Monthly Issue
From Home Furnishing Business
June 7,
2016 by in Financial Reports, Industry 
Last year the furniture industry finally exceeded the volume experienced in the pre-Recession years of 2006 and 2007 growing 5.2 percent to $92.1 million in furniture and bedding sales (Figure A).
Lacking new marketing strategies, the furniture industry has had to rely in part on sheer pent up demand to clear the hurdles in the past two years. Overall financial performance has improved among furniture retailers with much of it attributed to improved Cost of Goods Sold as a percent of Revenue.
This is the third HFB report Retail Metrics for Furniture Retailing providing a comprehensive look at financial performance in the home furnishings industry via comprehensive data collected throughout the year by HFB’s parent company, Impact Consulting Services. This data is collected through Impact’s FurnitureCore application, Best Practices, which provides an ongoing monthly measure of a retailer’s performance. This subscription-based online application allows retailers to compare themselves to other home furnishings retailers and devise a plan to better manage store operations. No individual retailer’s numbers are shared, only composite percentage results. (See Methodology for additional criteria used in the Retail Metrics report.)
The focus of this article’s financial comparisons is five-fold. Results are provided for All Participants and reflect the performance of the entire sample compared to last year. Two additional retailer segments are featured for performance comparisons based on revenues – Under $5 million and $5 million to $25 million. For the two larger retailer segments -- $25 million to $100 million and over $100 million –only trend comments are provided due to the proprietary nature of their data. It should be noted that retailers participating in FurnitureCore’s Best Practices application are retailers focused on improving their company’s performance and does not reflect the industry in total.
The sales ranges not only reflect size of retailer, but in turn the differing operational characteristics the company size brings to profitability. The Under $5 million retailers are the surviving Mom and Pops who have developed niches and strategies for staying in business. Retailers with sales $5 million to $25 million have often emerged from Mom and Pop stores and are usually very owner-focused in operations. The larger $25 to $100 retailers may also reflect similar ownership, but have also developed more tiered management operations adding professional managers, for example in warehousing/delivery functions. The largest sales group, the Over $100 million retailers have accounting practices are often driven by tax strategies.
For the two revenue segments featured for comparison, high performing groups selected by net income as a percent of revenue are featured. The Top Quartile includes the top 25 percent in performance, and the Best Performers represent the elite top 10 percent.
The overall financial performance of All Participants is shown in Table 1.
Overview of Key Performance Indicators
With the furniture industry showing ever-increasing signs of recovery, profitability among retailers is also up. The retailers as a group improved performance over last year in all key areas, except Store Sales Expense. These improvements resulted in Net Operating Income almost doubling over the previous year to 5.8 percent of revenue. Table 2 gives an overview of key indicators – Gross Profit, Sales Expense, General & Administrative Expense, Net Operating Income, and Credit Expense.
Selling Expense is consistent across the board with little variation. This category is comprised mostly of sales force compensation, advertising, and warehouse/delivery expense. What does vary are General and Administrative expenses. The biggest chunks of G&A are Occupancy costs (rent/lease) and Administrative costs, primarily administrative and managerial salaries.
Each segment of financial performance is presented in more detail in the below.
Above the Line Income
Total Revenue encompasses merchandise sales as well as returns, sales of fabric/leather protection, and delivery income (Figure B).
Returns: Merchandise Returns (Figure B) continue to represent about 3 percent to 4 percent of revenue. Smaller retailers tend to handle many of their returns outside of the tracking system with voided tickets and even exchanges. Meanwhile larger firms are more likely to document these transactions negatively reflecting on their performance.
Merchandise Protection: Merchandise Protection (Figure B) is an often an important profitability component to traditional retailers, with the exception of upper to premium dealers, who often consider it a negative. This income usually represents around 3 percent of total revenue and is down slightly from the previous year among All Participants.
Delivery Income: Free delivery (Figure B) has become the expectation of consumers in all retail outlets, and this is especially true for smaller retailers. The best performing companies have still been able to offset this expense as Delivery Income as a percent of revenue continues to decline. Larger retailers are able to offset this expense at nearly double the rate of smaller companies.
Cost of Goods Sold
The big improvement in the bottom line appears to be in the cost of goods relative to revenue. Either the retail is “buying better” or simply not having to discount its merchandise so heavily. For the total group, COGS was down 2.3 percentage point over the previous year to 52.1 percent of revenues with larger retailers outperforming their smaller counterparts. (Figure C)
Gross Profit
Alongside improved COGS, comes higher Gross Profit. For All Participants, Gross Profit increased 2.3 percentage points over last year to 47.9 percent of revenue. Best Performers among all sales ranges reached Gross Profits over 50 percent.
