From Home Furnishing Business
Area rugs are to a room like jewelry is to a well-put-together outfit. They’re great at pulling other items into a coherent space. Rugs are an anchor for the area. They’re nearly magical in their ability to transform a room.
According to a Home Furnishings Business consumer survey last month, area rugs are gaining in momentum as the go-to accessory for dressing up a space. Sales in the category climbed more than 6.6 percent from 2012 to 2013, and the category is poised to make similar gains this year. No surprise, more than half of the rug purchases— 57.6 percent—were bought for either the living room or den. The bedroom followed at a distant 11.9 percent and the dining room at 8.5 percent.
Shape was a deciding factor for our consumer panel in rug selection. Nearly 73 percent chose rectangular shaped rugs, while at a distant second, 11.8 percent opted for the “other” shape. Beyond that, runners and square rugs were each chosen by 6.8 percent of the sample.
A wide range of sizes were bought by our panel of consumers ranging from the smallest 2x3 to the much larger 12x18 and every size in between. Consumers most often opted for either 5x7 foot rugs (18.6 percent) or 8x10 foot rugs (17 percent).
Nearly 65 percent spent between $100 and $1,499 on their most recent rug purchase. The largest cluster of rug purchases (45.8 percent) fell within the $100 to $399 price range. Much like the rug arena, our consumers bought a broad array of color and style families, but didn’t stray far from the strong neutral family. Neutrals led the color parade with more than 69 percent choosing black, white, beige or the like. Green, a strong player in the upholstery arena, followed with a distant 13.6 percent. Other colors that got a mention, include blue, pink, red and yellow.
Our consumers appear to like to play it safe when it comes to rugs. While the design elements were quite varied, the largest cluster of consumers (28.8 percent) played it safe and bought a solid rug. Florals and geometrics tied at 17 percent; traditional motifs, 13.8 percent; contemporary designs, 10.2 percent; and stripes, 6.8 percent. Zig-zag patterns and animal prints rounded out the balance.
Not surprisingly, most of our consumers (76.3 percent) bought their rug after making their furniture purchase. Only 8.5 percent bought the rug with their furniture purchase.
Our group of shoppers showed a penchant for buying their rugs from mass merchants, like Target or Walmart, (30.5 percent) or home improvement stores, Lowe’s or Home Depot. (25.4 percent). Traditional furniture stores (11.9 percent) ran neck and neck with rug only stores (11.9 percent) and the Internet (11.8 percent) as the channel consumers chose for their rug purchase.
What Retailers Say
Nourison’s Luster Wash CK10
“Because of the beautiful copper color, it works well in many of our contemporary desert living homes. Because of it’s subtle abstract design, it can be mixed with other patterned rugs. It’s also available in other colorways and sizes.” It’s part of the Calvin Klein collection.
Retails at $1,099 for a 5.6’x8’
Retails at $699.99 for an 8x10.
Rizzy’s Napa Merlot
“An overall great value and style. This rug is hand-tufted in a New Zealand wool blend and features a heavy 10 millimeter loop pile.”
Company C’s Sheffield Stripes
“Company C is a very good vendor for us, and we do very well with the line. It’s not inexpensive and comes with an MRP so it doesn’t get kicked around for price.”
Retails at $2,055 for an 8x10.
What Suppliers Say
Surya’s 3300 From the Banshee Collection
This rug offers a soft, plush texture with a lustrous sheen. Hand-tufted in India of 100 percent New Zealand wool with viscos accents, the organic design combines with earthy and deeply saturated hues of copper and slate for a sophisticated style.
Nyla is designed and created to look like an antique, hand-made rug. It’s popularity lies in the design, and its affordable, power-loom price. Nyla is also available in a number of different colors.
Kevin O’Brien Tuscan Sun Bu Capel
This award-winning rug has a unique ombré look created with different shading throughout. Its extra-dense construction utilizing cut and look construction and texture from different yarn systems make this one of our best sellers.
Jaipur’s Garden Party from the Blue Collection
A welcoming blue ground offers the blossoming vine a cozy background. The livable design makes Jaipur’s Garden Party a winner among consumers.
Roses Rug from Company C
A whimsical rug with a botanical motif in wine, berry, and purple. The imagery portrays the vibrancy of English roses in full bloom against an evergreen ground. Carefully crafted with mottled green and black yarns the roses are tufted while the background has a loop pile for textural appeal in 100 percent wool.
Revival from Oriental Weavers.
A staple, day-in day-out top seller, the Revival collection meets the huge demand for over-dyeing The collection is made in the U.S., giving retailers a home-spun story to tell consumers.
Hints on staying on bad PR, enhancing your brand
Sometimes you just get surprised. Universal Furniture CEO Jeff Scheffer was working on the road—way on the road in the Middle East—when he got word last June of a headline-making controversy surrounding Paula Deen, the Southern chef who’d lent her name to a highly successful licensed collection at Universal. She was accused of making racial slurs in a lawsuit alleging racial and sexual discrimination.
