Monthly Issue
From Home Furnishing Business
October 16,
2015 by in Business Strategy, Industry 
One of the most powerful tools a performance driven sales organization has to motivate people and drive growth are goals.
By Tom Zollar
Yet, goals could be one of the least understood, and therefore most underused weapons in a store’s arsenal. In order to have the desired effect and power, goals must be at the front of everyone’s mind—particularly the sales manager’s—every day. Goals, and each individual’s commitment to them, are the driving force behind performance improvement.
Basically, everyone has goals but few people have structured, disciplined plans on how to achieve them. Too often, goals become wishes or daydreams as people go about their daily work and allow themselves to become distracted from the pursuit of their goals. Unless a goal is so important to a person that they are willing to commit themselves totally to achievement, the goal will be meaningless and will unlikely be reached.
It is often difficult to get a salesperson to commit to a goal for sales volume set exclusively by management, yet that is how most retailers create them. Other than the fear of losing one’s job, there is no internal, personal connection with an owner- or manager-based goal. A goal can be the motivating factor behind an individual’s performance only if a direct connection between the result and some personal need or want of the employee exists. It is, therefore, as important to know why a person wants a certain result as it is to know that they want it.
We often think that it is all about the money, but it is not. Employees are motivated by different things, not only income. Even though people have changed and various generations have different priorities, the following main motivational factors have consistently been cited throughout the last 50 years.
Fear—Sometimes the fear of losing one’s job pushes a person to strive harder to achieve a goal. Another person may be more afraid of failing as a blow to their self-esteem. Fear of being considered a failure by friends and family can be a powerful motivation to succeed.
Recognition—Many people like to be No. 1; the best at what they do. That need drives their performance. These people often grasp new ways and better methods faster than others because they see them as tools to be used to remain on top. Other people want to feel the internal pleasure of being told they have done a good job, have met their goals, and are valued employees.
Belonging—Some people thrive on teamwork and being part of a high-performance team. They like having a hand in setting their own goals, knowing management and their peers will respect them. These people respond to group celebrations for achieving group or team goals whether or not they have achieved their own.
Achievement—High achievers will always strive for more, often as much for their own personal gratification as for being recognized as leaders. Care must be taken in setting goals with these people so that they do not set them too high and doom themselves to failure, which is the last thing they want.
Aside from financial, these are the four top job satisfaction factors that motivate individuals. Therefore, to be consistently successful in gaining each individual’s commitment to a goal, managers must be aware of which factors play a part in each person’s mindset, and provide the opportunity for them to be rewarded in those areas of need.
That said, the strongest factor we directly control is that we pay them for how they perform. We can coach people toward goals better when we understand the underlying factors in play but we will always have sales volume as our primary target.
Before beginning the goal development process with individual salespeople, management must have an understanding of what the store potential should be. The simplest way is to multiply the store’s average revenue per up from the last 12 months times the most intelligent estimate you have for the coming year’s total traffic—Ups x Revenue/Up = Revenue. Then, look at what improvement the sales management efforts can honestly be expected to achieve in the staff’s performance. Take the estimated new revenue per up and multiply it by the traffic estimate to get a target for next year’s sales volume.
From a business management standpoint, this is a great way to determine where you think you can go in the coming year and also to get a handle on how much of an increase you want from your staff. In most cases, traffic will not increase much so growth will have to come from the sales team’s performance improvement. However, some stores may need to add staff in order to handle increase traffic. Either way, you need to know where your growth will come from and for what part of it to hold your staff accountable.
As much as the business manager needs to know this to plan for a store’s growth, it is not something that will motivate most staff. While they may be totally devoted to you and that could help motivate them, for the most part your goals are your goals. What you need to determine together is what their goals are.
Salesperson-Based Sales Goals are the most meaningful and therefore powerful ones you can have. So let’s look at a few things you can do to develop them with your staff members.
Goal setting should start with a one-on-one meeting between the sales manager and the employee. The meeting allows the salesperson to set a goal that the sales manager understands and to which the salesperson can be committed. Ensure the salesperson fully understands all of the implications of the goal. Help them relate the goal to their current level of performance in the three critical areas: traffic, close ratio and average sale. Finally, clearly spell out what has to be done by them and by you, in order to insure that the goal will be achieved.
You will basically use the same process we used for the store goal above, starting with where they are now. Show them how multiplying ups by their closing rate and average sales equals total sales. Then, how multiplying that by the commission percentage determines the majority of their income (less spiffs, bonuses, protection, etc.). The purpose is to connect the dots so they come away understanding how the numbers work together, because if they do, it will make buying into a performance goal easier for them.
