Monthly Issue
From Home Furnishing Business
March 12,
2015 by in Business Strategy, Industry 
Celebrating 75 years in the furniture retail business is an achievement of which to be proud. Marking 75 years in the shadow of one of the industry’s most powerful independent retailers—Art Van Furniture—is a feat to be shouted from a mountaintop.
Novi, Mich.-based Gorman’s Furniture is gearing up for its diamond anniversary this spring, and Tom Lias, president and COO, attributes much of the retailer’s success to its adaptive nature and remaining true to the Gorman’s way.
Home Furnishings Business: Gorman’s operates in quite competitive markets. What do you do to stay ahead of your competitors?
Tom Lias: We have to remember that retail is sort of like the game of golf where you’re really competing against yourself. Your execution of your individual game plan means more than anything else. We develop our game plan for our position, and we pay attention to it in a very disciplined way.
More than 20 years ago, we declared Gorman’s was going to be Michigan’s style leader. That allowed us to broaden our footprint in price and in style ranges with our merchandising platform of good, better, best and exceptional. We treat all products with respect in our operation from our Intro private label product the mantra of “starting out or starting over? Here’s where to start” to our exceptional lines. The good is just as important as the exceptional.
HFB: You’re celebrating the company’s 75th anniversary this year. In an industry that has seen a lot of retail closings, how has Gorman’s remained successful through the good times and bad?
TL: You don’t get to be 75 by doing the same old things. Instead, you get to be 75 through innovation and evolution and by trying things that, in most cases, you’re uncomfortable with.
We’ve always been a bit of an innovator in our segment of the business, and we’re always looking for new ways to improve.
Last fall, we got involved in the area’s Homearama with the local Home Builders Association. Gorman’s designed three of the six luxury homes on the tour, and it was an overwhelming success to be the presenting sponsor of the event. In March, we’ll receive a number of awards for design excellence from our work there.
That’s the kind of thing where you step out of your comfort zone. It put Gorman’s at the forefront of the market.
HFB: How do you communicate with your target consumer?
TL: The zero moment of truth is when someone on our team says “Hi. Welcome to Gorman’s.” Advertising is the brand promise, but the brand experience happens in the store.
It’s all about how we merchandise; how our designers communicate and work with the customers. That is paramount in all that we do.
We make sure the design staff has all they need to position the marketing promise. We have to have a certain image in our TV ads. We work with a firm out of Nashville, Tenn., that has been our partner for 25 years. They know what we want to say and how we want to say it.
The film image on TV and the style of our newspaper ads say we have style; combined with an Intro sofa, we have value, too. It is more about talking to the women than talking to the men.
We buy our media based on when women are listening to the radio or watching TV, and we gear it to those aged 35 to 64.
HFB: This issue focuses on partnerships. Our industry has seen partnerships grow and some falter. What’s your take on partnerships and where we are as an industry at nurturing them?
TL: We have an incredible amount of things going on at the same time. Our market position is 100 brands. When we say 100 brands, we don’t have to name any of them. WE have very important brands that are incredible supports of us, and we’re very protective of them.
Those brands are very important to us, and they are the core of what we do. In the marketplace, we’re the brand. When I choose to name the brands, they need to be important.
How we nurture those partnerships is that I find out what every one of them is best at and congratulate them for being great at it. We don’t want to buy from anyone unless they have a unique buying proposition.
We’re striving all the time to be a great citizen within that structure. You become a good citizen by being supportive and figure out what things work well. The majority of our partners are great at protecting us in our markets.
HFB: What challenges do furniture retailers face this year?
TL: The truth is it is becoming harder than ever. You have to know who you are and who your customer is. Then, you have to take that position and communicate it incessantly to the marketplace, and today, we have to do it in more places than ever before. The whole digital platform is now all consuming—social media, SEO—and you have to decide which vehicles are important and which services you offer are important. It’s a must to focus on the important parts.
Trying to be everything to everyone won’t cut it.
In our markets, we have the big box stores and then we have a slew of lifestyle stores. What’s left is a multi-brand, design- and service-oriented organization, and that is our goal. Luckily, that’s what the market has given us, and that’s what we’re always working toward.
March 12,
2015 by in Business Strategy, Industry
By: Tom Zollar
While the title of this article might make you chuckle (particularly if you liked the movie), it actually should be pretty scary to some.
In almost 40 years of working on the retail and wholesale sides of the industry, I have seen examples of both. In the first case, the sales manager leads, motivates and drives sales through the team, and in the second the manager provides support for the sales team by taking care of things that might prevent them from doing the job. Both approaches can work in certain situations, but only one maximizes performance. Which is it?