“I was in Dubai, we’d just gotten in from Kuwait,” Scheffer recalled. “We were all tired, and we went downstairs for a late bite to eat. I went back to my room and was working on my tablet, and I got an e-mail from (Universal Vice President of Marketing) Kevin Miller saying I’d better take a look at this. The news was just breaking.
“It wasn’t what I expected to see at one in the morning,” he said.
Robert Pritchard, a professor at Oklahoma University, served 25 years as public affairs officer for the U.S. Navy. He is a fellow of the Public Relations Society of America, and chairs PRSA’s educational affairs committee. During his years with the armed forces, he was no stranger to handling tough public relations situations. He had advice for companies facing negative publicity.
“Crisis management was the bulk of my experience,” Pritchard said. “The first thing to do is not hide. Analyze the situation—sometimes saying nothing is the best thing, but you always have to acknowledge the situation. “A good PR person can help avoid crises by recognizing a smoldering situation that could flare up,” he said.
Second, never lie. “Be truthful, and your message has to be consistent,” he said. “In my experience, 95 to 97 percent of the time if you present the right information, people make the right decision about you. “Sometimes you need to get poked in the eye and make changes. The Chinese word for crisis incorporates the word opportunity, and you should look at a crisis as a chance to improve. You need to be quick to respond, consistent, true and transparent.”
FIELDING THE BALL
When the Deen controversy hit the news, Universal tried to get out in front of it as quickly as possible. “I believe the news broke on a Thursday, and we talked with Paula over the weekend,” Scheffer said. “With everything moving so quickly, we felt it was important to take our time and not over-react or knee-jerk. We watched and listened on a number of fronts—the developing news, what our own people were saying. We did come out with a statement to our customers fairly quickly that we were examining the situation.
“The first thing we did was to bring our own folks together and explain what happened,” he said. “We don’t tolerate discrimination—we have a lot of diversity in our company, and we’re richer for it. We also talked with the other people in our building—Legacy Classic’s here, too.”
The company also held a conference call with its sales force and sent a letter to sales representatives to put in customers’ hands. “The other part of that conversation is that since things were moving so fast, a lot of people were rushing to judgment, and others were coming to her defense,” Scheffer said. “Wrapped around that was a recognition that we’re going to watch and listen, and take the time we need to make the best decision.”
In the end, Universal stuck with Paula Deen, and Scheffer said the reaction to its decision was overwhelmingly positive.
“Our phones lit up the day we made the announcement,” Scheffer said of Universal’s decision to continue its association with Deen. “Our Facebook page got something like 2,500 likes in a 24-hour period.”
The good news of a PR flap is that in many cases, people’s attention wonders elsewhere in an era of 24-7 news and viral outbreaks on social media. “We saw a 20 percent dip in (Paula Deen) orders in the five weeks after the news broke, but by six weeks it was back to normal, and we resumed growing with the brand,” Scheffer noted. “I’m sure there may be something we should have done differently or could have done better, but at the end of the day
I think people gave us good marks for the way we handled a difficult decision. “I don’t profess to be an expert, but I think the biggest (lesson) is that in a 24-7 news cycle and what seems like an instant gratification world where someone wants an immediate answer, you have to remain calm and not knee-jerk. You gather as much information as you can. You watch, you listen, you look at the facts, but it’s your decision and you have to trust your gut—after looking at everything.”
Public relations isn’t always about crisis management— there’s a big upside in using it to build your brand and tell about your participation in the communities you serve. San Diego-based Jerome’s Furniture expanded last year into the Los Angeles area, and good PR helps gain a foothold.
PR is a critical component in brand building,” said Jerome’s CEO Lee Goodman. “The third-party credibility aspect really goes a long way with the consumer who is tired of a world filled with advertising. “It’s critical to be relevant and interesting, or no one (media or consumer) will care about your message. It’s also important for your PR strategy to reflect who you are as a company. Do good things and let people know what you’re doing. It really comes down to that. We have long believed that as a furnisher of homes it is important for us to be good neighbors to our community. We are proud of how we give back. Sometimes, we get enough credit, some days we don’t, but we always rest well at night knowing we are working hard to do good things in the communities we serve.”
Got a funky promotion going on, something that really hooks up with your community? Make it an opportunity to toot your horn in the market you serve. When Harkness Furniture in Tacoma, Wash., offered customers free furniture if the Seattle Seahawks scored a touchdown on their first Super Bowl kick-off return, they figure it was a safe bet. Well, the Seahawks’ Percy Harvin did just that to open the first half in January.
