I must say that the biggest factor was the amount of effort my direct supervisor put into training me and providing me with opportunities to learn even more through additional educational activities outside of the company itself. Sometimes it took a push or a challenge to get me motivated, but in hindsight I probably got more from those experiences than I did from all of the on-the-job training over the years.
The best boss I had in my career, totally believed in this. I have well over a dozen notebooks in my bookcase from AMA programs, various seminars and other business courses I took because he challenged all of his direct reports to constantly find ways to grow and improve. Sometimes it was a pain in the neck to fit these external events into a busy schedule, but it was always worth it, because I use things I learned from them every day.
Looking through my book case, I found a segment from one event that seems to be an appropriate preview for next month’s Forty Under 40 issue. It comes from probably the most memorable one day session I ever attended. Our leader took all of his direct reports to Cobo Hall in Detroit for the “Success 1993 Seminar” which featured the top motivational speakers of the era, including: Zig Ziglar, Peter Lowe, Mary Lou Retton, General Norman Schwarzkopf and others. All day long we sat transfixed while these famous, successful people gave us their insight into what it takes to be all you can be.
They were all excellent, but the one that really blew me away was General Schwarzkopf. Certainly, the fact that he had just retired as a hero of the first gulf war was a factor as his presence and presentation were both commanding to say the least. However, it was his message that struck me the most and has stayed with me ever since. His topic was “Picture a Leader” and he spoke with a clear passion that you could feel throughout the hall. Here are some notes I jotted down from what one of our great military leaders said about being a leader:
The secret to the 21st Century will be leadership.
Nearing the end of the last century, Schwarzkopf’s concern was that we were not developing enough strong leaders to take us into and through the next century. Others have expressed similar thoughts related to generational shifts in values and focus. Each generation has always seemed to have concerns about how the next one will carry on. As people change so too must their leaders. However, the basic points he made back in 1993 will always hold true.
Leadership does not equal managership – leaders lead people, managers manage processes and procedures that involve people. One is an art, the other is more of a science.
His meaning here is pretty clear - leaders lead and managers manage. In my experience many people can be trained to be good managers. However, leaders must be developed and not everyone has what it takes to be a leader. Social psychologists have often said that leadership qualities and skills show up very early in childhood, but I have seen good people evolve into great leaders as they gain experience and confidence. Of course, I have also seen it go the other way. The best is to have a true leader who can also manage, but these individuals are hard to find.
The Challenge is to get people to do willingly, that which they would not normally do willingly.
This is probably the best definition of the difference between a manager and a leader I have heard. Leaders find ways to get people on board, so they actually do the right things because they want to, not because they have to. Teams with leaders in charge are always the most motivated and successful at whatever tasks they perform or roles they play.
Mostly, being a leader takes character. Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy. Lead by example, because people hope that their leaders are better people than them. It’s nice to be liked, but you must be respected.
Webster defines character as “the mental and moral qualities distinctive to an individual”. In this usage, the word is intended to indicate a high level of mental and moral strength. Good Leaders must be dedicated to their principles and values in order to be affective, so they need to be strong in these areas. Often this is hard because not every decision is always the easy one. Being a leader is not a popularity contest and as he says, respect is necessary for success, but being liked is not. I have read several articles stating that “wanting to be liked” is the top reason that new managers and aspiring leaders often fail. By the way, my understanding is that General Schwarzkopf managed to be both respected and well liked throughout his career.
A leader cannot delegate responsibility – that is theirs alone. Leaders delegate authority, so others can get their jobs done.
Leaders that pass the blame for failure on to subordinates or other team members lose the respect discussed in the previous point. Not only do those below stop trusting the leader in this case, so too do those above. There have been several examples of sports coach’s blaming the players for losing a game and in most cases the resulting news articles and player quotes reflect a loss of respect for that individual. Train your people how to be successful, give them the proper tools, coach them to make them the best they can be, then let them do their job.
“Leadership has many peaks and valleys. A good leader does not live for the next promotion or tangible reward. He or she derives pleasure from leadership itself. It is almost a calling.
