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From Home Furnishing Business

Mobile Revolution

Thinking of Incorporating Mobile Technology into Your Operation? Read on for Issues to Consider.

Got a smartphone? Next time you have a few minutes, run a search on the App Store for “shopping apps.”

You’ll find a lot of companies already on the mobile technology bandwagon. Best Buy, Walmart, Toys r Us, Overstock, Amazon, Zappos, Office Depot, Staples—the list could fill a lot of this page.

In home furnishings you’ll see names such as One Kings Lane, Ballard Designs and Ikea—no big surprise there—on the App Store, but for the most part furniture retailers are playing catch up with other consumer products sectors when it comes to granting their customers access to their products and services via mobile phones and tablets.

Sales of those units are growing every year, and there’s a generation of consumers entering their buying years that has never known a world without digital mobile technology.

Just when we were getting used to shoppers heading first to the Internet, it appears that not too far into the future, they’ll be heading for their smart phone or tablet instead—a lot of them already are. When that time comes, will they find you?

OPPORTUNITY & CHALLENGE
Mobile technology presents both opportunities and challenges to retailers, said Myriad Software Principal Carolyn Crowley. The San Diego-based home furnishings retail automation specialist made mobile the centerpiece of a couple of sessions at its user conference last month in San Antonio.

With so many consumers using their smartphones during the shopping, and sometimes purchasing, process, Web sites optimized for mobile users and in-store mobile-friendly features for product information and such can be a competitive advantage.

Crowley pointed out that Lowe’s is deploying iPhone-based mobile POS to compete with Home Depot. Furniture retailing, she pointed out, has some catching up to do.

“When you go to places like Best Buy, the capability of what you can see and do online is better in other industries,” she said in a phone interview after the conference.

One reason is that furniture retailers looking to put information onto customers’ phones face challenges unlike, say, an airline selling tickets or taking reservations via mobile.

“That airline controls what it’s selling, its own tickets,” Crowley said. “The challenge a furniture retailer has is that you’re working with products that aren’t yours, you’re getting them from a lot of different vendors.”

Take QR codes that could be on product in your store.

“Does that QR code lead the consumer to the retailer’s Web site or the manufacturer’s Web site?” Crowley said. “Manufacturers need to make the information available on the retailer’s Web site. That’s an initiative that needs to happen.
“From a technology provider’s standpoint, the more connections we can give the retailer to the manufacturer’s information, the more the consumer will come into the store.”
She added that from her clients’ feedback, she believes manufacturers are more comfortable driving traffic to their Web sites versus the retailers’ sites.
“The customer’s often already doing the shopping on line and knows what they want, but not all retailers carry the all the product they see on the manufacturer’s Web site,” Crowley said. “Wouldn’t it be great if the retailer could tell the customers (who visited the manufacturer’s site) we don’t have that particular product in the store, but we can tell you everything you need to know.
“It’s a challenge that some of the retailers can’t show (a manufacturer’s) product on their own Web sites because the customers are driven to the manufacturer’s Web site.”
At a Best Buy, a shopper can know for sure via her smartphone if the product is at the local store, and maybe go ahead and pull the trigger on a purchase.
While with furniture, especially something like upholstery or bedding, the customer is more likely to want to come into the store for a “touch-and-feel” test, having a shopping list on the customer’s phone when she walks in the door is just one example of how mobile can make the furniture buying process easier.
“Wouldn’t it be great if you could walk them around your store with their mobile device—you don’t even have to ask them what brought them into the store,” Crowley said. “Technology service providers like us should work with our clients’ manufacturers to get as much of that information available at their fingertips as possible. Ultimately, we’re trying to sell that manufacturer’s product line, and the more a Myriad or other service provider can provide to the retailer, to arm them for the consumer walking into that store, the better off we’re all going to be.”

GETTING MOBILE-FRIENDLY
Myriad brought an expert in mobile applications to its conference to give retailers advice on how to make the most of mobile. Scott Gamble, vice president of digital solutions at Alliance Data Retail Services, is accountable for all the Columbus, Ohio-based company’s consumer-facing digital initiatives in the areas of the Internet, mobile, e-commerce, social media and e-mail. He and his team are responsible for the development and execution of the Alliance Data mobile strategy, which has led to multiple industry-first products in the areas of mobile marketing, payments and service.
In addition to his 15 years with Alliance Data, Gamble has more than 20 years of experience in the retail payments industry, including management roles at GE Capital and SPS Payment Systems.
Things like virtual loyalty cards, optimizing credit programs for mobile users and “geo-fences” that alert customers to deals when they’re in a store’s vicinity are ways mobile can help retailers get consumers’ attention and build sales.