Once they understand how income is tied to what they do, you can ask them where they want to go with it. How much do they need to grow their income in order to do the things they want to do in life? Many people have never really thought about what they want to earn, living check to check thinking that the new car or house they want is beyond their reach. If you can find out what they want and tie that to selling more, then they will be more willing to take ownership of the sales goal and move closer toward their dreams.
Ask each person what they want to earn during the next year and help them come up with an income target that you both feel is achievable. Divide that amount by their historic effective commission rate (total previous income/total previous sales) to come up with what they will need to sell in order to earn it to create their sales goal. Drive home the point that this is their goal for themselves, but you share responsibility and will work hard to help them achieve it. If your store is properly staffed, most often the sales teams sales goals will exceed management’s target.
Reality is that many salespeople are not aware that the way in which they perform impacts outcome. Many consider their results to be a matter of customers’ likes or dislikes, the products a store offers, poor or ineffective advertising and promotions, or a dozen other reasons, all of which lie outside of their control.
The goal-setting process is the right time for the manager to discuss this issue and set the stage to work with them each month toward their mutual goal of income growth.
October 16,
2015 by in Business Strategy, Industry
The face of furniture retailing continues to evolve. What will it look like in the future?
By Bob George
This is not a new concept. In fact, for decades the expansion of air travel, the exploration of foreign countries by National Geographic, and the impact of the Internet have made us truly a world community.
Now, social media and the vast content of the Internet will, at the very least, allow people to be there in spirit. Furthermore, today international flights are departing from relativity small airports thus making it possible for the general public to get there easily.
What does this have to do with the furniture industry? Obviously, in the manufacturing sector, the production has and continues to move offshore. (See the current Statistically Speaking article.) However, what about the retail sector? In the not too distant past furniture retailing was local with a family name above the door and a reputation in the community that facilitated the consumer purchase.
Yes, there are many regional chains personified by local ownership remain on the retail landscape. Nevertheless, like restaurants, that local great place to eat has been joined by national chains offering good food and acceptable service. While the consumer encounter is good, this location offers neither the local flair nor the exceptional experience.
Will furniture retailing evolve to several national chains offering consistent service of a commodity product designed to satisfy the blended taste of a national consumer?
All of this leads to this question. Will furniture retailing evolve to several national chains offering consistent service of a commodity product designed to satisfy the blended taste of a national consumer?
Does economy of scale dictate that a 500-plus store chain only deliver the experience demanded by the consumer? Obviously two stores have the advantage over one but, if continued to increase, when does the point of diminishing returns come into play? And what gets lost in the process?
The challenge for local retailers is to truly differentiate themselves from the faceless larger chains that are gradually moving into their markets. This is documented in our feature article. From a consumer’s perspective of what is important, being No. 1 across the board is a necessity. What is your consumer DNA?
Sometimes it is not just about price or an extensive selection. The larger retailer will focus on one or two factors, such as price, selection, and the like, expecting the consumer to accept less than great on the others. Local retailers cannot let the consumer settle. If you communicate your differences, they won’t.
October 16,
2015 by in Business Strategy, Industry
Make the most of the Fall Market by discovering, connecting and learning.
by Sheila Long O’mara
Welcome to the Fall High Point Market. Central North Carolina can be quite beautiful this time of year as the fall foliage starts to change and cooler temps roll adding crispness to the air. And of course, it means the Market is here.
Time to refresh store merchandising with the latest home furnishings designs. Time to reconnect and catch up with industry friends. Time to swap ideas and strategies to boost business. Time to participate in a seminar or three to improve your marketing, logistics, sales or social media prowess.
We tend to think of the New Year or spring as times for new beginnings. Thankfully, the market cycles of our industry deliver a chance to freshen up every few months.
Take advantage of all that Market has to offer while you’re weaving your way through showrooms, seminars and socials. There’s a lot to be uncovered in 11.5 million square feet scattered among 2,000-plus exhibitors in 180 showroom buildings.
From my showroom tours of premarket and the Casual Market Chicago, exhibitors have a wealth of new product to showcase. Some of it is quite lovely while some misses the mark.
Please, allow me to preach for a bit.
I saw a lot of sameness from showroom to showroom, leading me to believe the herd mentality of our industry is alive and well.
For years, it seems as if a collection becomes a breakout success on retail floors, the next Market is flooded with similar looks.
