Monthly Issue
From Home Furnishing Business
October 13,
2016 by Jane Chero in Business Strategy, Industry 
This month’s theme deals with Retail Innovation and new ideas that have freshened up our stale industry in the last decade or so. It is a great subject for us to address because innovation normally involves some changes to how you do things and change is not easy for most of us individually. It is even more difficult to create and drive it within an organization! Most successful businesses embrace change and are able to make it happen within the company, helping them maintain an edge on their competition.
Sometimes in our excitement and desire to embrace new ideas, we rush forward without properly considering if it is actually the best thing for us to do. Other times we might not have the discipline to properly implement a new program. As a result, we can either end up doing something that is not right for us or doing something that is right for us the wrong way - ending up in a way that doesn’t gain the maximum benefit for the change we have created.
Every situation and company is different, so it is difficult in a brief article to put forward recommendations that will work for everyone. However, we have seen some pitfalls on the sales side and can give you some cautionary advice about how to reduce the possibility of having an unintended negative result from bringing innovative new ideas, systems and/or processes into your selling organization.
First off, I must say that personally I am kind of a Geek for new technology and ideas! I love being up to date with my devices, systems and processes and enjoy the challenges of changing things I do for the better. That said, I have found that not everything that is new is necessarily better and some new things that work for one person or company, don’t work well for others. There are many reasons for this, which involve a wide range of issues from ingrained culture or habits to current knowledge or abilities.
One issue we have seen is that somewhere in the pursuit of innovation and change, companies often forget who they are and how they got there. So my main caution is that in the mad rush to embrace change, don’t forget what has worked and abandon any of the things that have helped made you successful in the past. As the old coach once said: “blocking and tackling still win football games!” Here are examples of some pitfalls to consider as you embrace new sales support systems, processes and technology:
Automated Sales Reporting Pitfall
This will open a can of worms, so let’s start with it right away! A critical element of sales management has always been the consistent reporting of accurate sales performance data, so that it can be used to measure each individual’s results on the selling floor. There are three steps to this process: gathering the numbers, organizing/tracking them and most importantly, reporting them in such a way that the sales manager can use them during the coaching process to help improve each person’s performance. In the very beginning, before computers, the sales person wrote down their daily results and gave them to the sales manager who recorded them in a spreadsheet and made calculations to come up with coachable statistics like closing rate, average sale and revenue per Up.
With the advent of computer systems, this process has become more and more automated, in some cases, to the point where no one actually “touches the numbers” until the system spits out the reports. The question is: have we streamlined the process to the point where no one actually takes ownership of the numbers and thus the results?
Don’t get me wrong, I am all for making things easier and cutting out paperwork so we can spend more time with our people and they can focus more on their customers! The point I want you to consider is that when sales people had to write down information on their sales each day, the numbers seemed to matter more to them – at the end of each day they faced how they did. When managers had to get the sheets and input them into the system, they too knew what each person had done and what had happened that day in the store – in real time. Everyone in the process had a role they understood and because of that they were better able to work together, using the reports to determine where and how to improve sales. Isn’t that better than just collecting a sheet of paper off the printer, after the fact, and putting it into a mailbox or worse yet just emailing a file to each sales person?
I can tell you that those retailers who have automated the reporting process but still kept the staff involved in all of the steps, tend to perform better. So be careful just how streamlined you make this important process and make sure that in so doing, you have not watered down the importance of “owning the numbers”.
Selling Process Pitfalls
One of the most exciting things I have seen in the last decade is the use of Tablets on the selling floor to assist and augment the process of helping a customer find the product they want and creating the room/home of their dreams! To me this is one of the greatest potential uses of new technology for the sales person. We know that the majority of people we end up seeing begin their search online and most likely visit many sites including ours, before visiting a store. So in a very real way, we are an extension or continuation of that tech based process and the more we can tie into it the better. We also know that if the sales person has to leave a customer in search of information, they have a greater likelihood of losing that sale. Lastly, having web sites, design ideas and the ability to draw or create a room with the customer on the floor using their tablet provides further excitement and can enhance the process for some customers. All of that said, there are some things you need to keep in mind as you design and implement any selling process technology:
- A critical factor in having technology in the hands of the sales person is obviously their ability to use it “gracefully” and only when needed. Too often I have seen sales people act like a kid with a new toy and focus mainly on showing the customer all it can do instead of on how they can use it to help. Make sure anybody using Tablets/PCs to work with customers is fully trained not only in how to make the device work, but also on how to use it in the selling process – don’t assume they know, they don’t!
