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From Home Furnishing Business

The World is Shrinking

The face of furniture retailing continues to evolve. What will it look like in the future?

By Bob George

This is not a new concept. In fact, for decades the expansion of air travel, the exploration of foreign countries by National Geographic, and the impact of the Internet have made us truly a world community.

Now, social media and the vast content of the Internet will, at the very least, allow people to be there in spirit. Furthermore, today international flights are departing from relativity small airports thus making it possible for the general public to get there easily.

What does this have to do with the furniture industry? Obviously, in the manufacturing sector, the production has and continues to move offshore. (See the current Statistically Speaking article.) However, what about the retail sector? In the not too distant past furniture retailing was local with a family name above the door and a reputation in the community that facilitated the consumer purchase.

Yes, there are many regional chains personified by local ownership remain on the retail landscape. Nevertheless, like restaurants, that local great place to eat has been joined by national chains offering good food and acceptable service. While the consumer encounter is good, this location offers neither the local flair nor the exceptional experience.

Will furniture retailing evolve to several national chains offering consistent service of a commodity product designed to satisfy the blended taste of a national consumer?

All of this leads to this question. Will furniture retailing evolve to several national chains offering consistent service of a commodity product designed to satisfy the blended taste of a national consumer?

Does economy of scale dictate that a 500-plus store chain only deliver the experience demanded by the consumer? Obviously two stores have the advantage over one but, if continued to increase, when does the point of diminishing returns come into play? And what gets lost in the process?

The challenge for local retailers is to truly differentiate themselves from the faceless larger chains that are gradually moving into their markets. This is documented in our feature article. From a consumer’s perspective of what is important, being No. 1 across the board is a necessity. What is your consumer DNA?



Sometimes it is not just about price or an extensive selection. The larger retailer will focus on one or two factors, such as price, selection, and the like, expecting the consumer to accept less than great on the others. Local retailers cannot let the consumer settle. If you communicate your differences, they won’t.

 

High Point Hoopla

Make the most of the Fall Market by discovering, connecting and learning.

by Sheila Long O’mara

 

Welcome to the  Fall High Point Market. Central North Carolina can be quite beautiful this time of year as the fall foliage starts to change and cooler temps roll adding crispness to the air. And of course, it means the Market is here.

Time to refresh store merchandising with the latest home furnishings designs. Time to reconnect and catch up with industry friends. Time to swap ideas and strategies to boost business. Time to participate in a seminar or three to improve your marketing, logistics, sales or social media prowess.

We tend to think of the New Year or spring as times for new beginnings. Thankfully, the market cycles of our industry deliver a chance to freshen up every few months.

Take advantage of all that Market has to offer while you’re weaving your way through showrooms, seminars and socials. There’s a lot to be uncovered in 11.5 million square feet scattered among 2,000-plus exhibitors in 180 showroom buildings.

From my showroom tours of premarket and the Casual Market Chicago, exhibitors have a wealth of new product to showcase.  Some of it is quite lovely while some misses the mark.

Please, allow me to preach for a bit.


I saw a lot of sameness from showroom to showroom, leading me to believe the herd mentality of our industry is alive and well.

For years, it seems as if a collection becomes a breakout success on retail floors, the next Market is flooded with similar looks.

Let’s be honest. In all reality, how many Restoration Hardware lookalikes with “dry finishes” can one retail floor hold? I’d be willing to say not as many as manufacturers are currently funneling into the marketplace.

All done.


This season brings with it a cadre of  names from fashion, design and the music  scenes. EJ Victor and Jaipur will unveil collections with Kate Spade, while Hooker Furniture is featuring Cynthia Rowley.  Designer and HGTV’s “Fixer Upper” host Joanna Gaines has teamed with Standard Furniture for a collection, and country music singer Eric Church has partnered with Pulaski Furniture for a collection.

Exciting looks are out there. Seek them out and bring them to life on your retail floors to set yourself apart in your market. Make the looks your own and continue to wow consumers with exceptional service, design expertise and  professional delivery.

Do me a favor.  When you discover new product at Market that strikes your fancy, pop me a tweet @sheilalongomara or @hfbusiness. I’ll be on the prowl for great things, too, and I’m happy to share. Not on Twitter? Feel free to e-mail me at slomara@hfbusiness.com

Here’s to a great Market filled with great discoveries.


 

Eye Toward Growth

The Great American Home Store has its sites set for future growth in the South.