This was the general’s way of saying that there is a certain amount of passion and a whole lot of dedication that goes into being a true leader. The rewards and adulation will come if an individual stays focused on the act of leading and is motivated by doing it. When they lose that, they will begin to be less and less affective as a leader.
The Six Points of Leadership:
- Things will not improve until you admit that something is wrong
- Set Goals – Pick goals that everyone can understand and know their roles in achieving them
- Demand High Standards – Let people know what is expected from them. People will rise (or sink) to the standards you set.
- People work to succeed – Let them know how success will be measured.
- Recognize Success – Also accept mistakes, “Latitude to learn, NOT Freedom to fail”.
- Power Down! – Don’t tell people how to do their job. Give parameters – give standards – give authority – tell them WHAT to do, then let them do it! Weak leaders lack confidence in themselves and thus their people.
No comment necessary for this section since it is probably one of the best “To Do Lists” anyone interested in being a leader could have. Straight from one of our best military leaders!
General Schwarzkopf’s Secret to Success as a leader:
The general wrapped up his presentation by announcing that he was going to provide us with his “secret” to becoming a successful leader. He then told a humorous tale about when he arrived at the pentagon to take over as the person in charge of managing all military personnel – over three million people at the time.
The general he was replacing had been in the position for a long time and was beloved by everyone. Schwarzkopf expected to have three months of training at the side of his predecessor only to discover him walking out of his office to take three months leave before officially retiring.
He dramatically told us that he literally chased the old general down the hall, finally stopping him to ask how the heck was he going to be able to take over without proper training and guidance from him? The old man said, “Oh that’s easy. Just follow Rule #13,” and then he walked away. Schwarzkoph stopped him again and said, “I am sorry sir, but I do not recall a Rule #13.” As if reading it from a manual the older man said, “Rule #13… when placed in command, take charge, make something happen, don’t just sit there!” He then walked away again. Schwarzkopf yelled after him, “but how will I know what to do?” The old man paused and said, “Just follow Rule #14”. Schwarzkopf then asked, “What does Rule #14 say?” The old man didn’t stop, he just shouted over his shoulder and said, “Rule #14…do what’s right!”
General Schwarzkopf said he followed Rule #14 the rest of his career and it was the single biggest reason for all of his success as a leader. His last comment was, “The truth of the matter is that you always know the right thing to do. The hard part is doing it.”
It is this last point that I have tried to live by ever since hearing his presentation. It has served me well when I have been faced with tough decisions and I hope it will help you too.
The real message of this column is that all too often we keep our managers locked up in our stores and then wonder why they still do things the way they have always been done, instead of taking our businesses to another level with new ideas and knowledge. Take a lesson from my best boss and invest in your people so they can grow and move your business forward.
Thanks John!
June 14,
2018 by HFBusiness Staff in Business Strategy, Industry
Luxurious … stylish ... elegant—words you might not expect to hear when talking about recliners and motion furniture.
But times have changed.
Comfort and style have converged to create motion furniture that fits almost any lifestyle and décor.
“The large, bulky frames are losing their place,” says Bobby Gantt, director of research and development for Southern Furniture Company. “Better styling is taking over. Companies are making sleeker units to hide in frames better.”
Power play
“Comfort is always key … but power continues to grow and remains a demand of customers. Additionally, technology enhancements like USB charging are strong added features,” says Penny Eudy, product manager of upholstery, merchandising and TLA. “For La-Z-Boy, our Duo line has been a big hit. It offers the stylish look of stationary, but the comfort of reclining—so it’s the best of both worlds.”
USB ports are standard on Duo, and there’s an optional battery pack to provide power, cord-free.
Also gaining momentum in the category, says Craig Young, president of Bradington-Young, are new mechanisms that deliver a variety of design options. “Power recline and power headrests remain appealing features for our motion consumers,” he adds.
