Monthly Issue
From Home Furnishing Business
December 11,
2018 by HFBusiness Staff in Business Strategy, Industry 
Interestingly, while the story appears to be the expansion of the regional chains, the fact is that what used to be referred to as “alternative channels” are fast becoming the channels. While most of the noise in the press has been around e-commerce and its growth, the fact is the growth of the retail verticals, such as Restoration Hardware, and the manufacturing vertical, such as Ashley Home Stores, are making significant gains.
The future will see the blending of channels. Many of the e-commerce players are venturing into brick and mortar, experimenting first with pop-up stores and retailer partnerships.
Many traditional furniture retailers have hedged their bet by incorporating Ashley Lifestyle stores with their own brands to better serve their markets. Several of the large independents (multiple markets in the same states) have significant Ashley lifestyle stores in their footprint.
Will other manufacturers venture again into the manufacturing direct model in partnership with larger retailers? The model of the hospitality industry should be considered with its multiple franchise brands operated by experienced hoteliers.
But Power 50 is not all about sales and sales growth, but incorporates other measures, such as market share- which measures how well the retailer did compared to the opportunity. Additionally, today the expansion into additional markets must be a factor considered. While decreasing the retailers’ market share because of expanded footprint, the opportunity for future market share must be a factor. Social engagement with the consumer is also an important measure of the retailer’ market presences.
Market share is the most heavily weighted factor determining who makes the list, accounting for 46 percent of the total score. It is determined by dividing the retailer’s estimated sales by the estimated retail sales of furniture and bedding in each of the markets in which the company participates, whether it’s a metropolitan statistical area, micro statistical area, or a rural area. Sales of electronics, appliances, and housewares are not included.
To arrive at a list of home furnishings retailers with the strongest online engagement, we measure by 14 separate metrics. Sources include Alexa, Facebook, MOZ, OpenSEO, Twitter, and Pinterest. On Facebook, for example, the number of “check-ins” and “likes” were among the metrics, as were the number of Twitter followers, Pinterest “pins” and Google Page Rank, just to name a few.
From that data, we used a basic ranking methodology, assigning a numerical value to the ranked list of each metric. (For example, the retailer with the highest number of Twitter followers received a “1,” and so on.)
Then, we arrived at 14 individual scores calculated for each metric. After dropping the two highest scores to eliminate any outliers, the statistical average of the 12 remaining scores was used to calculate the final social engagement score.
The final factor in the Power 50 ranking is retail expansion, which accounts for 15 percent of the total score. Using public records, it measured store expansion and expansion into new markets.
In addition to the Power 50, HFB compiled separate lists that ranked regional chains, large independents, vertically integrated retailers, and independents with sales of less than $50 million in a single state.
November 7,
2018 by HFBusiness Staff in Business Strategy, Industry
This growth in the short term will be fueled by Generation X (35-44), which is the fastest growing age group under 65, projected to grow 1.8% in 2019. What follows is the Millennials, which will dwarf Generation X, but for now, their furniture purchases are limited.
Why are we excited about the sign of life in the furniture consumer? Research just conducted indicates they have a “dream style” that they look forward to in the future. The results were surprising.
When we forced the consumer to choose visually and did not allow the ubiquitous choice of “transitional”, we found some interesting dream styles.
While many of the consumers were stuck with the eclectic combination of traditional, surprisingly only 31% choose that as their style of their dreams.
The challenge of the industry is to make the consumer move on to satisfy their dream of a new style. The fact is that over 50% of the households are thinking about or are in the process of shopping for furniture. Unfortunately, when these same consumers are surveyed a year later, less than half have moved on that desire.
What influences style? The industry has struggled with style designation. In the eighties, consumers moved away from the historical designation of the 18th Century or French provincial. As individuals became more inclined to express their individual styles in apparel, home furnishings were not far behind. Style performance is influenced by the lifestyle of the individual and how they want to spend their time. DesignCliq, a family of applications that captures and engages customers, has explored the relationship between consumer performance, as it relates to a style of furniture, using a series of fun questions about their preferences.
DesignCliq Questions:
- How do you like to entertain?
- How do you spend your ‘me’ time?
- How would your friends describe you?
- When in a city, it would be fun to…?
- When looking for home décor inspiration you like the rooms to be?
- Where do you find style inspirations?
- Which magazine says you?
- Which would be your dream home?
- Who is your favorite male actor?
- You just won the lottery, now what?
The response to these questions are statistically weighed and associated with a retailer or manufacturer’s product. The result is that 87% of the consumers agree with this match.
A national survey recently conducted identified a breakdown of consumer style preference.
The designation of style can be expanded depending upon the merchandising assortment of the retailer or manufacturer. Several manufacturers and retailers are using this research to focus their merchandise selection.
The relationship between a consumer’s lifestyle and their style preference for their furniture is illustrated by the relationship between how they entertain and their preferred furniture style.
The major concern of brick and mortar retailers is traffic or the lack of traffic. FurnitureCore (the research arm of Home Furnishings Business) estimates that traffic this year is off 7%, but this is misleading with some retailers off substantially more. The key questions to retailers are simple: Who did they consider? Who did they shop? Who did they purchase from?
Obviously, a retailer must be “considered.” This is typically referred to as brand awareness. Established retailers have achieved this over many years of advertising and providing an outstanding customer experience. For established retailers, this level could be 70%+, but retailers entering a market with a substantial advertising plan may require 2-3 years to reach a 30% level, if consumers are not focused on furniture or advertising impressions have a low penetration level. For this reason, location, visibility, and signage for a retailer entering the market is critical and worth the additional occupancy cost.
The most important objective for retailers is to make the consumers visit the Internet to research their pending purchase. According to FurnitureCore research, 77% do so before purchasing. Interestingly, from that same research just under 50% visit the store first before beginning that Internet research. In other words, for these consumers, the retailers have an opportunity to impress. The take away for retailers: Don’t let your retail sales associates ignore those “tire kickers”.
“From our experience in assisting retailers with improving their sales management, these consumers are often not included in the traffic number.”
-Bob George, president, Impact Consulting
The buying process that ultimately occurs indicates that a consumer visiting a brick and mortar store can provide some insight to the changes in traffic coming into the store. The first recognition is that the target consumer is changing. The Baby Boomer, long the favored target for the traditional retailer, is receding into retirement. For the next decade, before the Millennials appear, the new target consumer is Generation X. Fortunately this consumer has not abandoned the independent retailer and regional chains unlike the coming Millennials.