By Daniel Beaird

Ron Becker was out of the furniture industry when he was called about an opportunity in 2002 in the Memphis, Tenn., market that the 27-year furniture veteran couldn’t pass up. The goal was to open a full-service furniture store unlike any in the mid-South.

“I have a love and passion for it,” said Becker, co-founder and general manager of The Great American Home Store.

He got his start in the furniture business at 25 years old and spent 13 years on the floor at Fleming Furniture in Paducah, Ky., and where later stepped into management. He helped take that local furniture company from $5 million in sales to $30 million before leaving to pursue other interests. 

The Great American Home Store (Great American) opened its first location Sept. 11, 2004, in Southaven, Miss., a suburb of Memphis, Tenn. It was designed after spending an entire year looking for the right location at a cost of $8 million. But in its first full year of operation, Great American generated $14 million in sales.

“We spent a ton of money on advertising before opening the first store, promising we were going to be great,” Becker said. Three furniture stores, an outlet store and two freestanding sleep shops later, the Memphis market has seen Great American’s growth firsthand. Future plans include stores in Little Rock, Ark., and possibly markets like Louisville and Lexington, Ky., and Nashville, Tenn.

“We are always looking for the right opportunity for expansion,” Becker said. “We want controlled growth. Customer service is extremely important to us and we’ll grow only when our operations manager, Bill Gill, says we’re able to.”

Great American’s second store opened in Memphis, Tenn., in 2007, bringing the furniture retailer to 110,000 square feet of total showroom space and 150,000 square feet of warehouse space in the two locations.

“We knew that in order to serve the community and distribute costs effectively, we would need two locations,” Becker said.

Both sites have on-site warehousing for customer convenience pickup.  

“It’s a one-stop shop,” Becker said. “Our customers don’t have to go to a bad part of town to pick up their purchases. Because our warehouses are connected to our showrooms, a little more than one-third of our business is through our customer pickups.”

As a locally owned and operated full-line home furnishings company, Great American touts that it provides the mid-South’s largest selection of quality furniture, bedding and accessories. It was founded on the thought of providing consumers with the convenience of a one-stop home furnishings superstore.

“As we started the process of building our company, I decided we would structure the business model around customer service,” Becker said. “Usually furniture companies are built around sales and they worry about service later.”

Becker decided that Great American’s sales volume would be controlled by its service associates, and they would only increase advertising dollars after meetings with service associates confirmed they could successfully handle a larger sales volume.

According to research by Pittsburgh-based Marshall Marketing & Communications, which provides marketing intelligence from consumer market and media research for local, regional and national businesses, Great American is the top cross-shopped furniture store in the Memphis, Tenn., market. That means customers who shop the retailer’s competitors, then shop Great American more than any other furniture store in Memphis; and customers also shop Great American stores against each other. 

According to Becker, 97 percent of its customer deliveries are completed to the customer’s satisfaction and the retailer boasts a triple A business rating in its market.

“That is very hard to do in the furniture business,” Becker said. “But we do what we say we’re going to do. There are no hassles and no surprises for the customers, and sometimes we take it on the chin because of that but we mark it up to marketing.”

According to Becker, all deliveries go through three phases of preparation before merchandise is readied for loading on trucks. Each driving team is responsible for its load, and once they accept the merchandise, all chargebacks for damages are the driver team’s to pay. Each driving team is paid a commission on delivered merchandise that meets the customer’s approval. The delivery process is completed via an iPad and iPhone application with each delivery, and Great American pays all sales associates and delivery people a weekly commission on delivered purchases.

Great American has treaded lightly in the digital marketing realm and hasn’t started selling online.

“We waited, and watched the good and bad of online marketing for our competitors,” said Jack Wells, marketing manager for Great American. “It’s a new territory for everyone and don’t let anyone tell you otherwise.”

“We have added new tools in our online development to help us advance to a sales funnel approach of moving customers from our web presence to our showrooms to a sale and, in the future, online sales,” Wells said.

Wells came on board in 2011 to create and steer Great American’s in-house advertising department.

“I’ve known him for 35 years,” Becker said. “He and I have the same value beliefs in life. Always do what is right and just even when nobody is watching or even when nobody cares.”

Wells started out in the bedding manufacturing industry 40 years ago and moved into the furniture retail industry in the mid-1980s.

“There I think he found his passion for advertising and marketing,” Becker said. “Jack is a great mentor for a lot of young people who are coming into our industry. He always finds time to help those who want to learn and grow in the advertising industry.”

