From Home Furnishing Business
This growth, while positive for the industry, indicated performance was outstanding when compared to other retail sectors. Achieving the status of outstanding growth has caused the financial community to focus on what is happening in home furnishings. This has brought attention to the potential investment opportunities in the industry.
While much attention has been focused on the e-commerce sector of the industry, this juggernaut is slowing, achieving only a 13.1% growth in 2018.
This growth has been in total home furnishing and initially improved the performance of home furnishing stores (those that merchandise the total product) as compared to furniture stores that primarily sell furniture and bedding (70% by definition). However, this comparison has changed with furniture stores regaining the momentum.
But with all this clamoring, many furniture retailers are facing declining traffic and the resulting sales decline. The result is owners challenging their advertising strategy.
Let’s focus on what is the right advertising strategy. By definition, advertising is the attempt to influence the behavior of customers with a persuasive selling message about the product.
First, we must have receptive consumers. Based upon research, the industry has that. As is typical in a good economy, a quarter (29.74%) of the prime furniture purchases are on the sideline. Another 15% have just made a purchase. The remaining fifty percent plus are our targets.
Furniture is on the fringe of satisfying a basic human need. Home furnishings is not a necessity in terms of basic needs, but instead provides comfort and for some consumers, a sense of presence. Insight form FurnitureCore, the research arm of Home Furnishings Business provided some perspective.
From the research, we see that our advertising effort must be a dual focus, communicating prestige as well as practical need. Considering the current advertising effort by the traditional retailers, we skipped these messages and are addressing price and the ability to finance. In fairness to the industry, the manufacturer sector is typically involved in communicating prestige/need in the process of establishing brand. In today’s residential furniture arena there is a lack of established brands. The Broyhill, Thomasville, and Lane brands have been allowed to deteriorate. With consumers under 50 (Generation X) and definitely under 35 (Millennials), there is little brand awareness. There are some exceptions with Brown Jordan, Eckornes, and Stickley who have presence with the more affluent consumer.
Why are brands missing from today’s communication with the consumer? First and most immediate, there is little brand advertising. As an example, in the most recent issue of Southern Living (Feb 2019), there was no furniture advertised even though there were several home decorating articles. In fact, there were few “call outs” to the product shown—a true indication of the magazine publisher’s perspective of industry support. If we go past the immediate and ask manufacturers why the immediate response is lack of margin to support consumer advertising. This addresses a decades old question: Can the industry afford not to advertise directly to the consumers the reasons to buy furniture? Are we destined to race to the bottom in terms of price? When we compare the consumer price index of furniture to all other consumer products, we get the answer as illustrated in the graphic.
Even with bedding included, the industry is declining even in the good economy we have enjoyed since the 2008/2009 comeback. In fact, we are 12 basis points below where we were in 2008.
Should we consider again an industry program to promote furniture as was done in the 80s/90s with Haven Magazine? Where would the industry be if we had cooperated—manufacturers and retailers—in the effort? Only the manufacturer-verticals, such as Ashley and La-Z-Boy, have created a brand presence at the consumer level. Was that the strategy that should have been executed in the manufacturing sector?
It is not to say that the industry does not spend to attract/motivate the consumer. In fact, 56% of the gross margin dollars are spent doing so. However, only a portion is spent in pure advertising. The graphic illustrates.
The statistics shown in the Expenditures graphic is for traditional furniture stores. Obviously, these percentages vary by volume level and individual retailer strategy.
In the last decade, retailers have abandoned a real estate strategy (owned) and leased buildings within established shopping areas with higher occupancy costs. The assumption is that traffic would increase and therefore lower advertising costs. The result is where advertising in total would be 5-6%, now occupancy and advertising combined with the goal being 12-14%. Interestingly, Julius M. Feinblum, president of JMS Real Estate, Inc., a firm that specializes in real estate for the home furnishing industry, cautioned against the use of rigid guidelines, saying each situation is different. The decision to open an additional store should take into consideration the incremental revenue that would absorb existing fixed costs.