The major challenge, as mentioned earlier, is to get the consumer to find time to purchase furniture. Unlike the older Baby Boomers, furniture is a shared desire. Interestingly, the males lead the way in initiating the furniture purchasing process. However, it is the task of the female partner to make the initial visit.
While interested in furnishing the home, the male delegates to execute a significant change from the preceding generation.
However, the shopping process is abbreviated with the task being complete within two weeks (37.7% for 35-44 and 30.8% for 45.54) or extended out beyond three months.
The reasons for the Generation X’s (35-44) furniture purchases are significantly different from the preceding generation, the young Baby Boomers (45-54). Obviously life changing events impact the purchase of furniture.
To summarize, when the consumer reaches 35-44 it is a time for change while the preceding generation of young Baby Boomers have settled down. Only 18% of both listed desire for new furniture as their reasons for purchase.
What are retailers doing to address the changing consumer?
While other distribution channels, such as the lifestyle stores Restoration Hardware (RH) and Arhaus have adopted a more focused marketing approach to selected lifestyle segments, traditional furniture stores have continued with large selections of products and styles.
The result is a time starved, often impatient consumer being confronted with a 100,000 square foot monument only to be abandoned for the more curated approach of the lifestyle stores that focus on the style that their targeted consumer wants. The frustrated traditional retailer bemoans the fact that they have the “Pottery Barn” look at a better price – why wouldn’t they shop?
Several traditional retailers have begun to recognize the problem and are executing solutions. Morris Furniture, with their new Columbus store, has adopted a lifestyle approach. Working with 
, a store design firm, consumer research was used to develop the new concept. Bill Chidley of ChangeUp explained the process.
“Like many furniture retailers today, Morris is under pressure from changing consumer behaviors and an abundance of new shopping choices when it comes to furnishing a room or just replacing a sofa. We knew that merely redecorating the store, or moving categories around was not going to be enough, so we started with the notion that the Morris brand —what it stood for and why— had to be the core. We needed to relaunch the retailer, and since they had virtually no awareness in the new market we were helping them enter, there was both an opportunity and a need to do this.”
Chidley says they began by gaining an understanding of what consumers want from a retailer through quantitative research they conducted in Cincinnati and Dayton—Morris’s two markets.
“ We learned that consumers find little difference between furniture stores when it comes to rational attributes like selection and having deals, and that they find them a chore to shop,” he said. “We also learned that Morris was under-appreciated for the quality and style of the products they offered. So, we crafted a brand idea around the proposition that Morris could provide the styles and inspiration the consumer is looking for from specialty competitors like Arhaus, but at a better price-point. The result was making their shopper feel smart and savvy for shopping at Morris.”
To activate the brand idea, the decision was made to revise the name and identity to Morris Home, and create a more sophisticated logo. “We developed a tone-of-voice for the brand that insured it ‘spoke’ (through advertising and marketing communications) with a voice that reinforced a stylish, inspiring, and savvy personality,” Chidley said. Finally, the concept was brought to life with a dramatic exterior expression, and a new layout that merchandised distinct style statements through whole-room vignettes down a main “boulevard” aisle. “This merchandising approach simplified shopping by aligning with the new shoppers path-to-purchase, where they begin online for inspiration then show up in the store with a more focused vision of what they want.” Chivley continued, “Instead of a ‘sea of sofas’, Morris shoppers now hone in on a style proposition that feels like Morris knows them and isn’t burdening them with an exhausting hunting expedition.”
The new facility is just the beginning to execute change. Starting with advertising and continuing through engagement by the retail sales associate on the floor, everything needed to change.
In January 2015, Morris Furniture Company began a two-year process trying to create a better shopping experience for their customers. The old Morris Home Furnishings had struggled with showroom display; balancing manufacturer galleries, lifestyle displays and product category areas. Owner Larry Klaben explains. “As an independent furniture and mattress retailer we needed to better understand our customer and how she shopped. We selected ChangeUp, a full-service design agency, to help us and to create an amazing customer experience.”
ChangeUp studied the store’s current showrooms as well as competitors’ showrooms, and surveyed furniture customers and Morris associates to fully understand what creates a better showroom experience. Their findings showed that furniture shopping is not so easy and is not fun for customers especially when they are making a long-lasting large ticket purchase. They advised Morris to simplify the process and to help focus the offerings in the large showrooms.
“That data resulted in our new name,” Klaben said. “We are now Morris Home, lifestyle inspired stores with category areas for non-lifestyle products. On one side of our showroom we feature certain lifestyles; Natural Living, Urban Loft and Modern Studio. We believe that no customer is limited to one lifestyle and these three lifestyle displays appeal to a group of consumers. On the other side of the showroom we offer; Uptown Glam, Farmhouse Chic and Heirloom Classic. Again, many customers are attracted to products within those three lifestyles to create their own eclectic look. In each lifestyle there is a selection of living rooms, dining, and bedroom along with accents to fully create the lifestyle environment. Once inside the lifestyle area there is an intimate feeling, which is mood specific to that lifestyle display. Inside each multi room area, a customer can experience the look and feel as if it were their own home.” Klaben added, “Outside the lifestyle area is additional upholstery that compliments that specific lifestyle.”
The lifestyle areas were designed to flex in size to meet expanding or contracting customer interest in a particular lifestyle. In addition, each of the three metropolitan markets the company serves have different consumer demands. Columbus is a more modern, contemporary, and urban customer than Cincinnati and Northern Kentucky, which has more Farmhouse and Classic customers.
“There are three specialty areas showcased in our Morris Home showrooms,” Klaben said. “There is a Design Center featuring customizable upholstery with extensive fabric options. Morris Home features Bernhardt adjacent to the Design Center as our best design provider. On the other side of the showroom, adjacent to the reclining category display, is the La-Z-Boy area. Our survey data showed that shoppers are often looking for these specific product categories so we located those products on the perimeter of our showrooms. These areas feature; dining, bedrooms, kids and teen, our Better Sleep Shop, entertainment and reclining.”
Klaben continued, “To help our customers understand their lifestyle preferences, we partnered with DesignCliq, both on our website and in our showrooms. The customer can take a short quiz to determine her dominant lifestyle. This helps both her and our sales specialists determine a starting point to begin shopping.”
Klaben says retailing is all about product and lifestyle displays and requires keen focus on carefully curated product and displays. “Our displays must rival and surpass the individual ‘lifestyle’ stores. That is our biggest challenge; to offer leading fashion merchandise and to offer value to our customers. Each product is merchandised to have a specific home within the six lifestyles, in the extended area or in the product category areas.”
