Monthly Issue
From Home Furnishing Business
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.
December 18,
2017 by Jane Chero in Business Strategy, Industry
With this issue, we celebrate those retailers that have achieved a significant presence within the markets they serve (market share). Some of these retailers have maintained their position while expanding their market footprint. Others, with just their sheer volume, have a significant national presence without dominating a single market. At the same time, some retailers with revenue under $50 million are dominant in their own markets.
Without a doubt, traditional furniture retailing is under assault from other distribution channels, yet this has always been the case. I am sure that the Sears and Roebuck mail order catalog was a threat to all retailers. More recently, the “1-800” number segment was thought to be the demise of furniture retailing as we knew it. Yes, we will need to change some of our practices and improve our productivity and I am confident we will do so. As I write this, I am leaving for one of our Performance Groups. This group of furniture store owners will share their best ideas and what is working for them. All members will leave with pages of notes to execute when they return home. These retailers will be here in the future.
As I close this annual exercise of determining this year’s Power 50, rest assured the numbers define who is selected- no thumbs on the scale. I look at the 300+ that made the first cut. I know that some of those just below the cut will make it to the cutoff next year. But most importantly, these 300+ represent over $30 billion in sales or approximately 30% of the market share.
Let’s continue into the future- history is on our side.
December 18,
2017 by Jane Chero in Business Strategy, Economic News, Industry
Even though furniture industry sales are projected to grow by a modest 4.1% in 2018, retailers who made the prestigious Power 50 list compiled by Home Furnishings Business undoubtedly will be disappointed if they don’t exceed that growth rate by a wide margin.
It will take an aggressive, play-to-win strategy to beat those industry projections, but that mindset is one of the factors that landed members of the latest Power 50 on the list in the first place.
But the list is not simply based on annual revenue – that’s why a handful of smaller independents made the cut. Instead, it takes into account factors such as market share, expansion, and social engagement.
Market share, in fact, is the most heavily weighted factor determining who makes the list, accounting for 46 percent of the total score. It is determined by dividing the retailer’s estimated sales by the estimated retail sales of furniture and bedding in each of the markets in which the company participates, whether it’s a metropolitan statistical area, micro statistical area, or a rural area. Sales of electronics, appliances and housewares are not included.
The list gives revenue the second most weight, accounting for 20 percent of the score. Revenues are compiled using publicly-available information or HFB estimates.
The factor getting the third most weight – social engagement – is the most complicated, but accounts for 19 percent of the score. It considers social signals, website metrics, and third-party scoring platforms to arrive at a list of home furnishings retailers with the strongest online engagement, as measured by 14 separate metrics.
Sources include Alexa, Facebook, MOZ, OpenSEO, Twitter and Pinterest. On Facebook, for example, the number of “check-ins” and “likes” were among the metrics, as were the number of Twitter followers, Pinterest “pins,” and Google Page Rank, just to name a few.
From that data, we used a basic ranking methodology, assigning a numerical value to the ranked list of each metric. (For example, the retailer with the highest number of Twitter followers received a “1,” and so on.)
Then, we arrived at 14 individual scores calculated for each metric. After dropping the two highest scores to eliminate any outliers, the statistical average of the 12 remaining scores was used to calculate the final social engagement score.
The final factor in the Power 50 ranking is retail expansion, which accounts for 15 percent of the total score. Using public records, it measures store expansion and expansion into new markets.
In addition to the Power 50, HFB compiled separate lists that ranked regional chains, large independents, vertically integrated retailers, and independents with sales of less than $50 million in a single state.
December 18,
2017 by Jane Chero in Business Strategy, Industry
The October issue presented the numbers and offered the observation that the faster growing retail options tend to offer a shopping experience that did not include a traditional sales person. It presented the opinion that many of today’s consumers do not feel the need for one and may actually fear having someone sell them something they don’t want, or interfere with their shopping experience. The solution presented was to make sure we are properly communicating the benefits of working with our staff and promoting our services to the consumer, not just our products. Don’t assume they understand the process, because they do not.
In the November issue, we addressed the fact that even though we know how important our staff can be to the customer, over 40% of those that do choose to shop at a traditional retail store end up leaving without buying because they “did not see what they wanted”. Since it is primarily the sales person’s role to help them find what they want, this is a very concerning number. So, we presented some ideas about the fact that many customers don’t even allow our staff to help them when they enter our store by telling them “I’m just looking”. If you can’t properly open the sale and build trust with the customer, then you have little or no chance to close the sale.
The main issue discussed last month was the fact that so many customers leave our stores saying they did not see what they were looking for. While the greeting is indeed the most important element, there is another critical step in the process that perhaps is not being handled as well as it could be by our sales team. 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. Therefore, to complete this trilogy, we will present some of the elements in the needs analysis and development process we use to train our clients to provide for their customers.
This great observation from Stephen Covey summarizes our approach:
“An effective salesperson first seeks to understand the needs, the concerns and the situation of the customer. The amateur salesperson sells products.”
Defining Needs Analysis
Needs analysis is not qualifying. Qualifying customers is a concept of the past. The idea that there are a few questions whose answers can tell us all we need to know to help a customer has been largely responsible for the dismal performance of our industry for decades. There are no such questions and few of us are trained to qualify anyone. Needs analysis and development, by nature of the very words, is a far more expansive process. The goal of needs analysis and development is to satisfy our primary mission to help our customers understand how to use our products to enhance their quality of life and not just how to buy them. Needs analysis is a mission-driven process and lies at the very heart of being a professional salesperson.