A NEW CONTEXT
Location-based marketing using geo-fences, for example, targets customers in a defined area around a store. It’s important to note that those customers have to opt in to receiving information from your store.
“That location awareness ties the context of knowing that it’s a brand I’m aware of that I’ve opted to receive information from and that the brand’s nearby—it ties all that together,” Gamble said. “The cellular networks will sell you that (locational) data for customer’s who’ve opted into receiving information from you.
“You can build a ‘fence; and be notified that one of your customer’s is in that fence—you can then send them a text.”
Consortia of non-competing retailers in the same area, for example around a mall, have made locational marketing using geo-fences much less expensive.
A key is getting those customers to opt-in, and mobile-optimized loyalty programs are one way to inspiring that commitment. It’s also convenient for customers to have that loyalty program on their phone.
“I don’t know anyone who has space in their wallet for another (loyalty) card or room on their key chain for another one of those tags,” Gamble noted.
Alliance Data research indicates that 18 percent of consumers agree that a mobile loyalty program gets more valuable as they have begun to expect offers to arrive; and that 31 percent of consumers agree that the program gets more valuable as it gets more relevant to their interests.
“Allow consumers to express preferences and filter those messages to correspond to that data,” Gamble said. “This context drives them to action,” adding that ADS found 52 percent of those on the program will visit the store’s Web site, and 50 percent will visit the store soon.
“Someone isn’t going to sign up for text promotions from 50 different brands. We’ve found they’re open to six or seven,” Gamble said.

MAKE THE RIGHT MOBILE
IMPRESSION
ADS research found that 61 percent of people have a better opinion of brands when they offer a good mobile experience.
Be careful here—if that experience is unsatisfactory, the reverse is true. Say you have a QR code shoppers can scan. Gamble related an anecdote of a retailer whose code generated a message telling shoppers they needed to view the target site on a computer.
“If you don’t connect the dots all the way to the end, it creates bad vibes from the consumer,” he said. “There are plenty of options for you to make your Web solutions mobile-friendly without spending a lot of money. Don’t do anything just to go mobile without tracking everything all the way through.”
Retailers can go out and buy an e-mail list, but they can’t buy a list of phone numbers for a texting campaign. Engage customers in the store and on your Web site to create that buy-in to what you have to offer.
“Create a database of mobile short-message service (that’s text in common parlance) users, and engage them responsibly with relevant content,” Gamble said. “Seventy-nine percent of active shoppers would opt in to store alerts for special offers and discounts; and 75 percent are interested in receiving location-based offers when near the store,” according to ADS research.
Above all, make sure the experience is mobile-friendly from end-to-end. Provide product information and add links for consumers to share via social networking sites. HFB


Inset Story

Quick Tips
Scott Gamble, vice president of digital solutions at Alliance Data Retail Services, offered these suggestions for retailers considering the use of mobile technology.
• Respect the mobile consumer.
More and more shoppers are taking their mobile phones into stores, and they’re expecting to be able to use them in yours.
• Understand that mobile is a shopping tool.
Consumers are using their smart phones to access product information, coupons and offers, comparison shop, purchase goods online and locate stores.
• Control your customer’s mobile experience.
Make sure your Web site is optimized for smartphone and tablet users.
• Build mobile-friendly in-store experiences.
Create a database of mobile users, and engage them responsibly with relevant content.
• Use barcodes to your advantage.
Deploy barcodes on your in-store merchandise that take consumers to your mobile Web site for more product information.
• Make sure your digital properties are in sync.
Audit your digital properties from end to end to ensure smooth transitions between channels.
• Mobile-optimize your credit program.
Introduce the account acquisition process to earlier in the shopping cycle to increase initial-purchase size; and educate customers on promotional offers and spending power while you can still influence shopping behavior.

On Bedding : Justice, Fairness and Humility

At first glance, it may seem like Colorado-based bedding chain Urban Mattress is doing everything … well, wrong. The stores give a percentage of all sales to charity. They don’t do big promotions. They’re very selective in what they carry, avoiding most of the big mattress brands. They encourage employees to own their own franchises.

Thing is, these unconventional principles are working. The eight-store chain (with more locations in the works) is thriving, experiencing growth in a still-hurting economy, with no end in sight. How did they do it, and why is it working so well?

“The driving force behind what we do … our value system … it’s really about justice, fairness and humility,” said Steve Von Diest , a co-founder and franchise owner in Urban Mattress who also coaches new franchisees.

“How justice plays out in the mattress industry is fairly deceiving,” Von Diest continued. “The bait-and-switching, even the labeling of mattresses from the same vendor between two different stores is very different … so we said, ‘What products can we choose that are going to eliminate the three-to-six-year turnaround (between beds)?’ We focused on products that we believe (are) right for the customer. We may not see the customers back for 10 to 20 years. That may not necessarily be right for our bottom line, but it’s right for them.

“We’re very upfront. We don’t do sales (promotions) because we’ve noticed a pattern in the industry—sales are typically a markup with a dropdown … we’ve lowered our margins to as low as possible because we’re owner-operated and we can do that.”