Morris Home is not the only retailer aggressively pursuing a lifestyle approach to merchandising. Art Van has executed new lifestyle displays for its Fall offerings using six distinct lifestyle themes: Mid-century modern, casual, urban, farmhouse, and traditional. All Art Van stores have begun reset.
In addition to the traditional furniture category, Art Van has added a new large home décor department featuring rugs, lighting, wall art, and other accents. The new home décor product will also be integrated with the lifestyle collection. From research done separately by Impact Consulting, parent company of Home Furnishings Business, the need to increase traffic to the store can be accomplished with the integration of all home furnishings products into the store. From FurnitureCore data, furniture and bedding represent only 40% of the consumers’ home furnishings needs.
While the consumer expends on average $848 per household for furniture, other non-durables in the home furnishing category exceeds that amount. While other home furnishing stores are invading our space, such as Target and Big Lot, presenting total furniture collections should traditional furniture stores not return in kind.
The sales of home furnishing stores surged in 2016 and 2017. Fortunately, furniture stores regained their growth so far this year. Much of this is based upon the recent difficulty of certain chains, such as Bed Bath & Beyond, due not to consumer preference but other external factors. However, the seasonality of this distribution channel (31.7 in 4th quarter) will even the performance.
Without a doubt, the emerging consumer is ready to furnish their homes. It is the challenge of the traditional retailers to satisfy their demand for furniture that meets their perception of style offered in an environment that matches their retail experience.
We must be able to change.
October 23,
2018 by HFBusiness Staff in Business Strategy, Industry
The overall U.S. economy is experiencing the second largest period of economic growth since World War II. And if the growth continues through 2019, it will be bigger than the dot.com boom. Economic growth in the U.S. is expected to remain above average through the end of 2019 but could fall back from growth levels seen in 2018. Most economists believe a recession is out to at least the end of 2020, perhaps 2021 or even 2022.
The Furniture Industry
Forecast. New data from a comprehensive revision of Personal Consumption Expenditures by the Department of Commerce, U.S. Bureau of Economic Analysis (BEA), confirms what industry experts have suspected for years. The furniture industry grew more slowly immediate post recession years than the prior PCE numbers indicated, cumulatively almost 10 percent less. This data detailing personal consumption of furniture is tied to the U.S. National Accounts including GDP.
The newly revised PCE numbers also readjusted furniture industry growth upward to a 4.9 percent increase 2016 to 2017. And through August of this year, PCE furniture consumption increased 7.4 percent compared to the same 8 months last year.
Industry sales, all channels, are forecast to slow slightly the remainder of the year, but should finish at least in the 6 percent increase range by year end. Growth should moderate in 2019 to between 4.8 percent and 5 percent continuing to 4.7 percent in 2020. (Table A)
The Bedding industry has been the fastest growing segment of the industry since the recession until last year when the industry was disrupted by consolidation as well as increased internet presence from online companies marketing primarily bed-in-a-box product. Growth in 2017 was 1.5 percent compared to 5.3 percent for all other furniture products. This year the Bedding industry has begun to recover and should expect growth of 4.4 percent while all other furniture is on track to increase 6.3 percent. Both furniture and bedding sales should approach 5 percent growth in 2019 and slightly lower in 2020. (Table B)
Distribution Channels. For Furniture Stores, one would have to go back to 2004 to see a higher growth year. Furniture Store estimates through August show a 7.8 percent increase in sales compared to the same period last year. This increase exceeds the performance of all other home furnishings channels, except electronic shopping (internet)/mail order retailers that grew 9.7 percent August year-to-date. These two channels, along with General Merchandise Stores, are the only furniture and home furnishings channels that are outperforming the 5.4 percent growth among U.S. retail sales for all products. Electronics and Appliances stores continue to decline in number. Home Furnishings stores sales have slowed. (Tables C and D)
Prime Furniture Buying Population. The good news is that Millennials are finally working their way through their prime furniture purchasing years. The age group 35 to 44 is now the fastest growing category under 65 and is expected to increase 1.3 percent 2018 and 2019. As the largest generation since the Baby Boomers, they have delayed marriage and household formations. Jobs coming out of the last recession were hard to find, didn’t meet their salary expectations, or were not the jobs they wanted. Whether this generation will place the same importance on their homes and home furnishings as their Boomer parents is not entirely clear at this time. Nevertheless, they are the prime consumer force in the United States. Unfortunately, GenXers in their mid 40s and 50s with their high salaries and big homes are still impacting the industry but are the fastest declining age group of prime purchasers falling 3.1 percent this year in numbers and another 3.6 percent next year. Baby Boomers are still impacting the industry as the older age groups continue to grow. (Table E)
The U.S. Economy
Despite a politically charged climate with concerns over international trade alliances and tariffs, upcoming mid-term elections, and polarized political parties, the U.S. economy continues to barrel forward at a record pace. The Home Furnishings Business (HFB) forecasts that follow are a result of a compilation of predictions by leading U.S. economists. Figure 1 provides the complete sources.
Real Gross Domestic Product. GDP of 4.2 percent in the second quarter, up from 2.2 percent in Q1, reflects the economy’s robust growth. Most economists agree the second half of the year won’t be able to keep up that pace and the year will finish around 3 percent growth. GDP is expected to slow in 2019 to 2.7 percent and further to 2.0 percent in 2020. A large number of experts feel this historical expansion will continue to cool with a recession looming toward the end of 2020 or 2021. (Table F)
Payroll Employment and Unemployment Rate. The U.S. worker shortage still looms large, especially in retail stores, as businesses struggle to find the right workers to match the job. (See the May, 2018 issue of HFB Magazine, “Statistically Speaking: Companies Look to Technology to Help Solve Nationwide Worker Shortage.”) Furniture store executives, in particular, have expressed frustration at turnover rates while trying to implement new strategies to attract and maintain quality employees. Non farm workers are forecast to grow 1.7 percent in 2018, slightly higher than the 1.6 percent growth in 2017. And although growth will slow over the next two years, companies will still add employees at a forecasted rate of 1.5 percent in 2019 and 1.3 percent in 2020. (Table G)
As the economy adds jobs, unemployment is forecast to continue to be low at 3.8 percent this year and into 2019 with only a slight uptick in 2020. (Table H)
Stock Market. The Dow Jones continues to express little interest in the political climate, instead focusing on increase business performance. The Dow Jones is forecast to end this year at 28,000 plus and grow above 30,000 in 2019. The market is expected to remain strong for most of 2020, but performance will depend on when an often predicted recession might arrive at the end of 2020 or wait until 2021 or even2022. (Table I)
Consumer Prices. The furniture industry continues to struggle to get prices up. This year growth in prices is expected to be negative again, down 0.5 percent from 2017, primarily in bedding. Hopefully, furniture and bedding prices will go positive in 2019 and continue to grow slowly into 2020. Meanwhile all consumer goods prices are forecasted to grow 2.6 percent this year and 2.3 percent in 2019. (Table J)
Gasoline Prices. The International Energy Administration predicts that the United States will become the world's largest oil producer by 2023 growing enough to meet domestic demand. While OPEC walks the tight rope between increasing and lowering production to insure profits and continued exploration, in a free U.S. economy that may prove to be more difficult. Oil companies must find the right balance between increasing supply slowly enough to keep prices high enough to pay for increasing exploration. Perceived shortages caused by hurricanes, the threat of war in oil-exporting areas, or refinery shutdowns can cause panic and prices to spike. Gasoline prices are expected to remain below $2.50 for a gallon of regular gasoline 2019 and 2020, with this year forecasted to average $2.70. (Table K)
Consumer Confidence. The current high level of confidence at press time reflects a sturdy economic expansion in the U.S. that’s about to turn nine years old with no end in sight, according to Market Watch/Barclays. Job openings are at a record high and unemployment is at a 17-year low. Confidence grows despite trade rhetoric, stock market volatility, and political unrest.
