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From Home Furnishing Business

Where Strategies Come From

By Bob George

If you are the typical retailer, as you read the feature article, your thoughts will center on your own operation and whether or not you should pursue the strategies.

Be warned!

What works for one retailer in specific markets may not work for another one in another.

The landscape is littered with the remnants of the next great thing. Strategies are the result of a thoughtful process that considers your company against the competitive setting in which it exists.

Often overlooked is the foundation upon which the strategy is based—the assumptions. Assumptions are defined as “those statements about probable developments which cannot be predicted with accuracy, over which the business may have limited control, and which may have a major impact on the attainment of goals and objectives.” Unfortunately, our assumptions are often ingrained in our thought processes over years of talking to ourselves. Do any of the following statements ring true to you?

·         Consumers are price driven ignoring style and quality.

·         The features and benefits that define quality cannot be communicated to the typical consumer.

·         The only way to motivate the consumer to buy is a promotional message.

·         Consumers will not buy without seeing, feeling, or sitting on a product.

 

Because of these deep-seated beliefs, we often miss the real breakthrough strategies. What was the source of the visions for retailers such as I.O. Metro, Room & Board, and Frontgate (yes, an online retailer)? I assure you that it was not from the assumptions above. Go to their Web sites to understand their assumptions and then compare them to your own.

The retailers and manufacturers that will survive and prosper are those looking beyond their accepted assumptions and identify the emerging trends. For example;

·         Almost 58 percent of consumers are willing to pay more for ‘sustainable’ product.

·         The quality delivered by American-made “Amish built” is a value to a growing number of consumers.

·         The retail experience delivered by certain lifestyle retailers results in margins 1.5 times those of the traditional independent dealers.

 

With a set of assumptions in place, the next step requires an honest evaluation of a company’s strengths and weaknesses in combination with an identification of your threats and opportunities. What do I mean by that? The definitions are below.

 

Strengths — Significant positive factors or competitive advantages within an organization that may be capitalized upon in the future.

Weaknesses—Significant negative factors or competitive disadvantages within an organization that may prevent that organization from achieving its goals and objectives.

Opportunities—Major external situations or events that may exist now or will occur in the future that, if exploited, could improve organizational performance.

Threats—Major external obstructions or risks that may now or in the future which should be avoided, minimized, or managed.

 

After this careful thought process, you can then begin to define the Strategic Elements of a plan. If the following are a part of your plan, go back to the beginning and start over!

·         Lower prices for products that are designed to replicate similar higher priced products. Low average unit selling price on premium bedding, bonded leather, etc.

·         Sales promotion that begin with 50 percent off and continue down the slippery slope to 60 percent and more off.

·         New after-sale add-ons beyond delivery charges.

While this is frustrating to the consumer, it is not as bad as the airlines’ baggage fees … yet.

A Giant Retail Strategy

By Sheila Long O’Mara

Love ‘em or hate ‘em, mass discounter Walmart can sure turn some merchandise, and the retailer has figured out how to recreate itself every five years or so.

That’s part of massive Walmart’s overreaching strategy. Today’s Walmart is far different from where the chain was in 2008, and it’s quite likely the retail giant will be much different in five years from now.

In a presentation last month at a retail conference in New York, Bill Simon, Walmart’s CEO, said the retailer was constantly investing in all channels. Those channels—ship from store, ship to lockers, smartphone self-scanning, same-day delivery and store loyalty—are building on the company’s founding principles of everyday low prices and a lean supply chain.

The interesting thing to note of Walmart’s strategy is that all the layers on top of that foundation, are open for discussion. Nothing is set in stone and inflexible. Currently, the retailer is in the midst of a number of new initiatives revolving around “the convergence of the digital and physical retail worlds,” Simon said. Take a look at a few of the projects that have come online at the giant retailer in the last 12 months.

1. Ship from store. The volume of fast-moving items ordered from Walmart.com that are then shipped to customers from local stores is in the “double digits,” Simon said. Ship from store is out of the test phase and now a reality.

2. Pay with cash—ONLINE. That’s unique for thee-commerce world. Walmart has figured out how to accept cash via its Web site.

