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From Home Furnishing Business

Looking Back to Look Forward

By: Sheila Long O'Mara

As we tie the bow on the last issue of 2014 and eagerly look forward to 2015, I have to say I’m feeling a bit nostalgic. It’s an odd, overwhelming feeling for a sometimes leather tough one like me.

The husband just gives me a funny look. The boys? Well, they dish out a lot of hugs, and toss out hilarious quips about off-the-wall subjects that ensure a cacophony of laughter. Mostly, however, the family—all with the attention span of gnats—grins and graciously puts up with all of my remember whens.

I don’t think I’m all that different than many other people, consumers if you will, who are looking to freeze a snapshot of their family’s history. Their family’s story.

Walking through our home and stepping through the threshold of any room, I spy something—sometimes several somethings—that trigger beautiful memories from years past.

My grandparents’ four-poster bedroom suite, a gift to me from an aunt who knew it was an important part of my history growing up lucky enough to have grands living close by. That bedroom group, now lovingly tucked away in our guest room, can awaken memories of early Saturday morning snuggles with my MaMa while my PaPa cooked a big ol’ country breakfast. Millions of books were read and countless teeth were pulled all while sitting on that bed in that very sunny room.

The cozy club chair that resides in our den by the hearth has held me while I held little ones safely through many long nights of sick cuddles. You know the ones I’m talking about—those 1 a.m. wake-up calls from high fevers. The nights requiring all-nighters not only for the child’s comfort, but also for the parent’s peace of mind. The chair, by the way, has been reupholstered several times now, but the memories, along with the springs, remain.

There are old quilts made for very young me by my other grandmother, pictures and a slew of tangible items. The cast-iron skillet and the old cookie press, both of which have survived a few generations. All of those treasures are intermingled with newer home furnishings, each with a story of its own. Sofas where all five of us jockey for his favorite spot during movie nights. The dog’s favorite rug, and the youngest one’s spot curled up right next to her. The lamps that share warmth and light on a winter’s eve.

Homes help create memories for families. Home furnishings help turn houses into homes for those families. Our industry has that much power!

As we wrap up the year and set our sights on the next year’s goals and promises, that power is an interesting nugget to keep in mind.

Happy nostalgic holidays to all of our readers, and here’s to a beautiful, prosperous next year.


It’s Resolution Time

By: Bob George

The appointment with your certified public accountant is still several months away. Your friendly banker’s annual meeting is also in the future. Therefore, your business resolutions are a matter for you and your personal business goals and objectives.

The month of December is probably budget time. More than likely, working from your financials, the chart of accounts has been transferred to a spreadsheet with your controller applying his or her best judgment for the expense items. The critical decisions regarding salary increases and topline (revenue) increases have been left for your final input. The forecast contained in later pages of this Home Furnishings Business issue may provide some guidance. Most likely the resulting bottom line will be quite similar to what you achieved last year.

Why?

Because you want a realistic budget. That’s why.

Now, finally, we get to those resolutions. Spreadsheets are wonderful tools that allow you to play the “what if” game. Increasing revenue by 15 percent; improving gross margin by two points; reducing sales expense by two points; reducing warehousing/delivery by two points; reducing general and administrative by two points – all of these actions will cause a significant change in your bottom line.

 The question becomes, “How do I make these actions more than the manipulation of a spreadsheet?” The answer requires the resolve to change not the numbers, but the people, process, merchandise, and retail experience. What gives you the resolve to make these resolutions and then stick to them? First, you must know that they are achievable when compared to industry standards of good performance. You may then reinforce this by participating in a dialogue with a peer group. This group’s past experiences often can guide you in evaluating your current situation. Next, establish metrics that you monitor weekly, monthly, and quarterly. Understanding the impact of each metric is essential.

What causes the metric to change? It is simple, but you must change the metrics. The starting point is a resolution followed by hours of execution. I hope you find inspiration and input from the pages of Home Furnishings Business.

Contact us if you need encouragement.