Lynn Franco, Director of Economic Indicators at The Conference Board says that, “Overall, these historically high confidence levels should continue to support healthy consumer spending in the near-term.” (Table L)
Prime Interest Rate. This short-term interest rate is the most commonly used in the banking system. The average rate for the year should be at 4.9 percent, according to leading economists. The 5 percent rate at press time, however, is forecasted to be raised to 5.25 percent by the Federal Open Market Committee (FOMC) before year end and continue through 2019. Another increase to 5.5 percent is forecast for 2020. The Prime Rate is generally increased if the FOMC determines that the pace of inflation within the U.S. economy is too high so as to bring inflation under control. (Table M)
The Housing Market
30-Year Mortgage Interest Rate. As the Prime Rate has edged up, so has 30-Year Mortgage Interest Rate to a forecasted average of 4.6 percent this year. While still low, rates should edge up again in 2019 to 5.1 percent and 2020 to 6 percent. (Table N)
New and Existing Home Sales.
With low inventories and slow residential construction, existing home sales are forecast to decline this year 1 percent and pick up slightly in 2019 at 2.1 percent growth, according to the National Association of Realtors (NAR). These low inventories are contributing to higher home prices. With existing home low inventories, new single-family homes are being cobbled up, many pre-construction. Sales of new homes are forecast to grow 8.6 this year following a 9.3 percent increase in 2017. As new residential construction ramps, up 2019 single-family sales should hit double digits. (Table O)
Housing Starts. Despite a recent slowdown, residential construction shows a positive trend. According to Kiplinger, “Increases in the cost of building materials and shortages of land and labor have left builders unable to ramp up construction faster, despite optimism in the industry about the direction of the market. Prices for building materials, however, have recently begun to ease somewhat.” (See HFB Magazine, July 2018, “Statistically Speaking: Housing Industry Struggles to Keep up with Consumer Work/Lifestyle Demands.”) The National Association of Realtors (NAR) forecasts Housing Starts for single-family units to grow 7.7 percent this year and is optimistic about double digit growth in 2019. No economists on HFB’s list ventured a forecast past 2019 but the trend should be positive. Likewise, after a negative growth year in 2017, multi-family units have rebounded and should increase 7.6 percent this year. The NAR predicts Housing Starts growth should then be flat in 2019. (Table P)
Home Prices. In July this year, the Census Bureau reported the median price of a new home sold in the U.S. was $328,700. Existing homes sold, tracked by the National Association of Realtors (NAR), reflect a July median price of $269,500. Low inventories of existing homes should help increase the price by 5 percent this year, with prices continuing to increase in 2019 at 3.6 percent. New home prices should be down slightly this year less than 1 percent, but grow 2.6 percent in 2019. (Table Q)
Conclusion. The U.S. economy appears very healthy. This growth should continue throughout next year, but at a slightly slower pace. In 2020 the economy should moderate further with increased anxiety among businesses as to how long the expansion can last.
September 7,
2018 by HFBusiness Staff in Business Strategy, Industry
Prior to the Internet, consumers followed the recommendation of friends and family as to which retailer to shop. Today, that source is one of the last steps that a consumer will process on the way to a purchase. The graphic below presents the steps by two distant groups: the Millennials and the Generation X / Baby Boomers.
Source: FurnitureCore.com
It is obvious from the accompanying graph that for over 50% of consumers that have purchased furniture, the first stop is research on the Internet. According to the same research, in total 72% of all consumers use the Internet during the purchasing process.
The conclusion is that the Internet has become the advertising medium of choice for the furniture purchaser. This is not to say that Internet advertising is the only source because the consumer must be influenced by other sources, to be enticed to visit the site initially through other traditional or digital advertising. The Internet is a primary touchpoint for everyone, but not everyone is using it for advertising purposes.
Without a doubt, the Internet is embedded into the buying process. An important measure is the differences between traffic into the store and the unique visitors to the website in that more than 72% of consumers visit the retailer’s site before purchasing.
The graphic below illustrates the measurement.
Source: FurnitureCore
It is true that prior to visiting the retailer, the consumer may have visited the retailer’s website in the prior month. Based on FurnitureCore research, 25% of the difference between visits to the website and a visit to the store consists of consumers educating themselves and indicates they will purchase beyond the month. Research from PERQ, a company that boosts website conversion through online guided shopping solutions, shows this at the beginning of the sales funnel, but 17% will buy within 2 weeks.
According to PERQ’s CEO Scott Hill, there is a significant opportunity. “Stores are getting traffic to the website and in some cases, paying a large amount to do so. This data shows the importance of having a way to stay in front of these consumers for the next 90 days while they decide their purchase destination. Nurturing these consumers through just e-mail marketing has proven to double the amount of consultations being set with sales associates. This is because, when on the website the first time, they were not always ready to schedule a consultation. But, 45, [or] 60 days later, all of a sudden getting an e-mail with an easy "Schedule a Consultation" button in it, allows them to engage when they are ready.”
Hill provided some interesting statistics (average).
