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From Home Furnishing Business
January 19,
2018 by Jane Chero in Business Strategy, Industry 
One of the barriers to producing this issue on merchandising has been the niggling thought of how can the product which has been carefully curated to appeal to a targeted consumer be communicated, if the first step in the process is research on the internet?
As an industry, we are beyond asking how the consumer can make a major purchase, such as furniture, without sitting on the sofa, seeing the finishes, testing the dresser’s weight and functionality. Why have we stopped? Because over 20% of the purchases are accomplished sight, unseen.
This may be the problem when over 50% of the sofas sold at retail are under $499. With a low-resolution screen shot on the website, how can the consumer establish value? Should we have not just given up and taken the low-cost approach of eliminating catalogs and world-class collateral, along with advertising in upscale shelter magazines?
Which came first, our abandonment of this advertising medium or the shrinkage of the magazine page count? As I have said before, there are more advertisements for “shower heads” in the shelter magazines than furniture. Also, if furniture is advertised, it is by the lifestyle retailers, such as Restoration Hardware and Pottery Barn. They are the furniture brands of today.
Don’t interpret this as me being against digital. Digital is a great tool to capture the attention of the consumer, but not to entice them to purchase value. From our latest consumer research (HFB – Nov 2017), the next power generation for the furniture industry, Generation X, is looking for quality. They are disgusted with the furniture purchased when they bought their first home. They are questioning the value compared to their parent’s purchases, “while not my style, it is still in great shape.” As an industry, have we failed to inform what constitutes value?
The home furnishings product has lost its panache. Other consumer durables have struggled and resorted to selling price and affordability, relegating the product to commodity status. Only the car manufacturers have continued to create the excitement and are merchandising their product. Maybe, this is the problem – the bulk of the consumer communication is by the retailer, not the manufacturer. Has the gross margin pressure from the offshore production castrated the manufacturers voice?
Merchandising will always be a major factor in the home furnishings process. It is just the message we are trying to communicate. If it is just utilitarian, so be it. For me, I would prefer a message which says, “My home furnishings must communicate who I am and reflect a sense of current style.” This is what the consumer wants, especially those under 45, as the research shows.
January 19,
2018 by Jane Chero in Business Strategy, Industry
From an architectural definition, “keystone” refers to the final piece of an arch which, when put in place, locks all the stones together, allowing the arch to bear a distributed weight. In the furniture industry, merchandising is the keystone to success. The responsibility for merchandising lies with both the supplier and retailer. In certain distribution channels where the entity is both supplier and retailer, it would appear the challenge of merchandising would be simpler. However, the “creative tension” between the two entities contributes to a better solution.
What is this lynch pin of success called merchandising? It sounds straightforward – the selection and presentation of products to a pre-determined group of consumers displayed in such a way that stimulates interest and entices the customer to make a purchase. The reason for pursuing a topic and expanding effort to better understand the specifics is to improve performance. Can improved merchandising improve performance?
In total, compared to other retail sectors, home furnishings did quite well in 2017 and is projected to continue to prosper into the future. In fact, only electronic shopping (Internet) has a better growth rate, as can be seen from the accompanying table.
In direct comparison are the lifestyle stores, which unlike their competitors the furniture stores merchandise a more complete product selection of everything for the home.
The first thought is consumers are purchasing more of the accessory products than furniture which is what is contributing to the performance growth. However, this is not the case.
The following articles explore the various elements of the merchandising function and approaches to better accomplish the task.
TARGETING THE CONSUMER
The tendency of most traditional retailers is to be everything to everybody – with the fear of losing a sale offsetting any consideration of inventory turns or productivity of selling space.
The result is 100,000+ square-foot showrooms built outside the shopping areas frequented by consumers on their weekly trips for pet supplies, groceries, and the other necessities of living. Furniture stores are often destinations unlike their competition – lifestyle stores, which are in the mix of other retailing.
Even with this abundance of space, most traditional retailers fail to satisfy the consumer. As can be seen from the graphic, the major reasons for not making a purchase is “could not find what I was looking for.”