Numerology

90% — American adults have a cell phone

58% — American adults have a smartphone

Pew Research

 

45 — Number of times a day millennials check their smartphones

MarketingLand.com

 

74% — Online adults using social networking sites

Pew Research

78.8 years
Life expectancy in the U.S.
81.2 for women; 76.4 for men
Centers for Disease Control and Prevention

 

Small businesses created 63% of the new jobs between mid-2009 and the beginning of this year

U.S. Small Business Administration

 

28% of the U.S. population lives alone

Euromonitor International

 

6,500 — Number of languages in the world

Infoplease

 

1.2 Billion — Number of people who speak Mandarin Chinese, the world’s most popular language

Infoplease

 

7 years — Length of autumn on Saturn        

NASA

 

$3,800 — average American family savings account balance

Federal Reserve

 

40% — Americans NOT saving for retirement

 

42% — Smartphone users who have redeemed a mobile coupon

Nielsen Co.

Wired for Relevance

By: Powell Slaughter

Consumer awareness of home furnishings’ online presence might be at its highest point ever, and retailers who haven’t done so already should take a hard look at the story they tell in the digital sphere.

Thank the huge amount of press generated by online home furnishings giant Wayfair’s initial public offering last month. Consumers already are using the Internet—via computer or smart phone—to do their homework before hitting your store; and the information you present, how well your digital presence matches your brick-and-mortar experience, and the ease of use can go a long way toward getting you on shoppers’ short list. They want to know as much as they can about your products and services before they even start a conversation.

“All of a sudden there’s a focus on furniture online” said MicroD CEO Manoj Nigam in the wake of the Wayfair IPO. “And the digital age is about being relevant to consumers. What television did in the 1950s (for retailers) the Internet is doing now.

“Your Web site has become your biggest advertising vehicle—it’s your front entrance now; and 25 percent of traffic is now mobile. People expect a consistent experience across multiple sites” no matter what device they use.

DIGITAL RELEVANCE

If you don’t provide the information they seek, an interactive approach to fielding questions, and an online presence friendly to multiple devices, consumers aren’t going to find your store relevant to the way they research and shop for product these days.

It’s more important than ever, for example, to make your online presence mobile-friendly.

“Mobile is overtaking desktops as the primary product-search method,” noted Jesse Akre, senior vice president for e-commerce at MicroD. (See sidebar, “Digital Responsiveness.”) “And the consumer is more and more wanting an experience online that they would get in the store. It’s not just about displaying products, digital is becoming the driver of the consumer experience.”

He suggests retailers looking to relate to consumers online adopt a “Web first” mentality. He identified four keys: pricing products online; merchandising your Web site; ease of communication with the customer; and understanding the impact of reviews.

Some retailers remain reluctant to put prices on their Web site, but Akre said that’s what consumers are demanding. You don’t need to be in e-commerce to show prices on line. The practice of “Web-rooming” practice has made it easier for shoppers to compare prices and do comprehensive research on an important purchase; and retailers must adapt to that highly informed consumer.

The majority of consumers shopping for home furnishings still go into a store to buy—but they want to be armed with as much information as possible before they cross the threshold, Akre said.

“You've been printing prices for years in your advertising,” he said. “Why won't you treat the online marketing opportunity the same?”

Those insistent on holding back on actual pricing might consider offering a range—i.e., “These sofas retail from $400-$500.”

The bottom line for a Web site is getting people into the store, said Dianne Ray, owner, Garden City Furniture in Garden City, S.C.

“We're going to have to stay current with upgrading our Web site, the look, the ease of use. If they have to flounder around on the site, they're out of there and gone,” she said. “We've discussed e-commerce, and if we're going to attract that Millennial customer we're going to have to move on that. Actually, the Web site is important for all generations.”

MERCHANDISING ONLINE

Shoppers will likely see a store’s Web site before they see the store, and retailers should pay close attention to merchandising issues online.

“Have you walked through your store the past week sprucing things up, maybe moving product or working on a display? Sure you did,” Akre said.

A furniture store’s Web site deserves the same attention. Ensure the site gives consumers the same first impression online as they get in your store.

Shoppers entering your store see a layout that you built with your own business considerations in mind. Steer your Web visitors the same way. Think about ranking products online by perhaps best sellers, leading brands or inventory turns.

Take a seasonal approach the way you would in the store: “Company coming for the holidays? Create a dining room to remember.”

Consider the designs and trends you’re focusing on at the store, as well as products with the highest gross margins. Those are the products that you should feature online to entice consumers into the store.

Retailers know how to do this in the store; it’s a matter of translating the same techniques to an online presentation.

Take a look at in-store signage, graphics and logos to ensure they sync with your online presence.