Harkness’ initial promotion hadn’t gotten much ink, and there wasn’t a lot of hype even after Harvin’s return. The process of paying out to its customers, though, created an opportunity—for a party. “After the actual run back in the Super Bowl, we didn’t get quite as much publicity on the front side,” said Harkness Furniture Owner Dave Harkness. “It was when we held the party. We’d insured the promotion, and the insurance company required us to get signatures from all the winners that they’d purchased furniture on this day and for this amount. It would take about four weeks for the checks to process, and that gave us time to think about how we wanted to handle it.”
Harkness personally called all 65 winners to explain the process and to get them back to the store to sign the paperwork. “We got a lot of mileage out of that alone,” Harkness said. “We wanted to capitalize on this and make it a truly special event. When we came up with this idea, we didn’t dream they’d actually return their opening kickoff for a touchdown. We decided to throw a big party for all the winners.”
In addition to their reimbursement checks, customers who’d participate in the promotion got an 8-by-10 color photo of the run-back; and a chance at five reproductions of the local newspaper’s Super Bowl story. “I think there’ll be a big following if we do something like this again,” Harkness said. “We can show that we’ve had winners, and people shouldn’t miss out on the chance. We think we’ll have big participation.”
Among other coverage, Harkness Furniture ended up on the local front page with the party. “We were on the 5:30 and 6 o’clock news the night of the party, and the story got picked up by AP (The Associated Press),” Harkness said. “I’m not one much for Twitter, but our marketing guy made a Tweet that Percy Harvin re-Tweeted on his feed, and he has something like 200,000 followers. We got a ‘thank you’ signed by all 65 contest winners, and I’ll mail that to Percy Harvin … We want him to feel a part of it.” According to Harkness, who spoke in mid-APRIL, business has been booming ever since. “We had a record February and President’s Day, and APRIL is off to a great start, too,” he said. “Our business has just flourished since the Super Bowl, and I don’t think that’s a coincidence. “I think, too, that those 65 winners are customers for life who’ll talk to their friends about the store.”
LIPSTICK ON A PIG
Public relations by itself is not going to help a brand that doesn’t deliver on its promise and add value. “You can’t put lipstick on a pig,” Pritchard said. “Well, you can, but it’s still a pig. Public relations can help a brand in two ways. First, it helps an organization identify and understand its core values.
“Second, PR, if it’s done the way I teach it, is the bridge between the organization and its customers. It helps the organization’s values line up with its line of business. For example, furniture retailers may think they’re in the business of selling furniture. A public relations approach to that is that they help people lead better lives.”
PR should integrate your message across all platforms— online, marketing, in the store—and to help everyone who touches the customer articulate that promise.
“A brand is not a name or a logo, it’s a promise,” Pritchard said. “Take Motel 6. Motel 6’s promise is a comfortable place to stay that’s the lowest price of any national chain. The people they talk to are frugal people.
“The first thing to do is understand with whom you’re interacting, not just sending information, but receiving something. “The communication strategies must be integrated, and PR is the focus of this particular effort. Identify every point of communication, and explain the message to everyone who touches the consumer.” HFB
Community commitment, faith in action help Miskelly Furniture ‘Own Its Backyard.’
Beautiful stores, a family friendly environment, strong in-stock position and faith in action have made Miskelly Furniture a go-to destination for home furnishings in Mississippi’s largest urban area.
The family owned business chalked up almost $50 million in sales last year, and an unabashed positioning as a faith-based company—backed up by action— coupled with big showrooms and a wide selection of home furnishings have made Miskelly a powerful local brand in central Mississippi.
Growing Up in Retail
Brothers Oscar, Chip and Tommy Miskelly founded the business in 1978. While the others retain ownership in the store, Oscar is the only one still active in day-to-day business. The brothers grew up in a retail environment and a region dominated by furniture manufacturing.
“Our dad was in the retail clothing business in northern Mississippi,” CEO Oscar Miskelly said. “There’s so much furniture manufactured in Okolona, (Miss.) where we’re from, that we were around that business all our lives, too.”
The brothers had a friend whose family ran a furniture store in Okolona, and they noticed that people came to that location from 150 miles around.
“We wanted to take that concept to a larger metro market,” he said. That market was Jackson, Miss. (See sidebar “A Look at the Market”)
The Miskellys opened their first store, a 10,000-square-foot operation in Jackson, in 1978. The new retailer got a boost the next year when a huge flood had a lot of people looking for new furniture, but the company didn’t expand its footprint much until 1980, when the brothers opened a new 25,000-square-foot—including warehouse—location at the site of the present Roomstore in Pearl, Miss.
“We’d seen double-digit growth every year, and we outgrew our old store,” Miskelly recalled. “We had 12 parking spaces when we started—we couldn’t envision taking care of more people than that at a time—and we ended up with people parking up and down a four-lane highway on weekends.”