3. Lockers in stores. Walmart has established lockers in its stores so customers can order online, go to the locker at a convenient time and pick up their order. Convenience at its best.

4. Scan and go mobile payment. This option gives consumers an easy self-checkout using their smartphone.

5. Store-specific mobile app. The app informs shoppers of specials available in a specific store on a particular date.

6. Same-day delivery. The grocery option is up and running in San Francisco.

What the heck does all of that have to do with strategy for furniture retailers?

Well, first of all, Walmart is selling a pretty decent chunk of furniture; that elephant in the middle of your marketplace is one of your competitors. Like it or not, it is. Next, the retailer is thinking strategically about its future, and that forecasting has its executive team looking ahead five years. What will the future look like for retail? For furniture retail? While the above specifics may not be specific to furniture, Simon hinted at other promising initiatives the retailer has cooking on its back burner. Adult beverages, fresh produce, Walmart Express AND, wait for it … home furnishings.

Much of what the retailer touches seems to turn to silver, if not gold. Strategic thinking is in its DNA. A lesson all retailers, including furniture dealers, should take to heart. Planning and thinking about and for the future are building blocks for success and longevity. Let’s get started on those and make the next five years in furniture retailing a success while we set the gears in motion for five and 10 years beyond.  

Happy High Point Market! We’ll see you there.

Round Two

Larry Norris reopened Norris Home Furnishings during dark days for furniture retailing. He hasn’t looked back since.

By Powell Slaughter

March 2009. The U.S. economy is a shambles. The housing market is practically non-existent after its overinflated balloon burst the previous fall. Layoffs, tight-fisted lenders and frightened consumers are leading to an unprecedented number of furniture store closings, and the grimmest outlook our industry has seen since the Great Depression. Open a furniture store? Why the heck not?

After Hendricks Furniture Group—the company that bought Ft. Myers, Fla.-based Norris Furniture & Interiors in 1998—withdrew from the Florida market four years ago this past March prior to declaring bankruptcy, Larry Norris, then 67, decided to make lemonade from what were then some particularly bitter lemons. He and his wife, Renee Norris, sat down in High Point with Home Furnishings Business during September’s Premarket to talk about the rebirth of the Norris retail brand.

Norris had founded the business in 1983 and had grown it into an important player in Southwest Florida’s home furnishings retail scene. By 1998, He and Renee had both survived cancer and felt good about an early retirement, hence the sale to Hendricks. He still owned the Ft. Myers showroom and warehouse—he’d been leasing it to Hendricks— and was not optimistic about his prospects for filling it.

He didn’t want it sitting idle, and he still felt the furniture itch. “I didn’t think we’d find a buyer or tenant for those buildings in this market the way it was then,” said Norris, president and owner of Norris Home Furnishings. “I told the Realtor ‘If we haven’t found a tenant by September, we’re going to the October High Point Market, and we’ll be back in the business ourselves.’

“Some of the salespeople called and told me customers were crying because the store was closing,” he said. “I have a passion for the industry, and I love it. I’d opened my first store in 1983, so that’s 30 years we’d been serving Southwest Florida.” The move was no surprise to Renee Morris, vice president and accessory buyer for the business. “I’ve always said that what makes an entrepreneur successful doesn’t go away just because you sell the business,” she noted, adding that Larry had been staying busy with development and other ventures. “We did not have a quiet retirement.”

GROWTH TRACK

When the Norrises came back to High Point that fall, they found a warm welcome—and vendors glad to see Norris back in the business willing to support his efforts. That welcome has been one of the keys to Norris Home Furnishings’ growth.

“First, we had a very good reputation in the community,” Norris said. Along with his own reputation, it helped that the closings didn’t hurt the Norris name—all customers in Florida received their merchandise.

“Second, we were able to acquire very good lines, and we could get credit when many others couldn’t. Credit managers who’d known me from years ago came out and said, ‘We know your character.’ We paid for inventory, and vendors gave us nice terms up front. I also was able to hire some people and put together a good team,” he said. “I like to think I ‘plant the seed,’ but other people are out there watering, fertilizing and making it grow.”

Renee Norris noted that the Ft. Myers store includes many of their original employees.