“If a digital impression is made, it has to carry through in the store,” Akre said, pointing to Dick’s Sporting Goods Web site as a good example. “You see the same banner on the Web site that you see in the store.”

Merchandising the site the way you do the store might seem like a big task, but Akre suggested retailers start small.

“Impact one category, say your top five sellers,” he said. “Next week, do your top 10. Just starting will get the wheels spinning as to how you want to do it. Start with the products you want to lead with online.”

EASY TO ASK

How easy is it for consumers to communicate with you online? Do you use live chat, provide a contact number or e-mail? Whichever method you use, fast response is vital.

“People are not going to wait three days for you to get back to them,” Akre said, adding that some shoppers in the store would rather use their phone to ask a question rather than a store employee. If you use QR codes, make sure it goes to a site that will build expectations for the product, not just provide dimensions and such.

“QR is about driving people to information you control,” Akre said.

David Gardner, co-owner at Warrenton Furniture Exchange in Warrenton, N.C., found a way to engage customers looking at information on their mobile by installing a large screen on the sales floor where the retailer can call up products for easier viewing.

“We can do bring all this information to a larger picture so they aren’t squinting at their smartphone,” he said. “Online is bigger than my warehouse, but we’ve found a way to humanize it.”

The best thing about a good online presence is it provides a 24/7 storefront, but that can create communication problems for something like a live chat function.

If a consumer is browsing at home at 10 p.m. and has a question, it’s better to take live chat off-line during non-business hours than to have “nobody at home” to respond to a question.

A strong FAQ section on a retailer’s site can take care of many customer questions with a simple click. Store policies for issues such as credit, delivery, returns, hours of operation and such should be easily available.

Social media, of course, is an area where furniture retailers can interact with customers. But if you are on Facebook, Twitter or other social vehicles, it’s better not to be there than to not stay engaged.

“One large retailer I know hadn’t engaged on Facebook in 30 days,” Akre noted. “But guess who had? A woman was moving to town and wanted a houseful of furniture.”

THE REVIEWS ARE IN

If you were shopping for products on your own part, which would you trust more? A testimonial from a previous customer, or an advertisement? Never underestimate the power of customer reviews. Check out sites such as powerreviews.com or shopperapproved.com to get an idea of what can happen.

“Good and bad reviews are expected,” Akre said. “And they like to see volume as well as a range of comment. It doesn’t happen overnight. That log of reviews has to build one at a time.”

Retailers can solicit reviews, he added. Incentivize along the lines of a percentage off on their next ticket for an honest review, good or bad. Ask customers in the store.

And don’t forget engagement when it comes to reviews. Respond to problem reviews with an apology and a solution.

“Shoppers eat that up,” Akre said.


Retail Details: Forward Motion

By: Powell Slaughter

Sometimes retailers are surprised at what strikes a chord with customers in the communities they serve—the sort of thing that makes a business a local institution.

In Knight Furniture’s case, it was a scale—an antique in front of the retailer’s main store in Sherman, Texas.

“We had a scale in front of our store that’s apparently become a community fixture,” said Joey Gunn, director of advertising and buyer at Knight, who represents the company’s fourth generation of family management. “It’s an old scale from the 1920s or ‘30s. It broke, so we pulled it inside until we could get the part.

“It’s so old that you can’t just go out and find parts for it anywhere, so we had it in back for a while until we could get it replaced.”

Gunn found himself inundated with messages asking where the scale was—apparently a lot of folks liked to stop and check their weight.

“I flirted with the idea of running a ‘save the scale’ sale,” he joked.

It might not have been a bad idea. Knight Furniture indeed is a local institution—dating back to 1912, when the store was founded. Knight operates two namesake stores in Sherman and Gainesville, Texas, on the outer fringe of the greater Dallas area; and an Ashley Furniture HomeStore it opened in Sherman two years ago.

 

CHANGING TIMES, CHANGING MARKET

Knight Furniture was founded 112 years ago by Joey Gunn’s great uncle, J.B. Knight. Back then Dallas was a lot farther away than it is now. While Knight Furniture competes today in a bigger world—metro Dallas—than its founder did, the store still has a “hometown” approach to dealing with customers that works.

“We’re about quality and value, and while that sounds old, you have to remember we’ve been serving this area for over a hundred years,” Gunn said. “We hear about customers buying things here that have become family heirlooms. We’re not going to be the place that sells the $100 sofa they’ll throw away in a year.”