Unfortunately, included in this category are several distribution channels - some winning, some not faring so well. Traditional furniture stores are one of the channels that fall into the latter category. In fact, while the total home furnishings sector has grown, furniture stores have declined. The graphic below shows the decline.
The challenge of satisfying all consumers is the diversity of the United States consumer. The most basic segmentation of the consumer is Age/Income of the households. The graphic illustrates the consumer breakdown.
Complicating this today is the emerging generational divide. Retailing for the past forty years has been dictated by one generation – Baby Boomers, defined as those consumers born after 1946 who were greatly influenced by the disruptive 60s. However, when they settled down they became the most driven generation ever. The sheer size of the population significantly changed the furniture industry. This generation, though still purchasing 37.2% of all furniture sold, is declining in purchasing power.
Retailers today must connect with the emerging generations, while continuing to meet the needs of the Baby Boomers. The table below defines the challenge.
Targeting requires understanding the consumer the retailer is selling or more importantly, the consumer the retailer is NOT selling. The following graphic illustrates (shading) the propensity of an upper/premium traditional furniture store to sell a demographic cell.
Developing a merchandising strategy to attract those consumers who are not being sold is the challenge for the furniture retailer going forward.
The strategy involves not only product selection, but also advertising to communicate to the underperforming demographic.
The understanding of the consumer can be further refined by understanding the psychographics (lifestyle) of the consumer to whom your merchandising strategy is attracting.
On the demographic profile in the figure above, it shows that the Upper/Premium furniture retailer sells all the ages/incomes. The understanding of the psychographics provides a way to attract those consumers who have lower incomes, yet purchase furniture at higher price points.
The accompanying graphic illustrates the psychographic profile of the consumer who purchases from this same upper/premium retailer.
Further complicating this demographic explosion is the changing ethnic mix of the United States.
The U.S. population is still a majority of non-Hispanic Whites, but in the younger age groups, that demographic is changing rapidly. Between 2010 and 2016, the total White population lost 2.6 percentage points falling from 63.9 percent of the population to 61.3 percent.
All other ethnic races gained ground with the Hispanic population gaining 1.1 percent points reaching 15.6 percent of the population.
Baby Boomers (now ages 55 to 74) have dominated consumer spending and the home furnishings industry for decades. Of note is that currently 73.3 percent of all Baby Boomers are non-Hispanic Whites. As they continue to age and the population dwindles, minority groups will gain more influence rapidly.
For Millennials (ages 15 to 34), White, non-Hispanics, have fallen to 55.2 percent of the group, and for the youngest Generation Z (ages 0 to 14) only 50 percent are now considered White.
Over one-third of the White, non-Hispanic, population is over the age of 55 reflecting the massive aging of the Baby Boomers. This compares to only 15.2 percent of the Hispanic and 22 percent of the Black/African American population.
For younger Americans, looking at each ethnic group, 58.2 percent of Hispanics are under the age of 35, compared to 40.2 percent Whites and 52.2 percent Black/ African American.
This is not to say different ethnic backgrounds do not assimilate into US retailing. However, when the customer base of traditional furniture retailers is analyzed, we find there is a failure to attract the emerging population. The graphic below presents the percentage of sales of a major regional retailer compared to the population in the market.
There are many factors which influence the procurement of consumers – product selection, advertising, retail experience – all of which constitute merchandising. Into the future, retailers will need to monitor how well they are serving the consumers in their market.
Merchandising was, at one time, quite simple. Today’s data driven retailers are taking share from traditional retailers with a total focus on the specific consumers they intend to sell.
SELECTING THE PRODUCT
The challenge of merchandising is the selection of products which appeal to the targeted consumer. A combination of price and quality constitutes value. Unfortunately, the latter part of the equation is difficult to communicate to the consumer. The absence of recognized brands leaves the challenge to the retail sales associate. The industry recognizes price segments which define merchandising segment of promotional, middle, upper, and premium. These ranges are presented in the table below.
