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From Home Furnishing Business

Coach's Corner: Don’t Just Tell it...Sell It! Discovering Words that Romance and Enhance Your Merchandise

In my March 2018 issue article entitled, “Words Matter, So Be Careful Which Ones You Choose to Use”, I talked about using stronger words, with a more positive meaning in our selling process to help customers better understand or visualize your message. A good part of the column was spent presenting alternatives to words we commonly use that actually have negative connotations for many of our target customers. One paragraph briefly touched on the concept of using words that help you “romance” your products, to get the customer connected emotionally with them and as a result, desire to own them. Here is what I said:

Sales people historically spend too much time and effort talking about the nuts and bolts of a product as opposed to the things a consumer really wants to know. Most often it is the aesthetics and function of an item that are their main priority. The proof is that the vast majority of people will not buy a product for their home, that they do not like the look or feel of no matter how much you discount it! Therefore, we need to “romance” the product and discuss what it does for the emotional wants of the customer, along with satisfying the practical needs they have. Words like gentle flowing lines, softly contoured back, generously padded arms and luxurious pleated English arm, make you sound professional and add value to the product. In addition, we do not recommend you use the words “special order” or “custom order” when referring to pieces you order specifically for a customer. While we understand what they mean, those are not necessarily positive terms for them. We suggest that you tell customers you will “have one made for them”. This creates emotional ownership of it when you write the order and is much more positive as a concept to most consumers.

While trying to determine what my message to you should be for this issue, which is devoted to Merchandising, I remembered this previous reference to finding better words to use during the selling process. I also recalled how much fun I had and the positive results I experienced during the retail training sessions when the group dove into this concept and tried to come up with glorious ways to describe products and vignettes in the client’s store. Back then we mainly used the staff’s experience as well as shelter/design magazines or books to find better words to use. What I realized, is that today we have much more available to us, including HGTV-type design focused programs, well over one hundred lifestyle centered magazines devoted to the home and of course the biggest reference library ever on the Internet. All of these can help us discover new, more colorful and emotionally powerful words to use in any conversation.

As a result, I decided to offer some ideas to improve your selling vocabulary with more romantic words. Here are some activities that salespeople and store employees can do that will help them find examples of words that will enhance their product presentations to customers.

What the store can do to help staff learn to romance the products they sell:

 

  • Each store vignette should have a name that describes it in colorful, design- relative terms, so the sales staff has a good starting point. These should be created by the buying team with input from staff designers and the rest of the sales team. Many online sites are great at using names to get their style message across. Be descriptive and fun, using phrases like Modern Minimalist, Vintage Elegance or Vivid City Vibes.
  • Saturday morning sales meetings should include a floor walkthrough to present new merchandise and discuss which customers it is targeted to and how to talk about it in the best way possible. Often, I see these presentations being done by staff members or teams that have been assigned by the sales manager. This is a great way to get new products launched and also improve the sales of specialty products and even slower selling vignettes. Sometimes products don’t sell on a floor because salespeople don’t know what to say about them, so give them the right words to use!
  • Train and coach the staff to use the right words to describe products and never to use manufacturer’s model numbers when referring to them. Teach them instead to use the name the manufacturer or store has given each product. I often hear salespeople start a presentation with something like: “this is the 99367, it is one of our best sellers”. The number provides no positive energy for the customer and calling everything you present a “best seller” is not good either. While that used to provide positive feelings for a product to generations past, it no longer carries much weight and can be a negative to some customers. It is just a lazy habit we tend to develop over time just to have something to say. Try something like “many of my more discerning clients have found this exquisite chair to be just what they want”, but only if it is actually true.
  • Bring in outside design trainers to improve your staffs design knowledge and learn new ways to talk about your products. Then have the sales manager follow up by coaching them and making sure they are using what they learned. Set up teams in the store to get inexperienced people working with the more design focused staff members in your store. Have them role play presentations together. Have contests to determine who does the best job each month and celebrate their success. This is a great way to help move your culture from just sales centered to design and sales focused. What the Individual can do to improve their ability to romance the products they sell:
  • There is no doubt that most accredited designers have learned how to use the right words to make a product exciting and memorable for their clients. But I have also seen many regular salespeople who have taken design courses either in person or online, who can also make a product dance in the customers’ eyes with the way they talk about it. It is not where you get the knowledge that matters it is how you use it to help potential clients get emotionally involved with your products and room layout solutions. No doubt, the best way to improve your ability to help customers find answers to their needs and wants for their home, is by gaining design skills and knowledge any way you can. You do not have to be a certified designer to be successful, but it sure doesn’t hurt!
  • Watch HGTV type programs focused on the home. I know you are probably already doing this, but are you really listening and learning or just being entertained? It may seem like a distraction, but I have found that many top salespeople actually take notes while viewing these programs and then work to apply what they heard in the store. It sure seems to work for them, so I recommend you give it a try.
  • Purchase and study books like: The Dictionary of Furniture by Charles Boyce and Furniture Facts by Annette Wagoner. Both of these great reference books are must haves for any furniture professional and are available on Amazon.
  • Review vendor catalogs and websites during your downtime at the store. Most manufacturers today put a good deal of effort into telling you what you need to know about their products. Since their websites are also aimed at your consumers, most do a pretty good job of using words you should study and incorporate into your presentations.
  • The role of the manufactures rep has changed greatly in the last few decades, but the best ones are still a wonderful source of information about their products and how to sell them. Pick their brains for insight into each product and what words they hear people using to describe them.
  • Read and study magazines for the home. These have always been a wonderful resource for learning about up-to-date design terms and trends. Keep them in the store, pass them around and see what catches other people’s attention. Chances are it will grab your customer’s attention too.
  • Visit other stores and websites to learn from the way they present products and how they describe them. Restoration Hardware, Pottery Barn, Wayfair and most of the niche online sites are great at finding new and exciting words to describe their products.
  • Do research online to find new, more colorful and exciting words to use. All I did was Google “words to describe furniture” and I was provided with hundreds of interesting links to try. Many like MyVocabulary.com and describingwords.io gave me great word lists and ones like fieldstonehilldesign.com delivered not only great words, but also basic design education. One thing I have found is that words that indicate what feeling or visual sensation a product or vignette delivers, are the most meaningful for the consumer. So, take some time to expand your vocabulary and upgrade your ability to paint a verbal picture for your customers when talking about your products. It will most certainly improve your sales performance and you may even have a little fun doing it, I know I did!