As for the second part of the equation, mercy, Von Diest defined that as “the driving force for what we believe a for-profit business can do in the community. … We care about our customers—not just what their mattress feels like, but also what’s going on in their marriage, their lives, because it all fits into taking care of people.

“We also tweak their mentality on how they too can give back to the community. So our giving program is not just me and (co-founder) Ethan Rietma giving in the background. We’ve actually put it very upfront in our stores, so our customers know that 1 to 2 percent (of sales) is going to go to a local non-profit (charity), and our customer gets to choose the emphasis. … In each of our stores, there are four to five local charities that the owner or their staff is passionate about.”

Addressing humility, Von Diest said “I wouldn’t necessarily call the mattress industry a humble industry. There’s not a lot of admitting of fault and errors. Ethan and I know that many of our customers may know more than us. They’ve done research, so we’ll humbly say we’re sorry, we’re ignorant. We’ll also own our mistakes, and we’re going to make it right with the customer. If we’re replacing something, we want to be very upfront.”

A Chat Between Neighbors
Urban Mattress started out in 2008 as nothing more than a friendly exchange between neighbors. “Billy Williams, who owns the franchise, was my neighbor and a good friend, as was Ethan,” Von Diest recalls. “We all lived on the same street, and Ethan and I had done non-profit work, community development, we were former pastors. … Billy said ‘Hey, I’m going to start a mattress store and I’d love to have you and Ethan join me to infuse the non-profit values—caring for people, caring for the community—into Urban Mattress.” Williams launched the store in Boulder, Colo., with Von Diest and Rietma, who eventually started three more franchises.

To Von Diest, it was crucial that they bring in like-minded people to open new stores. He recalled, “What Ethan and I said was ‘We’re going to take on young guys—upper 20s to mid 30s—and we’re going to teach them how to do this non-profit value set/for-profit mattress business. … We’ll help them launch new stores of their own because I really believe that the owner-operated model allows for care and an opportunity to sell that’s really different than your big box stores.”

Select Vendors
The leaders of Urban Mattress bring their carefully thought-out mindset to their selection of products as well. “We’re an elite retailer of Tempur-Pedic, and we love them,” Von Diest said. “Most of our staff sleep on them. Also, we are an exclusive retailer for Vi-Spring out of England. … We carry Sherwood Bedding out of Phoenix. Those are our main manufacturers. We do carry Sweet Sleep out of Boulder, Colo.—she is the provider of most of our organic pillows and accessories in the natural world.
“We’re not in bed with Serta, Sealy and Simmons and some of the big brands, so it allows us to differentiate product in our stores. It’s very difficult oftentimes to find our product style and quality in the big box stores … we’ve chosen our product to give (customers) a wide variety.”

No Push, Push, Push
Von Diest and his fellow franchisees pride themselves on Urban Mattress’ no-pressure sales approach.
“Our new staff, we script them that ‘You have to talk very upfront,’” he said. “Let’s just use the idea that there’s going to be no additional add-on prices of delivery, set-up, removal. All of that is very clear: It’s free. … We talk about why we price things the way we do. … The product we carry is good enough to sell itself. I just want (customers) to discover the best thing for them according to their pocketbook, as well as what’s good for their body.”

Publisher's Letter : The Value of Design

While he was explaining the features and benefits of the product, I casually mentioned a feature I saw on a similar product in another showroom. The feature I mentioned is a definite benefit and could easily be adapted to most any product you see at Market.

It addresses a problem most consumers have had an issue with at some point before. The fix was a very simple one, but one I had never seen. When I mentioned this, the manufacturer said in jest, “Thanks for the tip.” When I heard his response I just paused and thought, “oh damn, I just let the cat out of the bag.” After a couple of seconds, we both chuckled and our conversation began on how long it would take before others in the industry began knocking off this particular feature.

I’m guessing I’ll see it again in High Point at the April Market, but not from my manufacturing friend. He’s far too reputable and classy to blatantly “take” someone’s idea—but there are others, I’m sure, who are implementing this into the design right now.

I’ve heard it said, “Imitation is the highest form of flattery”, but maybe not in this case. Designers spend months working on a concept, picking the right materials and coming up with the perfect lines to create the perfect piece.

Once they are happy with the product, work begins with a manufacturer to produce it. The manufacturer builds and markets it, with hopes of getting it to retailers and in front of the consumer.  A lot of time and effort go into this piece. It was an idea in someone’s head just a few months ago. Now the whole world can see it, draw inspiration from it and well, knock it off.

I’m really not sure how I feel about this. When does a person cross the line from drawing inspiration to outright knocking off an idea? You all have seen a number of bedroom suits with similar designs and features, someone was first up with the idea, so did all others knock it off? Do you or your customer really care? 