The retailer’s current flagship store went up in 1995 in what was then an 80,000-square-foot space in Pearl with attached warehouse. Miskelly added another 40,000 square feet to the showroom in 2004. A previous location had converted to a clearance store in 1996. The retailer’s original Pearl location became Miskellys Roomstore in 2007, offering savings on room packages.
The Miskelly shopping experience starts with a sales staff that has a service mentality. “We have a family friendly environment—if it’s bad weather, we’ll have our staff outside with umbrellas,” Miskelly said. “We have automated doors so they aren’t struggling to get in with a baby carriage, no curbs. We have an area when you first come in and can decompress before getting approached by a salesperson.
“People form an opinion when they drive on your lot and walk through your door.”
That location, the “tower area,” is sacrosanct for arriving shoppers. There’s a display of furniture, and they have a chance to orient themselves, and look about the store. The area also features Bible verses—Miskelly is front-and-center about being a faithbased operation—and gives newcomers a sense of what they’ll find as they go deeper into the store.
When the customer makes a move, Miskelly Furniture takes a service-oriented approach to the sales process. “Once we have that initial greeting, that customer is aligned with a salesperson—and that salesperson is a servant,” said Alan VonderHaar, senior retail analyst and mattress buyer. When it comes to merchandising, Miskelly Furniture likes to offer a big selection by category.
“We’ll have upholstery laid out by lifestyle, kids furniture in one area,” Miskelly said. “We had a big re-model in 2011 when we did an area called ‘The Marketplace.’ It’s eclectic, one of a kind items, and the salespeople love it because there’s always color, new items, reclaimed looks that give them a lot to talk about.”
The Marketplace offers shoppers unique upholstery, wood pieces in surprising finishes, goods from countries ranging from Mexico to India, and interesting pottery. There’s more fun to be had with the “Caring Carousel.” The merry-go-round, which Miskelly found in Argentina, offers kids a place to enjoy themselves while their parents shop. It’s also part of Miskelly’s commitment to improving the community where it does business.
“We ask people to donate a dollar to ride it, which goes to a children’s charity we select on an annual basis,” Miskelly said. “Over the past 12 years we’ve raised $500,000 in money and furniture. It’s the right thing to do, and it’s one of the most rewarding things we do in our business.”
Building on Bedding
Miskelly Furniture’s first sleep store opened in 2008, and its second came online in 2010. After puttering along at 10 percent for a long time, the bedding category now accounts for around 25 percent of business. “We’d always carried bedding,” Miskelly said. “We were growing with it, but not dominant around here. “We still have it in the other stores, and as you build a specialty in it, it helps the business at all locations. We’ve been able to capitalize on a lot of the new technology and memory foams. It’s really given us a boost.”
Health-conscious shoppers and aging baby boomers are driving a lot of bedding business Miskellys’ way. “Our attachment ratio in power (bed) bases is one of the best in the industry,” Miskelly noted. “Once you try one of those out, you’re likely to buy.”
Marketing and Advertising
Miskelly’s primary advertising vehicle for sales is television. “In all advertising, you put your best foot forward, and our furniture is our best foot,” said Betsy Tabor, marketing director. “Television is best, because you can’t really capture our atmosphere with still photography. “All other (media) are supporting vehicles. Our local newspaper has gone down drastically in circulation, and we’ve supplemented the loss of print with social media.” Right now, Miskelly has around 9,000 “likes” on Facebook. The retailer is active on Twitter and does a lot of strong e-mail blasts.
“We fragment the message to make sure we reach our customers where they’re looking,” Tabor said. “We do a lot of online advertising.” While the social media world has made her job more complicated, it’s also made it a lot more interesting. “You can find new ways to reach more people and spend less money,” she said.
“We’ve always said, ‘We have to own our backyard,’ and with that we not only try to serve the people coming into the store well, but give back to the community that’s done so much for us,” Tabor said. With advertising “we’re positioning selection, service and price. We do want them to know why we’re the best choice around.”
A lot of the advertising highlights brand attributes of selection, service and a lovely shopping environment.
“As I said, we like to put our best foot forward, and for me, those brand spots are my favorites, because they show how beautiful our stores are,” Tabor noted.
Miskelly’s slogan is ‘beyond furniture’ and its ‘Sweet Dreams’ program with Tempur-Pedic is an example. “Tempur-Pedic approached us with a great deal of single mattresses they had available,” Tabor said. “We located the 501-3C’s for delivery. … It took us quite a while to find organizations that would qualify, and that would be able to use a single twin mattress. We then partnered with a local TV station to put together a campaign.
“Every week we’d deliver to another organization, and the station was great about giving coverage. Tempur-Pedic was extremely pleased, and they have taken our model to develop a campaign they’ll share with other dealers.”
“It’s a feeling and a passion passed from the owners to the employees,” VonderHaar said. “When you talk about branding, you have to talk about the community.”
Oscar Miskelly credits the size of Miskelly Furniture’s showrooms, economies of scale, depth of selection and same-day delivery for strong growth coming out of the recession.