- Website visitor – call to action click 12%
- Conversion from click to lead – 29%
- Conversion from lead to sale – 12%
According to Hill, the best performing clients have converted 20% or more of their leads into in-store sales. Hill added to the results, saying, “By giving consumers a way to research and engage that they value, local dealers can appeal to the type of consumer who will eventually come in-store and are able to learn more about the consumer prior to their purchase, to set automated nurturing efforts based on the personalized information learned. This allows for the consumer to better plan their purchase prior to visiting in-store the way they like, and allows the local dealer to stay in front of the consumer during their research process and for a personal reach out from a sales associate.”
A major concern with the design of the website is the impact of intruding into the consumer’s web-based research. It is documented that unsolicited intrusions increases the “bounce rate” of the site.
A more friendly approach is used by DesignCliq, an industry provider that helps furniture retailers realize the potential of internet marketing by offering a series of Style Preference Quizzes as an information feature on a retailer’s site. The tool assists the consumer in defining their unique style. The graphic below illustrates the output that is emailed to the consumer. In essence, it is the consumer’s “style DNA.”
Fred Star, founder of DesignCliq, offered some interesting statistics:
- DesignCliq builds immediate-long term customer loyalty—average 39% of visitors completing DesignCliq Style Quiz will register (name, Email address, and zip code) versus 4-6% Internet average
- Visitors’ DesignCliq engagement runs 7.14 minutes versus 1.6 minutes internet visitor site average
- DesignCliq Quiz establishes new retailer customer relationships—83% of visitors are new retailer customers
- Retailer enjoys immediate and lasting customer loyalty—33% of registrants will purchase within 12 months
- Retailers income—average DesignCliq Quiz customer purchase runs 29% higher than store average, as style becomes more important than price
With all brick and mortar retailers facing declining traffic, trying to influence the consumer at the one place they know potential customers (72%) will make that decision to shop is understandable.
When consumers that had purchased furniture were asked to rank the advertising media that had the most influence, the internet was number one for all consumers under 35 and 31% for older consumers. The graphic below presents the influence of all.
The importance of the other media should be noted. For example, Direct Mail is number three for Millennials and number two for older customers.
The major question for brick and mortar retailers is ‘when will the Ecommerce bubble stop’? Impact Consulting, a management consulting and retail operations firm specializing in furniture and home furnishings, offers research for durable furniture purchases which states that currently the level is comparable for both consumers under 35 and consumers over 35. The table below illustrates.
The Internet Has Changed Everything - Including Furniture Retailing
Perspective submitted by Micro D
Ever since the Internet became commercially available around 1989, much has been chronicled about how it would, and indeed has, changed everything. Just consider how it has transformed the way we stay informed, communicate, socialize, work, and shop. There’s simply no denying that in a short 30-year span, the World Wide Web has profoundly impacted our everyday lives.
The Birth of Ecommerce
Changes in consumer behavior are also driving a digital transformation for home furnishings manufacturers and dealers. Since the launch of the first ecommerce websites early and mid-1990s, companies large and small have embraced the connectivity, convenience, and power of the Internet to support our changing lifestyles.
Early marketers of books (Amazon 1995), online auctions (Ebay 1995), and other inexpensive and easy-to-ship products launched a new wave of ecommerce. While some home furnishings fall into this category, major furniture purchases and bulkier products like sofas and beds that typically require more research and consideration came online later.
According to Manoj Nigam, chairman and CEO of online furniture solutions innovator MicroD, “The earliest home furnishings websites started appearing around 1995, followed by the first successful furniture ecommerce sites in the year around 2000.”
One such early industry adopter was Carolina Rustica, a retailer of high-end furniture, lighting, bedding, and accessories. The company became nationally recognized as an industry leader in ecommerce for its progressive user experience, multichannel strategy, and growth that averaged 25% per year prior to being acquired by Mattress USA Inc, in 2012. Former president Richard Sexton, who now serves as chief product officer for MicroD explained, “In 2000, if you had a website with products and a checkout option, you were in business. Almost all the competitors I faced back then are now gone with the notable exception of CSNStores, who we now know as Wayfair.”
The Growth of Ecommerce
While furniture has lagged many other product categories in ecommerce, the relatively young online market for furniture has grown significantly in recent years. According to the U.S. Census Bureau[1], in 2004 ecommerce sales accounted for only 3.2% of the total furniture industry with store sales making up 93.4 %. The share of ecommerce grew to 15.3% in 2017, mostly at the expense of in-store sales. Since then, market analysts widely report steady growth of online home furnishings that consistently outperforms in-store growth rates.
Perhaps of even greater significance is the impact that the Internet is making on in-store furniture sales. MicroD’s Nigam believes that, “while some number of consumers are warming to making furniture purchases online, many more are using furniture sites to interact with products and make key buying decisions before they visit the store to finalize the purchase. When it comes to their bigger and most important purchases, most furniture shoppers still want to see and touch it in the store. The difference is that, rather than traveling to and shopping at multiple stores, they now visit just one or two stores that have the product they have fallen in love with online. That makes the quality of a retailer’s website even more important and why we focus so much on improving the customer experience.”
His observation is supported by analysis conducted by Statistica that shows 58% of U.S. home products in-stores were ‘digitally-influenced’ in 2016. Similar studies conducted by Google and others indicate that furniture sites will influence about two-thirds of all furniture sales in 2018.
Future Progression of Ecommerce
Looking at modern industry websites, it is easy to understand this growth. In contrast to sites of 15 years ago, new technologies provided by vendors have vastly improved the online shopping experience.
Difficult to navigate webpages have been replaced with fully integrated merchandising and ecommerce platforms. Flat product photos are being replaced with 3D assets that engage consumers to view products from every angle, get more accurate color representations, drape various upholstery fabrics, configure and personalize their product choices. Augmented Reality (AR) tools take the experience to a whole new level by enabling shoppers to virtually bring new products into their own home to confirm the look, fit, color, placement and more to be confident in their purchase.
According to Sexton, “Today’s furniture leaders are better adapting to market demands, leveraging their physical presence advantages, and making better use of visual technologies like 3D and AR.”
While many more advancements are certainly on the way, industry-focused technology partners will not only participate in the change – they will likely continue to be the agent for change in the home furnishings industry.
The Internet: Not One Size Fits All
Perspective submitted by BluePort Commerce
The Internet hasn’t impacted everything equally or in the same way.
On one hand, goods and services where “information” makes up the bulk of an offering – think music, books, photos, advertising, banking, TV, radio, newspapers and the like – have been fundamentally transformed.