I’m guessing the deciding factor is whether or not it moves off your showroom floor; and I’m OK with that. Maybe the original manufacturer that made this piece should have done a better job of marketing this item. They need to make the potential buyer aware of why the original design is hands down a better product.

They have to distinguish a value at that price point. Then, the consumer has a better understanding on why the price point is set as such. As they decide on which product to purchase, original or knock off, maybe that saying “you get what you pay for” will echo in their heads.

This issue of Home Furnishings Business magazine takes a look at intellectual properties and potential issues that could arise from buying and selling copyright infringed goods. Please take some time to read this issue and make sure you aren’t putting your business in a potential situation that you may regret later. 

Publisher's Letter: Employee Management

My second position was with a client that I worked with by way of the Fortune 500 that asked me to come to work for them. It was a dedicated third-party logistics provider that was privately held and employed just over 120 people. Less structured than my previous job, but attempting to become a “real” company.

This brings me to my present position as publisher of Home Furnishings Business. A team of five, the majority of us work from home, with some support from our parent company.  Each company has had its share of pros and cons, but each was driven by the fact you must have good employees to deliver on the promises you make to your clients.

At one time or another with each place I have been employed, I have hired, fired or have been counted on to keep morale up within my group of employees. I know the old saying, sh*t floats downhill but it amazes me how quickly a senior manager will run when such tasks come up.

Right or wrong here are a few things that I have learned along the way. 
When hiring, don’t try to just fill a vacancy. Use this time to find an “upgrade” and find someone that will work well within your team. If you hire a person that is motivated, smart and has a good work ethic, you can train them on the necessary skills to help them be successful in the position. They will grow into the role. Don’t rule out hiring from outside your industry, sometimes a fresh set of eyes, ears and ideas is what the position needs as a jumpstart. Explain what is needed for them to be considered successful and supply the tools to make that happen.
Firing, this is a tough one for most people. In today’s world of documenting potential issues, problems and inch-thick personnel files, it’s my thought that a person has a pretty good idea which path they are on before the firing takes place. If you have completed your supporting documentation and included it in this file, you should have no concerns about your next step. You have outlined what was needed for that employee to be successful, and they have not reached those goals. Lose no sleep when terminating an employee; you’ve had discussions along the way about performance issues and addressed this with each item that was put in the file. Cut the cord and move on, your team will be better for it.

Happy employees are more productive employees, but keeping employee morale up is a difficult task. Management needs to keep an eye on morale. Good employers will make sure an employee is feeling  happy and secure in the position, so they can focus on doing their job and not have concerns about the “what ifs”. It’s a fact that an employee will be more productive if they feel good about the company. Remove any doubts employees may have, and you will be rewarded by them. Be sure to acknowledge employees for the effort they give. Celebrate the wins and always be sure to include families in your celebration. The family may not be on your payroll, but they are a vital support for your employee. It’s important for family members to feel included and part of your team. 
This issue of Home Furnishings Business delves into these topics. Take a moment to read it and learn from others who are much more seasoned than me in what makes a successful team in the furniture industry. I’m sure you will walk away with an idea or two that will help you become more successful and create a team environment that will exceed your expectations.

Obamacare’s Impact a Question Mark

The jury’s still out on the impact of the Patient Protection and Affordable Care Act, better known as Obamacare, on businesses.

Jill Benson , an attorney specializing in employment issues in the Greensboro, N.C., office of Womble Carlyle, noted that employers will have to provide coverage in companies with 50 or more full-time employees. The next big deadline is March this year to give notice to employees, but that could be pushed back.

“It’s not clear yet what minimal essential coverage will be,” Benson said.

Taylor Ganz, vice president of finance, planning & administration at Profitability Consulting Group, said he’s spoken to a number of retailers who are reducing some full-time positions to part-time; and all part-time positions to 28 hours a week or less in order to reduce the number of employees they must cover in a health insurance program under the law.

“Some are raising prices, but they should be raising prices anyway,” Ganz said. “Up to now, a healthy benefit package has been a useful retention and recruitment tool, but because of the uncertainty around the new regulations it’s unclear how many retailers can offer the full level of benefits. … It’s the uncertainty about the law’s mechanics.”

With a huge number of retail associates spread over its Thomasville store network, Furniture Brands International has stayed abreast of health-care reform developments, said Beth Sweetman, senior senior vice president of human resources.
“We’ve been on top of health care reform for a couple of years, and we already comply with the legislation—we know what’s coming,” she said. “For us I think it will be an attraction and retention tool. Benefits are a significant spend for Furniture Brands, so we watch that carefully.”
Susan Brashears, at Brashears Furniture in Berryville, Ark., doesn’t expect much impact from Obamacare on the retailer’s benefit packages.
“We were already providing insurance for our people, and we have under 50 people,” she said. “We actually got a small rebate back from our health insurance company last year.”

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