Cover Story: Cheers to Five Years Matching Passion with Purpose

July 12, 2018   by HFBusiness Staff in Business Strategy, Industry   

Many of us have always been told to follow our dreams, but the truth is that’s not always the most practical path. Don’t misunderstand—following your dreams is a good thing, but sometimes pursuing those dreams just doesn’t pay the bills.

In his commencement speech to Stanford’s graduating class in 2005, Steve Jobs offered the following advice to the graduates: “You’ve got to find what you love … The only way to do great work is to love what you do.” In other words, figure out what you’re passionate about and then find a job that coincides with that passion.

However, sometimes we bounce between following our dreams and ignoring our passion, says Morten T. Hansen from the School of Information, University of California at Berkeley. In a study of 5,000 employees and managers, Hansen found that some people not only pursue passion in navigating their careers, but they also connect that passion with a clear sense of purpose on the job. He says, “While passion is ‘do what you love’ purpose is ‘do what contributes.’” And those who match passion with purpose, he says, perform better than their peers.

The honorees of this year’s Home Furnishings Business Class of 2018 Forty Under 40 personify this concept. There is plenty of passion and purpose in the inductees profiled on the following pages. For example, take a look at our honorary inductees, Drew and Jonathan Scott. From a very young age they had their eye on becoming entertainers, but they never expected it to happen with a tool belt and a real estate license. The Scott Living furniture collection was born because fans had been relentlessly asking them when they would create a line of furniture that incorporated their standard for quality and affordability.

Ultimately, they took the home furnishings industry by storm with multiple licensed collections, including an indoor furniture program with Coaster of America that started with 300 SKUs and grew to more than 650 SKUs in just one year.

“We’re passionate about engaging customers and delivering a meaningful assortment of product,” Drew said.

“We have our hands in every aspect of the creation process because it’s our passion. The purpose is to create new stuff that people haven’t seen,” Jonathan said.

For the Scott brothers, their fans’ passion became their purpose.

The profiles you will read on the following pages recognize those who have made outstanding contributions in the industry through passion and purpose. This recognition signals a bright future for them and will set the stage for great leadership into the future. While our honorees come from different segments of the industry, all of them possess the same qualities: They are passionate, successful individuals who do not let anything stand between them and their vision. They’re not afraid to break the mold if it means moving their brands, teams and companies forward. They deliver on business goals and meeting the needs of customers, not only in the brick-and-mortar world but online as well.

Once again, we bring together and celebrate those who are at the top of their game. They stand out from the crowd and we applaud them for their accomplishments, their business acumen, their passion and their determination during a time of such change in the industry.

Cheers to five years of Forty Under 40, and the road ahead!

Elana Stone Anderson, 31

Company: BedMart
Position: Vice President of Marketing

Elana is responsible for overseeing all marketing activities for BedMart Mattress Superstores, including action-oriented advertising targeted to increase door swings and brand awareness within Oregon, Southwest Washington and Hawaii. In addition to her marketing role, she also serves as BedMart’s furniture buyer, helping launch the company’s first furniture-only location. Elana embodies the tenacity and spirit of a young entrepreneur. She works tirelessly to ensure BedMart’s success and challenges herself and the company to have a strong presence in the marketplace, while pushing BedMart’s philanthropic goals and achievements higher and higher.

Elana was a finalist in the Oregon State University Austin Family Business Program. She was also recognized in the mattress industry as a Top 40 Under 40 and won the 31^st Annual Spirit of Portland Mayor’s Award. She also served as an ambassador board member for Albertina Kerr Centers, a leading provider of services to children, adults and families with emotional or mental health challenges.

Nick Bates, 31

Company: Spring Air
Position: President

Nick became president of Spring Air in January 2017 and is one of the youngest presidents in the bedding business. He is responsible for providing strategic leadership to establish long-range goals, strategy and policies. He plans, develops, organizes and implements the company’s fiscal performance. Nick brings a unique consumer perspective to his post and is making an effort to shift the company’s appeal to millennials. He has refocused Spring Air so that licensees work via committee to improve the organization’s profitability. He also created an environment in which all stakeholders are empowered to share their ideas/opinions directly to his office. Under Nick’s leadership, Spring Air has re-engaged with the bedding industry.

