Monthly Issue
From Home Furnishing Business
April 20,
2017 by Jane Chero in Business Strategy, Industry 
By larry Thomas
When it comes to dining at home, every day has become casual Friday.
And it has transformed what was once a niche within the dining room furniture category into the principal driver of business in the category. In fact, when retailers and manufacturers discuss the dining room category these days, it’s essentially all about casual dining.
“Those huge dining room groups just aren’t as important as they used to be. Those sales are few and far between,” said Bob Colin, senior buyer at Indianapolis-based Kittle’s Furniture. “In a lot of houses today, there’s a great room instead of a dining room. It’s much more casual now.”
And today’s casual dining means more counter-height tables, smaller case pieces, few large china cabinets and an incredibly wide array of finishes, textures and styles that didn’t exist in the days when formal dining ruled the kingdom.
“The more transparent the finish, the better,” said Jeb Bassett, senior vice president of Bassett Furniture’s wood division. “There’s not a lot of traditional cherry out there — even though it is available.”
Bassett Furniture, in fact, is so committed to casual dining that it has an entire factory in Martinsville, Va., devoted to the category, which it calls Custom Casual Dining. The company recently spent about $2 million to upgrade the facility, and the new equipment allows for faster drying times for the many custom finishes that are the centerpiece of the program.
But even with the upgrades, Jeb Bassett said business has been so brisk that the factory often operates 50 to 55 hours per week to keep up with demand and meet the company’s commitment to having custom-order furniture in the consumer’s home within 30 days of purchase.
“The more casual looks are more popular today than formal dining,” Bassett said. “Whether it’s a larger home or a smaller home, the living environment has all changed. The American consumer is just more casual.”
Research by Impact Consulting Services, parent company of Home Furnishings Business, bolsters that viewpoint. In a recent survey of consumers who recently purchased dining room furniture, 88% of respondents said they most frequently eat meals in a casual dining area or room, while only 12% said they regularly eat in a formal dining room.
Respondents said they also do a variety of other activities in the dining room or kitchen in addition to eating. The most frequently mentioned activity was simply sitting at the table and talking, which was listed by 28.7% of respondents. Some 17.9% said they watch TV, while 16% said they pay bills and 15.5% said they work on hobbies.
In addition, 12.3% said they do school work at the table, while 9.7% admitted to doing work brought home from the office.
“The open kitchen is taking on a role similar to that of a multi-purpose room, with a lot of other living activities happening in a space that was traditionally reserved for meal preparation and eating,” said Chris Henning, president of iron furniture producer Wesley Allen, which is enjoying success with metal dining sets featuring round tables that are 36 to 48 inches in diameter.
Not surprisingly, the Impact Consulting research showed that 72.8% of recent purchasers said their furniture was purchased for a casual dining area, and only 27.2% said it was for a formal dining room.
Among those who did buy casual, 45.5% said the purchase included a table, while 42.3% said they bought chairs. Only 3.7% said they bought a buffet or sideboard, and the same percentage said their purchase included a china cabinet.
Among formal dining purchasers, 13% said they purchased a buffet or sideboard, while 5% bought a china cabinet. And interestingly, the majority of those same purchasers said they didn’t eat in the formal dining room very often. Some 26.2% of respondents said they dine there less than four times a year, and another 35.2% said they eat there four to 12 times a year. Only 15.4% said they eat there daily.
However, 45% of recent casual dining purchasers said the casual dining area in their home was within the kitchen, while another 6.7% said it was a kitchen bar area with stools or chairs. Some 45.4% said it was an area separate from the kitchen, and only 1.9% said their home didn’t have a casual dining area.
Those trends have caused Wesley Allen and many other producers to target at least a portion of their product line to Millennials, and to a lesser extent, Generation X. In many cases, that means the consumer won’t necessarily buy chairs that match the table, said Diana Zaldivar, vice president of sales and merchandising at International Furniture Direct.
“The mix-and-match trend has been around for quite a while, but it’s finally getting into the mainstream,” Zaldivar said. “We’re no longer requiring our dealers to buy a set. And we’ve designed our tables so that you can use almost any of our chairs with them.”
She said these eclectic purchasers are moving the design needle away from traditional and toward contemporary and transitional looks. “People are looking for something that’s not too traditional but not too crazy, either,” she quipped. “It’s not a look that you will get tired of seeing. It’s a nice contrast that you can live with.”