On the other hand, areas involving more physical bulk have been more incrementally altered, mostly around the edges where information impacts a transaction that is primarily physical – think restaurants, car services, travel and, of course, dating.
Retail is somewhere in the middle. While shopping is an information-rich process, particularly in the area of marketing, it can also be deeply dependent on physical interaction with a product and its delivery.
Today, just under 10% of retail sales are transacted online with Amazon on track to do 50% of those transactions this year.Most of this volume is in easy to understand, easy to ship items, where the Internet’s strengths are most easily leveraged.
It’s in more complex categories like furniture, however, where the Internet’s impact on retail can best be evaluated. And, it’s by looking at these categories as the other 90% of retail transforms that the Internet’s future impact on retail can best be predicted.
The First Wave of Digital Retail: The Amazon of [Everything]
Despite looking the part, Jeff Bezos wasn’t a bookseller who put his bookstore online. Bezos was a hedge fund manager who shrewdly selected books to be the beachhead for Amazon, the website he launched in 1994. Books - easily understood, easily shipped, with a brick and mortar shopping experience easily disrupted by providing vast selection – proved right in the internet’s retail wheelhouse.
Amazon’s success led to a frenzy of copycats, applying the Amazon model to less ideally suited categories powered by a torrent of capital willing to fund them to do so.
The fundamental premise of these early dotcom models was the promise of vast selection at low prices, without the real estate or personnel expense of opening a store. In other words, more stuff, cheaper.
In categories where stores didn’t provide much value to shoppers, dotcom models thrived at the expense of suddenly useless brick and mortar players. Retailers like Blockbuster, Borders and Tower Records, all stores that essentially sold physically packaged information, didn’t stand a chance.
At the same time, retailers whose stores did provide value to shoppers, as a place to experience and/or efficiently obtain a product, rebuffed early dotcom insurgents like WebVan, Pets.com and, of course, my Furniture.com.
The First Furniture.com
As an attempted pure-play, Furniture.com was a perfect case study of a retail category stubbornly refusing to hop in an Amazon box. With over 250 smart, committed employees and nearly unlimited financial resources, we
developed amazing technology for marketing and selling furniture.
The economics of doing so, however, were horrendous.
Furniture isn’t easy for shoppers to understand online. As a result, we had to lower prices significantly to prompt “it’s so cheap, I’ll take a chance” purchases. And, once we sold a sofa, the expense of delivering it was punishing.
Our delivered margins were minimal, which when combined with the usual marketing expense of attracting shoppers online meant we lost hundreds of dollars on every order.
When Furniture.com ultimately closed, I spoke to a number of top 25 furniture retailers who were unsurprised by - and admittedly somewhat happy about - our demise. But, they also hinted that we were on to something, sharing that they’d had hundreds of shoppers in their stores carrying Furniture.com printouts, ready to buy.
It wasn’t that Furniture.com hadn’t impacted furniture retail it just wasn’t the same type of impact as the internet had on categories more readily suited for an Amazon box.
With ill-suited dotcoms closing in droves and VC funding evaporating in the “nuclear winter” that followed, it seemed possible that vast swaths of retail would remain unaffected by the Internet. Then, Steve Jobs relit the Internet’s retail fuse.
The first iPhone launched in 2007. Suddenly the Internet wasn’t confined to a bleak looking PC or laptop in your home or office. It was in your hand, it was personal, and it was everywhere.
Moreover, the iPhone unleashed two radical new capabilities. Its camera unlocked social media and democratized content creation. GPS finally anchored the Internet in the physical world.
Suddenly, the Internet was ready to disrupt two key pillars of traditional retail – media and location.
The Second Wave of Digital Retail: Enabling vs. Replacing Stores
Whereas the first wave of Digital Retail focused on replacing the store, these new capabilities made the second wave about enabling stores. As a result, this wave has had a far more profound impact on more of the retail landscape, particularly on big-ticket categories like furniture. Furniture retailers’ tried and true tactics of attracting customers – TV, Print and Radio – have been upended, with the internet both garnering shoppers’ attention, and raising the bar for smart, personalized advertising that traditional media can’t match.
The Internet is now in shoppers’ hands while they’re out shopping, raising the bar for synchronicity between the information they get online, and experiences in physical stores.
The New Retail Imperative
At one time, the Internet represented little more than a cheap way to open another store. It was, for many retailers, optional. Most retailers in big-ticket categories like furniture sat out that first phase, deciding that Amazon-style ecommerce wasn’t for them.
Today, a great retail website – the first place people land after seeing a retailers advertising, the means by which shoppers decide to allocate scarce time to visit a physical store, and a constant mobile companion inside that store – is no longer optional. Not just another store, a retailer’s website must now be their flagship store.
The Next Wave: Unique Solutions for Unique Product Categories
We are still in the early innings of the second wave of digital retail, as retailers adopt digital marketing strategies and point them towards increasingly powerful websites. For most retailers, there is a long way to go in both of these areas. In furniture, this transformation is just beginning.
At the same time, this transformation, nascent as it is, isn’t hard to predict. Other categories further down the Internet adoption curve provide a playbook for how retail will evolve in categories like furniture.
Perhaps more interesting is how furniture will evolve differently from other categories once this baseline digital competency is established. How will the Internet impact furniture retail and other big-ticket categories next? That has little to do with what the Internet can do for furniture retailers, and everything to do with what shoppers want it to do for them.
The Ideal Furniture Shopping Experience circa 2018
When it comes to furniture and the Internet, shoppers want something different.
A June 2018 survey asked 2,000 shoppers of all ages to describe their ideal shopping experiences on two dimensions:
- Whether they preferred shopping in a store or online
- Whether they wanted help shopping, or wanted to go it alone.
The result was striking and powerful evidence of something that those of us in this industry have felt for some time: Furniture shopping is a uniquely omnichannel experience, on both of these dimensions.
Future of Furniture Retail
80% of people prefer to shop in stores for furniture, and 50% want help when they do so.
It is in enabling and activating these shopping preferences that the Internet will ultimately most deeply impact furniture. Just like Amazon did for shoppers’ simpler preferences for books way back when.
In furniture, that means making store visits easy and efficient – as simple as making a reservation with Open Table or getting a car with Uber. Engaging one of retailers’ biggest assets – salespeople, currently on the sideline of digital retail – need to be providing the assistance shoppers want, both online and off. It is meeting unique requirements like these that will unlock the Internet’s true impact on furniture, and on the other 90% of retail.