- Many people are technophobic or intimidated by technology. They may not be comfortable working with a sales person using technology. In this case it could still be a good support tool to get information, but it should not be at the center of the process.
- One of the things I have personally felt when working with a professional who is using a Tablet to take notes or to help me find something, is that it often seems to be a distraction, with the person spending more effort interacting with it than with me. We are there to create a personal touch in the process otherwise they might as well buy on the internet! Don’t let it get in the way of that happening.
- There are some great sketching apps, which could be used to sketch with a customer during the selling process. However, in my experience they are not as quick, convenient nor as effective as a good old-fashion free hand sketch. Sketching during the selling process is meant to be a very simple and quick drawing of the room to help the sales person gather needed information and create a visual representation that will help them solve the customer’s problem. It may be powerful for design customers that are willing to sit down and spend more time on it, but for the vast majority of retail encounters using a Tablet to sketch is too cumbersome and detracts from the process, instead of facilitating it.
Other Potential New Technology Pitfalls
- The Furniture Training Company and several vendors have created extremely useful online programs to assist retailers in their efforts to get sales people trained and keep them up-to-date. Our view is that any quality online training program you use will most certainly help improve performance. However, there is nothing that replaces in-person, face-to-face, sales training. Online and video type sessions are great at presenting information like product knowledge, but it takes hands-on training and coaching to instill the behaviors they will need to consistently apply that knowledge on the sales floor. Don’t think that you can maximize your success with only online training, best if you use both.
I am all for using an automated system to contact customers to set up delivery, get survey responses and/or just to stay in touch. They get the job done relatively well and are better than not having it happen at all. My biggest caution with any of the new technology that deals with the consumer is that we do not let it replace the person-to-person contact and relationship that separates us from the online buying process and turns customers into lifelong clients of a company. Never let an automated system completely replace the personal touch that has built all of our businesses!
October 13,
2016 by Jane Chero in Product, Upholstery
By Trisha McBride Ferguson
If there’s one piece of furniture that establishes the style and décor of a home, it’s the sofa. As fashionable as they are functional, sofas serve as the centerpiece to the family room, living room, den, bonus room and plenty of man caves. Together with loveseats and upholstered chairs, they provide the go-to space for relaxing and entertaining.
The stationary upholstery category continues to grow, although at a slower pace (3.74 percent for the first half of 2016) than the impressive growth posted during the same period last year (5.31 percent). In 2015, stationary upholstery sales finished at $19.32 billion, up from $18.34 billion in 2014.
Combining stationary and motion sales, the total upholstery segment comprised 38.67 percent of total furniture industry sales (excluding bedding) last year, up from 38.55 percent prior year. For this first half of this year, it is trending flat at 38.67. Factoring in bedding sales, the first half of 2016 looks slightly more positive with total upholstery sales accounting for 32.98 percent of total furniture sales, up from 32.88 percent in the same period last year.
Design Matters
A quick look at Pinterest and Houzz shows that upholstered furnishings not only anchor a room’s design and functionality, they give consumers a way to express their personal style. Yet 44 percent of consumers who bought upholstery in the last 18 months cite product selection as the biggest shopping challenge they faced, according to Home Furnishings Business’ most recent survey. Respondents cited wanting a wider selection of products as a more significant challenge than experiencing higher prices than expected (19 percent), difficulty in distinguishing differences in products (12 percent), and inexperienced salespeople (4 percent).
As for design preferences, more than half of those surveyed (54.4 percent) identified their style as traditional, followed by contemporary (28.8 percent), country/rustic (6.3 percent), transitional (4.4 percent), cottage (3.8 percent) and mission/shaker (2.3 percent).
Shopping Savvy
It comes as no surprise that consumers are browsing and searching online before purchasing upholstery. A notable 61.9 percent of those surveyed report researching products online before making their upholstery purchase. When asked about the importance of upholstery manufactured domestically, 62.5 percent of those surveyed said they’d pay more for an item made in America.
Eco-friendly upholstery products are valuable to some, but not to a majority of shoppers. When asked about the importance of environmentally friendly furniture, 18.7 percent cited it as important, compared to 23.1 percent who classified it as unimportant—with the majority of respondents (58.2 percent) falling somewhere in the middle.
When it comes to shopping, the majority of these consumers are acting decisively. According to this survey, 39.1 percent shopped two weeks or less before purchasing, with an additional 28.6 percent buying within the first month. Their willingness to wait for custom-order upholstery mirrors this trend, with 65.3 percent of those surveyed reporting they would wait up to four weeks, 23.6 percent would wait up to eight weeks, and only 11.1 percent willing to wait longer than eight weeks.