Unfortunately, consumers do not recognize the factors that differentiate between price points. The result is consumers are under purchasing in relation to their household income.
The graphic illustrates the percentage of traditional fabric sofas purchased by household income.
Regardless of household income, purchases by these merchandise price segments are fairly stable. The graphic illustrates.
Within the price segment, there are shifts influenced by the economy. Currently, the price point distribution for fabric sofas (stationary) peaks at $499, based upon unit sales. The graphic presents the bell-shaped curve.
Most retailers can recite these best-selling sofa frames by units (not $). However, understanding best sellers by generation is not so easy. There is a significant difference here. Targeting products to consumer segments is the next level of merchandising. If Generation X purchases 34% of all furniture, should the retailer’s merchandise assortment reflect that same percentage?
Retailers taking this data to the next level would share this information with their sales associates to guide the consumers through the product presentation process.
Additionally, targeting email and direct mail to these consumers with product that they most likely prefer will improve the effectiveness of advertising.
Product merchandising is more than price and must involve styles. The industry has had a significantly long period without the emergence of a new style which captures the imagination of the consumer. Not since Bob Timberlake has the market responded to a must-have product.
The result is the furniture product becomes a commodity. How do we measure the value of this new commodity? We believe the share of income spent on the category by income quartiles (in the table below) shows the same relative expenditure no matter the income segment.
Yes, the higher the income segment, the more the consumer spends, as illustrated in the table. However, the expenditure is consistent.
January 19,
2018 by Jane Chero in Business Strategy, Industry
The goal of this magazine is to help our readers improve the performance of their business by providing critical information, so they can develop successful strategies for their company. To assist you with that process each year, the January Coach’s Corner article reviews the columns from the last 12 months to give you some ideas about potential retail resolutions you can make to help your business prosper in the coming year.
Most big-time sports teams have an offseason to reflect on what happened last year. Owners evaluate their players, coaches and management based on the results they achieved. They study their game planning and personnel moves to determine how it helped deal with the challenges of the last season. Upon completion they create a plan and set goals within the organization that will help drive positive change and performance improvement! Year-in, year-out, the winningest teams are the ones that do the best job performing this process.
In our business we do not have the luxury of an “offseason” for reflection and planning, but that does not mean we do not need to go through the process as much as a sports team does! It is every bit as important for us as it is for them, since historically the most successful businesses are also the best ones at reflecting, correcting and planning! They are always the most prepared for whatever the economy, the consumers and their competitors can throw at them.
Therefore, sometime in the first few months of each year, after we have gone through the hustle, bustle and distractions of the holiday season, owners, managers and staff need to take time to look back at how they did last year and analyze what caused it to happen. Obviously, you want to replicate or repeat those things that gave you a positive result and replace or rethink those that did not.
Most of you probably take the time to review your sales performance and set goals for performance improvement in that critical area. But do we do enough? A goal is not a plan; it is the result you want the proper execution of your plan to deliver. Many times, we want growth and set targets for it without charting a new path to get to them. Einstein is credited with saying: “Insanity is doing the same thing over and over again and expecting different results.” Therefore, in order to get the desired improvement in results, we need to make changes. Selecting what changes to make is a very critical activity, so many just avoid it.
My hope is to help you with that process. Each month for the past year we have presented you with an opportunity for positive change that will impact the sales side of your business. Each column targeted an area or process that many stores can improve and provided a brief overview of what could be done to make it happen. Looking back at this year’s issues will give you many ideas that could help you grow your business. Therefore, they present a great starting point for your planning process.
I recommend you review those that look interesting to you and select at least three to include in your sales improvement plan for 2018. They are presented in the order they were published, but that might not be how you need to approach them. Best to select those that are most important, then prioritize them based on urgency.
- January 2017 – “Retail Resolutions” – Just like this column, last year’s initial issue listed the previous 12 Coach’s Corner topics. If you have not already gone back and reviewed the 2016 offerings to create your Retail Resolutions for last year, you now have twice as many potential game changing ideas you can look at for this year’s planning process!