Most of us would say in retail selling, it is best to have a sales manager be a coach that consistently drives improvements, while the operations and office staff support selling. Historically, that is what we’ve seen in most successful home furnishing stores. Yet, in many stores, the sales manager spends 80 percent of his or her time supporting the sales effort and 20 percent leading it. Opposite of what needs to be if you want a coach instead of a waterboy.
Being on the floor and involved in the selling effort at your store is critical, but many sales managers spend too much time at a desk, removed from the sale floor. A real coach spends the majority of time where the action is, observing what players are doing, offering feedback for improvement and making plans to help employees improve. They coach and train to manage the team’s growth and development.
Often associated with athletics, the person charged with improving is the coach. It might be a hitting or fielding coach in baseball, a quarterback or line coach in football or a swing coach in golf. No matter the sport or the position, chances are there is a coach dedicated to improvement. That’s what retailers need for their sales team.
Perhaps the problem stems from the name we give the position. Is a sales manager different from a sales coach? A big part of the confusion could come from our perception of managing versus coaching. Managing is defined as “to be in charge of something such as a store, department, or project and be responsible for its smooth running and for any personnel employed”, by Microsoft’s Encarta Dictionary. The same source defines coaching as “the profession of training and guiding teams”. A manager is a director, administrator and supervisor, while a coach is a trainer, teacher and instructor.
The definitions seem quite different, but if you think it through, they really are not when applied to competitive environments like sports and selling. All managers are responsible for running a smooth operation, but they are also accountable for delivering results. Be it consistently excellent deliveries, customer service, office support or sales volume, they are expected to maintain and improve the store’s performance in each area. The good ones accomplish this by focusing on being a team’s performance coach and using training, teaching and communication skills to drive improvement. It is hard to be a successful manager without also being a good coach.
Whether you like sports analogies or not they are a great way to look at the selling situation. Much like athletics, we deal with creating and maintaining winning behaviors on the sales floor just like the playing field. With that in mind, let’s study the most successful teams to determine the importance of the coaching role.
Other than operations functions, most teams are made up of three main sets of people—owners, coaches and players. We want our favorite team to have the best individuals in all areas because that gives them the best chance of winning a championship. Which of the three roles holds the key to success in a game? The coach, of course. Have you ever seen a team with a weak coach win big time? Probably not. How about examples of great coaches taking over a weak team and turning them into winners? Happens all the time. It is the coaching role that drives a team’s success. The coach is the day-to-day grinder that knows what is supposed to be happening on the field of play and makes sure his players are consistently doing it.
Historically the best teams have an owner that hires the best coaches, helps them get the best players, and supports them. That is what should happen in stores. Hire and develop sales managers that can hire, train, coach and motivate sales associates to win the game on the selling floor. In most stores I have seen, there is a person in place that has the potential to be the sales coach. However, so much emphasis has been placed on the operational side of the business that they don’t have the time to be on the floor. They are too busy taking care of routine customer service issues, creating reports for management or printing sales tags to play a role in what’s happening out on the floor.
Much of what these sales managers are doing is necessary and should be part of their role, however, it’s imperative to ensure those tasks don’t overwhelm them and keep them from doing their most important function—making sales happen. Again, a sales coach should be spending about 80 percent of their time on the floor working with team members and driving sales, and 20 percent supporting the process.
Yet another sports movie analogy—show me the money!
Here’s a bit of proof from a store that reinvigorated its sales management effort in early 2011 as the industry was rebounding from the recession. The manager had assumed other responsibilities and was no longer devoting much time to coaching the sales team. The retailer installed an upgraded sales tracking system, retrained the sales manager and team, and continued to focus on coaching to improve the staff and their performance.
Note: The black line reflects the number of ups per month and the solid green line indicates the revenue per up each month. The dash green line is a trend line based on a two-month running average.
2011
2012
2013
What did it mean for this business? In the three-year effort the retailer was able to take its revenue per up from the lower $400s to more than $550. It continued to drive improvement through 2014, ending up that year at almost $600. As a result, the retailer did $1.15 million more volume on about the same traffic last year than they did before restarting the sales coaching process. That’s an enviable 27 percent increase over the last few years.
The bottom line is that everyone wants to be on a winning team and they can’t do that without coaching. Make sure you have a sales coach and not a sales Waterboy.
Editor’s Note: Tom Zollar is retail operations practice manager for Impact Consulting where he creates and delivers sales training for retailer sales associates and managers, facilitates retail performance groups, coaches managers and helps retailers grow their business. In other words, he’s our resident coach … without the whistle.