Norris originally planned to keep the new operation, which had opened as Norris Home Furnishings that December, fairly small.

“When we sold to Hendricks we had 110 employees, and

I told Renee I never wanted to have that many again, but we’re headed that way now,” Norris said.

Indeed.

Staying “small” didn’t last long. After re-opening at its original location, Norris Home Furnishings began opening stores during a period when many furniture retailers were closing. The 17,000-square-foot Sanibel store opened in January 2011. When the original Robb & Stucky liquidated a month later, Norris looked to fill a gap, and reopened Norris’ old showroom in Naples, the company’s largest footprint with 46,000 square feet. Current employment stands at 84 people, and the retailer expects to hit $20 million in sales next year.

“I’m humbled I have as many employees, customers and vendors as I have, and I try to keep them all happy,” Norris said.

A COMFORTABLE PLACE

Norris Home Furnishings leans toward the high-end, and it works to create a non-intimidating, low-pressure atmosphere. “Our employees are like family, and we like to think of our customers as extended family,” Norris said. “Even though we’re higher end, we bring a lot of value, and we have great customer service.”

A greeter welcomes customers, who are allowed to browse on their own for a while before the greeter passes their description to the next salesperson up.

“One of the comments we get is that our customers feel very comfortable in the stores,” Renee Norris said. “I might walk by the design center at 10:30 in the morning, and see a couple that still might be there at 2:00.”

The Naples store, being bigger, can show more products, but the merchandising is similar in all stores. Norris merchandises by lifestyle, not by manufacturer. Themes include Coastal, Island, Soft Contemporary and Traditional, with a heavy emphasis on full design.

“We have 15 licensed designers on staff, and all our salespeople are designer-oriented,” Norris said.

The company makes full use of those skills by offering a soup-to-nuts assortment of products beyond furniture and accessories.

“We also sell any kind of window treatment, wall coverings, drapery, bedding, and we have a rug gallery in the Naples store,” Norris said. “If a customer buys a new home or condominium, we can help them with everything they need to furnish it.

“We have contractors we work with,” he said. “If a customer’s buying an older home and wants to remodel a bathroom, we can help with that.”

PLAYING IN A TOUGH LEAGUE

When it comes to the high end, there are some pretty big names playing the furniture retail game in Norris’ market—high-profile brands such as the new Robb & Stucky; and Clive Daniel, the furnishings retail kicked off by former Robb & Stucky execs Clive and Daniel Lubner.

All are vying for a slice of the $692 million pie. That’s the total furniture sales volume for the combined Cape Coral-Fort

Myers-Naples-Marco Island, Fla., market last year. This year is on target to be about the same. For the first half of 2013, total furniture sales for the combined markets was $343 million.

“We have a lot of good competition, and I like good competition,” Norris said. “It helps our industry. The more people you have out there advertising, the better it is for retail.”

As far as advertising goes, Norris Home Furnishings runs around a third newspaper, a third television, plus magazines and direct mail.

“Half of it’s wasted, but I can’t figure out which half,” Norris joked. “We’re in a market where newspaper still works—it’s an older demographic, people who still read one every day.”

Charity and community activity is important in getting the name out and building reputation. Take the “Writer’s Domain.”

“We invited writers, New York Times best-selling authors with homes in Naples, to the store,” he said. “We tied it in with Barnes & Noble” for cross-marketing, as well as with local literacy groups.

“We sent the writers a questionnaire about what their writing environment is like, and we re-created those in the store,”

Norris said. “That was a fun event, and we got all kinds of press.

We’ll do that again in January. Most of those events are invitation- only, in the evening in the store.”

The store also cross-markets with builders and developers.

“Building’s coming back in our market,” Norris said. “We’re eager to do model homes for builders, because that’s an extension of our showroom.”

When Norris got back into business, he did find a new world of names such as Facebook, Twitter and Pinterest.

“When I was here before, we didn’t have social media— that’s all new to me,” he said. “We’re just getting into it—we recently hired a marketing firm who’s going to help us with that.”

Teaming with the right vendors also helps Norris stand out in

a competitive environment.