- February 2017 – “Average Ticket Delivers Sales and Profit Growth, How to Drive It in 2017” – As managers you can do a fantastic job of bringing in the right customers and having the right product for them, but in the end, it is the sales person that controls your average sale! Ultimately, only they are responsible for this result - it is their skillset and desire to maximize the sale that deliver higher tickets. It is their attitude that influences what they do with each customer and when they stop trying to build the sale. Therefore, you must do all you can to hire, train and coach your staff on how to increase their tickets with each and every customer.
- March 2017 – “Building a Client Base with After the Sale Follow Up” - We feel strongly that creating and managing a professional clientele development process is easily the weakest aspect of most home furnishings retailers selling efforts. I am not talking only about follow-up or sending thank you notes -- many stores do that -- but about a more fundamental paradigm of building long-term relationships with customers through truly caring about them and their needs - then making this a fundamental part of the company culture.
- April 2017 – “Making Friends in Your Market - Who are You and What Do You Stand For?” - Your ability to provide an exciting and helpful in-store shopping experience is certainly an advantage over the internet only retailers. But not every consumer realizes that they need or even want to have that face-to-face interaction. This column touches on some of the other areas of consideration you have that may help you define your store to the potential customers in your market and perhaps attract some of those that are on the fence about visiting a brick and mortar store.
- May 2017 – “Is Your Sales Management Effort Leading Performance Growth or Merely Providing Adult Day-Care?” - The question the title of this article presents is based on what is meant to be a humorous commentary about what a sales manager ends up doing much of the time in most retail stores. Unfortunately, it is often a more accurate depiction of the situation than any business owner would want it to be! The reason is that many managers get so wrapped up in solving the daily issues of their staff that they lose sight of their real role, which is to provide performance leadership that consistently improves the team’s results and actually makes all of their lives better.
- June 2017 – “Using Retail Sales Metrics – Drilling for Dollars” - The ultimate sales performance metric is total sales, everything else rolls up into it. If life was simple, this would be all we need, since it is the main end result we all want to maximize. However, as with any result, in order to understand how we got it, we have to look at its main ingredients and analyze them. Only when the right things are being done in the right order and at the right time, do we generate the consistent, high-performance results we desire.
- July/August 2017 – “Our Mission Represents a Higher Calling Than We Think” - We all know that a successful sales person on our floors can make a very good income. In most cases better than they can in other industries after spending more time and money on additional education. However, even when we show today’s younger applicants what they can earn, many of the ones we really want, turn up their noses and go elsewhere. Why is that? Perhaps it is centered on the fact that they are more interested in “making a great living” than just a good income.
- September 2017 – “Is it Time for an Upgrade?” - Unlike much of the last century, it is not the manufacturers and suppliers pushing retailers to change. Today it is the need to better serve the customer that drives innovation and thus change for all consumer products industries. Why has this happened, what does it mean for us as business people? Let’s take a big picture look at the marketplace dynamics that have caused this to happen and perhaps gain some insight into how we might improve our planning process for the changes we face.
- October 2017 - “Our Competitive Battlefield - the Enemies Are at Our Gate” - The very nature of who we are and what distribution channel we belong to can make our job either easier or harder! This column takes a look at the historic share data from a sales performance trend standpoint, so we can have a better understanding of who the players really are and how our market has evolved in the last couple of decades.
- November 2017 – “Why Many Customers Leave Our Stores Without Buying” - Recent research indicates that as many as 50% of those consumers who shopped a store and left without buying, stated that it was because the store: “Did not have what I was looking for.” Wow, that is an awfully big number. Isn’t it our sales peoples’ job to help our customers find what they are looking for? Let’s take a look at what could be causing this to happen.
- December 2017 – “So Why Else Do Customers Leave Without Buying?” - Once we get the consumer talking to us about why they came in, we need to properly analyze their needs and wants, then develop a solution that fulfills their dream for the room within whatever physical or financial limitations they may have or they will walk out. This column presents the essence of the needs analysis and development process we train our clients to provide for their customers.