Within six months of taking the reins, Nick partnered with Love Your Melon to help combat pediatric cancer by helping fund research and awareness. He is also a committed sponsor of the Pan-Mass Challenge, the annual cyclist ride to raise money for cancer research.

Christopher Casey, 35

Company: Ekornes
Position: Finance Manager

Chris Casey manages credit, customer service, logistics and distribution for all U.S. domestic upholstery manufacturing operations for Ekornes in Somerset, N.J. and Morganton, N.C. He has proven his leadership skills in various areas and was instrumental in getting Ekornes’ N.C. factory operational, bringing over 40 jobs to western N.C. He is described as an outstanding young man with imagination, energy and enthusiasm and is expected to become an even bigger contributor to the future of Ekornes and the industry. He reports directly to the president, Peter Bjerragaard.

Chris has an MBA in Accounting and Finance and is the NAFTA-certified lead for Ekornes, He also handle FTZ certification for their N.J. location. When he’s not focused on work, Chris is a committed husband, and father of three small girls that keep him quite busy.

Holly Clark, 34

Company: The Biltmore Company
Position: Manager of Marketing, Biltmore Licensed Consumer Products

As a licensing marketer, Holly Clark is committed to helping Biltmore licensees reach success and optimize their investment. She is a highly effective problem-solver and a sought-after source for innovative ideas. Holly is a vital source of strategic thinking and brings positive energy to the Biltmore team. She exhibits great integrity, passion and dedication and has helped launch and sustain licensed collections by industry leaders across product categories. She leads the digital tactical strategy for the brand to create a strong, cohesive presence in web, email and social. Taking on a role outside her job duties, Holly also serves as a leader in training and educational activities for all new hires within the 2,300-plus work force.

A supporter of the efforts to end human trafficking, Holly volunteers in her community. She is also a life coach who mentors those in need to help reach their personal goals and potential. As a missions coordinator for Lake Hills Church women’s group, Holly assists in organizing efforts to aid individuals and organizations in need in Western North Carolina. She is also a commercial actress and public speaker.

Jacob Cross, 34

Company: Selden’s Designer Home Furnishings
Position: General Manager

With his relentless work ethic and strong commitment for continuous improvement, Jacob Cross’ success in the furniture industry is secure. At Selden’s he oversees the daily operations of the company with energy and versatility while keeping sales managers and department heads on track. An active participant in all high-level strategy and performance initiatives, Jacob possesses the aptitude to take the retailer to the next level. He leads by example and cares about the success of the team members.

As a family member of the company Jacob is involved with various philanthropic and charitable organizations, including the Northwest Furniture Bank and the Bellevue Lifespring organization. He also participates in a relay team, “BeatNB” to raise money for neuroblastoma.

When not on the job or helping in the community, Jacob keeps busy with his wife Lauren and their three small children enjoying outdoor activities.

Nick Daniels, 29

Company: Furniture Fair
Position: Store Manager

When Nick Daniels was asked to open a store in Dayton, Ohio, he knew it was a big responsibility because it was the company’s first venture outside their home market of Cincinnati. He did such a good job, he’s been asked to do it again, this time in Louisville, Ky. As manager of the Dayton store, he oversees sales, merchandise placement and general building maintenance. Sales and sales management is his passion. As part of a small family business, he is also tasked with working with the social media response team. Committed to the industry, Nick looks forward to leading the company’s success into the future.

Recently Nick competed in his first full marathon, the Flying Pig in Cincinnati. While training was a challenge—due to tearing both his ACLs in high school—he completed the marathon in about four and one-half hours. During training he helped raise money for the Brent Howell Scholarship Fund, which supports addiction treatment. He also works with the Furniture Fair team to help provide donations for the Leukemia Lymphoma society. Nick was a NEXT Gen Leadership Conference speaker in 2015 and served as an advisory council and panel member in 2017.