Zaldivar and other executives agreed with Jeb Bassett that there has been a significant shift away from the traditional darker cherry and oak finishes and into lighter gray and white finishes.
“Gray is growing, but not as the same pace as white,” said Zaldivar. “People just can’t seem to get enough of the white finish.”
The same is true at importer Sunny Designs, where its Bourbon County collection, which features a white finish called French Country, is its top-selling dining group.
“We’ve got that group placed coast to coast. It’s retailing everywhere,” said Gil Sturtzel, Sunny Designs’ vice president of merchandising. “When you get something that you can sell everywhere, you know you’ve done it right.”
Sturtzel said one very popular feature is a storage system for larger dining tables that allows expansion leaves to be placed in felt-lined shelves underneath the table top. And many Millennials, meanwhile, are asking for wine storage racks to go along with their dining tables and chairs.
“I think Millennials are drinking more wine than anybody in the history of the planet,” he quipped. “So, we’re adding wine storage to a lot of our groups.”
At Kittle’s, Colin said the retailer’s key vendors include Canadel, which is popular at middle to upper middle price points because of the almost infinite number of custom finish combinations that are available, and Jofran, which he said is a top-selling line at lower price points because of the quality, styling and value it represents.
“Canadel is extremely hot. Our customer loves the ability to custom order it and get it quick,” Colin said. “They’re willing to pay for quality. They’re willing to pay to customize it.”
However, he said the number-one dining room product currently on Kittle’s floor is Klaussner’s Trisha Yearwood Home line, which he described as being styled well and priced well. “That’s about as formal as we really get,” he said of the Yearwood line.
He noted that Kittle’s also is having success with the Rachael Ray Home dining room line from Legacy Classic. And while he acknowledged he has not always been a huge fan of licensed collections from celebrities, he said it’s hard to argue with the success of both the Trisha Yearwood and Rachael Ray products.
“Some of the celebrity products do make sense on the dining room side,” he said.
Jofran’s Studio 16
Featuring a warm, wire-brushed distressed finish and metal detailing, this stylish group is suitable for a variety of room settings, especially when paired with the genuine leather Avalon dining chairs shown here. The table and four chairs retails for about $1,099.
Caracole’s Open Invitation
A restrained yet elegant silhouette defines this statement-making rectangular mahogany table. The custom designed finish brings out the mahogany grain and offers a subtle gold fleck, which is suspended in the finish. The legs and table apron are finished in a complementary Espresso Bean finish, and a thin Gold Bullion bead delineates the table’s apron. The table is 98 inches long and can be extended to 142 inches.
Bassett’s Artisan Dining
This bench-made domestic product is crafted from Appalachian hardwoods selected for their distinctive wood grains. The hand-planed live edges and exquisite finish give it an heirloom quality. Rectangular tables that seat eight to 10 are available in 72-inch, 90-inch and 108-inch models.
International Furniture Direct’s 962
A longtime best-seller, it features a hand-wrought iron base with metal trim and nail heads around the top. The table top features a distressed multi-color finish on solid wood, while the chairs are 100% solid wood and ship fully assembled. Approximate retail for table and 4 chairs is $1,299.
Fine Furniture Design’s Brentwood
The Brentwood Mila dining table, combined with the Mina dining chairs, feature an artful mix of styles, textures, materials and details that appeal to those who are equally comfortable at a world-renowned restaurant or eating takeout at the kitchen table. The table, shown here in a Sherwood Natural finish, has a tulip pedestal base.
Approximate retail price is $5,500 for a table and four chairs.
Klaussner’s Trisha Yearwood Home
This popular collection includes Trisha’s Table, which features a coffee brown finish with heavy distressing and burnishing to create an uneven, relaxed appearance. It is shown here with the Nashville arm chair and Monticello Display china cabinet, which is a statement piece itself. The 102-inch table and four chairs retail for about $1,399.
Sunny Designs’ Bourbon County
The distinctive ladderback chairs, wire-brushed oak top and French Country finish have helped make this dining group a winner in all regions of the country. Made of poplar solids, the leaf can be stored in a felt-lined compartment under the table. Approximate retail is $999 for the table and four chairs.