If you need any further advice or help with your plan or these “projects”, please feel free to contact me at: tomzollar@impactconsultingservices.com
You can find the Home Furnishing Business digital archive of past issues at: http://furniturecore.com/Default.aspx?tabid=676
January 19,
2018 by Jane Chero in Business Strategy, Industry
Since the end of the Great Recession, mattresses have been Old Reliable for just about anyone selling home furnishings.
Quarter after quarter, the category has registered comfortable single-digit sales increases while continuing its strong track record of profitability. Aided by the souped-up marketing budgets of many vendors, and financial incentives that include everything from local advertising rebates to special sales commissions, it consistently has produced healthy retail margins.
There are no signs that pattern is going to change anytime soon, but that doesn’t mean the category has been free from drama.
Last year began with Tempur Sealy International parting ways with its largest customer, Mattress Firm, in a classic he said/she said divorce. And it ended with Mattress Firm’s parent company, South Africa-based Steinhoff International, facing scrutiny over “accounting irregularities” that led to the resignations of its longtime CEO and board chairman.
And in between, traditional vendors and retailers got worked up about the rapid rise of so-called “bed in a box” producers who sell mattresses online and don’t mind tweaking the noses of traditional players. Mattress Firm got its nose so bent out of shape, in fact, that it sued one of the largest online players, Tuft & Needle, accusing the company of making false and disparaging statements about them in its advertising.
Another big online player, Purple, is about to become a public company (and may already be one by the time you read this). That’s important because, amid charges by traditional vendors that the sales figures tossed around by some online players are wildly exaggerated, it will give everyone a more accurate picture of the company’s finances.
(In presentations to potential investors last fall, Purple has claimed it had sales of more than $50 million in 2016 and was on a “run rate” to hit almost $200 million for 2017.)
But regardless of who’s right, the market share battle is not going to end soon, because a new online player emerges seemingly every week to challenge traditional vendors and retailers. And of course, many traditional vendors have developed their own bed-in-a-box programs, and a few online players are getting their products placed in brick-and-mortar retailers.
That’s a lot of drama for a category marked by slow, steady growth.
According to a proprietary industry model developed by Impact Consulting Services, parent company of Home Furnishings Business, bedding sales in the third quarter of 2017 were 4.8% ahead of the third quarter of 2016. That pushed the industry over the $4 billion mark in the quarter.
The 4.8% third-quarter growth was better than the first two quarters of last year, however. The industry model showed that the second quarter was 3% ahead of the same quarter in 2016, while the first quarter was 3.4% above the opening quarter of 2016.
For the first nine months of 2017, industry sales totaled $11.34 billion, a 3.8% increase from the first nine months of 2016.
Much of the growth for the past decade has been driven by specialty bedding, which essentially is any mattress that’s not an innerspring model. That point was driven home by an Impact Consulting survey of recent mattress buyers, in which roughly 48% of them said their most recent mattress purchase was not an innerspring model.
According to the survey, 40.9% of respondents said they purchased a memory foam mattress, while 4.55% bought an air mattress such as those produced and sold by Sleep Number, and 2.27% said they bought a latex foam model.
And since no respondents admitted to purchasing a waterbed -- yes, a few vendors still make them – that meant the remaining 52.3% bought an innerspring mattress.
While that may seem like bad news for producers of innerspring bedding, it’s not as horrible as it appears since many models classified as “innerspring” now have a combination of specialty foams – some of which are gel infused to help keep the sleeping surface cool -- and innersprings. These hybrid models are some of the top sellers today, despite the difficulty deciding how to label them.
Retailers and manufacturers will be happy to know that a plurality of respondents – 45.5% -- said they bought a king-size mattress. A queen mattress – the size leader in most surveys – finished second in this one with 36.4%. Another 11.4% said they bought a full-size model, and just 6.8% said they bought twin size.