“We’re the only Stickley dealer in Southwest Florida, and they are a great resource,” he said by way of example. “We just had four people up there in Manlius (N.Y.) in August. My goal is to have all our salespeople go through the factory. It’s a great education on the line and on how furniture should be made.”

LOOKING AHEAD

With a goal of hitting $20 million next year, Norris Home Furnishings continues to explore new possibilities for business.

“Right now we’re looking at the Internet, and we’re researching that now,” Norris said. “On our marketing plan, by the end of the year, we’ll come up with some kind of “Look Book” about Norris, telling customers about the store and the lines we represent. We hope it’s something people will want on their coffee table.”

Contract is another area with potential.

“Renee and I went to Neocon this year to see if we want to get involved to some extent with the contract market,” he said.

“That’s something we’d go into very slowly. I wouldn’t want to do a 300-room hotel.”

Renee Norris noted that while there’s been fast growth for the business, the couple wants to make sure it’s “responsible growth.”

“We’re tweaking a lot of what we’ve done and are working on infrastructure, because we have had that rapid growth,” she said. For instance, “our computer system is capable of so much more than we’ve utilized so far. … We’ve been working the last three months to link images to products in the system so it’s easily printable for the customer.” So, don’t look for another retirement in the immediate future.

There’s too much going on. “It’s still going to snow up North, and people will still want to move to Florida,” Norris said. “There’s always enough business, and if not, somebody goes away. I hope never to be that one.” HFB


Key Vendors

C.R. Laine, Century, Drexel Heritage, Fine Furniture Design, Henredon, Hooker, Lexington, Schnadig, Sherrill, Stanley and Stickley are key vendors among a total of around 300.

 

Key Management

Larry Norris, Owner and President; Renee Norris, Vice President and Accessories Buyer Doug Ulrich, General Manager Gary Klann, Naples Store Manager Luanza Maitland, Interior Designer and Buyer

 

"We have a lot of good competition, and I like good competition. It helps our industry. The more people you have out there advertising, the better it is for retail".

- LARRY NORRIS

Norris Home Furnishings

 

Norris Home Furnishings at a Glance

Upper-middle to high-end, design-oriented home furnishings retailer with three Southwest Florida stores: 20,000 square feet in Ft. Myers; 46,000 square feet in Naples; and 17,000 square feet on Sanibel Island. 36,000-square-foot warehouse/distribution center in Ft. Myers. Originally opened in 1983, sold to Hendricks Furniture Group in 1998. Re-opened in 2009 in Ft. Myers.

84 employees.

Annual revenue: $15-20 million

Web site: NorrisHomeFurnishings.com

Consumers Crave Comfort

By Sheila Long O’Mara

Consumers shopping for motion upholstery want more heat, more massage and more creature comforts in their reclining sofas and sectionals. In a Home Furnishings Business survey conducted last month of consumers who had bought motion upholstery within the last 12 months, nearly 62 percent either bought or would like to have heat and massage in their seating. Automated adjustable headrests and lumbar supports were highlighted by more than 53 percent of the more than 500 participates.

Storage drawers at 50 percent and hidden tabletops at 48 percent were also in the top four of consumer wants in motion upholstery. That’s great news for the category in which suppliers are packing more and more function into motion upholstery. Vendors of motion upholstery have continued to push the functionality of motion frames with power mechanisms, heat and massage, drop-down tables, MP3 docking stations and more. Most suppliers report that the more bells and whistles packed into a frame, the better a particular model tends to retail. On a scale of one to seven, more than 82 percent of the consumer respondents ranked their satisfaction with their motion upholstery purchase as five or higher.

While quite a number of motion upholstery vendors highlighted power recline as a big seller among their customers, our pool of consumers haven’t quite caught on to the fanciest of the fancy. Just shy of a third—29.1 percent—say they’d prefer a power-operated mechanism in their motion upholstery. The remaining 70.9 percent lean toward hand-operated or push-back mechanisms. Possibly the best news out of the survey is that the consumers who recently bought motion upholstery are now hooked and are pleased with their purchase. On a scale of one to seven, more than 82 percent ranked their satisfaction at five or higher.