Wesley Allen’s Tucson
Aimed squarely at Millennials and their dislike for formal dining tables, this is one of several casual dining sets that have become hot sellers. Made of hand-crafted iron, it is suitable for an eat-in kitchen and can double as a place for the kids to finish their homework.
Universal Furniture’s Synchronicity
The boldness of mid-century, California coastal architecture inspires this casual contemporary group, reflecting the relaxed 1960s culture in Southern California, with strong linear forms, cantilevered and slab elements. The mellow two-tone finish features a medium brown Horizon stain and a creamy Morning Light complement. The table retails for about $1,425.
John Thomas Select
The snow white finish of this gathering height table, paired with black onyx chairs, is one of more than 2,000 finish combinations available with this domestically produced line.
LumiSource’s Oregon
The industrial look is in full view with this popular set, which features metal legs and backrests juxtaposed with wood-finished seats and tabletop. It is available in antique metal/espresso wood, Grey metal/brown wood, and vintage white metal/ espresso wood. Table and four chairs retail for about $679, while bench retails at $199.
Standard Furniture’s Cambria
Featuring vintage styling, this best-seller invites you to gather ‘round with friends and family. It has weighty vase turnings and a distressed two-tone black and dark toffee finish. Approximate retail price is $1,649 for the table, two armchairs and six side chairs.
Vanguard Furniture’s Hoag Lane
From the Thom Filicia Home Collection, this table is made of Manchurian walnut solids and veneers and is available in a variety of finish options, including standard stains, artisan wood stains and premium leaf’s. It includes two 20-inch extensions, allowing the table to expand up to 120 inches for up to eight guests. Suggested retail starts at $4,497.
April 20,
2017 by Jane Chero in Business Strategy, Industry
Although it’s been around since American Express’s 1983 Statue of Liberty Restoration campaign, cause marketing has gained a lot of momentum in the last few years. More and more retailers have grasped the value in partnering with the organizations, people and happenings their customers care about. It’s a meaningful way to achieve corporate social responsibility goals while increasing customer loyalty, solidifying your brand, and growing your business.
Cause marketing is the marketing of a for-profit business that benefits a nonprofit charity or supports a social cause in some way. Usually it takes form as a marketing partnership between a nonprofit charity and a for-profit business in service of both parties’ goals. Businesses typically benefit from the good virtue associated with cause marketing while nonprofits benefit by increased exposure and the funding driven to their cause.
The motivation is in part a matter of social pressure because consumers have come to expect charitable conduct from companies. But the list of retailers sponsoring causes is also driven by the need to drive store traffic, engage employees and demonstrate community involvement.
At the end of the day, the connection between corporate and the consumer is the retailer. Retailers tend to emphasize cause-marketing programs with a local component, which makes sense because people typically feel good about doing business with companies that do good, allowing the merchant to draw attention to themselves and build good will.
We surveyed a sample of our retail readers and heard about many inspiring programs that have helped transform causes, local communities and the world. Many raise funds for a main cause but contribute to others during the year as well. It’s a testimony to the generosity of the furniture industry and the passion and commitment that has been ignited.
______
Retailer: Bernie & Phyl’s Furniture
Program Name: Multiple Sclerosis Fundraising
Benefit to: National Multiple Sclerosis Society
Contribution: $100,000 per year
In addition to supporting the MS Society, the Rubin Family has contributed to various charities for many years including combined Jewish Philanthropies, The Boys and Girls Club of America, Bridgewell, and The Home for Little Wanderers. Toy drives, ginger bread house contests and outings to Red Sox games with local children, are among the creative events organized. The retailer also donates furniture they are not able to sell to an organization called Teen Challenge, which helps teens recovering from drug and alcohol addiction.
______
Retailer: Brooklyn Bedding and Coconis Furniture
Program Name: Ante4autism Poker Event
Benefit to: Five Autism Charities
Contribution: $110,931
At the 9th Annual Ante4autism event at the Golden Nugget during the January Las Vegas Market, celebrities, professional poker players, Las Vegas residents and furniture industry attendees enjoyed a fun evening, while raising awareness and money for Autism charities. Brooklyn Bedding and Coconis Furniture are co-hosts for this worthy event.