Diana Daniels, 35

Company: Furniture Fair
Position: Director of Learning and Leadership Development

Diana accepted her first retail management position at 28 and relocated 500 miles away from her family to begin her leadership career. Since then she joined Furniture Fair as design coordinator to develop and lead the company’s complimentary design services program and to host “Train the Trainer” sessions. Today she serves as the one who is responsible for training and developing the store management and interior design team. Her primary focus is on improving employee engagement and productivity

As a creative thinker, she is committed to improving company operations and culture, and always goes above and beyond the call of duty. Honest, trustworthy and dedicated, Diana’s future is bright.

Diana worked very closely with the core values board at Furniture Fair to execute a fundraiser to support addiction recovery.

Haley Darsey, 21

Company: Darsey’s Furniture
Position: Sales and Social Marketing Director

Since she was old enough to walk, Haley Darsey has worked at the family business. She wrote her first La-Z-Boy special order, all by herself, when she was 11 years old. At 21, she is a beacon for the family business. As a senior marketing major at Sam Houston State University, Haley still works 30-50 hours per week at the store. She is the fifth generation to work in the family business and will hopefully one day own and operate.

Haley studied abroad (international business) and is part of Furniture First’s Next Gen group. She is a leader at the Kalin Center, an organization that is dedicated to helping abused children. She and her sister participated in a “Styles for Smiles” event to support a close friend who endured abuse. Haley is the secretary of an endowment board at the Crockett Public Library and helps feed the homeless while at college.

Amanda Daubert, 37

Company: Furniture First
Position: Director of Services

Furniture First’s retail membership relies on Amanda Daubert to provide information on partnerships and service providers with regard to consumer financing, furniture/mattress protection plans, POS systems and more. She is also responsible for bringing new retailers into the buying group. Additionally, Amanda oversees two Furniture First performance groups and a program called “Tools 2B First”, that helps retailers perform better as business owners. She has been dedicated to the industry and the buying group and consistently takes on more responsibilities within the organization. She has a passion for understanding members’ needs and strives to help their business succeed. Her efforts have resulted in a strong partnership with TD Retail, which resulted in obtaining the best rates possible for the retailers. Amanda led the charge to exceed several goals.

Amanda started and is continually growing the organizations NextGen group. She was a recipient of a WithIt Education Scholarship in April 2017.

Amanda is very involved with the Make-A-Wish Foundation. In addition to her career duties, she is going to school to pursue her MBA. Amanda is a wife and mother to three daughters.

Lauren Estep, 35

Company: American Home Furnishings Hall of Fame Foundation
Position: Executive Vice President

If it happens at the Hall of Fame, Lauren is involved. She is the machine that keeps the wheels turning. A powerful but quiet leader, Lauren is well-respected by the board of directors. When Lauren speaks, everyone listens. Lauren touches all aspects of the organization and is the force behind every press release, media contact and social media project. She orchestrates the preservation projects, including more than 60 oral interviews and the publication of more than 50 books on industry leaders. She played an integral role in the development of a new selection process, a new interactive Wall of Fame, a new website and facilitated the writing of a timeline history of the industry. The Hall of Fame would not run smoothly without her dynamic leadership, organizational management skills and her terrific attention to detail. Lauren directs the staff like a polished general and keeps everyone running on the same track.

With two young children, Lauren still manages to be involved in fundraising efforts at their school. She supports her local Relay for Life for the American Cancer Society and participates in City of Hope’s Future Hope for young leaders program. Lauren also volunteers for Vacation Bible School in her community.

Elise Gabrielson, 33

Company: Crypton
Position: Marketing Manager

In 2015 Elise Gabrielson was hired by Crypton to handle the brand management of a consumer-facing advanced performance home fabric technology. She surveyed the competitive landscape, vetted strategies and tactics, and coordinated with their outside agencies and inside staffers in marketing, outreach and sales to create programs and materials for the brand. Using platform strategies and influencer marketing, Elise developed content creation programs speaking to all audiences of Crypton Home, including a microsite, a blog, video content and more. In just under three years, she managed to help place Crypton among the top most-recognized home fabric technology brands. Her unbridled tenacity and commitment have resulted in significant benchmarks for the brand. An enthusiastic team player, Elise fosters a feel-good vibe wherever she goes.