The furniture industry’s Gross Margin (Figure D) is the envy of many retail sectors. Some vertical furniture retailers enjoy higher margins due to their direct sourcing models while electronics and appliance margins can run in the teens. With such healthy margins, why does the furniture industry make so little profit? Tracking how much it the industry spends on selling the product and running the business brings these low profits into focus.
Selling Expense
A significant 23 percent to 24 percent of revenue is spent on Selling Expenses (Figure E), and this figure has remained constant last year over the previous. This is the cost of attracting the consumer to the store (Advertising), converting that consumer to a purchaser by trained personnel (Sales) and successfully delivering that product to the consumer’s home (Warehouse/Delivery).
Advertising Expense. The cost of promoting product is a significant percentage of revenue. Last year the industry as a whole spent 6 percent of revenue on Advertising, similar to the year before (Figure E). Best Performing retailers over $100 million spent the most on advertising as a percent of revenue, but not significantly more than other groups. While advertising channels may differ by size of retailer, the total percent of revenue varies only one or two percentage points. Larger retailers will use more broadcast/air channels while smaller retailers rely heavily on print mediums, but the cost results are similar. It is imperative that advertising’s effectiveness be measured on a weekly basis and the only measure is number of visits – or ups – to the store or the website.
Sales Expense: The largest component of selling expenses is the cost of the sales associates, along with the cost of managing and motivating of them. Included in Sales Expense (Figure E) is the sales associates’ commission, as well as sales management, bonuses/contests and similar activities. Overall, Sales Expenses run about 9.1 percent of sales. However, over the last year it appears the smaller the company, the more the cost of Sales as a percent of revenue.
Warehouse/Delivery/Service: The “after the sale” cost of Warehouse/Delivery/Service is also a significant cost to the retailer. Last year these expenses totaled 7 percent of revenue, which was down over one percentage point from last year (Figure E). Often a retailer’s upfront performance is negated by the backend if the retailer is unable to manage it correctly. As reported earlier, merchandise returns can total over 3 percent of sales. Warehouse and Delivery must be managed intelligently and if not, outsourcing should be considered.
Store Sales Expense: A small but important selling cost, Store Sales Expense, averages 0.5 percent to 2 percent of sales. The Best Performers in the largest companies do outperform their smaller counterparts, but not significantly (Figure E). Retail technologies exist to eliminate the sales counter which can cost one percent or more, but can negatively impact the consumer’s excitement for the furniture purchase.
General and Administrative Expense
While not directly touching the selling process, the final piece to profitability is the control of General and Administrative Expenses. General and administrative expenses are, for the most part, fixed expenses and must be controlled relative to the potential volume. Primary components include Occupancy costs – the place to conduct business and the costs to keep it open, the cost of the management team that develops and executes a strategy, and finally the technology and information systems that are essential in controlling the process. These expenses can be as much as the Selling Expense in some cases and generally vary significantly by the size of the retailer. (Figure F).
Information Systems: Technology costs are staying around 1 percent, and for the Best Performing retailers, is down to 0.5 percent to 0.6 percent, regardless of size (Figure F). The successful implementation and ongoing maintenance of systems necessary to run a business smoothly can be painful at times but are critical to profitability. The larger retailers investing more in information systems have achieved an advantage in processing the customer order after the sale, often by transferring the process to sales associates.
Occupancy: The Best Performing companies enjoy Occupancy costs around 6 percent, compared to 7 percent to 8 percent for All Participants (Figure F). Often these larger retailers have the upper hand with the ability to secure the best locations. Consumers are increasingly placing a priority on location wanting to shop closer to home or visit retailers along their normal shopping routes.
Administrative Expense: The largest chunk of Administrative Expense is management salaries along with bonuses, professional fees, and insurance. Overall Administrative fees can total 8 percent to 10 percent of revenue on average for all retailers. Larger retailers over $100 million saw significant increases in these expenses last year. The decision to hire managerial positions is a hard one for many companies, but can produce big results with the proper personnel.