______
Retailer: City Furniture
Program Name: The Kevin Koenig Memorial Covenant House Cup Golf & Fishing Tournament
Benefit to: Homeless/runaway youth in Broward County
Contribution: $100,000 this year ($1.5 Million+ over several years)
City Furniture cares greatly about their community and has earned the Philanthropic Company of the Year award in Broward and Dade, Fla. Counties in the same year. It all started many years ago by making a donation to Covenant House, a faith based runaway shelter for kids and teens. They also began supporting the Museum of Discovery & Science and have donated close to $1,000,000 over the years. Their biggest focus for donations has been Habitat for Humanity
City Furniture is a major sponsor for; the Making Strides against Breast Cancer Walk, Dolphins (Cycling) Cancer Challenge event and the Broward Heartwalk. They also support Camillus House and many others.
______
Retailer: Furniture Fair
Program Name: The Anthony Munoz Foundation (Celebrity Dinner and Auction, and Youth Football Camp)
Benefit to: Tri-State Youth
Contribution: Approximately $450,000 each year
Furniture Fair has given to many different charities in the Greater Cincinnati and Northern Kentucky area over the past 54 years. They are great supporters of cause marketing and feel it is a wonderful way to show Furniture Fair cares.
______
Retailer: Hudson’s Furniture
Program Name: Pink Fundraising Event
Benefit to: Moffitt Cancer Center
Contribution: $10,000 per year
Hudson’s Furniture’s Pink Fundraising Event benefits the Moffitt Cancer Center and is Hudson’s largest fundraising effort.
Others include Hudson’s and the Salvation Army Angel Tree, The Boys and Girls Club of America, Back to School Supply Drives, and Basecamp.
______
Retailer: Gates Furniture
Program Name: Extreme Home Makeover
Benefit to: A Medford Oregon family
Contribution: $50,000 worth of furniture
The designers from Extreme Home Makeover approached Gates Furniture to ask if they would donate furniture to the local project. The Grants Pass, Oregon retailer was happy to oblige. When the house was ready, Gates closed for a half day and the staff of 30 went to the makeover project property and furnished the entire house. Owner, Giff Gates said “the team has been inspired by others. They’re fantastic”. Gates also donates to other causes including Hearts with a Mission a cause that serves local homeless and at-risk youth.
______
Retailer: Michael Alan Furniture & Design
Program Name: Sleepless for a Cure in Havasu
Benefit to: Cancer Association of Havasu’s low cost Mammogram Program
Contribution: Over $212,000 in eight years
Sleepless for a Cure in Havasu starts with a 24-hour sleepless-a-thon- at the store kicked off by the Mayor. Women from the community decorate mattresses in honor of those that have fought breast cancer followed by a vote for the most outlandishly decorated mattress. The event continues with chair massages, auctions, fashion shows and trips to the local coffee shops to stay awake all night. After 24 hours, local cancer survivors join in to announce total donations.
As a local, family operated furniture store, owner Chris Cooley said, “We want to be more than just a furniture store, we want to give back and be good neighbors to our surrounding communities.”
______
Retailer: Olinde’s/Ashley HomeStores
Program Name: Habitat for Humanity Donation of Goods
Benefit to: Habitat for Humanity
Contribution: $101,934
In addition to charitable donations of goods to Habitat for Humanity, Olinde’s supports the Inner Wheel of Baton Rouge Trash & Treasure Sale donating approximately $70,000. Other organizations like The American Red Cross, American Cancer Society, Baton Rouge General Foundation Burn Unit, the Greater Baton Rouge Food Bank as well as many local churches and schools have also benefitted from door prizes, gift certificates, auction items and monetary donations from Olinde’s.
______
Retailer: Schneiderman’s
Program Name: Annual Golf Tournament
Benefit to: Ronald McDonald House – Twin Cities
Contribution: $650,000 (Total Direct Giving)
Schneiderman’s Furniture contributes to charitable causes in which their customers and associates are involved. They participated in a fundraiser for Parkinson’s research and contributed $155,000 to the University of MN. They have also partnered with Bridging, a charity organization that helps those in transition. When delivering new furniture, the delivery team often re-purposes customers used furniture (when in acceptable condition) to donate and have passed the 10,000 mark for items contributed.