New distribution channels into furniture retailing take a different perspective. Lifestyle stores, such as Pottery Barn and Restoration Hardware, while selling all home furnishing products, relies on stores in proximity to the consumer and less on advertising. For this distribution channel, reliance is on more stores and targeted direct mail campaigns and catalogs. The table presents some statistics.
As can be seen from the table, lifestyle stores have 353 stores per thousand households. This compares to a third of that for FurnitureCore’s Top 100 regional chains/large independents/independents. Another approach is the fast growing e-commerce channels. E-tailers, for the most part, eliminated occupancy and minimal expenditure in presentation (except for online chat), a new financial model was created. However, this model has not been successful to date. Even with competitive pricing, the savings are not enough to offset increased delivery/returns expenses. While still less than 20% of total industry sales, the growth rate is significant. Recently, many of the e-commerce major players are exploring brick and mortar.
The major question in furniture retail is what should the message be? The predominance of messaging in traditional retailers is low price – long term financing. Research by FurnitureCore indicates other ways to break through, including product information and humor. A good example of humor is represented in a recent television commercial created for Bernie & Phyl’s in Boston.
Bernie & Phyl’s advertising agency, DeVito/Verde, had to address the iconic advertising platform that had served the retailer for decades to increase awareness.
Ellis Verdi, president of DeVito/Verdi explains. “We do talk about value in the campaign, but we’re doing it in a way that is far more memorable, and doesn’t look like typical category advertising. Humor is effectively used as a means to increase recall in a cluttered environment because like any good joke, we want people to remember it. Otherwise it’s a total waste of money. Secondly, we’re actively seeing more younger people, those who are inclined to appreciate a smart, witty humorous approach. We understand not everyone has a sense of humor because we’ve already received a few letters. They’re affected by the humor, but it seems they all want to talk to someone, which is great because when you speak with them they end up being convinced to visit the store, or at least they’re no longer as upset with the advertising. Also, we picked up increased engagement and interest from those who did find these campaigns funny.”
Verdi continued, “One challenge we had was to convince the owners not to be in their own commercials. It’s extremely difficult to take owners out of their own commercials. But the proof is in the pudding; they have been extremely successful. There is a competitor in Boston called Jordan’s that suffers from the disease of wanting to be the star of the ads. We measure success on comp store sales. Prior to our new campaign we were seeing negatives. Post: we’ve seen significant positive comps for the past several years.” The swing has been “substantial”, according to Verdi, “What made it so effective is that all the campaigns are inexpensive to produce, and allow us to have flexibility in messaging and maintain the disposable quality of production that the rest of the industry has fallen in love with. “
As important as the message is, the media used to communicate. According to FurnitureCore research, television for traditional retailers represents the largest share of advertising expenditure. The graphic illustrates the breakdown.
From a consumer perspective, the internet/email has the most influence on their intent to purchase as can be seen from the following graphic.
While the Internet is important even Wayfair, has turned to print. Bob Sherwin, Wayfair’s head of North American marketing confirms, “The [Wayfair] catalog offers an incredible opportunity to deliver a rich, tactile shopping experience to our customers. We send it to high-value target customers, people who have moved to certain neighborhoods—it’s for targeting prospects as well as existing customers.”
Home Furnishings Business’ custom publishing division has had similar success with their hybrid magalogs (magazine/ catalog format) when combined with consumer targeting. According to Bob George, publisher of Home Furnishings Business, and president of Impact Consulting, the parent company of HFB, a documented purchase of over 9% of a retailer’s customers and 4.5% of profiled customers has been achieved with this high quality content rich piece.
We know the consumer is attracted to digital and there are many vendors jumping on the opportunity. The retail experiences can be classified as extended reality (XR), virtual reality (VR), and augmented reality (AR). Augmented reality in the furniture industry has advanced the furthest.