Reclining sofas and sectionals—motion upholstery—remain one of the fastest growing categories in the furniture industry. Since 2009, retail sales of motion upholstery have grown 16.07 percent to $6.59 billion in 2012—making it the fastest growing category for furniture retailers. The category made up 8.96 percent of all furniture and bedding sold in 2012, almost as large as the 14.05 percent that mattresses command. What is it that has the motion upholstery rocking along on such a growth projectory? We see a correlation between more upscale styling and function as a key driver. Motion suppliers are pushing the style envelope and marrying better looks with all the creature comforts consumers say they crave. Traditional lifestyles from sister company Design Circle like Classic, Estate and updated New Traditionalist have viable motion upholstery selections currently in the marketplace. Lane’s more classic styled, high-leg recliners, for example, add a hint of traditional to any setting. The Modern consumer shopping for motion upholstery can also find a varied selection of styles, including American Leather’s classy, contemporary swing recliners in a variety of updated colors. As we know, the beefy, bulky, plush motion frames tend to carry the marketplace, but if consumers are looking for a bit more panache to add to the homes the looks are available.

12 Reasons for Motion’s Growth

1.       The demographic for motion upholstery continues to grow alongside the aging population—a group that tends to gravitate toward lift, heat and massage features.

2.       Younger consumers tend to lean toward furniture with an ergonomic story to tell. Think gaming chairs or exercise balls.

3.       The influence of the automobile industry and its seating designs featuring lumbar support, heating and cooling seats, neck support and more. Why not relax as comfortably at home?

4.       The home theater has moved out of the basement and into the great room. Motion upholstery now has a broader audience.

5.       Motion suppliers have gained an edge by right-sizing their products. Motion comes in all shapes and sizes now. Remember the days when extra-large seating was all that was available?

6.       Better performance fabrics and fewer covers with scratchy olefin. Better fabric designs that work with motion upholstery have brought new consumers into the fold.

7.       Better leather education. Consumers now understand the durability of leather and its tendency to improve with time.

8.       Stressful lifestyles and long work days have consumers eager for soft place to land at home. Relaxation, pampering and nesting have come a long way with the benefits of motion.

9.       As the bedding sector have shifted its marketing toward better health through rest and relaxation, consumers have heightened expectations on how home furnishings can improve down time.

10.   Men and women are shopping together more these days, and having a man’s viewpoint in the furniture selection points toward better sales for reclining sofas and sectionals.

11.   Advances in motion seating size, silhouette and functionality, like wall huggers and multiple width seating, provide a broader reach to consumers.

12.   Successful marketing campaigns have removed some of the stigma of the category as “my father’s recliner” providing shoppers with “permission” to opt for a seating that does more—reclines, massages, stores and chills a drink.

 

What Retailers say

Ashley Primematic  Durablend  Sectional

This two-piece sectional is a fantastic look at an unparalleled value. The color is a great crimson red (not another brown sectional!) and has two power recliners, a drop-down storage tray and storage in the chaise/ottoman. Customers can’t resist the features and at $1,299, it has the price, look and bells and whistles that make this a HOT mover!

Seth Weisblatt

Sam’s Furniture & Appliances

Fort Worth, Texas

 

Comfort Design’s 114 Ventana

“We show it along with a recliner in a pale yellow, and it stands out like a beacon in a brown leather department. It has a split back with a high-grade leather so it’s very comfortable. We sell sectionals, sofas and recliners off that frame.” Retail price is $2,999.

Tom Lias

gorman’s furniture

Novi, Mi.

 

Coaster’s 550152 Reclining Loveseat

 “The majority of motion upholstery tends to be dark brown or black so the combination of neutral coloring, attention to detail and price makes this item a great seller.” Retails at $764.95.

Niraj Shah

Wayfair

Boston


 

What Suppliers Say

Palliser

Palliser’s Cortez sectional makes a powerful statement. Available in any of Palliser’s more than 300 leathers and fabrics, the Cortez is a strong seller, according to Lorri Kelley, vice president of sales and service. As show in this great leather with all power recline, the sectional retails at $5999; dressed in fabric with power recline, $3,599. “The power mechanism is the overwhelming majority of sales,” Kelley said.