Not surprisingly, bedding specialty stores were the most popular retail locations for a mattress purchase. Some 36.4% said that’s where their most recent purchase was made, while 29.6% said they used a traditional furniture store. In addition, 11.36% each said they bought their mattress at a mass merchant and on the internet, while 6.8% said they used a wholesale club.
Department stores trailed the field with only 4.55%.
And the industry’s long-running message of urging consumers to replace their mattress every eight to 10 years seems to be having an impact, as more than half the respondents (54.6%) said a mattress should be replaced every six to 10 years. Another 27.3% said it should be replaced 11 to 15 years after the purchase, and 11.4% said it should be within five years of the purchase. Only 6.8% said replacement should be in 16 to 20 years.
January 19,
2018 by Jane Chero in Business Strategy, Industry
The early 21st century hasn’t been kind to many of the furniture industry’s legacy brands, but Century Furniture has survived and even thrived despite recessions, a flood of low-cost imports and a tidal wave of e-commerce players.
Now positioned as the largest producer in the high-end segment of the market, the company is run by the third generation of the founding Shuford family – a group that wants to do more than just protect the brand and preserve the assets.
Company president Alex Shuford III says he and his siblings, in fact, are anything but protectionists, and they have the support of their father, Alex Shuford II, who remains Century’s chairman of the board.
The third generation took control of Century in 2013 when Alex II and his children, Nancy Shuford Bledsoe, Comer Shuford Wear, Eliza Shuford Hucks and Alex III acquired the company from CV Industries, another family entity that also owned textile producer Valdese Weavers.
Two years later, the new leadership spearheaded Century’s acquisition of high-end leather upholstery producer Hancock & Moore and upper-end brands Jessica Charles, Randal Allan and Cabot Wrenn. Those companies, along with longtime Century subsidiary Highland House, are now part of the Rock House Farm Family of Brands.
And last year, Century acquired the 200 Steele showroom building in High Point, N.C., where it will open a 40,000-square-foot showroom in April.
Alex Shuford III recently spoke with Larry Thomas, senior business editor of Home Furnishings Business, about the company’s growth strategy, its new showroom, and the challenges of running a family-owned business.
Home Furnishings Business: What is the strategy behind your recent acquisitions? Can we expect to see other acquisitions in the months ahead?
Alex Shuford III: We always keep our eyes on the horizon looking for entities that would be good fits for us. We’re a pretty young ownership and management team, so instead of being protectionists, we’re sort of expansionists. We think the industry needs a little bit of scale, and part of that comes from the regulatory environment…and from the way the operational side of the business works these days.
We think there’s a certain benefit to scale, but then it also tips the other direction if you start to get so big that the people leading the company can’t have their toes in the sawdust. Furniture is such a relationship business that at that point, it tips to the bad side. If you’re really small, you lose the benefits of having enough revenue (to hire) some of these really smart people who keep you from stepping on land mines. If you get too big, then the people who are trying to run it can’t connect with what’s happening at the factory level…and can’t connect on a personal level with the customers. It’s hard for companies in furniture to separate themselves purely on product. A lot of them, like us, separate themselves on a handshake and a history of trust.
One of the things that we’ve kind of make a blood pact in the family is that we’re not turnaround people. We don’t want to buy distressed companies because it takes so much time and energy away from the rest of your business. You might end up fixing the thing you bought, but then you look in the rearview mirror, and the thing you ignored while you were fixing the purchase is now also broken.
HFB: Why was Hancock & Moore a good fit?
Shuford: It’s a company that shares our values. They have a group of people that we feel like we can help take care of, as well as, or even better than previously. And it’s not a direct overlap to a segment of our own business. It would be silly for us to just buy another Century. They are a like-minded company that allows us to have a slightly different distribution, and makes us better in a product category that we’re not in at all or not in it as well as we could be.
Century sells leather, but Hancock and Moore is the undisputed leader in high-end leather. We shored up that wall of the castle pretty well. That’s a way for us to defend our flank in a big way.
When the owners were selling it, I think they were looking for a safe harbor to put their company. That’s very different than somebody that is motivated by just getting the most money for it. It was more important to them to find a good partnership for the people, than it was to just make the most money.