“We aim to be in stock 85 percent of the time on everything we have to show, and certainly, the community service helps,” he said.
All that’s paying off at Miskelly Furniture, which ranked first on Home Furnishings Business’ Power 50 ratings of independent retailers. “We had some of our best months and days last year that we’ve seen in six or seven years; and in the first three months of 2014 we’re still tracking ahead,” Miskelly said. “We continued to be aggressive with our advertising even during the downturn, and I think people remembered us when things started turning around.
“Long-term financing has built our average ticket, and as housing starts have improved we’re doing more housefuls of furniture.” HFB
Miskelly Furniture at a Glance
Headquarters: Pearl, Miss.
Store Count: 6 stores around the Jackson, Miss., area, including its 120,000-square-foot flagship store in Pearl; a 40,000-square-foot namesake location in Madison, Miss.; a 40,000-square-foot Miskelly Roomstore in Pearl; two 6,000-square-foot Miskelly Sleepstore locations in Flowood, Miss., and Ridgeland, Miss.,; and a 15,000-square-foot clearance center in Pearl.
Key Management: Oscar Miskelly, CEO; Betsy Tabor, marketing director; Alan VonderHaar, senior retail analyst and mattress buyer; Deborah Watson, COO; Tracey Dillard, marketing assistant.
Annual Revenue: About $50 million in 2013.
Employment: 250 employees.
A Look at the Market
As a middle to upper-middle price-point retailer, Miskelly Furniture has a good home in the Jackson, Miss., area. Fifty-one percent of consumers there are looking for middle prices; and 23 percent are at upper-middle points, according to market analysis from Home Furnishings Business’ parent company Impact Consulting. Retail sales of home furnishings in the market are on the upswing, as well, with 2013 sales totaling $142.4 million, a 1.1 percent increase over 2012, when sales were up 7.2 percent from 2011.
Miskelly Furniture hung its hat in the Jackson, Miss., area, and that’s where CEO Oscar Miskelly spends most of his spare time. “I enjoy youth sports, and I’m very involved with that in our community, not just from a coaching, but promoting things to help kids, whether to advance to the point they get a scholarship or to provide an outlet,” he said. “I work on promoting that in our community.” Marketing Director Betsy Tabor also makes an effort to be involved with local high schools’ booster clubs. Miskelly Furniture is very upfront about being a faith-based business, and Oscar Miskelly and others in the organization are very involved in their church.
He also noted that he’s benefitted from traveling to see how other furniture stores operate. The store is a member of Impact Consulting’s Strivers performance group, but Miskelly said the family focus of so many retailers predates Miskelly Furniture benefitting from that association.
“We’ve been able to travel and visit with a lot of other retailers, and furniture retailing’s family orientation makes our business pretty special—you’re always taking with the principals,” he said. “Other people like Nebraska Furniture Mart are willing to spend time to talk about what they do. … I was just out in California to see Living Spaces.
“We try to stay on the cutting edge of what’s going on in furniture retailing across the country. That’s helped us a lot, the ability to travel and see how other people are doing things.”
Forget national reach: Branding is all about your market.
The furniture industry is chock full of brands—La-Z-Boy, Ikea, Bassett, Ashley, Ethan Allen—we know them, and we love them ... sort of. Problem is, those “icons” mean way less when the people looking for furniture find that the name and the brand doesn’t add up to their expectation. If you’re an independent retailer, it’s up to you to make your name a brand. What do you bring to the table, what makes you the go-to destination for home furnishings in you marketplace?
This month, Home Furnishings Business takes a look at branding, and what you can do to plow your own ground when it comes to creating a brand.
WALKING A LINE
Bassett Furniture is a fairly well-recognized name among furniture companies, and it’s been making waves with its HGTV Home collection. Is there any sort of “push/pull” between the Bassett brand and HGTV, and how does Bassett manage that? “With any brand partnership it helps if there’s a congruence in values, at both the business and product level,” said Renee Loper, vice president of independent retail business development and marketing. “It’s why we have such a great working relationship with HGTV.”
The brand values Bassett wants to bring to the table include category leadership, teamwork and innovation. “There’s also the quality of people at the employee and corporate level, and there’s a log of similarity between the companies,” Loper said. Are there any brand-building lessons Bassett has learned in it relationship with HGTV? “The biggest lesson we’ve learned is to always be true to those core brand values and focus on those, to make sure those values are clear and defined; and that everyone on the team is working toward them,” Loper said. “You have to look at your brand from the consumer’s perspective. For HGTV, we have what we call ‘Essence,’ which is our brand mantra.(See accompanying grapic). Essence guides everything we do from a design perspective, photography, even the fabrics.