Becker says Wells has helped Great American grow its business by double digits each year he’s been on board and has cut Great American’s advertising cost by 50 percent since joining the company.

“I convinced Ron that the company could save money by bringing advertising and marketing in house,” Wells said. “We started with print and moved toward doing all of our television advertisements recently. The team is all either cross-trained or in the process of ongoing training to make sure everyone can do everything in my department, from print to television to the ever-increasing use of Internet marketing.”

“When we started the company, I was spending 11.25 percent in advertising to revenues,” Becker said. “Last year, we finished with a 5 percent advertising cost to revenues.”  

FurnitureDealer.Net recently redesigned Great American’s web site and now the company has a blog and a presence on Facebook, Twitter and Pinterest.

“We have found Andy Bernstein (FurnitureDealer.net president) and his team at FurnitureDealer.Net to be an invaluable asset to helping us foster our future vision for our web presence,” Wells said. “We worked on a mobile-friendly site first because so many consumers check their phones or tablets first. Our e-marketing segment grew from there into ‘infotainment."

Great American has also developed a monthly e-magazine with embedded video that promotes its television advertisements. All of the retailer’s design work is in house and they laid out the redesign of the website for FurnitureDealer.Net.

“Great American’s team designed the look to match their new branding, and along with that we added our best coding practices and user experience knowledge to make it a site that’s easy for customers to get the information they need and help drive leads to Great American,” said Kayla Wallace, a business consultant for Minnesota-based FurnitureDealer.Net. “One of my favorite things about Great American’s new design is the first impression. It does a great job reflecting the feeling of their physical stores online and that is always something we want to accomplish. I like how easy it is to understand, at a glance, what Great American is all about, what services they offer and why they carry the kinds of products they carry.” 

“We take on challenges all day, every day,” Becker said. “I don’t worry about anything but I get frustrated because I can’t find people fast enough.”

“Ron’s going to do it the right way,” Wells said. “And we wouldn’t be in the business if it wasn’t up to our standards. Ron’s passion for the industry and attention to detail as well as his uncanny talent for selecting and building the right team is the cornerstone to our success. He understands and appreciates the value of our sales force being in position for so many years, and has worked hard for this to be a customer- and employee-focused company. Ron is very loyal to his employees, and our vendors not only respect him but many have become close friends throughout the years.”

The Great American Home Store

Headquarters: Southaven, Miss.

Year Founded: 2004

Footprint: Three furniture stores, one outlet store and two freestanding sleep shops in Memphis and Cordova, Tenn., and Southaven and Olive Branch, Miss.

Employees: 90-100

Awards: Mississippi Retailer of the Year, 2007; Finalist for Memphis Business Journal’s Small Business Awards, 61-350 Employees, 2007; Best Independent Sealy Retailer in the Mid-South, 2005-2010

Key Vendors: Austin Group, Bernhardt, Catnapper, Corinthian, Flexsteel, Fusion, Hammary, Jaipur, Klaussner, La-Z-Boy, Magnussen Home, Pulaski, Sealy, Tempur-Pedic, Universal and Vaughan-Bassett

Website: GreatAmericanHomeStore.com

 


 

Take 5: Michael Amini

Michael Amini, CEO of full-line producer Aico, took over as president of the

American Home Furnishings Hall of Fame board of directors earlier this year. During his short tenure at the helm, he has led the institution on a mission to broaden its reach and boost its industry cachet.

Here, he discusses upcoming changes to the Hall of Fame induction banquet set for Oct. 18  and other plans for the group.

Home Furnishings Business: Earlier this year, the American Home Furnishings Hall of Fame underwent an extensive rebranding initiative. Why the change?

Michael Amini: In January, we changed our name to the American Home Furnishings Hall of Fame Foundation to underscore our scope of work and the inclusion of all segments of the home furnishings industry.

Previously, it was the Furniture Hall of Fame. But we all know, no matter if you have a mansion, small home or big home, by having just furniture without wall art, rugs, accessories or lighting, the house won’t look like a home. Therefore, we can’t do everything based on furniture. We need to bring everybody together in the industry, and I’m very happy that we have achieved that.

HFB: What reaction have you gotten to the changes so far?

Amini: Very positive. The Hall of Fame is undergoing a significant transformation and we will continue to change the industry’s perception of the organization with the extraordinary event coming up Oct. 18. We are hoping for unconditional support of the entire industry.