Arguably, the Internet’s only superpower is to get people what they want more efficiently. Thankfully for furniture retailers, furniture shoppers want a store and some help. To the extent that Amazon-style businesses (or Amazon itself) capture share in furniture, it’s because brick and mortar retailers have failed to deliver an experience that feels easy, relevant and personalized. Those retailers who leverage the Internet to do so will prove as disruptive to the future of retail as those first dotcom insurgents, twenty-five years ago.
The Evolution, Optimizing for Mobile
Perspective submitted by FurnitureDealer.net Commerce
The Internet has revolutionized the computer and communications world like nothing we’ve ever seen before. It is the ultimate mechanism for moving information. From its roots on the PC or laptop, to today’s mobile devices, the Internet is everywhere including in shoppers’ hands before, during, and after shopping. As technology continues to evolve we need to harness the emerging technology to have an impact on the way home furnishings companies market and sell their products.
Andy Bernstein, CEO of FurnitureDealer.net agrees.
“I believe that the Internet is one of the greatest if not the greatest invention we have ever come up with, but it really only does one thing. It moves information, and does it incredibly well.”
Whether you are a consumer shopping for furniture, a retailer who wants to find perspective customers, a manufacturer who wants to sell to a retailer, or you simply want to share your product and tell your story to end-consumers, moving information is part of the equation.
Fifteen years ago, many in the industry thought it was too costly to extract data from a retailers POS system and too labor intensive to include pricing on websites. Additionally, retailers were concerned about making their prices available on the Internet. The initial thought was that once a retailer puts their prices on the Internet for the world to see, it would become easier for a competitor to beat that price, or for a consumer to use that price as leverage for negotiating elsewhere. There were pros and cons for both sides, but the mindset was “we need to focus on other things right now”. That’s no longer the case.
“Five years ago, we declared war on our customers’ sites that didn’t have prices on them,” Bernstein says. “Today almost all of our clients’ sites have pricing. It’s a massive amount of work but it’s necessary. At least half of our clients’ sites now connect to their POS software as well as their inventory system. Now we can communicate inventory, location and real pricing information.”
The retailers’ website is where many customers are making their initial furniture purchasing decisions. Searching for furniture that fits their needs and finding information about cost and delivery is a time saver. Visitors must have a good experience or we risk losing them as potential customers. Offering a sub standard shopping experience is something retailers can’t afford to do.
“At FurnitureDealer.net we’ve always hired digital natives. In most cases, they are recent college graduates with a good working understanding of the Internet. As long as they are good learners, they can learn the furniture part along the way,” Bernstein said. “But one of the things we realized is there were very few people in our company — who were creating information being used by furniture shoppers — that had first hand experience with furniture shopping. Since many of our employees were recent college graduates either still living at home or living on their own with hand-me-down furniture, we knew they had not walked in the shoes of our consumer,” he said. “We get about 4.5 million visitors per month on our network of websites from people who are actively shopping for furniture. So, it’s important that our team understand that journey. We decided to launch a training initiative and bonus program and gave employees who completed the training $2000 each to go furniture shopping. The goal was for them to really be a part of the experiences and the hassles of shopping and owning nice furniture,” Bernstein continued. “We got clubbed over the head,” he said. “The first thing we noticed during the initiative was that if you don’t show prices on your website, it’s useless. It’s hard to tell the difference between a $500 sofa and a $5000 sofa. They look the same. So, if you don’t show the prices on your website, the tool becomes less valuable.”
Now, mobile is changing the game. Devices like smartphones, iPads, and tablets are dramatically changing the way consumers shop and how furniture retailers should manage their business. We know that customers are using their main weapon of choice— the phone in their pocket— to access the Internet.
“ Over 55% of the traffic across our network is coming from mobile devices,” said Bernstein. “Very quickly mobile became the dominant way for people to access the Internet, which makes sense because we have our phones with us all the time now.”
With 85% of all searches for furniture beginning on the web, and mobile web searches exceeding desktop searches, furniture retailers must have websites that are optimized for mobile.
Mobile marketing is also becoming increasingly popular for retailers with tools like location-based marketing, SMS marketing, and mobile search ads allowing retailers to customize offers at just the right time. “It’s not easy to shift the mindset to be a mobile-first company, but the consumer shifted a long time ago and the furniture industry must do the same,” Bernstein said.
Bernstein believes we need to reinvent everything to be ‘mobile first’ and figure out how to create amazing experiences for the consumer. “Technology providers, including us, are creating friction, frustration and hassle in the process. Whether you are a retail employee servicing a customer or a consumer just trying to do business with a store, we are doing things that make it really difficult and we need to fix that. Our company is doing a lot of little things, as opposed to one or two big things. We are trying to look at every touch point and find ways to do things better.”
According to Bernstein, “We are looking at every single aspect of the consumer shopping experience and every aspect of the details to better understand the communication and information needs between the consumer and the retailer. We believe the consumer is using the Internet before they ever step foot in the store, as well as when they are in the store and even after they leave the store. They expect to use their main weapon of choice —the smartphone in their pocket—to access the Internet as part of their shopping journey.”
Bernstein says Amazon.com is having a profound impact on consumer expectations. He believes experience has trained us to be frustrated by any tiny little thing that is not quite as good as the Amazon experience. But, big box and brick and mortars are responding to Amazon’s Prime Day. Target and Best Buy have done some incredible things to make it so that consumers can use the Internet to find which products are available at which locations. “I’ve used both platforms and while Best Buys’ was a good experience, at the same time it was horrible compared to what Amazon provides,” Bernstein noted.
“So, If Best Buy and Target are struggling to deliver an experience that can satisfy a customer in a world of expectations set by Amazon, how do you think my customers feel? That scares me and keeps me up every night. Amazon is making a huge push into our category. My clients, the independent brick and mortar furniture retailer, are for the most part, a lot closer to flat instead of growing and growing, so we are looking into every single aspect of the customer experience from what they are researching online, to when they find products, to how they are managing their process, to how they are interacting with the salespersons. It’s a really hard mindset shift for companies like mine to make.”
FurnitureDealer.net has focused a lot on sight engagement tools. “Basically we built tools that engage customers. We ask them questions to understand what they are really interested in so we can personalize and automate a lot of different things, to continue to deepen our understanding of each person. We’re obtaining granular data one customer at a time,” Bernstein said. “We are programming the website to have a software brain that behaves much more like a salesperson would but it’s performing marketing functions. We are creating customized offers, but they are low on the totem pole of what really matters. I am far more excited about the ability to successfully understand, assist and recommend product solutions that match. “ Bernstein continued, “What’s far more valuable and harder to do is to develop the ability to more expertly make matches, not just make matches and discount them, but to make better matches by listening and understanding, but we still have a long way to go.”