According to Richard Sexton, chief product officer at MicroD, the focus is AR. “For our industry, let’s settle on AR, since this is the most simplest application and is defined by the mixing of digitized assets and some reflection of reality, such as a customer’s home scene.” Sexton says the biggest challenge right now is the degree of realism not meeting expectations. “You need significant computing power to use high polygon models in a dynamic environment, let’s say, pacing a sofa in a customer’s living room. You can do this on a desktop effectively, but its certainly not mobile, its not dynamic, and its not convenient. You can’t walk around the sofa to see how it looks, but you can generate a high quality rendering of the room scene. If you want to make it a mobile or tablet application, then you sacrifice quality of the image and degree of realism, and end up with a somewhat cartoonish experience due to the low poly count of the models. However, it is dynamic and you don’t need the use of markers to define the room dimensions, this is determined through the application itself.”
While many furniture retailers have announced AR applications over the last year, most have not resonated with the consumer. What does the future hold? Sexton says, “…as computing power continues to escalate and the native AR capabilities continue to evolve with ARKit and arCOre, we will definitely see new apps that better reflect mixed reality, there is no question. Virtual reality will certainly become more meaningful once the hardware is streamlined and the experience less jarring. You can imagine the in-store applications that will evolve with VR.” In the meantime, Sexton says, “hybrid solutions, such as out 2D/3D experience (360 spin with 4k resolution on 2D models) are the ideal gateway experience to bring customers into the 3D world. We will be deploying this platform over the next few months.”
While exciting in concept, neither AR/VR will replace advertising in the short term as a motivator to purchase.
For many, at least initially, they are seeking answers to the remaining questions they have before zeroing in on their final product selection. Often this involves seeing, feeling and touching items to learn if they provide the look, comfort and functionality they seek. But in many cases, it also involves other considerations like financing, pricing, design assistance and other options available to them. In other words, while they can get a pretty good picture of what they want product wise from their research, customers often do not understand our promotions, programs, product selection opportunities and support service offerings. As a result, our sales people are expected to give them answers and explain their options so they can become completely confident with their decision. The problem is that our staff members do not always have these answers readily available, and today’s less patient consumer can be easily turned off when this happens.
This point was driven home to me when a family member recently remarked that every time he shops for furniture, he seems to know more about what is available at the store than the sales person in the store. He explained that he does a great deal of online research using the store’s website before he visits. So, when he gets there, he has maybe two or three items to look at and a few questions to get answered in order to make his decision. The problem is that in his experiences the person who greeted him was either unaware of what was being promoted in the store, not familiar with what was offered on their website or unable to easily explain the pricing and purchasing options.
What hit me about this conversation is that I hear the comment “I knew more than the store’s salesperson” so often, that I believe it probably ranks right up there in the top three or four customer complaints about the in-store retail sales experience. It is certainly part of the reason that so many of us prefer to purchase products we understand and know about on the Internet. Perhaps it is one of the proverbial straws that is breaking the brick and mortar camel’s back?
Truth be told, this is probably not a product knowledge issue. I am pretty sure that most sales people in our stores do know more about the products they carry than their customers. We spend a great deal of time training them about the items we carry, so they should be able to answer product related questions fairly well. So why then do we continue to hear complaints on a regular basis about sales people’s inability to handle their customer’s information needs?
I believe that in many cases, the issue we are dealing with relates to other things our staff members should be able to help with and also their ability to see things from the customers point of view, so they better understand the questions being asked. Today I think we have many cases of sales person confusion or unfamiliarity with their store’s website, promotions, financing programs and other offerings. While this is initially a training opportunity, it is the ongoing communication and coaching effort that I see as the problem. We often make assumptions that our people understand what we offer in these areas and know how to properly explain or sell the benefits available to the customer. In many cases we let them use their own words instead of helping them learn the best way to say something.
In addition, we are constantly changing our programs/promotions, often assuming they are keeping up with it all. The worst cases are when a retailer does not “trust” their staff with prior knowledge about upcoming promotions or programs, so they don’t tell them about what is happening until the last minute, leaving little time to prepare. Some forget to formally tell them at all, merely posting a copy of the ad. As a result, we hear many comments from customers about sales people not knowing what is on promotion or what is being featured on the store’s websites. This is one of the biggest mistakes a retailer could make. Not only do we look like fools, but it only adds to the consumer’s natural distrust they feel towards our industry. This is reflected by the fact that retail sales people finished second to last on a recent “Occupational Trust Level Report”. Nurses were in first place, which is a good thing!