Elise volunteers with Pooch Pop Up, a company that provides comfort dogs for patients in hospitals. She is also a member of WithIt and participates in a Young Textile Professionals group. Passionate about her hometown of Detroit, Elise donates her time and energy to Gleaners Food Bank and Greening of Detroit. She also worked with the City of Taylor, Mich., to develop, design and project manage a city park.

Jon Gadbois, 36

Company: Boston, Inc. (Furniture & ApplianceMart and Ashley HomeStore
Position: Vice President of Marketing

At Boston, Inc, Jon oversees all aspects of marketing two unique brands: Furniture & ApplianceMart and Ashley HomeStore. Jon and his team of two are responsible for everything from media buying to graphic design, copy writing to reputation management, media planning to digital strategy and everything in between. In the industry for 18 years, Jon started on the sales floor and worked his way up. He is a true leader with a proven record of delivering results through marketing campaigns. Gadbois consistently hits his goals related to driving in-store traffic. He has successfully navigated changes while improving marketing strategies to squeeze every last ounce of value from each dollar spent on marketing.

Gadbois served as board president for the Portage County United Way in 2017 and currently serves as past president, sitting on both the board of directors and the executive leadership team. He is the sitting Poet Laureate of Stevens Point, Wis., where he exposes youth to the diverse world of poetry and how it can serve as an outlet for them to express themselves creatively at an early age.

Mehdi Gold, 39

Company: Coaster Company of America
Position: Director of E-commerce

Mehdi arrived in the U.S. when he was 20 years old and didn’t speak any English. Since then, he earned his MBA and landed the job of director of E-commerce for one of the largest furniture importers in the country. He is responsible for over 100 drop-ship accounts, including top 100 U.S. retailers with over $90 million in direct-to-consumer e-commerce business. He is also in charge of leading the site strategy and building product roadmaps. Prior to joining Coaster, Mehdi was a vice president at Bank of America and a vice president at JP Morgan Chase, managing the highest-performing branches in southern California

Mehdi volunteers his time to feed the homeless at a local church and donates money for children with special needs in Iran. Mehdi and his wife are planning to adopt a child from Iran who lost her parents in the recent deadly earthquake in April.

Kristin Hawkins, 37

Company: Steinreich Communications
Position: Vice President

Kristin may very well be one of the leading PR strategists in the industry. Her strategic communications skills and knowledge of the home furnishings industry combined with strong business acumen serve her clients well. Her leadership role in the strategic and creative positioning of client projects includes new product launches, marketing campaigns, corporate communications and strategic events. A longtime member of the furniture industry, Kristin previously held a marketing position with Broyhill Furniture, where she transitioned into a newly developed position managing the organization’s new product development stage-gate process. She held a similar position with HSM.

Kristin has served as a department chair for corporate fundraising initiatives in support of JDRF (type 1 diabetes research) and the March of Dimes. She is also a dedicated mother who is very involved with her daughter’s pre-school activities.

Karl Heinritz, 26

Company: FurnitureDealer.net
Position: Merchandising Operations

In charge of the merchandising operations team, Karl Heinritz has a vast array of responsibilities. At the core of what he does is to make sure FurnitureDealer.net’s content catalog is utilizing the most sophisticated information and processes to ensure that the content is the finest in the industry. Karl is an ambitious, tech-savvy problem-solving machine and is credited with improving the company’s internal system for accuracy of pricing, improving the company’s relationship with manufacturers, and developing sustainable processes for business growth. Karl is a visionary and an exceptional young professional with a strong work ethic. He is “wise beyond his years” and brings his A-game to work every day.

Karl consistently volunteers at industry events, and is a leader that helps organize non-profit events.

Michael Herschel IV, 27

Company: Furniture Marketing Group (FMG)
Position: Marketing Coordinator

Michael Herschel has been with FMG for almost four years.

His primary duties are to budget and implement monthly consumer mattress promotions of behalf of participating members. In that time, he has helped increase sales of FMG-endorsed mattress suppliers through their dealer network via a series of campaigns that include digital marketing, video content, in-store signage and gift with purchase. Michael’s excellent communication skills and outstanding work ethic have helped members understand and utilize the vast number of product and service offerings available to the memberships’ major furniture and bedding suppliers, including many top 100 furniture stores.