______
Retailer: Turner Furniture
Program Name: 100th Anniversary Celebration
Benefit to: Local charities
Contribution: $100,000 for charities plus $100,000 worth of free furniture to customers with a value match to a charity
For their 100th anniversary Turner Furniture gave away $100,000 to local charities and $100,000 in free furniture to their customers. The customers that won the free furniture were allowed to choose a local qualifying charity and Turner Furniture donated a dollar amount equal to the furniture they won to the charity of their choice.
______
Retailer: Wolf Furniture
Program Name: Annual Vendor Outing
Benefit to: Local women’s, children’s, and veteran’s causes.
Contribution: $60,000 to $100,000 annually
Since 1902, Wolf Furniture has recognized the importance of being a good neighbor to its local community and supports well over 100 local charitable organizations allowing for increased visibility for events with limited budgets. Wolf’s is also involved with The United Way, The American Cancer Society, Boy and Girl Scouts of America and Habitat for Humanity. The Wolf family also has a foundation that supports the arts and education in their region.
Through charitable donations and philanthropic community activities, the furniture industry has a reputation of being committed to making a positive impact. So find a cause, if you don’t already have one and start planning.
Consumer Trends: NRF Says Consumers Plan to Save Tax Refunds for Later
A record low number of Americans will spend their tax returns this year while the second-highest number on record will put the money into savings, according to the annual tax return survey released in late February, by the National Retail Federation and Prosper Insights & Analytics.
“Financial security continues to be top-of-mind for all Americans, and consumers are hanging on to their tax refunds tighter than ever,” NRF president and CEO Matthew Shay said.
“Consumers are leveraging their tax returns to build up their savings, but that’s good news in the long run because money saved today is money that can be spent down the road, particularly during the back-to-school and holiday seasons later this year.”
Of the 66 percent who are expecting a refund this season, only 20.9 percent of consumers will spend their refunds on everyday expenses, 8.7 percent will use them for major purchases such as a television, furniture or a car, and 7.6 percent will splurge on special treats like dining out, apparel or spa visits. The numbers are down from 22.4 percent, 9.2 percent and 8.3 percent last year, respectively, and are record lows in the history of the survey. The number planning to spend the money on vacations dropped to 10.7 percent from last year’s 11.4 percent, the lowest since 10.3 percent in 2013. In addition, 8.8 percent plan to use their refund on home improvements.
The survey, which asked 7,609 consumers about their tax return plans, was conducted February 1-8, 2017 and has a margin of error of plus or minus 1.1 percentage points.
Furniture Retailers Missing Another Chance to Engage Customers?
Omnichannel — the buzzword of retail in recent years — is being added to the vocabularies of retail finance professionals as well, but an executive at one major finance provider is concerned that many furniture retailers may be missing the party because they don’t have a mobile app for their store.
Mike Ritter, who heads retail card services at TD Bank, said a survey the company conducted at the winter Las Vegas Market showed that 58% of the retail respondents didn’t have a mobile app. Only 32% said they had an app for their customers, and another 11% said an app was in the works, but wasn’t live when the survey was conducted.
He said the results were “a little surprising,” especially since 47% of those who didn’t have an app said they didn’t see a business need for one.
“It’s something the industry is still wrestling with,” Ritter said of the use of mobile apps. “We’re working really hard to try to do this omnichannel experience of promoting product and promoting financing until the purchase takes place, regardless of where it takes place.”
Of the 142 retail executives surveyed, 59% said most of their customers make the purchase in their brick-and-mortar store, while 31% said most make the purchase online and only 4% said most use a mobile app.
And even though physical stores still account for a majority of purchases, Ritter said the vast majority of consumers shop online first, which magnifies the importance of having a good website and mobile app.
“The more information you put in their hands, the easier you can make that final transaction,” he said. “It makes it more likely you’re going to be able to close the sale.”
He said TD Bank, which offers private label credit cards and promotional financing programs, encourages retailers to allow consumers to apply for credit online before they come to the store — or while they’re using a Smartphone in the store. He said the company is “very active” with mobile apps and can help develop promotions and financing programs that engage customers through the app.
“As we work with our partners on app development, it’s very important to make financing a part of it,” Ritter said “The ability to serve up product offers or financing offers when people are engaging at the store can be a really powerful tool from a financing perspective. Most people think they can afford less than they are actually going to qualify for.”