“As motion furniture continues to grow at an increasing rate, we continue to offer more innovation and increasing functionality with our products. Power headrests have become a must-have in motion products and offering power lumbar support has also proven to be the perfect touch to add to our product,” says Rodd Rafieha, senior vice president of Abbyson.
“We also have more versatile features we are including, such as drop-down consoles with pull-up headrests that include lighting as well as lighted cup holders, power and USB ports,” he adds.
“Connectivity is important these days—USB ports and charging stations,” says Gantt, adding that simple but effective power mechanisms are gaining popularity. “It allows for more comfort options as opposed to just three positions.”
Scaling down
While comfort is king and technology is the icing on the cake, manufacturers are finding success with scaled-down versions that have the look of stationary furniture.
“Consumers crave the comfort of motion furniture, and we find a strong appetite for motion designs that don’t look like the category’s traditional silhouettes. We continue to innovate our designs so that they look like stationary designs, but offer a comforting surprise,” says Young. “Our smaller-scale, stylish designs with an optional lumbar support are also capturing the attention of motion-savvy consumers.”
An example is Bradington-Young’s bestseller, the Newman Luxury Motion sofa. “The sofa, which falls into our luxury motion segment, offers a sophisticated design that incorporates the functionality and comfort consumers want in motion upholstery,” says Young. “Newman allows comfort and incredible design to coexist in one great sofa.”
One trend that Gantt has seen in motion furniture is “frames aimed for women … smaller, curvier, and a larger array of fabric and leather options,” he says. “A large number of consumers look for motion furniture that resembles traditional stationary seating.”
“Consumers’ taste in motion furniture has shifted from the bulky, oversized products to focusing on a more transitional look that still focuses on comfort and style,” says Rafieha. “Our bestsellers are the sleek and slender styles that mirror the look consumers are aiming for.”
Strong performers
So what makes a bestseller a bestseller?
“Bestsellers for us is what sells the most volume for our partners and provides our partners with the best gross dollars profit,” says Rafieha. “We also monitor customer reviews and their experience with our products so that we can continue to develop products that consumers are looking for to complete their homes.”
The motion category continues to be one of the industry’s stronger performers, says Young. “We are selling at all price points in the category,” he adds.
La-Z-Boy, says Eudy, has always been known for comfort. “When you add in the quality of our products and the overall value and sheer number of scaling options, there is a great fit for everyone,” she says. “Additionally, the fact that our furniture is fully customizable makes each piece truly unique.”
Larry Smith, CEO of Barcalounger, says their Seymour Collection is a top seller because of its "clean modern design and the trend-forward white leather with gray undertones. The pieces are highly functional as well, with both power headrest and power recline, USB ports, and personal memory position." The color, Dove, has proven so popular, he adds, that it’s been requested on other pieces manufactured by the company.
Motion forward
Innovation, manufacturers say, continues to attract consumers.
“Innovation will be critical as the category moves forward,” says Eudy. “Consumers want function and comfort. It’s bringing the two worlds together to give them everything they need and want.”
Part of that innovation is making the pieces more comfortable and convenient. “We see a number of newly engineered mechanisms coming into the category that accommodate longer legs, a deeper seat, and a taller power headrest,” says Young.
Another area of the market that continues to see solid growth, says Gantt, is stylish lift chairs. “The aging population is into technology,” he says.
“Looking forward, the motion furniture industry will continue to add more functionality to every piece that is being offered,” says Rafieha. “The time is coming when every piece in retail stores will include power features.”
What the data shows
Research by Impact Consulting Services, parent company of Home Furnishings Business, sheds light on some of the amenities consumers seek in motion furniture.
When asked about the top four items they have now or would want to have in reclining furniture, in the fabric category 59.38% chose automated adjustable headrest and lumbar supports; 53.13% chose a storage drawer; 50% chose heat/massage; and 43.75% chose a docking station for telephone.
Rounding out the list were a hidden tabletop and built-in remote, both at 34.38%; surround sound system, 21.88%; and built-in beverage cooler, 18.75%.
In the leather category, the top choice was heat/massage at 63.33%. Both a telephone docking station and automated adjustable headrest and lumbar supports came in at 53.33%, and at 40% was a hidden tabletop.