Let’s be honest. In all reality, how many Restoration Hardware lookalikes with “dry finishes” can one retail floor hold? I’d be willing to say not as many as manufacturers are currently funneling into the marketplace.
All done.
This season brings with it a cadre of names from fashion, design and the music scenes. EJ Victor and Jaipur will unveil collections with Kate Spade, while Hooker Furniture is featuring Cynthia Rowley. Designer and HGTV’s “Fixer Upper” host Joanna Gaines has teamed with Standard Furniture for a collection, and country music singer Eric Church has partnered with Pulaski Furniture for a collection.
Exciting looks are out there. Seek them out and bring them to life on your retail floors to set yourself apart in your market. Make the looks your own and continue to wow consumers with exceptional service, design expertise and professional delivery.
Do me a favor. When you discover new product at Market that strikes your fancy, pop me a tweet @sheilalongomara or @hfbusiness. I’ll be on the prowl for great things, too, and I’m happy to share. Not on Twitter? Feel free to e-mail me at slomara@hfbusiness.com
Here’s to a great Market filled with great discoveries.
September 11,
2015 by in Business Strategy, Industry
The Great American Home Store has its sites set for future growth in the South.
By Daniel Beaird
Ron Becker was out of the furniture industry when he was called about an opportunity in 2002 in the Memphis, Tenn., market that the 27-year furniture veteran couldn’t pass up. The goal was to open a full-service furniture store unlike any in the mid-South.
“I have a love and passion for it,” said Becker, co-founder and general manager of The Great American Home Store.
He got his start in the furniture business at 25 years old and spent 13 years on the floor at Fleming Furniture in Paducah, Ky., and where later stepped into management. He helped take that local furniture company from $5 million in sales to $30 million before leaving to pursue other interests.
The Great American Home Store (Great American) opened its first location Sept. 11, 2004, in Southaven, Miss., a suburb of Memphis, Tenn. It was designed after spending an entire year looking for the right location at a cost of $8 million. But in its first full year of operation, Great American generated $14 million in sales.
“We spent a ton of money on advertising before opening the first store, promising we were going to be great,” Becker said. Three furniture stores, an outlet store and two freestanding sleep shops later, the Memphis market has seen Great American’s growth firsthand. Future plans include stores in Little Rock, Ark., and possibly markets like Louisville and Lexington, Ky., and Nashville, Tenn.
“We are always looking for the right opportunity for expansion,” Becker said. “We want controlled growth. Customer service is extremely important to us and we’ll grow only when our operations manager, Bill Gill, says we’re able to.”
Great American’s second store opened in Memphis, Tenn., in 2007, bringing the furniture retailer to 110,000 square feet of total showroom space and 150,000 square feet of warehouse space in the two locations.
“We knew that in order to serve the community and distribute costs effectively, we would need two locations,” Becker said.
Both sites have on-site warehousing for customer convenience pickup.
“It’s a one-stop shop,” Becker said. “Our customers don’t have to go to a bad part of town to pick up their purchases. Because our warehouses are connected to our showrooms, a little more than one-third of our business is through our customer pickups.”
As a locally owned and operated full-line home furnishings company, Great American touts that it provides the mid-South’s largest selection of quality furniture, bedding and accessories. It was founded on the thought of providing consumers with the convenience of a one-stop home furnishings superstore.
“As we started the process of building our company, I decided we would structure the business model around customer service,” Becker said. “Usually furniture companies are built around sales and they worry about service later.”
Becker decided that Great American’s sales volume would be controlled by its service associates, and they would only increase advertising dollars after meetings with service associates confirmed they could successfully handle a larger sales volume.
According to research by Pittsburgh-based Marshall Marketing & Communications, which provides marketing intelligence from consumer market and media research for local, regional and national businesses, Great American is the top cross-shopped furniture store in the Memphis, Tenn., market. That means customers who shop the retailer’s competitors, then shop Great American more than any other furniture store in Memphis; and customers also shop Great American stores against each other.
According to Becker, 97 percent of its customer deliveries are completed to the customer’s satisfaction and the retailer boasts a triple A business rating in its market.
“That is very hard to do in the furniture business,” Becker said. “But we do what we say we’re going to do. There are no hassles and no surprises for the customers, and sometimes we take it on the chin because of that but we mark it up to marketing.”
According to Becker, all deliveries go through three phases of preparation before merchandise is readied for loading on trucks. Each driving team is responsible for its load, and once they accept the merchandise, all chargebacks for damages are the driver team’s to pay. Each driving team is paid a commission on delivered merchandise that meets the customer’s approval. The delivery process is completed via an iPad and iPhone application with each delivery, and Great American pays all sales associates and delivery people a weekly commission on delivered purchases.