February 16,
2015 by in Business Strategy, Industry
By: Sheila Long O'Mara
Kevin Sauder, president and CEO of Archbold, Ohio-based Sauder Woodworking, recently took the reins as chairman of the American Home Furnishings Alliance. He takes over as the industry is facing a number of regulatory issues and is sure to have a very full year. Sauder gave us a bit of his time recently to answer a few questions.
Home Furnishings Business: Share with me your outlook on the state of the industry for 2015. What are the challenges and what are the strengths?
Kevin Sauder: All signs point to a stronger economic environment for 2015, particularly with housing starts and the positive consumer feelings about lower gas prices. So we think furniture should have a good year. Sauder is booked solid through the first quarter.
Medium and higher-end furniture is a big-ticket, planned purchase, so it tracks more closely with consumer confidence, the stock market and housing starts. At the low end and in the ready-to-assemble (RTA) markets, we’re more tied to disposable income and the purchase of new electronics, such as TVs and computers. So we like to see low gas prices and innovations in electronics.
We’re fortunate in the RTA industry to make a product that ships well to consumers and is immediately available in inventory. The dot com channel, whether Internet-only retailers or combining bricks and mortar with online retailing, is a real growth area for our company because it takes advantage of these benefits.
HFB: What is the biggest obstacle facing the furniture industry?
Sauder: Other big-ticket purchases like cars and appliances spend huge budgets on innovation and advertising, which builds brand awareness and consumer demand for the newest thing. Furniture retailers like Restoration Hardware, Pottery Barn, Ikea, and Crate & Barrel have done a nice job of defining their niche and creating real demand for their products. It’s harder for more full-line retailers and manufacturers to create those “gotta have it” products to bring in the crowds without being tied to Labor Day promotions.
HFB: What’s your perspective on domestic manufacturing?
Sauder: More than 90 percent of our products are made in Archbold, Ohio, because we have a very productive labor force and a highly automated factory. Where it’s impossible to automate major portions of the production process, we’ll still need to import some complementary items. Domestic manufacturing can be a real benefit to the retailer with quicker response times, less inventory risk, and better quality control. But the Asian factories continue to improve and often represent real value for long runs of popular SKUs.
HFB: Where does the industry need to move in regard to the regulatory climate?
Sauder: We used to be reactionary to government regulation, ‘Why are they doing this to us?’ But once we started becoming more proactive and getting involved upfront with standard setting and testing, the industry developed a healthier relationship with agencies like CARB, EPA, and CPSC. Sauder offers our internal chemist to work on formaldehyde standards and our product safety director to help design safety tests. Ashley has done much of this as well. The AHFA also plays an important role in all of this. I think we need to keep being proactive to ensure our voice is heard and common sense legislation becomes the norm.
HFB: What would you like for your legacy as the 2015 AHFA president to be?
Sauder: I’m thrilled that they asked a guy who makes $99 TV stands for Walmart and Ikea to be the next AHFA president. The furniture industry is rapidly changing, the retail channels are evolving, and the regulations keep coming. We need to be very inclusive in utilizing the strengths of our entire AHFA membership and work together to grow our industry.
January 12,
2015 by in Business Strategy, Executive Changes, Industry
Satya Tiwari, president of rug, decorative accessories and accent furniture vendor Surya, has been steering the company since 2004. During that time, the company has blossomed into the go-to resource for retailers seeking a coordinated approach to their rug and accessories merchandising strategy. The company is in the midst of building a one-million-square-foot warehouse space and 60,000-square-foot office space in Georgia. The building will bring the company’s facility under one roof, a must Tiwari says to maintain Surya’s collaborative environment.
Home Furnishing Business: What’s your outlook for the home furnishings industry in 2015?
Satya Tiwari: I think 2015 will be great. The economy is growing; gas prices are lower leaving consumers with more money; housing is making a comeback. All indicators show that this will be a strong year for our industry.
For our organization, growth is very important. We want to grow by capturing more market share with our existing categories and by helping our customers grow their accessories business.
HFB: It’s been a big year for Surya with the planning of the Cartersville, Ga., facility and other initiatives. What’s driving your growth?
Tiwari: For sure. We are investing for the future. At the end of the day, the market we sit in is immense. In all our categories, it’s a big industry. We compete against Restoration Hardware, Pottery Barn, Crate & Barrel. These guys have done a great job. Our value isn’t just selling our retail partners product, but in being their service center.