As for brand preferences, the importance of a brand name is declining. Of respondents most recently surveyed, 63.7 percent rated the brand as somewhat influential to their purchase—the middle ground between very influential and not influential at all. This is down from the 67 percent of shoppers who responded similarly in last year’s survey.
Vanguard Furniture’s Brit
Rolled arms, casters, and a button-tufted back give Vanguard’s Brit sofa a casually elegant look. Ultimately configurable, its cover (available in fabric or leather), finish and embellishments can be customized. Suggested retail starts at $4,800.
Uptown from American Furniture Manufacturing
“This is one of our bestsellers because it has a casual, contemporary style, a soft chenille fabric with attractive coordinating toss pillows, and it’s a tremendous value at $499 for the sofa.”
Kennedy from La-Z-Boy
Petite in scale with narrow arms, the Kennedy is perfect for smaller spaces. It features welt trim, fully padded arms, and ComfortCore® zoned cushioned seating. Suggested retail as shown is $879.
Universal Furniture’s Corbin
Sleek and urban, the Corbin’s signature is an exposed chrome frame complemented with upholstered arm caps and loose, box cushions. It’s available in gray cloud velvet (quilted), brown leather or gray leather. Suggested retail ranges from $1,500 to $2,250.
HTL’s RS-11048
This sofa-chaise from HTL features slightly flared, curved arms with welt detailing and espresso-colored wood legs. It’s also available in coordinating sofa, loveseat and chair configurations. Power reclining models such as this include USB port for device charging.
Rachael Ray Home Collection by Craftmaster
Part of the Upstate collection for Rachael Ray Home, the R7612 Sofa is shown here in fabric Frasier 10. It features a relaxed traditional aesthetic and classic details such as pewter nailhead trim. Suggested retail sofa price is $1,299.
Sherrill Furniture
The 2361 Sofa from Sherrill Furniture is made in the USA and features eight-way, hand-tied construction and feather-down throw pillows. It’s shown here with the Falcon Brown fabric cover, a contrasting welt in Porto Tobacco, and bronze nailhead trim. Suggested retail is $4,439.
Santor from Taylor King
Transitional in style, the 85” Santor is Taylor King’s best-selling sofa. It boasts a distinctive silhouette with thin, track arms and a comfortable seat depth. Suggested retail is $5,547.
Bellini Modern Living’s Lauren
Luxurious without being fussy, the Lauren sofa offers contemporary styling, clean lines, and neutral versatility. Its leather cover is distinguished by unique quilted detailing on its inner arms. Suggested retail is $5,249.
Oliver from Best Home Furnishings
This transitionally styled sofa offers clean lines and coil-encased seat cushions. It’s available in over 700 fabrics, with a choice of pillows and finish options. Suggested retail starts at $1,099.
A.R.T. Furniture’s Stuart
The Stuart Sofa has a classic sleigh-style exposed wood frame with three-cushion seating. Its four pillows feature linen and animal print fabric and custom trim. Suggested retail is $3,927.
Magnussen Home’s Swan
Inspired by the elegance and grace of a swan, this namesake upholstery group features a curved, solid-wood exposed frame, a v-shaped back, channel tufting and luxurious coordinating accent pillows. Suggested retail is $999.
Klaussner’s Leisure
“This sectional features down-blend deep seating—its slightly lower seat height is what makes it retail well.” Suggested retail is $1,999.
-Len Burke, Vice President of Marketing
Flexsteel’s Blake
The Blake upholstery group from Flexsteel features lifetime-warranted blue-steel spring construction and design details such as clean lines, small nailhead trim and block legs in a rich wood finish. Shown here in leather 014-07, the suggested retail for the chair and ottoman is $2,835.
Nicoletti Calia’s Romeo
Combining European contemporary style with modern functionality, the Romeo sofa with chaise features ultra-smooth, virtually silent, power motion. Its sleek, off-the-floor silhouette has a sculptural, stainless-steel base and is available in multiple configurations. Suggested retail is $4,999.
Somerton Dwelling’s Miranda
A fresh option in seating, Somerton Dwelling’s Miranda chair is stylish and comfortable. Available in a variety of fashion fabrics, it can be used as an accent chair, dining chair or desk chair. Suggested retail is $340.
Manhattan from Ekornes
With a fixed back, gently sloping contours and a curved exposed wood frame, the Manhattan has an evolved sense of style. It’s available in a traditional three-seat sofa, a two-seat loveseat, and chair. Suggested retail is $3,395.