Thirty percent chose a built-in remote; a storage drawer, 26.67%; and at 23.33% each, a built-in beverage cooler and surround sound system.
When it comes to reclining mechanisms, for fabric recliners, 62.5% preferred a hand-operated mechanism vs. 25% who preferred power. Just over 12% preferred a body pressure mechanism. However, power mechanisms were the winner for leather recliners, at 50%, with hand-operated and body pressure coming in at 26.67% and 23.33%, respectively.
Style is a factor as well when choosing motion pieces. When asked, “Is the style of reclining furniture an inhibitor to your purchase of this type of furniture?”, in the fabric category 52.94% responded “yes” and in the leather category, 60% responded in the affirmative.
How does price factor in consumer decisions? When asked, “What would you expect to pay for a good quality fabric reclining chair?”, 52.94% responded with $300 to $599, and 29.41% with $600 to $999. Just over 11% considered $1,000 to $1,999 to be a fair price, and 5.88% in the less than $300 price range.
Cost expectations were just slightly higher for leather, with 46.67% expecting to pay $600 to $999 for a reclining chair and 26.67% in the $300 to $599 range. Just over 13% would pay less than $300, and 6.67% were in the $1,000 to $1,999 price range. The same percentage—6.67%—expected to pay more than $2,000 for a quality leather recliner.
June 14,
2018 by HFBusiness Staff in Business Strategy, Industry
The company has a history of providing value to the customer, and Price is continuing that value by adding new product categories and recognizing the importance of e-commerce in today’s marketplace.
Price recently spoke with Home Furnishings Business about growth strategies, the challenges faced by home furnishings retailers, and what consumers are looking for.
Home Furnishings Business: The Houston market represents $825 million in the upper/premium price point, or about 33 percent of the total market. While the Houston market is more affluent than the rest of the nation, pressure still exists on the better segment. What is a possible strategy for Star Furniture?
Bob Price: Our merchandise strategy is simple and straightforward—build assortments that are balanced by style and price point. Price points cover good, better, and best pricing. Additionally, the products represent the best value at each price point.
Today, there is pressure and competition in each pricing category. The strategy also places the highest priority on quality, as well as being in-stock on the items that are in the assortment. Our goal is that every customer who appreciates style, regardless of income or type of home, can find furniture they want at Star Furniture.
HFB: Your background is in providing significant value for the consumer. Will elements of that strategy appear in the Star game plan?
Price: Yes, certainly. But, to be fair, providing value for the consumer has been a key strategy at Star Furniture for over 100 years.
Many in our industry concentrate on value at certain price points. We believe the objective is to provide value in every item, regardless of price point. Price is certainly a component of the value equation, but value also includes quality, scale, style, and service.
HFB: Out of the gate, you were challenged with the hurricane. For a seasoned management team, this was a challenge. As a new leader, was it a time to bond?
Price: Bonding may not be the right word to describe what happened with the challenges Star Furniture experienced from Hurricane Harvey. I can tell you that as a company, there was a single focused effort to do the right thing for the community, the customers, and our associates. If working together as a team is bonding, then yes it was.
HFB: There are several retailers in your market, some local (Gallery Furniture); others regional (Rooms To Go). Is the strategy for everyone to stay in their lanes?
Price: Our strategy is a growth strategy. While we are always respectfully aware of the competitive realities in all markets, our number one objective is to better serve the customer.
The fact is that we must focus on the customer, while at the same time, be aware of the strategies of other furniture retailers. We need to grow our sales and grow our brand. If we constantly strive to improve our assortment, improve the delivery of furniture, and most importantly, improve the customer’s experience in our stores and on our website, we can achieve our strategy of growth.
HFB: While the home furnishings sector is growing nicely compared to other retail sectors, furniture stores are not achieving the same growth. Are there any plans to add other product categories (i.e. top of the bed) to the store assortment?