We have to be first class in sourcing, merchandising, logistics. We have 6,000 customers. The question is how do we help them capture a higher share of the accessories market. That’s an area where our partners can use our help. At the end of the day, a great sofa is a great sofa, but it’s not the sofa, but how retailers help consumers visualize it. It’s all in how they capture the end consumer’s attention.
We truly take a collaborative approach with our retail partners and share information back and forth to enhance growth for us and for them. We listen closely to our customers. We’re one of the leading sources in collaboration with our partners. By putting our heads together, we can do great things.
HFB: Surya has been undergoing a large merchandising transformation with its leap from rugs to the addition of lighting, art décor and accent furniture. What’s the thought process behind the expansion into other categories?
Tiwari: We feel that accessories category has been a failure for retailers because they expand it to include too many suppliers. By expanding Surya’s category offering, we can help them better focus on that segment of the business.
We really are a service company, and as we continue on that path, we can help our partners be successful.
We have a very productive product development team. People just assume they’re only developing product, but they have created 10 to 15 lifestyle environments that encompass price, design aesthetic, ideas of types of houses and more.
It gives us a holistic understanding of the U.S. market. We use the environments to create the feeling, the texture, the warmth of a home. At the end, we develop product to meet these lifestyles. We visualize how the product will look in the environments and how it should be photographed. There’s a lot of thought that goes into our approach, and we have a number of people who travel the world to stay abreast of changing lifestyles.
HFB: Surya has partnered with a number of designer names for product launches. Can we expect to see more of those partnerships in the future?
Tiwari: We currently have a lot of strong names, and we want to digest and take the lines to the next level. We don’t want to overdo it.
We’re creating our own brand, as well as those with our partners. We want to strengthen those that we’re working with, but keep in mind, we look for partners with a design aesthetic, not just a name. Adding names is easy, but really connecting with them takes a lot of resources.
Although these names are important, we don’t want to become just a house of brands. It’s a delicate balance to maintain.
HFB: Surya has a heart for giving back. Talk about that passion. Where does the urge to give back come from?
Tiwari: At the end of the day, we’re humans. We live and work in a community. Let’s face it, selling a rug is not the sexiest thing. We’re not just here to sell products. Life has a higher calling, a higher meaning than that. Our goal has been to remain connected in the communities in which we work by supporting causes that mean something to us.
For the last five years we’ve been contributing to great causes, and those efforts connect our team in an important way. It shows us higher meaning of life; it helps keep us above the clouds.
December 4,
2014 by in Business Strategy, Industry
By: Sheila Long O'Mara
As we tie the bow on the last issue of 2014 and eagerly look forward to 2015, I have to say I’m feeling a bit nostalgic. It’s an odd, overwhelming feeling for a sometimes leather tough one like me.
The husband just gives me a funny look. The boys? Well, they dish out a lot of hugs, and toss out hilarious quips about off-the-wall subjects that ensure a cacophony of laughter. Mostly, however, the family—all with the attention span of gnats—grins and graciously puts up with all of my remember whens.
I don’t think I’m all that different than many other people, consumers if you will, who are looking to freeze a snapshot of their family’s history. Their family’s story.
Walking through our home and stepping through the threshold of any room, I spy something—sometimes several somethings—that trigger beautiful memories from years past.
My grandparents’ four-poster bedroom suite, a gift to me from an aunt who knew it was an important part of my history growing up lucky enough to have grands living close by. That bedroom group, now lovingly tucked away in our guest room, can awaken memories of early Saturday morning snuggles with my MaMa while my PaPa cooked a big ol’ country breakfast. Millions of books were read and countless teeth were pulled all while sitting on that bed in that very sunny room.
The cozy club chair that resides in our den by the hearth has held me while I held little ones safely through many long nights of sick cuddles. You know the ones I’m talking about—those 1 a.m. wake-up calls from high fevers. The nights requiring all-nighters not only for the child’s comfort, but also for the parent’s peace of mind. The chair, by the way, has been reupholstered several times now, but the memories, along with the springs, remain.
There are old quilts made for very young me by my other grandmother, pictures and a slew of tangible items. The cast-iron skillet and the old cookie press, both of which have survived a few generations. All of those treasures are intermingled with newer home furnishings, each with a story of its own. Sofas where all five of us jockey for his favorite spot during movie nights. The dog’s favorite rug, and the youngest one’s spot curled up right next to her. The lamps that share warmth and light on a winter’s eve.
Homes help create memories for families. Home furnishings help turn houses into homes for those families. Our industry has that much power!
As we wrap up the year and set our sights on the next year’s goals and promises, that power is an interesting nugget to keep in mind.
Happy nostalgic holidays to all of our readers, and here’s to a beautiful, prosperous next year.