CH Living’s Sutton
The Sutton's squared back gives it modern appeal, while its recline, glide and swivel features make it a top-seller. It boasts a hidden-release mechanism and is available in over 200 fashion fabrics—shown here in Honor Flurry. Suggested retail ranges from $675 to $825.
Lee Industries’ 3583-03
This classic track-arm sofa features a bench seat and three back cushions. It’s shown here in Belize Camel—a 100-percent Belgian linen, and complemented by legs in a tobacco finish.
Suggested retail starts at $3,231, as shown $4,701.
Hancock & Moore’s Sundance
A bestselling stationary sofa for Hancock & Moore, the Sundance exemplifies the designer aesthetic. There is a slight concavity to its shape that makes it a perfect sofa to float in a room. Subtle button detailing on the sides and nailhead trim give it universal appeal. Suggested retail is $9,825.
October 13,
2016 by Jane Chero in Business Strategy, Industry
By Bob George
This issue’s focus is on innovation, a focus that we plan to repeat each year. We believe that it is important to recognize the impact of game-changing developments that contribute to the future success of furniture retailing.
I have been fortunate to be involved with Impact Consulting’s performance groups over the past decade. A cornerstone of the process is to share “Best Ideas.” Each member prepares a written presentation that describes a best idea expanding upon why this best idea was developed, what was the approach to implementation, and finally the success of the best idea. The members take the process seriously contributing dollars to a winner pool. This pool is won by the idea voted the best by the group. The ideas are often simple and receive comments from the group such as “Why didn’t I think of that?” But more importantly, these ideas are shared with others in the group to be not only implemented, but also improved upon.
As a management consultant attending these meetings with the confidentiality agreement firmly in place causes my mouth to water at the possibilities of sharing with others these unique ideas. However, I resist the temptation and wait for the idea to emerge in the industry and it will because good ideas cannot be suppressed. Fortunately, some retailers give permission to distribute because they know that an idea is worth nothing until it is implemented. Implementation is what differentiates great retailers from good retailers. If the traditional retailer is to survive the onslaught of new distribution models, then innovation or more simply put best ideas, must become part of the ongoing process. Our performance group members are consistently in the top quartile of financial performances. The best ideas that they generate focus on specific financial elements and the results reflect that execution.
We are considering creating an industry-wide “Best Idea” contest. There will be an entrance fee, a panel of seasoned retailers who will judge the entrants, and finally a winner to share the pot. What do you think? This is how innovation occurs – a single idea that evolves to a positive outcome. Why should we leave out the manufacturers? They need to innovate as well.
An Update
As we communicated in the May issue we have changed the structure of our editorial staff to have editors with specific expertise in each area. In that effort we are pleased to announce the following.
Veteran journalist, Larry Thomas, who has covered the home furnishings industry for more than twenty-five years, has joined Home Furnishings Business as business and financial editor. In his new position he will focus on business and financial news and will write feature articles for the monthly magazine. He will also oversee the daily newsletter, Home Furnishings Business Now, and will write additional content for the HFB website, www.HFBusiness.com. Larry’s expertise will add a depth of understanding of the business and finance implications of the issues facing the industry. Please send any information to lthomas@hfbusiness.com.
Home Furnishings Business is pleased to have Trisha McBride Ferguson on our staff as our Product & Style editor. She brings over twenty years of industry experience as a writer and designer. She has worked closely with many leading home furnishings manufacturers. She is also Editor in Chief of our customized retailer magalogs which blend consumer home decorating content with furniture product information to drive retail traffic. Please send information about your product-related news and events to trisha@hfbusiness.com.
September 9,
2016 by Jane Chero in Industry, Internet
One of the most discussed issues in the industry today is the internet and the impact this new distribution channel is having on traditional ‘brick and mortar’ retailing. The reason for this concern is obvious when we look at the graphic below.
Without a doubt, a significant percent of furniture revenue is moving through e-commerce. The saving grace is that of this total, 49% is sold through furniture retailers with a ‘brick and mortar’ presence.
The growth of internet sales is still more than twice the rate of store sales growth. However, in the last two years, e-commerce growth has slowed down as the table below illustrates.
This finding is the same as was found in the Fourth Annual Major Purchase Consumer Study (June 2015) conducted by Synchrony Financial that concluded a 2% drop in purchases online from 2014 to 2015. While the total number of purchases has decreased, the total sales volume through e-commerce has grown.
However, it still remains a significant portion of the industry volume. To raise another point, other alternative channels are capturing almost the same level of sales as e-commerce. In some cases, such as mass merchants, the sales levels are higher than those seen with e-commerce. The question must be raised, “Should the industry not be as concerned with these channels? The graphic, a repeat from the April issue on distribution channels, explores the impact.