Price: Yes. We plan to add more style categories, as well as new merchandise categories. The first new merchandise category we are planning to add is a complete assortment of window product. This assortment will include hard window and soft window. There are several other new product categories that are in the planning stages.
HFB: E-commerce is obviously a future consideration. With Star’s sister companies a significant demographic presence would be possible. What is Star’s forward look on e-commerce?
Price: E-commerce most certainly plays a huge role in our growth strategy. Our website is one of the ways we can tell the customer who we are and what merchandise we carry. A viable, competitive website also provides the customer with options. We realize some customers want to buy from a store, others want to buy online and perhaps most important, a lot of customers want to pre-shop online and then come to a store. We face the same challenge online as we do in stores and that’s to address improving the customer experience. As the customer continues to change, we have to change our strategies, including how we present our assortment online.
HFB: What do you think are some of the biggest challenges faced by home furnishings retailers today?
Price: People—recruiting, hiring, and maintaining a best-in-class management team, buying team, selling team, and support team; in-stock/inventory levels—having the merchandise the customers want to buy on hand and ready to deliver; logistics—flowing the inventory needed; having the right amount on hand/not too much and not too little; differentiation—what will insure that when the customer is deciding where to shop, they choose Star Furniture; vendor partnerships—we have developed some great partnerships with our vendors. Even with that, there is still opportunity in having a mutually beneficial relationship that boils down to simply listening to what each other’s needs are.
HFB: How has your past experience in merchandising helped in your role as a CEO?
Price: Personally, I know I have been blessed to have worked for some exceptional CEOs and many great merchants during my life. I have also been blessed to have learned from a lot of people I have worked with. Many of these people have served as role models, whether they are aware they were or not. Today, not one day goes by when I don’t learn something from someone who I work with at Star Furniture.
HFB: What attracted you to the job at Star Furniture?
Price: The opportunity to significantly help grow a business, the opportunity to be a part of the Berkshire Hathaway company, and maybe most important, the opportunity to spend my day with some very talented and special people who come to work with the same one single mission—to grow Star Furniture.
HFB: What opportunities for growth do you see for the home furnishings retailers?
Price: All retailers, including home furniture retailers, have the same number one opportunity—to better serve the customer. This opportunity never goes away in retail. The customer experience gets a lot of conversation. But more times than not, that’s about all.
Improving the customer experience is a mission that is never complete. It’s something we have do every day for the rest of our life. It’s interesting to see how the results differ when a retailer builds a business that addresses what the customer wants and needs as opposed to a more selfish motive that addresses how the company places the priority on doing what the company wants to do.
Other opportunities for growth include:
- Respecting the customer’s time—how do we help them purchase what they want faster
- One-stop shopping for the home—how many products that the customer uses in their home can be purchased in one location; this opportunity is both for a store and certainly for online
- Training—qualified and knowledgeable selling associates and websites that have all the product information the customer wants
- Excitement—a store environment that is colorful, fun, easy to shop, and [up to date]
HFB: Are you seeing any trends in what consumers are looking for, such as sustainability, customization, etc.?
Price: Number one is customization. Customization has been a consistent and evolving trend over the last decade. I think customization will continue to be even more important. For example, offering a sofa in only one color is really a merchandise decision made with the retailer in mind. A sofa that gives the customer the option, at the same price, to choose from three other stocked colors, is a merchandise decision made with the customer in mind. This would be good example of customization. Another example that supports customization is offering custom order options. The custom order category continues to grow, particularly when the product is available domestically.
Casualization is another trend. It supports having furniture you live in, not just look at. Store presentations are more casual today, dress codes are more casual today, and with a possible exception of bedroom, casual continues to grow and formal continues to decline.
One more trend that seems to continue to grow is in the mattress category. Comfort and better health are the drivers for this growth area. Selling systems and floor presentations continue to be more focused on comfort level rather than price. Demand for related product such as adjustable beds and bed pillows are also growing and seems to get more important every day.
May 10,
2018 by HFBusiness Staff in Business Strategy, Industry
Today, if someone approached you at a gas station, your reaction would be fear; it must be a car-jacking. This human interaction has left the retail experience. Is gas less expensive? Probably not.