Unless we all come together and support the industry as a whole with the most prestigious event and organization, it will be a pity because every industry that I have looked into has a hall of fame. As the furniture industry, which happens to be the second largest purchase in anyone’s life, we have to have one organization that brings everyone together.

The change is not just the name. It’s in every aspect of the operation—the way we have been doing things, the way we have conducted our business, the way we have celebrated and the way we have announced things—it all has changed. 

HFB: How will the October gala be different than in years past?

Amini: This will be a whole new experience that will be attended by a blue ribbon guest list. The gala will be held at the Grander Resort, and celebrated as never before with an inspirational and entertaining program. For the first time, we will include entertainment, the very talented Morgan James. Award-winning actress Jane Seymour will host the event. It’s going to be an extraordinary event never seen before.

We will induct five industry leaders into the Hall of Fame and showcase each inductee’s innovation in the industry with a live video format. The atmosphere will be set by a liquid laser light show coordinated to music, a red carpet entrance and sound. This is sure to be at the top of the list as High Point Market’s most memorable evening.

We are raising the bar, and I want to personally invite everyone in the industry to join and support the organization. The Hall of Fame belongs to all of us. We all love the industry otherwise we wouldn’t be in it. Without the cumulative support of the entire home furnishings industry, we will not succeed.

No matter what we do, what magic we put on, we need the support financially—as a membership, as a sponsorship, as a thought process and thinking of new ways of bringing people together— whatever people can do to help and support. That’s what we need.

It’s very easy to get involved. People can go online, sign up and become a member. Participate in the gala to ensure the celebration is the most memorable celebration of the industry. 

HFB: What other changes can we expect to see as the American Home Furnishings Hall of Fame continues to evolve?

Amini: These changes positively support our mission of celebrating the power of our past, while fueling excitement for the future. We are still building on our core initiatives with our oral history program, writing the history of the industry, video interviews with our inducted members, the “Tell Us Your Story” program and updating the Walk of Fame.

We’re also in the initial planning stages for a leadership program for current and future leaders.

HFB: The oral histories are a great way to record the industry’s past. How can people get involved?

Amini: Our oral history and book publishing programs forever capture the personal stories and culture of the furniture industry. Published as a book and available by topic on the web site, these rich little gems share the memories and wisdom of our leaders in their own words and through historic photography. We are always accepting recommendations for industry leaders whose stories need to be captured and encourage people to contact the Hall of Fame to set up an interview to ensure history is not lost.

What is an industry without a history?A lot of us are interested in the history. I love to go to countries and look at their museums and palaces. It gives you a sense of energy to look at what our predecessors have done, what they have gone through, especially for such a young country.

We need to capture this history. My vision is the Hall of Fame needs to have a building in High Point right along Main Street with over 100 years of history of furniture that people can walk in. They can talk to people to find what they want to find out about a certain style of furniture, about people who have been innovative in that particular segment, and to see who has been inducted in the past and why they have been inducted.

We need a physical place that people can walk into rather than the Hall of Fame just being a dinner. For that, we need money. We need the support to purchase a building, to hire people that can capture the history and publish books, for us to be able to do oral interviews with people, and for us to capture what is necessary to make the Hall of Fame organization a place that people can go for answers.

That is my vision and unfortunately it’s not going to be done in one year. But I’m hoping our leaders who are in line to become presidents and to become supporters to lead this organization to a point where this particular vision becomes a reality.

We have had wonderful people on the board. We have also had great people on the executive committee who are supportive. Without their support, we couldn’t have accomplished all that we have  over the last few months.

 

Online Shopper Inquiries

By Tom Zollar

After a sales training session a few years ago, a client’s top design salesperson issued an edict—we are struggling to properly handle all the Internet inquiries we get. Come up with some direction for us.

 I get great feedback and ideas salespeople I work with, but since Yvonne routinely writes more than $1 million each year, I tend to listen to her closely. So we developed some recommendations to help clients take advantage of the growing opportunities. Here are the strategies we have found to be successful.

Whats and Whys of Internet Inquiries

First, we have to understand some basic truths that are important to help maximize performance in this area. Many salespeople do not like handling phone or Internet inquiries because they see them as a waste of time. That could not be further from the truth. These customer contacts represent some of the most qualified leads a store receives, and consequently they should be handled quickly, dynamically and professionally.