If we are not communicating with or educating our staff members about our programs, on a timely basis, how can we expect them to consistently use them to help our customers make informed decisions? Do we just assume they can figure it all out and maximize their results with them? Unfortunately, I think many retailers do that either by accident or a lack of accountability with their store management. Some may think it is getting done, when in reality, it is not happening consistently, if at all.
Remember that Advertising + Merchandising + Selling Effort = Sales Success, so tying them all together with a consistent communication program is critical. Here are some points to consider when putting together your sales communication program.
- Your message needs to be delivered on a consistent basis by your management team. This should include monthly sessions to review results, celebrate success and preview the next month and weekly update meetings to inform, prepare and excite your staff for every event/program/promotion the store is running.
- Here is a list of Advertising related considerations for this process:
- What is the theme(s) for the month or individual week? This is particularly important for major events like anniversary or warehouse clearance sales. Share it with your people so they can get excited about it and be ready.
- What are the events each week? If the promotion involves different segments or advertising vehicles, makes sure the staff knows about them.
- Are there any pre-events or special events like private sales? Will there be an invitation only type presale or some other limited offering to current or targeted customers?
- How will they be advertised or promoted? Your staff should be aware of what ads will be run, when they will hit and who they are going to. If possible, they should have copies of them to review prior to them hitting the media.
- What POS will be used? Most events, particularly big ones have supporting tags, posters, signs or other POS items to keep the theme throughout the store. Preview these items to the staff so they know where they are and how to use them.
- Here is a list of Merchandising related considerations for this process:
- What products will be featured in the promotion? Inform the staff which products or product lines will be featured and any special information about them to help build excitement.
- Best price? Let them know how the pricing works out and what are the ways they should consider selling up or down from the featured items. Is there a related good-better-best story they need to be aware of to help their customers select the proper product for their wants and needs?
- Competitive Situations? Let them know how the featured products are positioned in the market place so they have no surprises.
- Stock status and any systems or logistics considerations? Inform the staff about the in-stock situation for featured products and any other supply or delivery information they will need.
- Below is a list of Sales related considerations for this process:
- What is the Salespersons role and how should they work with consumers – what are the “hooks”? Don’t assume that your sales people know how to best use the tools that every promotion gives them. Each one has its own set of reasons for the customer to want to buy now and from you. Make these clear and use role play if possible, to help them learn how to use them in the selling process.
- Financing programs? Again, if the promotion includes long term financing as a reason to buy now or to buy more now, make sure your people understand what is being offered and how you want them to use it to maximize their results.
- Delivery and Follow Up recommendations? If there are any delivery or other considerations tied into the promotion, make certain they are clearly covered with the staff and understood.
Additional considerations to keep in mind with your staff:
- Do they know what to say? Don’t just let them figure it out themselves. Give them the words you want them to use and coach them so they do.
- Train your people on how to best use your website so they understand it and can help their customers use it. I am amazed by how many sales people do not take the time to study their store’s website and learn how to use it. As a result, their customers often know it better than they do. I recommend you have monthly sessions dedicated to reviewing and working with your website, so they know it as well as they know the showroom, because that is what it is!
- Have your website easily available throughout the store, so your sales people and customers can work together using it as a tool. This includes having Wi-Fi available for your customers and sales people to use in the store. If you have put the thought and investment into your site that you should, then it is one of the greatest selling tools you have available. Make sure it is used as often as possible.
- Keep your staff aware of what is on your site on a weekly basis so that they are not surprised by anything the customer finds on it. Your weekly sales meetings should always have a five-minute website update so they always know what is happening on the site.