We should not dismiss the cost in that selling expenses currently average 9.38% of sales for traditional retailers, a significant amount compared to other consumer goods retailers.
Traditional department stores are struggling to survive. The Bon-Ton stores are in liquidation and the other major department stores are on deathwatch. Many things contributed to their demise and it was not their home furnishings category. The appearance of the discount department stores, with less service, but the appearance of lower prices, shifted the consumer traffic. Some will argue the service left first and the consumer followed. There is some truth in that, as the department stores struggled with finding competent sales associates, so service did deteriorate. This struggle is there today (see Statistically Speaking in this issue).
The home furnishings stores are growing faster than their cousins, the furniture stores, for many reasons. However, the retail sales associates in the home furnishing stores do not have the same job descriptions as their counterpart in furniture stores. Whether we want to recognize it or not, the discount department stores, such as Target and Big Lots, are becoming the strategic threat.
It may be time to let go of our most treasured concept of the retail sales associate and the UPs system.
We should take it slowly and first, begin with the UPs system. Today, retailers are spending thousands of dollars each month to make the system fair and measurable. Facial recognition cannot tell the retailer how the consumer wants to be sold. It can only tell them it’s the mailman.
Let’s focus the attention on the consumer and let a “natural selection” process happen, as our retail sales associates approach the customer. From Impact Consulting research, certain retail sales associates sell older/younger lifestyle, and so forth better than others. Forcing the matches can be detrimental.
Analyze how successful your sales associate is with different consumer characteristics and coach improvement. While you are doing that, I am working on the ultimate solution.
May 10,
2018 by HFBusiness Staff in Business Strategy, Industry
But life doesn’t always imitate art. The stores have been built, the doors are open, sales associates are waiting … all that’s missing is the shoppers. Furniture retailers have built it, but consumers have failed to do their part.
Fortunately, though, furniture stores haven’t overbuilt, either because of strategic insight or lack of capital. Destination stores for furniture retailers are fast becoming a fading memory, as time-strapped consumers elect to allocate their free time to soccer games and family pursuits. In fact, 82% of consumers drove less than 25 miles for their last home furnishings purchases.
This trend—consumers driving fewer miles to buy furniture—has forced retailers to locate their stores in more expensive shopping areas, eliminating real estate accumulation as a strategy for building wealth.
Old best practices have been modified to evaluate advertising expenditure and occupancy as one factor, recognizing that a good location offsets the need for additional advertising—a concept that some retailers have trouble accepting.
So where does sales management begin? It’s often difficult to define. Does it occur when the consumer walks through the door, or is it when they visit the retailer’s digital store—its website?
We know, from FurnitureCore research, that 72% of consumers visit websites for research before visiting the retail store, with 49% first visiting stores before going to a retailer’s website.
Where the frustration lies for traditional retailers is the difference between unique consumers visiting their site and traffic into their store, often between 70% and 80%.
The question must be: Where did the consumer go?
Several vendors are addressing this question by engaging website visitors to obtain contact information.
PERQ intercepts the visitor with a message offering a drawing for a product or an offer of shopping assistance. The risk of irritating the consumer is measured by an increased bounce-back from the retailer’s site.
“PERQ is an AI-based online guided shopping solution that, when applied to a retailer’s website, turns their website into their best salesperson,” says Scott Hill, co-founder and executive chairman of PERQ. “This can be done with any website and requires no work from the retailer. It’s easy to implement with just a simple line of code.”
The resulting leads, if followed up, could drive traffic to the retail store. According to Hill, the results for retailers have been significant.
“When someone engages with our technology, the average time on site lift is three times,” says Hill. “Most of our customers see visitors actually spending an average of 12-14 minutes. When a retailer’s website is helpful, consumers are more likely to stay on site than head to a competitor’s site.”
This is a significant improvement over the industry average, as shown below.