Statistically Speaking: 2019 Ends a Year of Slow Steady Economic Growth As 2020 Begins on an Optimistic Note

The Chinese trade war has caused many companies to become hesitant and cautious during 2019 with many consumers sharing the same concerns. At press time rumblings of a possible trade war truce could ease some future fears. Forecasters surveyed in November by the National Association of Business Economics put the odds of recession this year at 47%, down from 60% in the spring. This month’s Statistically Speaking will highlight 2019 yearend economic indicators and point to a hopeful 2020.

U.S. Economic Indicators

As shown in Table A, GDP growth continues to be slow but stable – showing increases every quarter in 2019 through Q3, the most recent data at press time. Many indicators slowed in the second quarter of 2019 and declined, most notably U.S. imports and exports, as companies began to grapple with the longer-term repercussions of the tariff wars. Imports slowed in the Q2 2019 – decreasing 2.8%, while exports took a downturn in the third quarter – dropping 5.9%.

But the consumer shrugged off the negative economic news with slow but steady spending, up 2.9% in Q3 2019. Private residential investment, which has consistently fallen in 2018 and through the first half of 2019 found its footing in the third quarter, growing 5.1% Additional economic indicators from the Bureau of Labor Statistics (Figure 1) show the unemployment rate remaining low – fluctuating around 3.6 for most of 2019 and finishing November at 3.5. Average hourly earnings continued to slowly rise each month – increasing from $27.82 in May to $28.29 in November. Prices indexes, both consumer and producer showed virtually no growth. And not surprisingly the U.S. Import Index has showed negative fluctuations due to the ongoing trade war with China, but finished November at 0.2.

Personal Consumer Expenditures

Personal consumption expenditures have maintained growth throughout 2019, despite business’ pulling back over trade war concerns and a slowing global economy. Spending on both services and durable goods have propelled positive growth (Table B). Consumer spending on healthcare and housing increased above 4% every quarter in 2019 compared to 2018. Among the biggest losers in the battle for the consumer dollar are motor vehicles and gasoline which dropped dramatically from 2018, along with clothing and footwear that showed only slight growth.

After a disappointing first quarter in 2019, the second quarter posted good growth in all major spending categories before slowing in the third quarter and through October of Q4 (Table C). At press time, data from Adobe Analytics estimates that the sales for the full weekend (Thanksgiving through Cyber Monday) topped $29 billion, or 20% of total revenue for the full holiday season, up from 19% last year. Many retail tracking analysts reported brick and mortar traffic down and mobile phone shopping significantly up.

As shown in Table D, spending on furniture increased each quarter in 2019 over the same period in 2018. All categories of furnishings and durable household equipment maintained positive growth with the exception of carpets and other floor covering – dropping 0.6% in 2019 Q2 and major household appliances down 0.1% in the first month of Q4 2019.