Great American has treaded lightly in the digital marketing realm and hasn’t started selling online.
“We waited, and watched the good and bad of online marketing for our competitors,” said Jack Wells, marketing manager for Great American. “It’s a new territory for everyone and don’t let anyone tell you otherwise.”
“We have added new tools in our online development to help us advance to a sales funnel approach of moving customers from our web presence to our showrooms to a sale and, in the future, online sales,” Wells said.
Wells came on board in 2011 to create and steer Great American’s in-house advertising department.
“I’ve known him for 35 years,” Becker said. “He and I have the same value beliefs in life. Always do what is right and just even when nobody is watching or even when nobody cares.”
Wells started out in the bedding manufacturing industry 40 years ago and moved into the furniture retail industry in the mid-1980s.
“There I think he found his passion for advertising and marketing,” Becker said. “Jack is a great mentor for a lot of young people who are coming into our industry. He always finds time to help those who want to learn and grow in the advertising industry.”
Becker says Wells has helped Great American grow its business by double digits each year he’s been on board and has cut Great American’s advertising cost by 50 percent since joining the company.
“I convinced Ron that the company could save money by bringing advertising and marketing in house,” Wells said. “We started with print and moved toward doing all of our television advertisements recently. The team is all either cross-trained or in the process of ongoing training to make sure everyone can do everything in my department, from print to television to the ever-increasing use of Internet marketing.”
“When we started the company, I was spending 11.25 percent in advertising to revenues,” Becker said. “Last year, we finished with a 5 percent advertising cost to revenues.”
FurnitureDealer.Net recently redesigned Great American’s web site and now the company has a blog and a presence on Facebook, Twitter and Pinterest.
“We have found Andy Bernstein (FurnitureDealer.net president) and his team at FurnitureDealer.Net to be an invaluable asset to helping us foster our future vision for our web presence,” Wells said. “We worked on a mobile-friendly site first because so many consumers check their phones or tablets first. Our e-marketing segment grew from there into ‘infotainment."
Great American has also developed a monthly e-magazine with embedded video that promotes its television advertisements. All of the retailer’s design work is in house and they laid out the redesign of the website for FurnitureDealer.Net.
“Great American’s team designed the look to match their new branding, and along with that we added our best coding practices and user experience knowledge to make it a site that’s easy for customers to get the information they need and help drive leads to Great American,” said Kayla Wallace, a business consultant for Minnesota-based FurnitureDealer.Net. “One of my favorite things about Great American’s new design is the first impression. It does a great job reflecting the feeling of their physical stores online and that is always something we want to accomplish. I like how easy it is to understand, at a glance, what Great American is all about, what services they offer and why they carry the kinds of products they carry.”
“We take on challenges all day, every day,” Becker said. “I don’t worry about anything but I get frustrated because I can’t find people fast enough.”
“Ron’s going to do it the right way,” Wells said. “And we wouldn’t be in the business if it wasn’t up to our standards. Ron’s passion for the industry and attention to detail as well as his uncanny talent for selecting and building the right team is the cornerstone to our success. He understands and appreciates the value of our sales force being in position for so many years, and has worked hard for this to be a customer- and employee-focused company. Ron is very loyal to his employees, and our vendors not only respect him but many have become close friends throughout the years.”
The Great American Home Store
Headquarters: Southaven, Miss.
Year Founded: 2004
Footprint: Three furniture stores, one outlet store and two freestanding sleep shops in Memphis and Cordova, Tenn., and Southaven and Olive Branch, Miss.
Employees: 90-100
Awards: Mississippi Retailer of the Year, 2007; Finalist for Memphis Business Journal’s Small Business Awards, 61-350 Employees, 2007; Best Independent Sealy Retailer in the Mid-South, 2005-2010
Key Vendors: Austin Group, Bernhardt, Catnapper, Corinthian, Flexsteel, Fusion, Hammary, Jaipur, Klaussner, La-Z-Boy, Magnussen Home, Pulaski, Sealy, Tempur-Pedic, Universal and Vaughan-Bassett
Website: GreatAmericanHomeStore.com
September 11,
2015 by in Business Strategy, Industry
Michael Amini, CEO of full-line producer Aico, took over as president of the
American Home Furnishings Hall of Fame board of directors earlier this year. During his short tenure at the helm, he has led the institution on a mission to broaden its reach and boost its industry cachet.