“We went through a repositioning of our own brand, going back to its purest form. What do HGTV’s fans and viewers get from its programming? What are the key triggers in it for our business, which is product design? As we select fabrics and finishes, they have to pass that litmus test. HGTV is about freedom of design, personal taste, and having fun with it. We had to flip our view from the manufacturer’s perspective to what HGTV viewers are seeing and getting from our brand, the HGTV Home Furniture Collection.” What are the opportunities, and challenges, of linking with a well-known brand? “The challenge is that especially with a brand as large and as loved as HGTV, and very broad-based—if you add in digital properties, the magazine and the programming it reaches more than 100 million people— is that we’re speaking to a lot of different people with a big range of incomes and style preferences,” Loper said. “The good thing for us is that people just light up when you mention HGTV. From a conversation and training standpoint, just mentioning HGTV opens up a lot of conversations. And they hear it’s from Bassett, which is an established brand. The doors open easily.
“The challenge is to stay focused on the core brand essence.”
A Retailer’s Brand
What defines brand for a retailer, and how do you measure it?
“Brand is what the community thinks of you,” said Lee Goodman, CEO of Jerome’s Furniture in San Diego. “It takes into account every encounter the consumer has with you—in person, on TV, charity involvement, billboards, what their neighbors say, what their mama told them, social media, what your trucks look like, your signage—and wraps it up into one big ball. That big ball is our brand. “We measure it in many ways but where the rubber hits the road is, are people coming into your store and shopping you? If they are, then your brand resonates appropriately. If they don’t come in, then you’ve got a problem. We work with FurnitureCore to understand the metrics on how often we are being shopped. That information is invaluable.” Last year, Jerome’s opened its first store in the Los Angeles market, and Goodman had some thoughts on establishing a brand in a new territory.
“It’s a whole new ball game—we have to think differently and have a different type of messaging depending on which market we are speaking to,” he said.
Sixty years of serving the San Diego community, running hundreds of spots a week, billboards, print ads “virtually means nothing when you move to a new media market,” Goodman said. “Sure there are transplants who know us, but for the most part we have to say hello to a whole group of people that have never heard of Jerome’s. “Of course, we don’t forget to inform them we’ve been in business for 60 years. That really resonates in a town like L.A. that has had so many furniture retailers go bust. We can assure the marketplace that we are experts and are here to stay. There’s comfort in that to the consumer.” The goal is to tell the Jerome’s story from the beginning at the appropriate pace, so that the community stays engaged. “We talk about being in business for 60 years,” Goodman said. “We talk about Jerry’s dad’s business philosophies. We talk about how the third generation is involved in the business today. We talk about
Jerry’s price and why we believe that is a fundamentally superior way for us to price our products. We have things to talk about, we have the selection people want at a great value. And we give the customer a positive experience at all touch points. “It’s not, come buy this sofa on sale this weekend.
It’s not, ‘Oh look, we have a $299 table.’ We don’t say come in and you don’t have to pay until 2019. We explain who we are as a company and how we evolved, and we find that people really respond to that. We have a good story to tell, we just have to tell it.” Measure how your message resonates in your market.
“We look at reach and frequency to determine how our messaging is getting out into the community and we listen to feedback from our locations, and social media,” Goodman said. “And hey, we look at sales. When the cash register is ringing you’re doing something right.
“There’s no silver bullet, but our mattress business, which is mostly house branded, gives us real insights into how our brand is faring, because if people buy our mattresses they are buying into the Jerome’s brand.”
Were there any particular challenges in bringing the Jerome’s brand to the LA market?
“In LA, most have never heard of us so clearly we need to really shake the bushes to get attention in a cluttered world,” Goodman said. “The good thing is, we actually have a good story to tell. Consumers are still interested in a good story, and frankly the market needed a store like Jerome’s. So it’s not like we were one more voice shouting about an upcoming sale or financing. We are truly different from our competitors, we have a 60-year history that establishes us as experts, and our location in South Bay is spot on.”
“If I had to pinpoint a challenge for LA, it’s the traffic. Of course, all that traffic is people in cars who need to buy furniture, so we’re going to look at that as a blessing instead of a curse.”
High-end motion vendor Ekornes has been stressing its Stressless line of chairs as a brand for several years.
“Our mission is to build the Stressless brand here in North America,” said Ekornes Marketing Manager Beverly Kastel. “Without brand awareness our consumers don’t know about our company or products and they certainly are not going to walk in a store and ask for Stressless by name. We estimate that we have approximately 30 million consumers in our target market that we want to reach. Of course our goal is to get them familiar with the brand enough to go their nearest retailer to learn more and eventually purchase Stressless.
“We’ve done several brand awareness surveys throughout the past seven years and we know we have very low brand awareness levels which is a huge opportunity here in the (United States) in particular. In Norway and Germany, for example the Stressless name is a practically a household term and we’ve seen an increase in brand awareness correlate strongly with an increase in sales in these markets.