Pretty soon, Knight and every other furniture retailer in metro Dallas will face a well-financed competitor that’s about to make a cannonball into the local pool—Nebraska Furniture Mart’s half-million-plus-square-foot showroom set to open next year.

Gunn actually looks forward to that challenge, since it will put a spotlight on furniture for miles around.

“They have a great organization, and I’ve been to their Kansas City store,” Gunn said. “They will make furniture popular in Dallas, and that’s a good thing, they’re going to make furniture cool—but if furniture’s going to be cool again, you have to be relevant and be part of the conversation.”

That kind of completion had better make retailers in the area pay attention to what they’re doing.

“You can’t get lazy—no matter what you’re telling your customer, they deserve more than that,” Gunn said. “Competition brings everyone up.”

Not only that, Gunn doesn’t think other furniture stores are Knight’s real competition as long as it takes care of its own business.

“The home furnishings industry competes with movie theaters, with maybe buying another car or a boat,” he said.

It’s all about what people have to spend, and with all the options out there, Gunn welcomes anything that puts furniture front-and-center in consumers’ minds.

 

STEPPING UP

All of which is not to say Knight Furniture is just waiting for a rising tide of furniture awareness. The retailer is in the midst of a remerchandising effort at the main Sherman store that will put key categories front and center in the three-story facility.

While bedding sales have run a respectable 18 to 21 percent of revenue, Knight was worried it was losing sales in the category. Right now, it’s moving its bedding department from the third to the first floor in an area designed by Connie Post.

“There were customers who came in here, purchased product and loved us, but never made it to the third floor,” Gunn said. “One of my worst fears is that people buy their furniture here but don’t even know we have bedding. And the Mattress Firm fraternity makes sure those people know they can get it at their stores.”

The Sherman store is on a square in town that gets a lot of foot traffic—and attention, remember the scale?—and Knight is big on window merchandising.

 “We’re always changing what’s in our front window,” Gunn said. “Since we’re on a square, we have a lot of people walking by, so we pay a lot of attention to those front windows.

“We create what we call ‘lifestyle pods’ where we offer a complete look. We change a lot, because all of a sudden that look can get stale, and we aren’t relevant.”

Knight Furniture’s window clings also capitalize on the retailer’s foot-traffic curb appeal.

“We have those themed along lifestyles like ‘Relax’ or ‘Comfort,’” Gunn said. “One of our tag lines for advertising is ‘We’ll make you feel at home,’ so we play to that.”

 

REACHING THE AUDIENCE

Figuring out the new advertising landscape is a challenge.

“Before 2008, you could get your advertising on TV and make sure the whole region saw you,” Gunn said. “Now, a lot of people have Dallas channels, Sherman channels, then you throw in cable and U-Verse.

“We’re still promoting a family feeling, and that it’s about the relationship and not necessarily making the sale. Sometimes we’re so busy selling something that we forgot to make a friend.”

Knight also is latching onto the days that get shoppers shopping. An event like Black Friday wasn’t important to Knight Furniture even a couple of years ago.

“I don’t know if it was because we didn’t have our message out there or that we’re just now catching up with what shoppers are doing in other categories,” Gunn said. “The amount of business we do on non-holidays versus holidays? There’s a lot of water flowing downhill out there, and you can tell when you’re hot and when you’re not.”

 

UP AND COMERS

Joey Gunn, 31, is heavily involved in an industry effort to build bridges among the rising generation of retail and vendor leaders—Next Generation Now.

After working in his family’s business since his warehouse days at age 14, he was very glad to encounter other young folk that wanted to carry on a tradition.

“Five or six years ago, that kind of thing wasn’t important to me, and I wasn’t important to them, but then I got to where I was making decisions here,” Gunn said. “I walked into a room and found a bunch of people with the same problems.”

By dint of age, Gunn and his fellow generation members find their elders looking to them for answers to breaking ground in areas such as e-commerce and social media as it relates to furniture retailing.

“They want us to solve the ‘technology crisis,’ and we’re front and center on that,” Gunn said. “That’s good, but even though I started working in our warehouse when I was 14, as far as being in a decision making role, it’s only been about five years.”

He said his focus is finding out who Knight’s customers are and who’ll they be in the next few decades.

“We’re at a very tricky stage,” Gunn said. “We want new customers, but we can’t lose our base. If we don’t get hold of the ones who are coming, we won’t do well.”

 

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