“All of the consumer data we capture enables the industry to start leveraging marketing automation options, which further increases lead to sale conversion,” he adds. “Our exclusive partnership with the industry’s only dedicated CRM—Who’s Up—and our ‘Nurture’ automation solution can be used to increase results by creating processes to help take advantage of the website leads.”
According to Impact Consulting (parent company of Home Furnishings Business), with a properly designed website that includes pricing—a necessity—the number of inquiries from consumers have been reduced to 1-2% of the unique visitors.
A microsite on the retailer’s website, DesignCliq offers a friendly approach to intercepting the consumer by offering a style quiz—a less-invasive way of intercepting these invisible shoppers. In fact, the quiz’s questions don’t mention furniture at all.
According to Fred Starr, DesignCliq’s president and founder, of the consumers who engage in the quiz, 95% or more complete it and 40% or more provide contact information. And, most importantly, more than a third make a purchase—sales ticket averages run more than 25% higher due to increased customer loyalty.
“DesignCliq is a unique, highly effective way for the retailer website to bring the consumer and retailer together for a personal shopping/purchasing experience,” says Starr. “The friendly, personalized DesignCliq quizzes give retailers special ways for the retailer to serve customers as the home furnishings expert and establish immediate loyalty.”
At the end of the style quiz, the consumer is presented with a graph showing what styles they like—and what styles they don’t like. “Upon completion of the quiz, we have a page that comes up and asks them to register,” says Starr. “If they do, they get the graph, and some of our retailers offer an incentive [such as a discount or style help from an in-store decorator].”
Starr says that more than 75% of consumers shop for home furnishings without an understanding of style options and their likes and dislikes. “They’re flying blind,” he says. “And overall consumers establish an immediate trust and loyalty with the retailer offering overall home furnishings expertise. Style quizzes give the retailer an especially high level of expertise to respond to this major need.”
A next effort for DesignCliq, Starr says, will be to create a series of email blasts tailored around the consumers’ style preferences. “Maybe once or twice a month mailings where we emphasize their style—if their style is contemporary, we have a contemporary product shown and content about contemporary,” Starr says.
Another method to engage website visitors is a “chat application” that allows the consumer to interact with knowledgeable sales associates about the products they’re seeking. This is an essential requirement for e-commerce retailers, with more than 60% of all sales involving chat. It has proven difficult for the traditional retailer to execute insofar as to whom to assign the responsibility; sales associates often believe these contacts to be poor opportunities to make a sale.
Podium has launched its Podium Webchat, a service that enables businesses to convert website visitors into customers by taking them offline into text messages. According to the company, empowering consumers to text a business from its own website allows both the consumer and the business the flexibility to respond, helping initiate offline, in-person interactions. Podium Webchat’s interface allows business owners to manage and respond to all webchats from a single dashboard, consolidating SMS/text, Google Business Messaging and Facebook Messenger conversations into the Podium Inbox.
Outside distribution channels are impacting sales management. The advent of online design assistance, such as laurelandwolf.com, is interfering with what has traditionally been a service offered by furniture stores.
Commonly called “home plans,” the close rate increased by two times and average tickets by four times when consumers were offered these services. How can the traditional retailer be more proactive?
Moving the consumer from the digital world to the real, brick-and-mortar world is the next step.
Over the last decade, the cost of creating the store visit (ups) has increased, now an average of $25 per UP.
While advertising for all retailers is averaging 5.6% revenue, Impact Consulting believes that is understated and should include 3.4% of the revenue that is the cost for outside financing.
Traffic through the door has only been a conflict between store management and senior management. Overhead reduction has eliminated the receptionist in most stores, which ensured that the mailman did not influence the traffic count.
Impact Consulting still favors self-recording by sales associates, turned over to the sales manager to enter into SalesWorks, an online management tool that has been around for 25 years, and double-checked by a simple door counter.
“While not as sexy as the facial recognition software, the daily discipline of accessing individual sales associate performance is essential,” says Tom Zollar, vice president of retail operations for Impact Consulting.