In addition to the retailers who didn’t see a business need for an app, 19% said technology limitations prevented them from having an app, 18% said their customers didn’t want one, and 14% said financial limitations were holding them back.
In addition, the majority of respondents (64%) said most of their customers were 35-54 years old, while 19% said the majority of them were age 55 and up. Only 16% said the most of their customers were age 18 to 34.
Storis Does it Again: Awarded Best Place to Work Honor
Retail software provider Storis has been recognized by New Jersey publication NJBIZ as a “Best Place to Work in NJ” for 2017.
The Best Places to Work in NJ is an awards program produced by NJBIZ since 2005. The program identifies, recognizes and honors the top places of employment in New Jersey that benefit the state’s economy, workforce and businesses.
“This award is greatly influenced by the team of people here at Storis. It’s gratifying to know that our people are happy to come to work every day,” said Barbara DeGenova, senior manager of human resources.
The Best Places to Work in New Jersey program is made up of 100 companies split into two groups: 65 small/medium-sized companies (15-249 employees) and 35 large-sized companies (more than 250 employees). Companies from across the state entered the two-part process to determine the 100 Best Places to Work in New Jersey.
A significant factor in determining who makes the list is feedback compiled anonymously from the company’s employees. The registration and survey process was managed by Best Companies Group, who analyzed the data provided and used their expertise to determine the final rankings.
Storis currently has 116 employees in New Jersey.
Companies who made the list will be honored at an April 26 awards ceremony, during which each company’s specific ranking will be revealed for the first time. In 2014, Storis received the #1 Ranking in the Small to Medium Business Category.
April 20,
2017 by Jane Chero in Business Strategy, Industry
The excitement of the election is in the distant past even though the media continues to do replays of what happened. With some degree of optimism we forecasted a modest increase of 4.5% for 2017. Historically, with the exception of 2008, the year after an election has been an improvement over the election year.
After getting off to a slow start in January, President’s Day was a bright spot. March has been all right, but not a barn burner. All the soft data – consumer confidence, stock market indices, and manufacturer’s sentiment are very positive. Unfortunately, the hard data continues to show the slow, but steady growth that has been the case for the past five years. The upturn in housing starts/home sales sputtered a little in January/February with the increase in interest rates. However, the first time home buyers continued to participate,which is key to industry performance.
As an industry we should all continue our optimism. I believe that barring an international event we will achieve the forecasted growth. However, with this optimism we should take a hard look at the underlying value of our industry, specifically what the consumer is willing to pay. In the past six years all home furnishing prices have continued to decline with furniture and bedding leading the way. Why does the consumer not value our product when compared to other consumer products?
The answer cannot be to allow quality to deteriorate. Or is it that what the consumer wants is disposable furniture? Our future is not bright if this is the case.
April 20,
2017 by Jane Chero in Business Strategy, Industry
By: Tom Zollar
The April issue of Home Furnishings Business is aimed at helping you compete in retail’s highly competitive battleground. It really comes down to one of the most basic challenges every retailer faces – getting people in your market to want to do business with you instead of others or “Selling your Store”. That may sound simple, but accomplishing it has become much harder as the number of options the consumer has to purchase from has grown. Even though you very likely have fewer actual brick and mortar home furnishings retailers physically in your area, competition for the consumer located within your market has actually increased dramatically.
So how do we maximize our ability to compete? It really comes down to having a very clear vision of what our customers want from us and what we can offer them that truly differentiates us from all of those competitors chasing their business. Once we have that, we must translate it to the three areas that most impact our sales success: Advertising, Merchandising and In-Store Experience!
Last April’s Coach’s Corner addressed the importance of using the in-store experience to separate yourself from the competition. Obviously, your ability to provide it is certainly an advantage over the internet only retailers. But not every consumer realizes that they need or might even want to have that face-to-face interaction. In this year’s article, we are going to touch on some of the other areas of consideration 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. Below are a few approaches to consider.
Promote Your In-Store Experience and Services
Most of today’s retail advertising and much of the space on our store website, talks about items we sell, not services we provide. We are so steeped in our traditional approach to driving traffic by using product and pricing, that we have lost focus on what is really our difference - the in-store experience. We assume that consumers know about what we can do for them to help create the home of their dreams, when in fact, most do not. Instead of trying to add value to developing a relationship with us by visiting the store, we tell them how much we will save them if they buy from us. Rather than creating the impression that their results will be better by working with our staff, we tell them we are cheaper than the competitors.