Credit Income and Expense
Retailers acting as credit houses are disappearing and what was once a key area of profitability is now a crucial place to control costs. Net Credit Expense totals 2 percent to 4 percent of revenue for the Best Performers regardless of size and 2.8 percent for All Participants (Figure G). From our perspective, credit is a selling expense that has emerged as a perceived necessity to generate consumer traffic. In our experience, less than 30 percent of consumers opt for offered credit promotions.
Net Income Before Interest and Taxes (% of Revenue)
Last year saw a big improvement in Net Income Before Interest and Taxes. While the average participant saw Net Income increase to 3.4 percent of revenue from zero percent, Best Performers experienced double that at 7 to over 8 percent, regardless of size.
Summary
The growth in the furniture industry is reflected this year in the improved financial performance by furniture retailers. Keep in mind our numbers are only guidelines to stimulate thought and discussion of how to profitably run a retail operation. We caution any specific retail figures, to be comparable, must be compiled to conform to these classifications.
We believe an ongoing focus on a company’s statistics is the path to high performance. It is not achieved in a month, but is part of a continuing process. Such a process is greatly enhanced with membership in a retail performance group that allows for open and frank discussion with peers of the barriers to achieve certain objectives.
While the overall industry statistics are improving, many retailers are achieving exceptional results. We challenge you to be one of those. Home Furnishings Business is committed to providing input to your process.
June 7,
2016 by in Economic News, Industry
Millennials, Americans born roughly between 1982 and 2000, account for more than one quarter of the nation’s population. As of 2015, these 17 to 34 year olds numbered 83.1 million and have surpassed the 75.4 million Baby Boomers. The Millennial generation continues to grow as young immigrants move into the U.S., while deaths among Baby Boomers exceed the number of older immigrants. These children of the Boomers will emerge into full adulthood in 2017 as the largest consumer generation in history.
This is the first of two articles profiling this generation. The initial article explores demographically how the Millennials have altered the population, income, education and household characteristics of both the Under 25 and 25 to 34 age groups over a ten-year period. The article next month will explore how researchers think this generation will spend its estimated $200 billion dollars annually starting next year.
Population
As a whole, the number of 15 to 34 year olds has grown 9.5 percent from 2004 to 2014 (most recent population data). As shown in Table A, the glut of Millennials is in the 20 to 24 age group – totaling 22.9 million in 2014 after jumping 12.6 percent in ten years. Ages 25 to 29 have also grown dramatically, increasing 15.7 percent from 19 million to 22 million. While dipping down to 19 million in 2008, age group 30 to 34 has climbed up to 21.5 million. The Millennial stragglers are in the top end of the 15 to 19 age group. Once the highest young adult population in 2006 and 2007, most have since aged into their twenties leaving this age group relatively flat at a 3.7 percent growth over the ten-year period.
Income and Employment
The economy has had a major impact on Millennials. Many of them still live with their parents, have crushing student loan debt and are underemployed at best and unemployed at worst. Over the past ten years individual incomes have yet to reach pre-recession levels. Latest median income figures from the Census Bureau report Millennials ages 25 to 34 earn $31,219 annually, down over 10 percent from a peak of $34,459 in 2007. Many of the Under 25 age group Millennials are currently part-time employed college students, underemployed graduates or workers in unskilled low paying jobs.
Education
The percentage of Millennials that are college educated is higher than any generation preceding it, a fact that should bode well for future economic growth. Over seventy percent of Millennials have some higher education (Table C) a much higher percentage than their Boomer parents.
Unemployment
Despite the level of education, a staggering number of Millennials are still looking for work. At the end of last year, 9.4 percent of adults ages 20 to 24 seeking jobs were still unemployed (Table D).
Marriage
Of all of the characteristics of Millennials, perhaps none is more significant to the home furnishings industry than the tendency to delay marriage (Table E). In less than ten years, the marriage rate shifted from 38 percent of adults marrying by age 34 to only 26.8 percent. Marriage spurs home ownership and family planning which in turn feeds the home furnishings industry.
Homeownership
Although Millennials make up the largest and most educated generation in American history, the combination of economic factors, delayed marriage and family formations and shifting consumer attitudes also make them the slowest to embrace home ownership. This is most evident in the 25 to 34 age group where home ownership has fallen 10 percentage points in 10 years. In 2004, 49 percent of Millennials owned their own homes compared to 39 percent in 2014. (Table F).