“By keeping that score on a daily basis for each individual person, and the store, then you know which people are performing at the store average and which people are performing below it,” he says. “It’s a constant improvement process, and as we say so often, data doesn’t give you answers, it just lets you ask better questions.
“The only reason you look at the numbers is so you can track it and improve it, and the only reason you track and report them the way we do is so you know which salesperson you have the best opportunity to improve and which ones will give you the biggest return when you improve them.”
The key overall metric of sales management is revenue per UP, or simply the sales generation for each buying group through the door.
Revenue per UP is a component of close rate and average ticket; focus is needed on both in order to see improvement.
“Revenue per UP is basically a result, and you can’t coach a result,” says Zollar. “Average sale and closing rate are the two things your salespeople basically deliver to you. Revenue per UP becomes a great red flag because it’s basically a very measurable number that tells you how well you’re doing in the store with the traffic you’re advertising.”
Traffic was down more than 7% in 2017, even though industry sales of total home furnishings was up 4.7% and furniture stores was up 1.9%. The reason: increased close rate and increased average tickets from better informed (better researched) consumers.
Who’s Up is a new application to monitor UPs status for retail sales associates.
It's three main components—UP-List, CRM, and analytics—provide automated sales team rotation and customizable workflows, push notifications for salespeople and managers, the ability for salespeople to capture contact information on their smartphones, daily emails to show active deals and scheduled follow-ups, and reports for managers and owners showing the information needed to measure, track, and improve their sales teams’ performance.
“Who’s Up provides valuable analytics that help managers measure and improve the performance of their sales teams. As the Up-List is being used, we capture data on how many UPs, be-backs, and other activities salespeople are taking, and how long they are spending with customers,” says Brad Eaton, co-founder of Who’s Up. “After finishing up with a customer, we ask the salesperson for information on what happened—whether they made the sale, and if not, what was the objection or reason the customer left the store without purchasing.”
This data, says Eaton, is provided to managers and owners in reports that allow them to see how each of their salespeople stacks up against the others. The reports also show how many UPs and be-backs they’re taking, how much time they’re spending with customers, what objections they’re struggling with, and how often they’re getting contact information and following up with customers to make the sale.
“Retailers are seeing happier sales teams with a lot less chaos and disagreements around the rotation system,” says Eaton. “Their conversion rates are improving because they’re armed with the tools to measure and coach. And, they’re more empowered to follow-up and nurture the relationships with customers going through their buying process.”
Another challenge for retailers is attracting good sales associates, especially with low unemployment in many markets and a younger demographic with an aversion to commission sales. However, unemployment projections indicate a decline of retail employment.
A case in point is the recent bankruptcy and liquidation of Bon-Ton stores, which has displaced more than 1,900 experienced furniture sales associates.
The value of a sales manager is something that cannot be overstated. The role—and often the process—is often delegated to the store manager or their assistants.
“When somebody says, ‘I have sales managers, but they sell too,’ or ‘I have a sales manager, but he manages the store and takes care of the operational issues too,’ I say, ‘In order to be a successful salesperson on your floor, you need to work full time, right? In order to be a successful sales manager, don’t you need to work full-time too? Which job is not a full-time job if you have the same person doing both?’” Zollar says. “And the truth of the matter is for most stores that have five or more salespeople, managing them is a full-time job if you want to make a difference.”
The more “other” things you give your sales managers to do, such as taking care of customer service or dealing with other issues in the store, the less likely they are to not spend enough time coaching the sales force, Zollar adds.
A major complaint of consumers is that the retail sales associate pounces on them when they walk in the door. Are we now, with modifications to the retailer’s website, invading the digital store in the same way?
Consumers today want to shop and buy on their terms; they don’t want to be “sold to.” Shelter magazines, at one time, served the purpose of letting the consumer dream about what could be; is the website now the place to not only dream, but conduct research?
Some retailers are eliminating the UP system, allowing the consumer to self-select—a major fear for traditional retailers. But consider: If the consumer has already researched what they want before walking in the door, what is the purpose of the retail sales associate? Maybe just to help them imagine what could be.