We should be spending at least equal time helping potential customers understand the process and how visiting our store can help them through it. Even though they do research to find what they think they want and where to get it before buying, most don’t have a clue how to put it all together and create the look or feel they really want for their home. What better way to differentiate ourselves than by creating the perception in the public’s mind that we are problem solvers and creative assistants they can use to augment their abilities and improve the end result of their efforts? So, take a look at your marketing programs and make sure you are selling and adding value to having an in-store experience with your store as much as you are with its products and prices. If indeed what we offer when they come in is a benefit to them, then be proud of it and make it known in your market!
Create Strategic Alliances
Understand that our biggest competitors are not the other businesses selling furniture products. They are the businesses selling cars, travel, TVs, hot tubs, appliances, movies, massages and more. Indeed, anyone in our market who provides a service or product to the consumers that is paid for out of discretionary income is a competitor of ours day-in and day-out. Obviously, those that sell things for the home are our most direct competitors, but the fact that the average household only spends between 5% – 6% of its income on the home means there is not a lot to go around. We all fight over the scraps so to speak. Perhaps there might be some way to join forces or piggy back our efforts so that we can reach out to common customer groups and maximize our effectiveness together?
The key is to find businesses in your area that market to the same target customers as you and create a partnership with them. These strategic alliances can help both parties get their message to potential customers, in many cases at a very opportune time in their purchasing cycle. We all know that people tend to buy home furnishings soon after purchasing a new or pre-owned home, so the smart ones have already partnered with real estate professionals to reach out to their customers after a sale is complete. But can we go further? Sure, what about moving companies and title service providers?
There are many other partners to look for. Just ask yourself, when do people need our products? When someone buys a new TV they may need a place to sit, so talk to appliance stores. Just like when a family has a new baby, they may need a youth bedroom, so talk to local doctors or hospitals. Some businesses are letting their employees work from home and perhaps they need home office furniture. Great partners we often neglect are local insurance agents. They totally understand partnerships and usually know when people need new furniture because of a disaster or a divorce. Why not have them referring their clients to you?
These are obviously “you scratch my back and I’ll scratch yours” situations, but have you really looked out into your business community to find all the opportunities available? If not, now is a great time to start!
Maximize Your Community Visibility
Participating and being a positive contributor to your local community has always been of major importance to any business, but particularly a small local one. As the Millennials and younger generations take control of the spending power it is becoming critical. They expect it and indeed demand it of anyone trying to solicit their business. Having a positive reputation for community involvement is not just a plus, today it is part of the price of admittance to the retail game in every market. Therefore, you need to look at what you are doing and how you are actively supporting your employees’ efforts too. Sponsoring events, contributing products, money and labor to charities are only the beginning today. You must be perceived as being a doer that has a visible role in as many common good processes as they can support.
A side benefit of community participation is the networking opportunities it provides you and your staff. Often, we see owners joining the Chamber or other organizations, which is great. However, it is much stronger to be seen as someone that is a real leader who walks-the-walk and talks-the-talk by getting their employees out of the store and encouraging them to be involved in local support efforts. There are plenty of groups in which they can participate, that will further impact your company’s community involvement. Several clients have sent out their delivery trucks and crews to help people move their belongings after a disaster. What better advertising could you get then people in need seeing your name on the side of a vehicle coming to their rescue? Sponsoring soup kitchens, delivering food to the needy, it is all good!
If You Have Local Roots, Make Them Known
My last point is a very simple one that most small businesses do take advantage of often. It is the fact that they are from the place where they do business and they are part of the local heritage. While this has always had some traction with the American public, we are seeing a resurgence in its power. As the next generations evolve they are beginning to put more value on doing business locally with people that are part of their community. The better job you do with my previous point, the more important this one becomes!
In summary, who and what you are is not only the products you supply to your market, it is the services and benefit you provide the people in your community. It may sound self-serving, but the better you are at being a good neighbor, the more successful you will most certainly be as a retailer!