Furniture Expenditures
The glut of the Millennials, the Under 25 age group, is one of the few groups to increase expenditures on furniture in the last 10 years, although expenditures still comprise only about 5 percent of industry sales. Many of these Millennials, however, still rely heavily on family financial support. Millennials ages 25 to 34 as well as the older GenX 35 to 44 group, traditionally the core of the furniture industry, have both failed to reach pre-recession furniture expenditures – down 8.2 percent and 12.3 percent.
For the home furnishings industry, the Millennials always seem to be just over the horizon but yet to make their big entrance. In terms of furniture industry sales, sales to the Baby Boomers are still growing, but they will begin to lessen their impact and make way for the Millennials.
Many things add up to help explain the slow arrival of the Millennials on the home furnishings consumer scene. The long recovery from the recession brought stagnant wages and higher unemployment. Add to that the delaying of marriage and slow home purchases. But the industry is ready. In the next issue, Statistically Speaking will examine the attitudes and lifestyle characteristics of Millennials and whether home furnishings purchases will become as important to them as they have been to their Boomer parents.
June 7,
2016 by in Business Strategy, Industry
Literally every sales management training program I have seen during my forty years in our industry, has at some point made the statement “what is not measured cannot be changed” or something very similar! It is so basic to performance coaching that it is usually one of the first points covered and it is made abundantly clear that without the proper tracking, reporting and use of selling metrics, sales management will not be as effective as we need it to be! It is like having a map to navigate an unknown country with your desired destination plainly marked on it. Nice to have, but absolutely useless unless you consistently and constantly know where you currently are! The ultimate example would be the GPS system in your car that keeps you informed and allows you to make the proper course corrects in real time.
Owners/managers all have one goal or target that they do this with, since it is the main metric that drives their business – total sales volume. However, the major problem with only focusing on total revenue is that it is the end result of our efforts in so many areas within our business. Unfortunately, it is virtually impossible to improve a result if that is all you focus on! You just can’t “Coach” a result! You need to break it down into all of the individual factors that deliver what you want, then improve those that are deficient and maintain/maximize those that are sufficient.
As an example, a golf coach would never be successful if all he/she focused on was just getting the final score down to par. First it would have to be determined which aspects of the pupil’s game needed the most help: driving, fairway shots, chipping, putting, etc. Next they would work together on the behavior changes necessary in each of the weaker areas to cause improvement. The result would be an overall lower score, moving them towards the goal of par. Of course if it was my game we would not need to measure the individual facets to determine which to coach, since they ALL are bad!
Similar to golf, selling has a number of facets that greatly influence our end results. Breaking your individual staff member’s performance down to the basic areas that help them make the sales is the best way to know where to focus your attention, then observation and other tools will help guide your coaching/training efforts to deliver sales performance improvement. We have discussed a good deal of these sales management functions in previous articles, but here is a brief overview of the numbers you should be paying attention to and how to analyze them.
Four Key Effectiveness Metrics Tell It All
Effectiveness is a key issue in any environment in which person-to-person selling is the backbone of the business. To be successful in these situations high levels of individual interpersonal skills must be present. The only way management can determine if these skills are, in fact, being applied by salespeople is to measure those elements of sales performance that reflect their use.
Keeping in mind that Total Sales = Traffic X Close Rate X Average Sale, the following four measurements should be used to determine all baseline statistics (where you are now), to prepare on-going performance analyses and to develop goals (where you want to go).
Traffic is defined as: the number of potential customers (or family groups) who come into the store for any reason connected with the store’s business.
Most retailers call these “Ups”. This term derives from the colloquial use meaning that a salesperson is up to bat for this customer opportunity. Effectiveness is based on the number of opportunities that exist to make a sale. All opportunities must be counted because each one requires that a salesperson make personal contact with the customer or prospect. Traffic counts also provide the base measurement for determining close ratios and Revenue per Up, two important indicators of salesperson effectiveness discussed below.
Close Ratio is defined as: Number of sales divided by number of UPs, expressed as a percentage
Are your people connecting to their Ups? The key factor for calculation consistency is how you will measure the number of sales made. We strongly recommend that you combine all sales slips written for one customer on any one day by one salesperson into one total sale amount so that you are always measuring average sale and not average ticket. Doing this will ensure that you are getting a true picture of the total contribution of each sales process and are not inflating your close ratio due to administrative considerations. It is our experience that stores that measure only average ticket hold an unrealistic view of their close ratio that understates the need for training or improvement.