This is by no means a complete list of the things you need to make sure you are communicating to your staff on a regular basis. However, it is a good starting point. And, if you pick up a few tips from it to help you expand your list then we are on our way to satisfying more customers, or at least not scaring off as many.
America has long been a nation of homeowners believing that owning a home versus renting is the best economic decision and a goal most households should strive to attain. But for many in pursuit of homeownership and those already there, the Great Recession forced the goal aside and renting became the viable alternative. Now safely out of the recession, many renters are choosing to stay put or better yet, keep the freedom to move. Renter-occupied housing is at its highest level in almost 50 years (36.2 percent of households) and up 9.3 percent 2010 to 2017. This compares to owner-occupied housing only increasing by 2.4 percent (Table A).
According to an October 2018 survey from Freddie Mac, 78 percent of renters believe renting is more affordable than owning. Across all generations, reasons for renting include housing shortages, rising home prices, remaining fear after the last market crash, ability to pick up and move and a desire to live closer to work. Using data from the U.S. Census Bureau’s 2017 American Community Survey published in the Fall of 2018, Statistically Speaking details the changing profiles of the renter versus the homeowner.
With a large portion of the population aging to 65 and over, American household demographics have shifted in the seven years 2010 to 2017 since the last recession. The 65 plus age range now comprises over 25 percent of households in the United States (Table B). Ages 25 to 64 that made up 75 percent of households in 2010 have dropped to 70.8 percent in 2017.
Total household formations increased only 4.8 percent since 2010 as Millennials have been slow to enter the housing market, either as renters or owners. At the same time, as Baby Boomers have poured into the older age groups, the 65 and over group jumped 23.4 percent. Household formations for ages 25 to 44 slowed to a negative growth down 1.0 percent from 2010 to 2017, while ages 45 to 64 increased slightly by 1.4 percent (Table C).
For the furniture and home furnishings industry, as the Baby Boomers continue to age, their purchasing power will lessen significantly over the next 10 years. Table D shows the median household income of each age group in 2017. Not surprisingly, ages 45 to 64 have the highest median household income at $72,443, while ages 25 to 44 is 9 percent less at $65,879. The aging Boomers over 65 have median household incomes of $43,735.
Owner-occupied vs. Renter-occupied
As expected, renter-occupied housing leans toward younger age groups with 8.6 of all renters under the age of 25. This includes many rentals across college campuses and young adults just starting out. Discounting these young renters and looking only at the over 25 age groups, apartment rentals are increasingly growing into a broader mix of old and young. For households age 25 years and older in 2017, about half of all renters were age 45 and over. This compares to 75 percent of owner-occupied housing (Table E).
Comparing the change in number of owner-occupied units to renter-occupied units over seven years, renter households went from 34.6 percent of total housing units to 36.1 percent - increasing 3.7 million units from 39.7 million to 43.4 million households (Table F).
As would be expected, families contribute to the higher average number of occupants in owner-occupied households, but the difference is not significant compared to renter units. Owner-occupied units in 2017 had an average household size of 2.72 persons, while renters had a household size of 2.51. As more single people have turned to renting, the majority of homeownership is narrowing to mainly families. (Table G).
As would be expected renter households have a greater tendency to contain only one occupant compared to owner-occupied units, 37.1 percent of renters versus 22.7 percent of owners. But over 35 percent of both renter and owner owned units have three or more occupants (Table H).
One of the biggest differences in renter and owner households is that owner-owned residences are primarily married couple families, 60.1 percent compared to 27 percent of renter housing. Likewise, almost half (48.2 percent) of renter households are nonfamily and unrelated individuals compared to only 26.8 percent of owner residences (Table I).
In addition to increasingly limited new housing construction, the housing industry is facing a future where over half of all owner and renter occupied units are approaching 40 years old. Between 2000 and 2009 new housing construction began to diminish and completely stall due to the market crash. Although renter-occupied units were in high demand during and after the Great Recession, apartment construction failed to pick up and was only 10.9 percent of all units during the same time period. Since the recession ended in 2009, only 5.1 percent of all owner-occupied homes and 5.6 percent of all renter units have been newly built (Table J).