An historical perspective can sometimes be viewed as a negative. However, when the catalog showrooms, such as Blackwelders, Roses, and Furnitureland South, threatened the status quo of the industry, the discussion was the same. Furnitureland South alone remains, but only by adapting its strategy. Likewise, when Costco debuted its “furniture only” store in Washington State, many proclaimed the end of furniture retailing as we knew it.
The traditional industry has weathered the storm of other alternative channels and survived, but each new channel has taken a portion of sales until the traditional channel now represents less than 40% of the market. Maybe we need to change instead of surrendering a portion of our sales.
September 9,
2016 by Jane Chero in Advertising, Bedroom, Industry, Product
Dreamy Bedrooms
By Trisha McBride Ferguson
The Bedroom category (master bedroom and adult bedroom furnishings) has been climbing steadily in annual sales over the last five years. In 2015, the year ended with $10.86 billion in sales, up from $10.36 billion in 2014. Adult bedroom continues to see growth this year with second quarter up 3.75 percent over the same quarter last year.
Universal’s Halston
Part of its Curated collection, the Halston fully upholstered bed features a tufted headboard with subtle arch and nailhead trim. It’s shown here in a gray cotton velvet and is also available in linen. Suggested retail $1.875.
A.R.T. Furniture’s Epicenters Williamsburg
Directly inspired by the warehouse-turned-loft neighborhood of Williamsburg in Brooklyn, NY, this bed features a stacked railroad tie design, a reclaimed pallet finish, and a two-drawer storage footboard. Suggested retail for the King bed is $2,999.
Ashley’s Windlore
Rustic yet refined, the Windlore bedroom collection maximizes the beauty of minimalism. Its rustic oak-grain character is enhanced with a two-tone finish that modernizes its plank styling and hardware-free design.
Cresent Fine Furniture’s Larkspur
Simple yet sophisticated, the Larkspur platform panel bed features clean lines and a fresh finish. Suggested retail for the Queen bed is $1,199.
Flexsteel’s Homestead
This solid hardwood bedroom group is crafted of birch veneers and features a black rub-through finish. Its round metal hardware wears a gunmetal finish and the bed and mirror are available with metal or solid-wood frames.
Furniture Traditions’ Master-piece Pier Group
Full of innovative features and clever details, the Master-piece pier group adds function and interest to a timeless look.
Greenington’s Currant
Crafted of 100-percent solid Moso bamboo, the Currant bedroom collection blends contemporary and Mid-century Modern influences. An eco-friendly and sustainable option, the platform bed is shown here in a black walnut finish. Suggested retail for the Queen bed is $1,878.
Hooker Furniture’s Chatelet
This upholstered mantle panel bed is part of Hooker’s whole home collection inspired by timeless antiques found in Old World Europe. The epitome of rustic luxury, its look is defined by pecky pecan veneers wearing a soft amber finish with highlights of distressed aged white.
Ligna Furniture’s Jackson
Crafted of solid, rough-hewn mahogany, the Jackson collection fuses modern and rustic. The bedroom group wears a cinnamon and sea salt finish.
Modus’ Townsend
Effortlessly stylish, the Townsend collection is crafted from solid hardwood and features naturally rough-hewn planks with heavy saw marks, pitting and distressing. A nine-step finish highlights its wood grain while simulating the patina of age. Suggested retail for pieces in the bedroom group range from $299 to $2,249.
Orient Express Furniture’s Boulevard
The Villa Collection’s Boulevard bed is one of Orient Express’ most iconic pieces. Its scalloped headboard is covered in an oatmeal linen and features a button-tufted back and nailhead trim around its headboard and rails. Suggested retail starts at $1,699.
Stanley’s Virage
Part of its whole home collection, the Virage Panel bed combines stark lines and clean surfaces with subtle moulding details and sweeping arched plinth bases. Its cherry veneers wear a Truffle finish accented by lightly striated Caviar black paint and glowing hand-applied Antique Gold Leaf highlights. Suggested retail for the Panel bed is $2,829.
Stickley’s Highlands
Stickley’s Mission collection is crafted from solid, quarter-sawn white oak and includes the distinctive yet timeless Harvey Ellis bedroom group.
Vanguard’s Emma Bed
From Vanguard’s “Make it Yours” bedroom program, the Emma bed features a fully upholstered headboard and footboard. Available in fabric or leather, its tufted headboard is accented with nailhead trim. Suggested retail for King starts at $4,146.