April 20,
2017 by Jane Chero in Advertising, Economic News, Industry
After years of fighting back from the housing bubble pop, the Housing Industry is finally on the mend and appears to be getting healthier by the year. Although still shy of 2007 pre-recession levels, housing appears to be catching up fast despite a couple of stumbles last year. This article picks up from Statistically Speaking’s September 2015 article Housing’s Rebound.
Although the rate of growth slowed for existing home sales last year, unit sales approached pre-recession levels. Meanwhile, new home sales, while still well below pre-recession numbers, are catching up to pent up demand as housing construction steadily increases its new single family homebuilding. Multi-family construction is the one area lagging in 2016, but starts are up in 2017. With both rental and homeowner vacancies at their lowest, the Housing Market is, most assuredly, on an upswing.
As shown in Table A, indexed growth for existing home sales in 2016 was only 3.6 percentage points shy of peak 2007 pre-recession sales. In 2016, 5.49 million existing homes were sold compared to 5.65 million in 2007. For new homes, the 559,000 units sold in 2016 were still 27.8 percent below the 769,000 sold in 2007. However, as construction has played catch-up to demand, new home sales have grown 82.7 percent since the recession bottom of 2011.
New Home Sales
New home sales had a solid performance in 2016 – increasing 11.3 percent from 2015. However, sales are off to a slow start with January sales flat on a seasonally annualized basis (Table B).
Existing Home Sales
Despite dipping in 2014, existing home sales (Table C) have grown steadily in recent years – up 3.8 percent from 2015 to 2016 and another 4.4% jump into January of this year.
Existing home sales grew consistently throughout the country last year. The Northeast region, the smallest in terms of home sales, was the fastest growing last year – up 5.7 percent 2015 to 2016 to 740,000 units plus an 8.1 percent boost (seasonally annualized) to start off 2017. Increasing 2.8 percent from 2015 to 2016, the South still leads the pack with 2.2 million existing houses sold in 2016. The Midwest had a slight decline from 2016 to January 2017 – down 0.8 percent to 1.3 million annualized resales, while the West had the biggest leap into 2017 – increasing 8.4 percent in January to 1.29 million annualized units (Table D).
New Housing Construction
Despite the growth in new and existing home sales last year, New Housing Construction, specifically, multi-unit apartment construction fell considerably. After solid gains since 2011, combined growth of single and multi-unit construction went negative last year – falling 0.5 percent to 1.17 million units. Due to booming housing starts in January of this year, 2017 began 9.6 percent higher with a seasonally annualized average of 1.29 million units (Tables E and F).
As shown in Table G, single-family construction has maintained its upward trajectory since the Great Recession. However, 2016 single- family units totaling 747,000 are still 23.1 percent below peak 2007 levels. Meanwhile multi-family construction at 392,000 units in 2016 is well below the 451,000 in 2015.
The flat growth in new construction was not a result of declining construction of single-family units (Table H). Growth has continued unstopped in recent years – increasing 7.5 percent from 2015 to 2016. Up 8.1 percent annualized, the first month of 2017 builds on the momentum.
The slowdown of total new housing construction came solely on the shoulders of multi-family apartments and condominiums where construction fell by 13 percent in 2016. On a positive note, authorized permits for the first month of 2017 are up 13.7 percent (Table I).
Rental and Homeowner Vacancy Rates
Rental vacancy rates at 6.9 percent are at their lowest in over 30 years, giving way to high rents (Table J). Meanwhile homeowner unit vacancies have also continued to drop to 1.7 percent in 2016 – the lowest in over 10 years.
The vacancy rate of rentals is lowest inside metro areas, both in principal cities and in the suburbs, compared to outside of metro areas. Inside metro areas for both urban (principal cities) and suburban areas have similar vacancy rates at 6.7 percent and 6.3 percent respectively. These rates have continued to fall over the last seven years. Meanwhile, vacancies outside metropolitan areas are much higher at 9.4 percent last year and have shown little improvement over the last few years (Table K).
For homeowner units, vacancy rates in the suburbs of metro areas are low at 1.5 percent in 2016 and only slightly higher at 1.9 percent in principal cities of metro areas. Vacancy rates outside metro areas are higher at 2.3 percent (Table L).
Pent up demand from Millennials aging into their prime homeownership years combined with low vacancy rates have set the stage for good housing growth in the near future. And nothing spurs the home furnishings industry as much as home sales.