The combination of Millennials slow to form households (renting or buying) and Boomers aging rapidly has significant implications on the furniture industry going forward. With the job market improvements, it appears that though they have a lot of catching up to do, Millennials are poised to make their mark on the home furnishings industry just as the Baby Boomers will be lessening their hold over the next 10 years. There are some signs many will retreat to the suburbs like their parents to own homes and raise families. Others, whether or not they delay marriage, have grown to like the freedom and convenience of apartment living and are a growing segment. Both groups will challenge the marketing efforts of retailers in the future.
In an upcoming article of Statistically Speaking we will expand on the renter/owner profile and look at the economics of these renters and homeowners and how much they are really paying in monthly costs compared to their incomes.
It is hard to ignore the closing of retailers that have been in business for decades and manufacturer brands once stalwarts now liquidating.
Home Furnishings Business, with its parent company Impact Consulting and sister company FurnitureCore.com, has the same concerns in that our future is imbedded with the furniture industry. Reflecting on our masthead “strategy for the furniture industry,” we need to deliver on our promise.
The furniture industry is not an early adopter in terms of forward strategy. In fact, as other retailers are abandoning a “store on every corner,” furniture retailers are expanding their market footprint, rejecting the concept of furniture as a destination retailer. The need for gross margin per square foot of selling space will become a key performance indicator with this strategy. Likewise, furniture retailers are moving to smaller footprints with less selection (brands) and unique retail experiences. This is similar to the restaurant industry where unique upscale restaurants were replaced by mid-priced chains, such as Applebee’s and Outback. As with the fast-food chains trend of two decades ago, such as McDonald’s and Burger King, they are replacing the mom and pop burger joints, trading uniqueness and quality for dependability and consistency. The results are good food, but not great food.
Now, twenty years later, consumers are seeking out the unique burger joints and steakhouses, willing to pay more for a great meal. Creating this experience is the entrepreneurs will to replace efficiency with the unpredictable “farm to table” concept. Maybe furniture retailers and manufacturers could speed the repeat evolution and create excitement in product and the retail environment in which it is presented.
The focus of this issue is merchandising, the functional area of the industry responsible for creating the product and experience that would eliminate the boredom in the industry. Without better merchandising, the industry will continue to sell 50+% of the consumers with incomes over $100k sofas below $399.
If current retailers and manufacturers don’t, the market will correct itself with entrepreneurs emerging to excite the consumers.
“Planning involved in marketing the right MERCHANDISE at the right PRICE at the right TIME in the right QUANTITIES and the right MESSAGE.” – American Marketing Association
THE RIGHT MERCHANDISE
The manufacturer’s merchandiser is not typically the product designer. However, many entrepreneurs in the furniture industry have a background in furniture design. Often this becomes a challenge as the company becomes a success and grows. Bill Becker, founder, CEO and Design Director of BDI, has faced this dilemma. “I founded BDI with the belief that great design has the potential to enhance the way people live and work. Design-driven entrepreneurs are most successful when they lead with their strength while surrounding themselves with individuals who bring varied areas of expertise to the organization. While I come to work every day passionate about design, I realize that in order to lead a successful organization, I must have equally passionate people in all roles— from operators, to marketing, to customer service. There’s a true excitement for an entrepreneur in building an organization that consists of a diverse team from a variety of disciplines. I feel we have successfully developed a team that shares our company’s passion for design and innovation, while bringing a wealth of knowledge and experience to the table.”
However, the merchandiser must give direction to the product designer. Today, as the consumer has moved from a preference, to a distinct style, to a more eclectic look or lifestyle, defining this direction can be a challenge.
In recent research confined to urban areas (markets $100M+ in furniture sales) in order to capture more diversity in style direction, we found some interesting perspectives.
It should be noted that the term “transitional” was not used because it is an industry term that has allowed the consumer to accept the confusion of no style. We have been “transitioning” for 20 years.