Let’s consider how other professionals work with their clients. For example, how does a good doctor, lawyer or dentist do their job? Their business is referred to as a Practice because it is based on a group of clients that they develop over time by providing successful results to them. These people rely on them for advice, recommendations and results that fit their individual needs/wants. However, the steps they go through are exactly the same as the ones sales professionals must go through.
Certainly they have to greet and establish trust with their prospective clients. Next, they proceed to the critical phase of needs analysis and development to determine what treatments or actions will deliver the best result for their clients. To do that they ask a great deal of questions and do tests or research to make certain that they understand the situation and determine the real needs. Would you become a client of one of these professionals if they merely gave you a quick answer before understanding your problem? It would be like a doctor saying “Take two aspirin and call me if you don’t feel better tomorrow.”
Retail customers need to give a professional sales consultant a lot of information in order to help them solve the issues the consumer brings to the store. In most cases, just like with a doctor, most customers do not know what information the sales person needs to have. So, as with these other professionals, our sales staff must have a method of discovering the real truths. A doctor asks questions about symptoms to determine the root cause of the problem. We also have to ask questions to find out the real needs and wants of our customer.
Our business is driven by the needs of our customers to create beautiful homes. Therefore, the need lies in the home, not in the store. Solutions can be found in the store, but if your staff is ever tempted to think of a customers’ need for some item or a thing in your store – have them STOP and THINK of this basic principle. The need is in the home. In order to understand the need and offer a solution, you must deal with the home first.
Getting Started
In order to get started, it is often helpful to ask some key questions about where the customer is in their buying journey. Getting an idea of what they have already done and seen will help the sales person catch up with them and be more of a partner as they go forward. It can also shorten the discussion time needed by determining if they have actually found something they like or at least have a good picture in their mind of what it could be. The following questions are examples of what has worked well for many such as; “Have you been shopping long?” and “What stores have you visited?” Or, “Have you been online?” “Whose sites have you visited?” and “Did you visit our website?” Other questions to ask are; “Have you seen anything you liked?“ “Where was it?” and “What did it look like? Do you have a picture or can we bring it up on the screen here in the store?”
These questions will help us determine not only where the customer is in the shopping/buying process, but how she is approaching the task of finding new furniture. Many customers already have a good idea of what they want when they enter the store. If we can determine this early in the process, it can make the rest easier, particularly if the customer can give us specific guidance about what she is looking for by showing pictures from a magazine or website. If not, they can often accurately describe it or even give us a brand, style name or number that can be researched. In fact, many may even have gone on your store’s website and selected products to look at prior to visiting your store. The quicker we can find that out, the better.
However, do not assume that they will tell us! Remember the fears and lack of trust they bring with them to the store. We will usually have to find a way to get this information from them, it will not automatically be volunteered until they trust us and we ask them these questions.
Making the Key Needs Analysis Request
After learning where they are in the process and determining if they have already found something they like, no matter what we learn, the best way to really dig into needs analysis is to ask the customer to tell you about their room.
This is the starting point of all product needs analysis. It can only happen after we have earned the right to ask for this information, by virtue of completing a successful greeting and earning a level of trust from the customer regarding not being sold something she doesn’t want or that isn’t right.
This is what is called a “high-gain question”, which means that it is one simple question, which will return a lot of important and useful information to us. In addition, it will reduce the total number of questions we have to ask to get all of the information needed to help this customer achieve her goal.
Sketch the Room
We feel very strongly that the most effective needs analysis tool we have at our disposal is the sketching process. Only by making a visual representation of the room can we share a common understanding of exactly what the problem is and what the customer wants to have happen. You have heard that “a picture is worth a thousand words” and that has certainly been proven true here.
Sketching is a very detailed process previously addressed in the June 2015 issue of HFB in an article titled “Sketch to Build Sales”. I highly recommend that you go to our website (www.hfbusiness.com) and click on the magazine tab and dropdown menu for past issues to review this information so you have a better understanding of this important element of the needs analysis process.
Summary
My intent here has been to give the reader some ideas about the importance of Needs Analysis and offer a few tips about the steps involved. This is by no means a complete dissertation on it, merely something to get you thinking about how it is currently being done in your store and what you might want to do to make it better. Your best solution will always be to bring in an outside, professional trainer that can help your staff improve in this critical area and take better care of your customer’s needs. By the way, if during the interview a trainer doesn’t ask you a lot of very pertinent questions about your situation and what you want to have happen, before they tell you what they will do - don’t hire them!
December 18,
2017 by Jane Chero in Business Strategy, Industry
By the time he was in his mid-20s, his father essentially turned the business over to him, and Schneiderman and his brother, Russ, successfully ran Schneiderman’s Furniture for almost four decades until Russ tragically lost his battle with cancer in 2011.
That was also the year Larry Schneiderman learned he had Parkinson’s Disease, an incurable central nervous system disorder that can include symptoms such as loss of balance, tremors, and general slowness of movement.
But that didn’t stop Schneiderman from running the family furniture business. Until fairly recently, most employees of the six-store chain didn’t even know he had the disease.
He even found time to fulfill one of the items on his “bucket list” by becoming an author. Published in 2014, “Call of the Couch” is a memoir about his family’s “love affair” with the business. The book won a Midwest Book Award in the business/memoirs category, and also was winner of the Axiom Business Award for books in the business category.
His second – and he says final – book, “Nobody Knows,” was launched in October. It’s a novel about a carpet store executive who finds out he has Parkinson’s Disease while trying to straighten out his messy personal life.
Early this year, Schneiderman stepped away from day-to-day oversight of the business and sold Schneiderman’s Furniture to his son, Jacob.
Larry Schneiderman recently spoke with Larry Thomas, senior business editor of Home Furnishings Business, about the new book, his struggles with Parkinson’s Disease, and the current state of the furniture industry.