Average Sale is defined as: Total sales volume divided by the number of sales made, expressed in dollars
Are your people maximizing their opportunity with each Up? Here, again, the way the number of sales are counted will affect the outcome. Counting only the number of tickets will cause the average sale to be understated and will provide you with an understated view of performance. When measuring individual performance and comparing one person to another or one person to the store average, the conclusion to be drawn regarding higher performers is that they have the ability to recognize the greater needs of some customers. In other words, higher performers have and apply selling skills that lower performers do not possess or do not apply.
Revenue per Up is defined as: Total sales volume divided by the number of customers seen (UPs), However it can also be calculated by multiplying Close Rate X Average Sale
Revenue per Up is a critical measurement for use by management to understand the true effectiveness and efficiency of each salesperson. This measurement takes into account the effects of both close rate and average sale by combining their effects into one comparative index that indicates how many dollars of revenue are generated each time an individual salesperson greets a customer.
It is the variance among salespeople from high to low that shows the opportunity for store and individual improvement. This variance highlights the cost to the company of allowing high and low performers to have equal customer opportunities without making every possible effort to enhance the selling skills of the low performers. Keep in mind though, that Revenue per Up, like total sales, is a result that can’t be directly coached, it is mainly a “Red Flag” that makes you aware of how staff members are contributing to your business. Since Rev/Up = Close Rate X Average Sale, you must drill down to those numbers to find the driving factor for the performance.
The above four measurements are the most important metrics that should be used in all furniture stores’ sales performance analysis programs. However, in most stores there may be additional key performance measurements that should be considered. Here are a few additional performance numbers to track, report and coach:
Protection/Warranty Close Ratio
In many stores, Protection/Warranty sales is the most profitable product category and provides a significant contribution to the overall success of the company. Many stores currently only track the percentage of these sales to the total. Again, that is a result and can’t be directly coached. We recommend that this closing ratio be tracked, since it directly reflects how effective each person is at presenting these products to their customers and it can be coached.
Product Category Performance Percentages
It is extremely important to know how each of your staff members are performing in every product category a store sells. You will find that some of your people don’t sell bedding, others might fail to make the grade in case goods, a few don’t sell stationary well, etc. As an example, if your store has a lower average sale than it should, chances are you are under performing in Case Goods – find out who is pulling you down and fix it!
Sketching and In-Home Business Development
We recommend that Sketching be an integral part of every store’s selling process, but this is particularly critical in any store that deals in better goods and design or In-Home sales. Therefore, it can be very helpful to understand how many customers each staff member sketches with and how much In-Home business they are generating, based on appointments set up, made and sold.
Summary
Sales performance metrics are a management tool that should be used to better understand the dynamics of the store and to gain valuable insights into what is actually happening on the selling floor in the relationships between salespeople and customers. Comparative data should be used within a framework of clear goals, training, one-on-one coaching and counseling, and a structured feedback system. This is how to best develop a winning team and keep it winning!
June 7,
2016 by in Furniture Retailing, Industry
BY Trisha McBride Ferguson
While cocktail ottomans are gaining popularity as the place of choice for consumers to prop their feet or lay the remote, there’s no shortage of growth in the occasional table marketplace. From traditional to modern to farmhouse, today’s table styles help tie a room together while offering both fashion and function. No longer limited to identically matched sets of cocktail, end and sofa tables—consumers and designers are creating curated looks using carefully chosen tables to set a unique design aesthetic.
In 2015, occasional tables accounted for $3.3 billion in sales, a 5 percent increase when compared to sales of $3.17 billion in 2014. Sales growth in the category from 2013 to 2014 was notably lower at just 2.8 percent. In the overall home furnishings market, the occasional category accounted for 18.1% of total industry sales last year.
Greenington’s Rosemary Coffee Table
Edgy and eco-friendly, this coffee table is crafted of 100-percent solid bamboo. Its sophisticated lines reflect Mid-Century Modern influences. Suggested retail is $672.50.
Ferris Coffee Table NBWY-007 from Four Hands
The clever interplay of thick peroba wood slabs creates a modern take on the modular cocktail table. Its thoughtful design allows expansion from 48” to 76” wide. Suggested retail is $1,930.
Vanguard Furniture’s G231C Norma Cocktail Table
Part of its Barry Goralnick Collection, the Norma Cocktail Table features a metal base crafted in a French Brass finish. Its inlaid Agaria Marble Top adds both luxury and organic appeal. Suggested retail is $2,997.