This lack of definition has created a problem at the retail level when the consumer cannot communicate their style. In fact, in the just completed research, only visuals were used.
There is a distinct dividing line between the younger furniture purchaser (<45 age) and the older furniture purchaser (>45 age). The graphic below provides the comparison.
As would be expected, the younger consumer has embraced contemporary and midcentury. However, the merchandiser must anticipate using the overused quote, “know where the puck is going, not where the puck is now.”
In the same research conducted by FurnitureCore, the research arm of Home Furnishings Business, the question was asked about the consumers’ “dream style.” The following presents the findings.
Looking to the future, we see the driving force will be those consumers under 45.
The traditional furniture industry is in a race to the bottom in terms of price. The pending tariff (25%) if implemented will increase prices by necessity, but if the industry follows the past tendency, it will begin to find ways to reduce prices—unfortunately at the expense of quality/design.
The manufacturing merchandiser must create product at price points that the retail merchandiser is seeking to maximize sales to the consumer. This collaboration between manufacturer and retailer is critical to success. Unfortunately, much is missing from this collaboration. The result is the race to the bottom.
Comparing the retailer and manufacturer’s selling (not list MSRP) price point to the industry is critical. FurnitureCore shared the current (2018 YTD Q3) information for standard sofa / fabric / independent retail chain.
Currently, the industry is underselling this consumer based upon the percentage of units sold to households with incomes over $100k. From FurnitureCore, we received the following data for 2018.
As can be seen from the table, when over 50% of all fabric sold under $399 is purchased by consumers with household income over $100k, the industry has a marketing problem. We cannot continue to excuse those sofas are for the playroom in the basement.
RIGHT MARKETING MATERIAL
The once elaborate catalogs produced by the manufacturers have all but disappeared. Unfortunately, timely photography has as well. The marketing material provided by the manufacturer provided inspiration for the marketing to the consumer. Did the inspirational spreads in Southern Living drive the success of Broyhill’s Fontana or Bob Timberlake’s Lifestyle Rustic Collections?
Currently, messaging from traditional retailers are focused on price and financing with an assortment of product shots. In comparison, lifestyle retailers such as Restoration Hardware and Pottery Barn sell the dream of a beautiful home.
The current dominant furniture purchasers is Generation X (35-45 age group) which is motivated by visual images, but as important as the look is the information of how to execute. Per FurnitureCore research, printed materials that present the product without the price/financing hype is more effective.
The visual display of the product in furniture merchandising is critical to creating the dream for the consumer. The success of the warehouse display, pioneered by Levitz’s in the seventies, declined as consumer in the nineties wanted to see products displayed in room vignettes. This consumer demand resulted in the creation of manufacturing galleries with space allocated to a specific style/collection.
Today, the consumers’ first step in shopping is research on the internet. Retailers are battling to communicate to the consumers, translating what the consumer likes to a definition of style is a challenge.
An attempt to accomplish this is being pursued by a new computer application, Shoptelligence. According to Denise Mahnick, Co-founder, “Not all shoppers have an impeccable sense of style, and most will readily admit that which is why shoppers crave assistance when furnishing and decorating a room. Shoptelligence makes it easier for shoppers to find inspiration and relevant merchandise that matches their individual tastes and preferences.”
Powered by machine learning algorithms including image and natural language processing, Shoptelligence enhances a retailer’s basic product data by adding over 900 style attributes. The style platform makes it easy for retailers to dynamically and automatically merchandise to the individual shopper in their context while increasing average order value (AOV), site engagement and customer loyalty. The technology automatically and dynamically serves contextual cross-category room décor ensembles, helping retailers deliver a seamless and rewarding shopping experience that boosts a customer’s buying confidence. The technology acts as a trusted style advisor that assists the customer throughout the buying journey and seamlessly connects online inspiration to in-store purchase.
Other applications, such as DesignCliq allow the consumer to pursue to process of self-discovery by defining their lifestyle and the application suggesting their style DNA.