Here, he discusses upcoming changes to the Hall of Fame induction banquet set for Oct. 18 and other plans for the group.
Home Furnishings Business: Earlier this year, the American Home Furnishings Hall of Fame underwent an extensive rebranding initiative. Why the change?
Michael Amini: In January, we changed our name to the American Home Furnishings Hall of Fame Foundation to underscore our scope of work and the inclusion of all segments of the home furnishings industry.
Previously, it was the Furniture Hall of Fame. But we all know, no matter if you have a mansion, small home or big home, by having just furniture without wall art, rugs, accessories or lighting, the house won’t look like a home. Therefore, we can’t do everything based on furniture. We need to bring everybody together in the industry, and I’m very happy that we have achieved that.
HFB: What reaction have you gotten to the changes so far?
Amini: Very positive. The Hall of Fame is undergoing a significant transformation and we will continue to change the industry’s perception of the organization with the extraordinary event coming up Oct. 18. We are hoping for unconditional support of the entire industry.
Unless we all come together and support the industry as a whole with the most prestigious event and organization, it will be a pity because every industry that I have looked into has a hall of fame. As the furniture industry, which happens to be the second largest purchase in anyone’s life, we have to have one organization that brings everyone together.
The change is not just the name. It’s in every aspect of the operation—the way we have been doing things, the way we have conducted our business, the way we have celebrated and the way we have announced things—it all has changed.
HFB: How will the October gala be different than in years past?
Amini: This will be a whole new experience that will be attended by a blue ribbon guest list. The gala will be held at the Grander Resort, and celebrated as never before with an inspirational and entertaining program. For the first time, we will include entertainment, the very talented Morgan James. Award-winning actress Jane Seymour will host the event. It’s going to be an extraordinary event never seen before.
We will induct five industry leaders into the Hall of Fame and showcase each inductee’s innovation in the industry with a live video format. The atmosphere will be set by a liquid laser light show coordinated to music, a red carpet entrance and sound. This is sure to be at the top of the list as High Point Market’s most memorable evening.
We are raising the bar, and I want to personally invite everyone in the industry to join and support the organization. The Hall of Fame belongs to all of us. We all love the industry otherwise we wouldn’t be in it. Without the cumulative support of the entire home furnishings industry, we will not succeed.
No matter what we do, what magic we put on, we need the support financially—as a membership, as a sponsorship, as a thought process and thinking of new ways of bringing people together— whatever people can do to help and support. That’s what we need.
It’s very easy to get involved. People can go online, sign up and become a member. Participate in the gala to ensure the celebration is the most memorable celebration of the industry.
HFB: What other changes can we expect to see as the American Home Furnishings Hall of Fame continues to evolve?
Amini: These changes positively support our mission of celebrating the power of our past, while fueling excitement for the future. We are still building on our core initiatives with our oral history program, writing the history of the industry, video interviews with our inducted members, the “Tell Us Your Story” program and updating the Walk of Fame.
We’re also in the initial planning stages for a leadership program for current and future leaders.
HFB: The oral histories are a great way to record the industry’s past. How can people get involved?
Amini: Our oral history and book publishing programs forever capture the personal stories and culture of the furniture industry. Published as a book and available by topic on the web site, these rich little gems share the memories and wisdom of our leaders in their own words and through historic photography. We are always accepting recommendations for industry leaders whose stories need to be captured and encourage people to contact the Hall of Fame to set up an interview to ensure history is not lost.
What is an industry without a history?A lot of us are interested in the history. I love to go to countries and look at their museums and palaces. It gives you a sense of energy to look at what our predecessors have done, what they have gone through, especially for such a young country.
We need to capture this history. My vision is the Hall of Fame needs to have a building in High Point right along Main Street with over 100 years of history of furniture that people can walk in. They can talk to people to find what they want to find out about a certain style of furniture, about people who have been innovative in that particular segment, and to see who has been inducted in the past and why they have been inducted.
We need a physical place that people can walk into rather than the Hall of Fame just being a dinner. For that, we need money. We need the support to purchase a building, to hire people that can capture the history and publish books, for us to be able to do oral interviews with people, and for us to capture what is necessary to make the Hall of Fame organization a place that people can go for answers.
That is my vision and unfortunately it’s not going to be done in one year. But I’m hoping our leaders who are in line to become presidents and to become supporters to lead this organization to a point where this particular vision becomes a reality.
We have had wonderful people on the board. We have also had great people on the executive committee who are supportive. Without their support, we couldn’t have accomplished all that we have over the last few months.