Furniture and furniture accessories (clocks, lamps, lighting fixtures, and other household decorative items) both outperformed all U.S. durable goods in 2019 (yearto-date through October) with strong growth in the second quarter (Table E). Retail Sales by Home Furnishings Outlet Total U.S. retail sales, including brick and mortar stores and Internet shopping, were up each quarter in 2019 over the previous year’s quarter. Starting out 2019 with just 1.8% growth in the first quarter over 2018, each quarter followed with increases over 3% (Table F).

After increasing by 6.3% in 2018, furniture store sales were down 2.4% in the first quarter of 2019 compared to Q1 2018, while home furnishings store sales also declined 0.9%. Furniture store sales were the first to pick up – increasing 0.4% in Q2 2019. Home furnishings store sales began to show a positive change over 2018 in the third quarter of 2019 – increasing 0.9%. October sales were up 3.9% for furniture stores and 0.6% for home furnishings stores (Table F).

The much higher reported increases in personal consumption expenditures for furniture products and home furnishings emphasize the pinch retail furniture and home furnishings stores are feeling from online retailers and big box stores. E-commerce shopping for all products, including furniture and home furnishings continued double digit growth throughout 2019. Meanwhile, the biggest home furnishings retail loser, electronics and appliances stores, saw sales drop 2.9% to 5.2% every quarter in 2019 compared to 2018.

Table G details the other major types of retail sales categories. Retail sales of electronic shopping and mail-order houses continue to skyrocket as more consumers turn to online shopping. On the flip side, department stores (excluding discount department stores) continue to plummet – down 12.1% in 2019 Q2 and 10.9% in 2019 Q3. Although discount department stores also show negative growth, warehouse clubs and superstores have posted slow growth each quarter in 2019 over the same quarters in 2018.

Consumer Price Index

The Consumer Price Index (CPI) rose last November by 2.1% compared to November 2018, but was down 0.1% versus October of 2019. Many Furniture and Home Furnishings product categories increased their year-overyear prices from Nov. 2018 to Nov. 2019 with the exception of Floor Coverings, Window Coverings and Major Appliances. Exactly how much of this increase is associated with the Chinese tariff trade war is unknown, but portions of the tariff increases have been passed along to the consumer. However, compared to October, month-to-month November CPI growth declined less than 1% in all home furnishings categories, except for Window Coverings which increased slightly and Major Appliances which fell 2.9%. (Table H).

Housing

Although housing inventory in 2019 has been slow to keep up with demand, both new single-family home sales and existing home sales increased from January to October. Existing home sales grew from 4.93 million to 5.46 million, while new single-family home sales increased from 644,000 to 733,000 (Table I).

Housing starts have fluctuated throughout the year – peaking at 1.38 million in August, while completions dipped in September down to 1.14 million before finishing October at 1.26 million. The most promising outlook for 2020 is building permits took a significant leap in October to 1.461 million permits, the highest of 2019 (Table J).

Imports and Exports

Partial import data from the fourth quarter of 2019 showed October imports of furniture and bedding posting the ninth straight year-overyear monthly decline falling 10.5% over October 2018. Compared to the previous September, October one-month imports increased 3.1% primarily due to the surge from Vietnam. Chinese imports of furniture and bedding fell 37.4% over October 2018 and a one-month September to October decline of 6.6%. Outsourcing to Vietnam, Malaysia, Taiwan, Indonesia, and Cambodia has been evident as these countries have increased imports.

Trump announced mid-December of 2019 a “Phase One” deal that shelved new tariffs on $160 billion of Chinese smartphones, electronics and other goods that had been set to take effect before Christmas. He also cut the tariff to 7.5% from 15% on another $120 billion in Chinese goods. As the trade deal moves further along, a future issue will look more closely into the impact this war has had on the furniture industry and what temporary and permanent steps U.S. companies have taken to protect themselves against future wars.

Editors Letter: Have We Become Too Transactional?

In the past year, the Power 50 increased sales by 4.4%, maintaining market share. Expansion occurred in new markets (91 markets) and within markets with new stores (147). What will 2020 bring?

The decision is whether to move forward with haste or is it time to “hunker down” and consolidate gains? The economy, at best, can be described as “choppy.”

We believe the next two years, while not signifi cant growth, will not be a signifi cant downturn either. History is our best guide as can be seen below.

Except for the second term of Barack Obama, election years have experienced growth in Real GDP over the last 20 years. Recessions occurred in 1990, 2001, and 2008-2009, but never in election years, except of 2009, which ended mid-year.

Cover Story: Home Furnishings Business’ 9TH Annual Power 50 Retailers

Growth in mass merchants/discount retailers, such as Target and Big Lots, have shown growth as they discover the contribution of gross margin per square foot of selling space that the furniture product category provides.