To begin the training process, retailers must ensure staff members are on the same page and understand the promising potential source of business Internet inquiries present. Here are issues to discuss with them:

  1. Consumers seeking information online are not tire-kickers, lookers or price-shoppers. Instead, they are legitimate ups and need to be treated as such. They have decided to buy something, researched online to narrow their choices and are now looking for a place to buy it. What better chance can you have?
  2. For the most part these inquiries represent the best selling opportunities a retail salesperson will have, because they are looking at a product and are willing to tell you in what they are interested. How many of the in-store customers you approach give you that information? If you do get that far, what are the chances you will make the sale?
    Most salespeople agree that once they get to the point where a customer will tell them what they want, they have more than a 60 percent chance of success. Inquiries give them a head start on the process.
  3. Inquiring customers are typically in the final stages of making a purchase decision and are at a point where they are narrowing down choices, how much to pay for it and where to buy it. Therefore, if they ask you for a price and you give it to them, you have addressed only one part of their need. That said, they may well shop around and go elsewhere to buy, based solely on price. You should address each of their needs and in doing so, give them a reason to buy from you.
  4. It is critical for sales management to understand that many retail salespeople are most comfortable working face-to-face with customers so they can read body language and communicate more effectively. Working with someone online is much different and might not be something at which every salesperson is competent. It has been said that younger people are better at communicating via written word, having grown up with e-mail, texting and social media. But it is more a matter of desire than age. Yvonne is from my generation, and she is a killer with inquiries. Truth is some salespeople will be better at handling online inquiries; those are the ones that should be given the majority of them to maximize a store’s return on this potential customer base. That might not seem fair, but those who are most comfortable doing something are usually the best at it. Find out who they are and create an Internet response team to funnel these valuable leads to.

Process Recommendations

Here are a few recommendations about how to respond to these inquiries. Each organization needs to determine its specific process and what incentives to include, but this should put you on the right path:

  1. Answer Their Question: Respond promptly (within a few hours if possible) with the answer to the question. Failure to do so will mean immediate rejection. These are not the most patient people, and they are used to immediate answers from Amazon, Target and other online retailers. However, you must give them additional answers to questions they did not ask in order to separate yourself from the others and make them want to do business with you. Always try to give them the specific information they seek, such as the price of a item on your website, but if possible, also quote the range of price that the product is available at depending on fabric, options, group make up and other attributes.
  2. Offer Options of Which They May Not be Aware: Always try to give them more to think about like similar products you carry or can order that can provide them with both product and price related options. Consider something along the lines of sharing the varied services the store offers. “One of great things I like about working for Sample Furniture is that we offer our clients so much selection that they can almost always find the perfect product for both their lifestyle needs and their budget. As an example, we have several very similar sofas in a broad array of fabrics and leather that range in price from $599 all the way up to $1,199. Some are also available as sleepers or with a reclining function built in. Whatever you want, we can make it happen, even if we need to have it built especially for you. I have included some pictures with my e-mail to give you an idea of other options you may want to consider.”
  3. Be Visual: One great advantage of the Internet versus the phone is that it is visual. Take advantage of that by sending pictures of the item the consumer has asked about and other similar products. Go out on the sales floor with a mobile phone and send back actual pictures of the furniture in the store. What better way to pique their interest in coming into the store.
  4. Give Them A Reason to Buy from You: Separate yourself from the competition by adding value to the process and creating a desire to do business with you and your store. Add value by giving them specific reasons why buying from your store will be their best choice. How about something along these lines? “Another great aspect of working here is that customers can shop with confidence based on our lowest price guarantee. We also offer free design services to our clients, including an in-home visit if needed, to ensure your new (insert product) is perfect for your home.”
  5. Get Them Into the Store: You must give them a strong reason to come into the store and meet with you to complete the process. This should involve some sort of legitimate special offer for your online friends. The main thing is to get them to print out the e-mail and bring it to you in order to take advantage of the offer. Something as simple as concluding the response with: “We value our online friends, so if you just print this message out and bring it to me here at the store, we will give you an additional 10 percent off of whatever you select.” (Put offer in bold so they don’t miss it.) You could also offer a gift certificate or gift, but we find that a discount on a purchase tends to work best. A colorful coupon in the signature of the e-mail works well.

Keep in mind that many consumers shopping online are trying to be as efficient as possible in their search, so you need to get to the point as quickly and directly as possible. The recommendations above are a bit wordy to give you an idea of what could be included in your response, but it is best to be as brief as possible while still getting your point across. They will be more likely to read text if it accompanies pictures.

You have a great opportunity with these clients. Give the recommendations a try, adapt them to fit your business and find what works best for you.

 

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