RIGHT INSPIRATION: 2019 DESIGN DIRECTIONS
Each season as buyers and designers strive to predict consumer buying patterns, the role of trend identification and forecasting becomes essential. From color and material to shape and style, knowing what’s on-trend in home and interiors makes it easier to create showroom vignettes consumers can’t pass up. Here’s a look at some of the directions you’ll see more of in the coming year.
Interior design has evolved into a means for homeowners to express their unique point of view. As a form of personal expression, the concept of the ‘well-traveled home’ has emerged. Home furnishings have adopted the role of storytelling as consumers surround themselves with individual pieces reflecting their perspective and experiences. Matched suites of furniture have given way to thoughtfully chosen combinations of distinctive items with a shared connectedness.
No longer are interior spaces limited to only one style such as traditional, cottage, modern or industrial. Instead, the newest looks are multi-layered to create visual appeal. For example, an editorial feature in a current shelter magazine showcases a classic living room primarily furnished in an updated traditional style—punctuated with a modern cocktail table and contemporary artwork. Similarly, global and ethnic design influences are now mainstream and seamlessly blended with vintage and current elements. As consumers curate spaces that reflect their individuality, the high-low effect of combining expensive and inexpensive furnishings has taken root.
Craft + Function
At one end of the spectrum, handmade and artisan-inspired looks have never been more popular. Furniture and accessories reflecting weaving and hand-craftsmanship boast widespread appeal. Textiles featuring chunky textures and visual dimension are giving new life to classic furniture silhouettes while helping homeowners create cozy environments. Looks that mirror embroidered and hand-pieced constructions are also in-demand. The direction dovetails the prominence of earthy furniture design directions celebrating organic shapes and natural materials such as raw woods, roots, and stone. Rich textures, natural imperfections and effortless elegance are all hot themes.
In contrast, the demand for innovation and high-tech furnishings shows no signs of ceasing. While consumers love the appearance of a natural-wood end table, they can’t do without it when it has an integrated USB charger. A stylish accent chair in a shearling-like cover is a statement piece that becomes a must-have upon first touch. Products featuring integrated technology, versatility, and mobility are thriving across all home furnishings categories while comfort is just as essential. Performance fabrics that are durable and easy-care are quickly outpacing traditional options. And, multifunctional furnishings designed for smaller spaces are finding favor with consumers just starting out as well as those downsizing.
Color & Pattern
Whether in wall colors or textiles, a general warming of color continues. Yet, there’s no one singular direction, as illustrated by the forecasts of leading color experts. Pantone announced Living Coral as its 2019 Color of the Year (COY). A peachy shade of orange with a warm undertone, it’s a hue the company says conveys optimism. Metropolitan, a soft neutral grey, is the COY for paint resource Benjamin Moore. Described as: calm, composed and effortlessly sophisticated, the barely-there shade is the epitome of understated. Sherwin-Williams identified Cavern Clay as its COY, a shade mirroring the warm reds emerging in home furnishings. This warm terracotta with elemental roots is described as having the soul of the American Southwest while giving a nod to Mid-century Modern style.
In textiles, the top color stories include warm reds and terracotta, Gen-Z yellow, leafy green and emerald, and indigo—with the blue family maintaining its status as the perennial favorite. Millennial pinks are migrating to a warmer, blush undertone. Fabrics artfully combining warm and cool tones, such as taupe and gray, offer a transitional solution for homeowners who only recently updated their home décor palette to gray. Look for patterns with faded edges, graphic overlays, and metallic highlights. This blurring of elements continues as the definition of what constitutes global, tribal and handcrafted relaxes. While florals haven’t departed, they’ve been reinvented with modern interpretations, multi-layered techniques, and unique colorations. Hand-painted and watercolor looks are trending as well as vintage motifs inspired by antique rugs and animal hides. Fabrics emulating natural stone or marble remain popular while ombre treatments and tonal shading effects add fresh appeal to classic constructions.
Merchandising may be the key to the future success of the traditional industry. With the familiar Wayfair jingle in our ears – Wayfair- we got what you need – we may need to take heed.