Magnussen Home’s Bellamy T2491
Modern meets traditional in this stylish cocktail table crafted of pine solids and featuring brass hardware with a pewter overlay. Its classic scroll design gives it a timeless quality. Suggested retail is $
Stein World’s Vincent Cocktail Table 331
A table with a point to make, Stein World’s Vincent occasional group features a solid, inverted triangle-shaped base. It’s crafted in a mahogany tone finish and has a wood-framed glass shelf.
Ashley Furniture’s Traxmore Table T766-1
Wood and metal combine to create this unique cocktail table. Casual, medium-brown pine table tops feature removable wood serving trays and are supported by a slanted black metal base crafted from tubular steel and finished in a dark, textured, powder-coated finish.
Circles Cocktail Table from Hickory Chair
Inspired by an artifact on display in the collections of the New Mexico History Museum, this Made to Measure cocktail table is rich with historic influences. Its straight lines and clean silhouette give a nod to Arts & Crafts styling. Suggested retail is $3,225.
Klaussner’s Shoal Creek Cocktail Table
This multifunctional cocktail table is all about keeping clutter contained. It features a lift-top storage feature on one side and drawer storage on the other. Antique pewter metal legs and an “X” metal stretcher complement a light gray, ash finish and U-shaped drop bail pull hardware. Suggested retail is $
Jofran’s Beacon Street Cocktail Table 1649-1
Offering a new twist on a classic shape, this slatted-shelf cocktail table boasts a warm, multi-toned finish over solid acacia. It’s complemented by coordinating end, sofa, and chairside tables. Suggested retail is $199.99
Stickley Furniture’s 2016 Collector Edition Console
Equally at home in the foyer, living room or dining room, this console boasts dark copper hardware and three inlays made with sycamore, maple, cherry, makore, magnolia, and bird’s eye maple. Also includes back panel wire access cutouts and a power strip.
A.R.T. Furniture’s Epicenters Williamsburg Single Dresser
Featuring unique artwork created by a local artist and inspired by Brooklyn street art, this distinctive chest delivers plenty of charisma. Suggested retail is $2,079.
Borkholder Furniture’s Sienna Bench
Scaled for today’s living, this multifunctional bench features distinctive architectural elements. American-made and solid-wood, it’s shown in a brown maple finish. Suggested retail is $1,499.
June 7,
2016 by in Financial Reports, Industry
From all indications the storm has passed in 2015. Total furniture and bedding sales exceeded the 2007 peak. Financial performance has improved significantly from last year’s breakeven level to a much better 3-4% range for all traditional retailers. Is it time to breathe? From my perspective as an observer of the industry for the past 35 years, the answer is unfortunately not. Furniture retailing is like riding a bicycle. If you stop peddling, you slow down and eventually fall over. Unlike other business sectors that consider long term strategies, the time frame for a furniture retailer is much, much shorter. Regrettably for many retailers, the consideration begins when the situation is critical.
From a financial perspective, in 2015 it was relatively straight forward. Furniture retailers were able to increase margins over two percentage points. For the most part, this flowed to the bottom line. What gave retailers the impetus to increase margins? Was it better merchandise, improved consumer attitude, or was it the result of tighter margins at the supplier level?
The question becomes, “Is this a permanent solution or a short term fix?” As business slowed in this year with the industry up only 2.2% from Quarter 1 last year, will we panic and sell “price” or sell “financing”? The independent furniture retailer is up against significant competition from other distribution channels. The most immediate are the etailers (Internet) that have gross margins in the 24% range, but have yet to make a profit. Understandably, it takes significant investment to pioneer a new distribution channel. However, how long will investors endure the losses?
Interestingly, Amazon, one for the pioneers in this space, recently announced that they plan to open 300-400 bookstores. Now that they have captured significant share in the product category and caused the demise of bookstores, they are returning to opening bookstores. Maybe we can speed up the process of furniture and sell them the existing stores.
We recently completed some research that, contrary to popular belief, indicates more consumers visit the store before doing online research. Our take-away – we have an opportunity to sell the advantages of purchasing in a “real” store - the opportunity to see the product, to understand the quality and, most important, to be assisted in a major purchase by trained sales associates, associates who will work with the customer in creating the entire room. The final benefit is the delivery and installation by the company from whom the purchase was made.
We have the strategic advantage if we will use it not only with the Internet retailers, but also with the lifestyle stores who have limited selection and sales associates less skilled at selling the product. Keep pedaling, but it’s time to engage the next gear.