We are out to do the same here. Do brands matter to furniture shoppers, in terms of retail and vendor names? “Yes, we think brands matter in all categories,” Kastel said. “Not everyone is shopping based on price alone, especially once you get into the luxury product arena and at the price point we compete at.
“We want to create brand awareness, preference and eventually a Stressless community. There is not a lot of brand building going on in the furniture industry, and we feel like we have a unique story and proposition not only for our consumers but for our retail customers as well. “
The Stressless marketing program is built on 3 pillars: advertising, retail display/merchandising and training.
“If one of those pieces is missing we are not going to be as successful as we can be,” Kastel said. “We ask our retailers to support and advertise the Stressless brand locally and we pick up the national and in some cases, the regional advertising as well. That way we are working on all cylinders, reaching consumers at all levels with the same message.
“For example, if our national television advertising attracts a consumer to check out our Web site and potentially connect with us on social media, then when that same consumer sees a local TV spot or a newspaper flyer or ad for their local retailer there will hopefully be some connection.”
The goal with all Stressless communications is to drive consumers to Web site so that they will find out where to purchase in their local area, educate themselves more about the local store and then when they do make it in to the store they are predisposed on our brand, the products and what the local retailer has to offer.
While Ekornes is the company, Stressless is the brand it wants to push.
“It’s not translated into anything else but ‘Stressless’ around the world, and it’s definitely the name we want consumers to remember,” Kastel said. “Ekornes is the company name but Stressless is the brand we are building. There are some retailers that still know us by Ekornes but for the most part I think they are all aware of what we are trying to accomplish with ‘Stressless’ in the marketplace.” In it’s re-branding efforts, Ekornes/Stressless is targeting some 30 million consumers.
“That is why we are reaching outside the traditional TV and print box to communicate with these folks,” Kastel said. “Digital advertising and social media are excellent and extremely efficient ways to reach them but we do not leave TV and print out of the mix. Our target market is older and these traditional channels still resonate with them.
“Also, for the past four years we have very strategically gone into seven markets with a comprehensive campaign to the build the brand in a certain region to see what kind of impact we could have. Instead of spreading our dollars so thin and not making much progress, we saturated these particular areas with a strong mix of traditional and non-traditional marketing and saw some great success in terms of building brand awareness.
It also helped us in other ways like increasing sales, opening up new retailers and solidifying relationships with some of our existing retailers. In 2014 we are going back to a national brand building approach with a very strong mix of traditional and non-traditional media along with a solid focus on building distribution in certain areas.” HFB
Lessons in Rebranding
Steve Blue, president and CEO of Miller Ingenuity, helped his 60-year old company successfully implement a corporate rebranding effort.
Here are some lessons from that experience.
· Don’t Fix What’s Not Broken
Coca-Cola learned not to tamper with a beloved brand in 1985 when it decided to re-stage its iconic brand with “New Coke.” The public was outraged and let Coca- Cola know they didn’t want a “new” Coke. They wanted their old Coke, literally a quintessential icon in American popular culture. Coke responded within a few months and brought back “Classic Coke.” Classic Coke sales rebounded. Although New Coke remained on the shelves, it eventually faded from store shelves. Some commentators felt the move to New Coke was a marketing gimmick to regenerate interest and sales in the brand after sales erosion due to the
“Pepsi Challenge” taste test campaign. Don Keough, company President, responded to the charge saying “We’re not that dumb, and we’re not that smart”.
· Expansion may require a bigger umbrella.
International Harvester changed its name to Navistar International in 1986 when it sold its farm equipment business and entered the truck, diesel engine, and bus markets.
Although the name is “made up,” it broadened the brand and has strong connotations of movement and direction. As a 2013 company report stated, Navistar was selected as a name with a strong sound, a resonance to Harvester, and a connection to its root words “navigate” and “star.” It does all of those things and has since become the name of the holding company over multiple Navistar divisions, International Trucks, and MaxxForce Diesel engines.
· Respect your heritage but don’t let it get in the way of making your brand relevant and compelling
Miller Felpax had been family owned since its inception more than 60 years ago. The Miller heritage could not be lost, particularly because its founding products were innovative for their time. However, the full name didn’t have the same meaning as it once did, so the company changed one word that encapsulates aspects of its culture, its operating philosophy, and its service to customers: “Ingenuity.” At the same time, this name placed the company smack in the middle of the position we wanted to occupy in its current and future customers’ minds, an ingenuous company
· Names have to be understandable, accessible, or at least intuitive in meaning.
In the beginning it was unclear why Jeff Bezos would name a bookseller Web site, “Amazon.” The story is told that he named it after the river, of course, because of its size. An early logo consisted of a large “A” shape with a river-like line running down the middle of it. And the tagline was:“Earth’s biggest bookstore.” Bezos’ ambitions were as large as the company name, and he eventually developed a business model that would include far more than books.Amazon continues to fit this e-commerce giant now, doesn’t it? No wonder there’s a smile on the box. Other names can be just plain difficult to figure out. When Kraft split off its snack division in 2012, they named it Mondelez.