 

Flexsteel Industries

Flexsteel’s Julio is all about comfort and eye appeal—sometimes a tricky combination when it comes to motion upholstery. Justin Mills, director of advertising and public relations, said the design tells the story. “Julio begins with a wonderfully soft automotive bucket seat and deep pocketed back divide,” he said. “The arm, arm pad, back and chaise page are lined with a French flap stitching detail that highlights the architecture of design.” In leather, Julio comes standard with power recline and is priced to retail at $1,999. Julio is also available in fabric with or without power recline.

Franklin Corp.

The Milano sectional from Franklin Corp. offers several features that make it a winner for the upholstery supplier—eye appeal, comfort with a chair and a half reclining scoop seat and a great price point. “The Milano is totally modular and can be built several different ways—including a console and tablet tray with USB charger,” said Chuck Tidwell, vice president of merchandising and product development for the company.As shown, Milano retails at $2,399 in bonded leather. In a smaller configuration with two recliners, two armless seats and a wedge, the sectional would retail at $1,699.

 

Best Home Furnishings

The Bodie motion sofa from Best Home Furnishings is a streamlined reclining sofa that features power recline. Eric Vollmer, sales and marketing specialist for the company, said is available in “hundreds of fabrics and also with a manual reclining function.”As shown in leather, Bodie retails at $1,374 with the power reclining mechanism

Lane

The Grand Torino reclining sectional from Lane is among the company’s top selling motion groups, as well as top viewed on the Lane Web site. “The transitional design with comfort cradle seating and envelope style padded arms make it incredibly versatile,” said Mindi Brothers, vice president of marketing. Grand Torino offers a myriad of creature comforts, including a storage console, pulldown table and drink holders, power recline option and a sleeper sofa with the company’s trademarked iRest gel-infused foam mattress. Estimated retail price as a four piece, double reclining, sleeper sectional is $2,499.

Cozzia USA

Cozzia’s EC618 robotic massage chair is marketed as the Ultimate Massage Chair, and its target retail price is $3,999 to $4,999. Controlled by a microcomputer that performs a number of massage techniques, Bob Bruns, president of Cozzia USA, said the chair is a best seller with its bells and whistles. The chair uses innovative 3D robotics technology to offer a thorough massage by focusing on the acupressure points of the back. In addition to the mechanism, the chair has 64 air bags and vibration massage in the seat to create the various types of massage techniques. In addition to the massage and heat functions, the chair offers speakers and LED lighting for audio and visual stimulation.

Ekornes

The Stressless Buckingham sofa is the winner at Ekornes. The three-seat, low-back sofa retails from between $4,200 and $5,800 depending on the leather. Inspired by some of London’s most chic addresses, Buckingham offers a sleek, classy feel to reclining sofas. Buckingham features gentle curves, padded arms and a supple seat to provide the ultimate in relaxation. Each of the seats offers individual recliner with the patented Stressless Glide System to provide the right amount of support.

La-Z-Boy

The Pinnacle Reclina-Way full reclining sofa from La-Z-Boy offers two fully reclining end seats that offer full-body chaise support and plush, pillow high backs. Amy Hellebuyck, manager brand marketing and public relations for La-Z-Boy, said the “line is a top-seller because of its smaller scale, as well as its customization and fabric and leather options, including power, a drop-down table and console.” Target retail price starts at $1,159.

Super Bowl -- A Retail Touchdown

With the biggest sporting event of the year only a few days away, home furnishings retailers across the country could see an extra boost to their already increased sales thanks to rabid football fans.

BIGresearch, an online market researcher, predicts 800,000 pieces of furniture will be sold this year as consumers prepare for the Pittsburgh Steelers and the Seattle Seahawks to meet in Super Bowl XL. 

The company determined the number after conducting a survey for the Retail Advertising and Marketing Foundation, a part of the National Retail Federation.

The estimated figure for economic jolt for furniture retailers is nearly 170,000 higher than those found in their figures for 2005, the group reported.

Last year, 530,000 pieces were sold for those looking to new furniture -- especially home entertainment centers. BIGresearch determined 1.7 million new televisions will be sold to those looking to upgrade before the Super Bowl.

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