HFB: What was the rationale for buying the 200 Steele building?
Shuford: That was a different type of acquisition. It was more about controlling your own fate. It’s a beautiful building. It gave us an opportunity to pick our neighbors, and have the overall property really be reflective of what we’re trying to do at the product level.
If you can get all your brands into one building, then you can set the tone of how the entertaining will go, what kind of customer you’re going to attract, how the docks are going to operate, how the bathrooms are going to be kept clean, and so on. Our customers at the high end are very style and design-focused individuals, and those components within the housing of your brand matter to them.
Our goal is to get 200 Steele to the point where our customer has enough people to see in there … that they say ‘we commit a day to 200 Steele.’ It’s especially important in the inclement weather markets. (Laughs). We want to make sure there’s enough in the building to make them say they can’t skip it.
HFB: What are some of the key features of Century’s new showroom?
Shuford: It’s about 40,000 square feet, so it’s going to be a little smaller than our previous showroom. But we’re actually kind of excited about that. At Market Square, we had so much space (more than 60,000 square feet) and it was not linear.
Most people come to High Point and schedule their world around one-hour tours. The problem with Century was that during the last 10 minutes of our old one-hour tour, you had to be jogging. So you ended the tour kind of tired and not really remembering what you saw. Now, when people end the tour, they won’t be overfed. They won’t be rushed, we hope.
It used to be that a buyer would come to market, and buy 25 new settings. Now, they might be buying five. So each setting has to do more, and we’ve driven our business around configurability and customization. So instead of just showing yet another bedroom or yet another living room setting, we’re trying to show you a setting and then have a conversation about what it can do in its footprint.
It’s the sales per foot story. It’s the critical number for the modern era. So by shrinking (the showroom), we’re going to be more mindful of doing what we’re talking to our retailers about doing.
HFB: What special challenges does it present when you’re running a successful, well-established family business?
Shuford: The third generation can end up with a couple of characteristics if you’re not careful. They’re either not overly motivated by the monetary success of the business because that piece has been kind of given to them. Or they can get really scared about messing it up.
If they’re not hungry, they get out-maneuvered by more aggressive competitors. And if they get really nervous and scared about messing it up, then they get that decision phobia, and then again, they can get out maneuvered.
I think one of the things we do well as a third generation is that we’re not afraid to risk part of the business. My Dad has been pretty supportive of allowing us to stay entrepreneurial.
My Mom and Dad raised us on a working farm. We grew up mucking stalls and feeding horses after school. And in the summer we were bailing hay. There’s nothing like coming home from school and mucking 20 stalls with a pitchfork. (laughs) So there are no prima donnas in our generation.
HFB: What are your strongest product categories today?
Shuford: Occasional furniture and upholstery are kind of driving the marketplace right now. There are fewer and fewer true case pieces in the home, but there are a lot of tables.
Bedroom and dining room is a little bit slower and a little more price sensitive, and dining room is transforming. The formal dining room is giving way to these multi-purpose rooms. They might have a big table, but if you were to walk into that room anytime of the year except for Thanksgiving or Christmas, you might not see it laid out in the classic dining room way. The table may be against the wall being used as a big console to show off art objects, or it might be used as a big desk where the kids are doing homework.
The other piece of the market that is growing for is the outdoor living room. That has become pretty important to us. It has been a nice piece of growth over the years.
HFB: Is your business with interior designers growing faster than other parts of your business?
Shuford: Over the last six or seven years, it certainly has been an area of strength. But this year, the retail side of our business outpaced the interior design part from a growth standpoint. Both grew, but retail had a little resurgence, which was nice to see. I don’t know what the cause was, frankly. I was a little surprised to see that happen.
The pressure that’s on retail is very acute. Certainly, we’ve had some market share gains based on the programs we have done and some of the turmoil in the vendor ranks. If retailers are a little bit nervous or a little bit apprehensive, sometimes there’s a flight to stability. We may have benefitted from that.