The name has been criticized on two counts. It’s hard to pronounce—what is the correct pronunciation? And, what does it mean? If you are a linguist you might understand the root words for “world” and “delicious.” Maybe. Similarly, Philip Morris renamed itself Altria when it was trying to position the company more as a food marketer and less as a tobacco company. What’s an “Altria”?
Not intuitively understandable. One thing is clear: customers or consumers will not work to understand your name.
· Avoid initials unless you are a big player with an enormous marketing budget.
Avoid brand names that are merely initials. If your initials are well established in the market, still ensure your tagline delivers a branded proposition or benefit. Consider the case of SAP, which is dominant in the Enterprise market and compliments it’s small and midsized business targets with the lines: “The
Best Run Companies Run SAP” and “Run Better.” Of course, GE has the marketing muscle and marketplace presence to make big claims. Neither of these brands have restaged their names but have evolved their brands’ taglines multiple times to reflect marketing objective and market needs.
Elements of Marketing
What are the elements at Jerome’s Furniture for a great marketing program? What are the best ways retailers and vendors can tell their stories and get the word out about the company and its products?
“In today’s world, you have to be everywhere. It’s not easy like it was years ago and you buy some network and the local paper,” said Lee Goodman, CEO of Jerome’s Furniture in San Diego. “There’s a dizzying amount of places to reach the consumer today and no single place has the golden egg. It makes for a lot more work, different creative messaging, and spreading your budget across many different vendors. You have to be fast, you have to be relevant, and you have to be really smart to do it right.
“You cannot set it and forget it. Constant evaluation of how your efforts are working is another key component. Look at those metrics, study them, compare them against sales, have your sales floor communicate back to you what’s working, and hone your plan every minute of every day. If you are being successful right now, go buy your marketing department lunch. They are doing a whole lot more than they used to, I guarantee it—and they are going to have todo a whole lot more tomorrow.”
All the warning signs are flashing—Consumer Price Index —Furniture— flat when compared to all consumer products; Furniture Purchases as a percent of Disposable Income— declining, dwarfed by the increased expenditures in communication. Ignore them! We are lucky to have survived the “almost” depression. Slowly we are pulling out of the decline, but the lights keep flashing.
This issue deals with Brand, the most important element in the health of a product category. What are our brands? Let’s not “cop out” with that “retailer is the brand” scenario. Yes, the retailer has a brand. However, that brand is about service, value, experience, not product quality and style. That is the realm of the manufacturer. The question becomes, “What has happened to brand.” Yes, we have brands: Century, La-Z-Boy, Henkel Harris, Broyhill, Natuzzi, Lane, and more. Yet few of these would register with consumers under the age of 45. Why? Have we failed to maintain our brands?
A recent analysis of the leading consumer shelter magazines yielded an interesting landscape. As far as product goes, sink faucets and shower heads were comfortably out in front. And, when looking at how the consumer would acquire the product, there was heavy representation of the e-tailers and specialty retailers. It is not a surprise then that the consumer, when shopping, considers both of these retail channels on the same level as the traditional retailers who have been in the local community often for 50 years or more.
Has our lack of clarity failed to communicate to consumers that we have a difference? Are the words we are using factors? Does the term “mixed hardwoods” fail to excite in the way that “rich mahogany”, “hard rock maple”, and “elegant pecan” do? Do the often-used terms of “eclectic style” and/or “transitional” fail to communicate style trends we believe in? These terms can mean anything you want them to mean. The consumer is, in fact, searching for Brand. The rapid growth of Amish furniture is an example of this.
Amish furniture is not only about style. Rather it is more about quality, durability, value—all characteristics of a brand. Obviously, I have been addressing the furniture category rather than the bedding industry, an industry that is in direct contrast to furniture. Why has bedding outperformed furniture in the past decade? In short, it is because the bedding industry has excited the consumer with brands that promise the product will deliver something that is different, often something that will make the consumer’s life easier, happier, better. This becomes the challenge for the furniture category.
I cannot end this article without extending my compliments to those CEO’s and presidents of manufacturing operations who have withstood the pressure to make their brands less by reducing quality, infringing on designs, and other short-term actions in pursuit of short term gains. And, finally not to let the retailers “off the hook,” demand that your suppliers create and maintain their brands, that they help you to sell to the consumers by delivering their part of the process. But be willing to allow your suppliers more margin to do so. When a strictly utilitarian product classification like women’s handbags can re-create itself into a category that has women, even those with modest incomes, purchasing a product that can represent a substantial portion of their salaries, this gives hope to our industry, one that is so intimately a part of the consumer’s daily lives.