The emerging consumers that follow the Baby Boomers are choosing their preferred channel of distribution based upon retail experience off ered. A recent survey by FurnitureCore (the research arm of Home Furnishings Business) separated the choices by age group. As can be seen from the table at left, regional chains are emerging as a preference for the under 45 age group, showing less of a preference for the Internet. It should be stressed that this survey is for furniture purchases over $300. The younger consumer (25-44) was very satisfi ed on a scale of 1-5 with 5 being very positive. The table below divides the response by age group.

Both of these points are contrary to the noise around the decline of traditional retailing. POWER 50 — METHODOLOGY Market share is the most heavily weighted factor determining who makes the list, accounting for 46% 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 is a metropolitan statistical area, micro statistical area, or a rural area. Sales of electronics, appliances, and housewares are not included. To arrive at a list of home furnishings retailers with the strongest online engagement, we measure by 14 separate metrics. Sources include Alexa, Facebook, MOZ, Open SEO, Twitt er, 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 Twitt er 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 fi nal social engagement score.

The fi nal factor in the Power 50 ranking is retail expansion, which accounts for 15% of the total score. Using public records, it measured 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.

What Sells: Did You Do Your Home Work?

The concept of the home office has evolved alongside technology at an increasing rate. Advancements in technology have been added to desks themselves with the popularity of adjustable height desks on the rise. Alongside this, multiport charging stations and lighting can also be found in many of today’s desk solutions. To get to the heart of the conversation, we need to know what today’s consumer wants and needs are for their next home office purchases. After all, their need for these pieces may be just around the corner. According to Remote.co, a resource for businesses exploring the possibility of remote work, 73% of the workforce will be remote workers by 2028 as Millennials and Gen-Z flood the market.

Manufactures aware of this shift have weighed in with their foresight. “The concept of a home office continues to evolve as technology gets more minimalistic, says Stefanie Lucas, Bassett Furniture’s chief merchandising officer. “We find the key to consumers is the ability to be flexible for whatever room you may need. Building your own idea of a home office, rather than to be locked into a heavy, masculine look, is what we believe to be trending today.”

With open floor plans and more work from home, consumers are integrating their spaces for multi-use. Consumer research conducted by FurnitureCore, Inc., the research arm of Home Furnishings Business, showed that of consumers who recently purchased home office furniture, 69.77% define their home office space by the activity performed there while only 30.23% define it by the type of furniture in the room. The same research found that 46.51% of consumers define the primary use of the home office as an area to work when not in a regular office, followed by 39.53% as an area for home and family business, and 13.95% as a space for home-based business.

Lisa Cody, vice president of marketing at Twin Star Home, echoes these findings saying, “Thanks to the fact that more and more companies have embraced the concept of employees working remotely and the impact that is having on products and services that cater to consumers who work from their kitchen or family room, the future of the home office category is very bright.” Looking back on the FurnitureCore industry model, of consumers polled on their home office location, 60.47% reported the home office being in a dedicated space with 39.53% reporting it to be in shared space. We can expect this number to continue to shift along with open floor plans, more minimalistic technology, and increased remote workers.

When working from home, the entertainment area is close at hand if not already in the same room. Just as with home offices, technology shapes this category at accelerated rates. And it’s not just technology, but how the consumer accesses their entertainment today — think streaming services like Netflix or Hulu. Just as we faded away from VHS into DVDs in the early 2000s, we are fading away from DVDs into these services and similar offerings (Disney has recently released its own much anticipated streaming service, Disney+). These services have offered flexibility to consumers. As Tonja Morrison, director of marketing at Hancock & Moore pointed out, “With so many streaming services online, families can go to the movies whenever they like – in their home theater.”

Based on the same FurnitureCore industry model exploring consumer purchases in the home entertainment category, we find that 91.76% of consumers have their entertainment center in their living room or family room! Families certainly have a designated, central location to enjoy their favorite movies and shows together. Other locations included the bedroom at 8.25% and ‘other’ was indicated by 3.09%

Central to the entertainment center is of course the television. How the consumer wishes to display their television impacts the type of entertainment center they will purchase. Largely, consumers wish to place their TV on top of a console with media storage (53.61%) followed by wall mounted TVs (36.08%). As consumers make the switch to consolidated, minimalistic technology, we can expect wall mounted options to rise. Just as important is size of screen. 47.42% of consumers reported that their next TV purchase within a year would be a screen 55” or larger! 25.77% will purchase a screen 37”-52”, and 6.18% will purchase a screen 36” or smaller. The remaining 20.62% do not plan a purchase over the course of a year. Obviously these consumers will be looking at sizable display units to match. Read on to discover popular entertainment center displays and home office solutions that are sure to move off of your retail sales floor.

 

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