July 24,
2018 by HFBusiness Staff in Business Strategy, Industry
Home furnishings isn’t in the first tier of essentials for us—that space is reserved for the basics of food, shelter, and safety—but once those needs are satisfied, we can turn to the second tier of making our surroundings comfortable.
While most established countries have the basic necessities covered, some segments of the population still struggle with obtaining the most basic element, safety; safety is, for all of us, an increasing concern. But this article is about the furniture industry, not the challenges of society.
It’s within the second tier that the furniture industry struggles for the attention of consumers. What’s included in this tier has changed over the decades, but for centuries, making our home environment more comfortable and entertaining was a high priority.
Could the key be that, as consumers spent less time in their homes, with working spouses spending much of the day in the workplace, the perceived need for home décor also diminished?
After the first tier of essentials, on what do consumers plan to spend their disposable income? According to FurnitureCore research, their next travel destination tops the list.
As the data shows, furniture has moved down the list—but at least the latest widescreen television has lost its attraction.
The furniture industry for the past four decades, has grown from $19B to $110B, weathering financial downturns with a major disruption during the Great Recession.
The recession in 2008 and 2009 was a major disruptor, resulting in a significant loss of furniture retailers.
The furniture industry has grown; but compared to other consumer products, furniture has been a deal for the consumer. The graphic illustrates that in terms of 2009 a $1,000 furniture purchase would be $899. However, for all other products excluding food and energy it would be $2,710.
While the industry has grown, the growth has not been as significant when adjusted for the CPI:
In fact, if the CPI had kept pace with all products, furniture/bedding would be a $211B industry.
The fact is that the expenditure for furniture/bedding at $924 per household annually has not kept pace with the cost of housing.
The fact is that the consumer’s expenditure for furniture has declined as compared to overall total consumer price indicies (CPI).
Even though furniture has been a good value for consumers, their expenditure has not significantly increased.
The major question is why. An often-touted reason is lack of innovation; there could be a case for that. Take food, for example—it has exploded in terms of choices. Just go to a grocery store and take a look at its endless aisles.
Innovation can be more than product, but the buying process—transferring product to a consumer—can be innovative as well.
Innovation in Product
For a discussion of innovation in product, we need to separate aesthetic design from functional design.
Without a doubt, the introduction of the farmhouse style (and its many iterations) was fueled by Bob Timberlake’s introduction and how it caught the imagination of the consumer.
“In upholstery, I think the introduction of the first close-to-the-wall recliner by Berkline in the mid-1970s was extremely important,” says Jerry Epperson, managing director of Richmond, Va.-based investment banking and research firm Mann, Armistead & Epperson, Ltd. “Not just for letting recliners go into more rooms, but because it allowed, in the 1980s, great advances in motion sofas and sectionals that would not have been possible without Berkline’s innovation. More recently, the addition of the second stage of power to motion has been extremely important (the first stage was in 1986-88 and failed).”
Innovation in mattresses has been the introduction (or reintroduction) of more complex foam mattresses, which led the way for gels, inflatables, hybrids, and now, the reintroduction of waterbeds, notes Epperson. “Change and innovation are critical in the mattress sector or we run the risk of it being a commodity,” he adds.
“In wood furniture, we have seen great modifications to adapt to the new technological wonders of our age, whether huge flat screen televisions, desks specially made for laptop or desktop computers, or the addition of plugs for power or USB ports,” says Epperson. He adds that finishes are more durable and attractive, the addition of engineered wood has given flexibility and saved costs, and RTA has made advances to keep up with the demands created by internet retailers.
“I believe logistics will play an increasingly important role in furniture and mattresses, and that the requirements of shipping may have a much larger impact on wood furniture of the future,” he says. “Our industry is in a race to see who can transport the merchandise from the factory where it is made to inside the consumers’ homes with the fewest intermediate steps, all of which cost time and money. In many ways, we believe logistics may prove who are the winners, and may be a major factor in profitability in the future.”
Innovation in Disruption
Before the 1980s, there were fewer distribution channels. Better goods were the go-to source for the upper end and mass merchants—such as the almost-forgotten Montgomery Ward—and the struggling JCPenney and Sears served the growing middle market.
In the shadow of these giants were the mom-and-pop retailers suffering through being referred to as “dirty window stores” to become regional and national powerhouses.
There have been challenges in the past four decades. The Levitz stores conveyed value with their warehouse environment—product stored above the display. Within a decade, Levitz was a national threat in every market.
A significant local retailer in New York created the concept of Rooms To Go, appealing to the insecure consumer who wanted a complete room, decorated, at a great value. It expanded nationally and is still a dominant presence in the market.
From the hills of North Carolina appeared the 1-800 retailer. Blackwelders was followed by Roses Furniture and Furnitureland South.
Growth was fueled with small ads in shelter magazines such as Southern Living, but more importantly through word of mouth by satisfied customers. Many have gone by the wayside, but not before capturing 20% of industry sales. There are some survivors, such as Furnitureland South, a significant furniture retailer.
The manufacturer-direct store was an important innovation that disrupted the furniture industry. Furniture brands expanding upon the concept but failed. Only Ashley Home has successfully executed the concept and is now the number one retailer and manufacturer of furniture.
Advances in internet retailing are most visible with the creation of viable brands, with Wayfair topping the list for creating brand recognition, says Epperson. “Also, constant improvement in both communications and logistics have allowed the internet retailers to experience rapid growth without having stores, or even carrying inventory,” he adds.
The growth in imports has allowed larger retailers to leverage their size to their advantage by purchasing globally and in huge quantities at the most efficient sources, says Epperson. “Consumers have never had more choices of where to purchase home furnishings and how to finance the items bought,” he says.
Reaching the Consumer
Do retailers today have too many methods to reach the consumer?
In the large view, messages can be broadcast to a huge audience via newspapers, television, and radio, in the hopes that the people who have an interest receive the message; on the other hand, having data on each household in your territory and targeting specific individuals with certain promotions might work best.
“Social media by itself is both an opportunity and a confusing mess,” says Epperson. “The brick-and-mortar furniture and mattress retailers have an advantage in name recognition, stability, and high visibility over long periods of time, whereas, generally speaking, few consumers know anything about most of the internet vendors, who could disappear overnight.”
All retailers have three important customer bases to appeal to: baby boomers, Generation X, and millennials (with Generation Z right behind).