Michael is an honors graduate of UNC–Wilmington, and will begin an MBA program in the fall of 2018. During his spare time, he coaches various different age groups of AAU basketball.

Harrison Hood, 29

Company: Sunbrella
Position: National Sales Manager

Harrison is responsible for all Sunbrella sales to the indoor furniture industry both domestically and internationally and has six direct reports. He works side-by-side with each rep to provide all the tools and resources needed. He also works with their customers to provide products as well as a level of service that is unmatched in the performance fabric arena. Leveraging the Sunbrella brand is also a key focus for Harrison. Because of Sunbrella’s terrific brand presence at the retail furniture level, Harrison also manages direct retail relationships with the top local, regional and national retail furniture chains. He has demonstrated key leadership qualities that have taken him from sales associate at age 23 to national sales manager at age 28. As a result of his efforts, Sunbrella has tripled their indoor business from 2014-2018.

Harrison is an Eagle Scout and an integral part of troop 205 in Lexington, N.C. His grandfather started the troop in the 1950s and his father was the scoutmaster for over 25 years. He donates many hours volunteering at homeless shelters in his community and is an active member in a young professionals group at the First Presbyterian Church of Greensboro.

Daniel Howe, 25

Company: Amazon
Position: Vendor Manager, Category Management

Daniel’s accomplishments in the e-commerce mattress and furniture space are prime drivers of the growth of the furniture business at Amazon. He is always thinking about ways to create a better experience for the customer, including how to improve browse experience, returns, reviews, selection, and more. Daniel is directly responsible for managing the P&L of mattress and furniture categories that represent $600MM+ $600 million-plus in annual revenue and oversees the growth, marketing and merchandising strategy for hundreds of vendors to create a best-in-class experience for the customer. He leads all category pricing initiatives, and has led free cash flow projects, including direct imports and deals. His work in direct imports helped to improve sourcing efficiency, which led to greater savings.

As the co-founder of Women in Pets, Home Furnishings, Toys, Fabric.com, Daniel helps to promote diversity in the Hardlines organization at Amazon. He obtained buy-in from leadership stakeholders to drive the project and planned cross-category events to develop resources around hiring of underrepresented groups. He is also involved in community food projects and is a sustainability ambassador and works to educate the community about the importance of reducing waste.

Stillman Johnson, 26

Company: Vintage Furniture
Position: COO/CPO & National Sales Manager

Stillman began his career in his family’s retail store as warehouse help and slowly worked his way up through the delivery department to eventually become part of the sales team. After a few years, he took the reins as GM and broke records with overall annual sales. Drive and self-motivation are what propels him to push himself and his team to dream bigger and do more. At just 26 years old, he oversees all daily business activity including facilitating logistics for shipments, maintains inventory levels within the warehouse program, assists in product development for case goods and bedding, and hires and trains the national sales team. He is truly a force to be reckoned with.

Stillman offers charitable donations through his community to assist during natural disasters and offers monthly donations to his local Do Good Foundation, helping those in need all over the world. He has also funded/sponsored the Shreveport Mudbug Hockey team, encouraging them to make their comeback. He was state ranked in Team Roping Rodeo while he was in high school.

Ryan King, 35

Company: Ergomotion
Position: Account Manager, Bedding Channel Eastern U.S.

Adept at providing leading solutions, floor mapping and retail-level sales training for Ergomotion’s clients in the Eastern time zone, he achieved his current position within the first year of his employment at Ergomotion. Ryan is truly a dedicated salesperson in the field and is sure to be a great asset to the industry for years to come. He is the first “official” sales trainer at Ergomotion.

Ryan served in the U.S. Air Force for four years, including in Operation Iraqi Freedom in 2005 and 2006. In 2012, he graduated summa cum laude from Coastal Carolina University. He is a volunteer at the Helping Hands Community Kitchen in Myrtle Beach, S.C.

Lydia Lutchenkov, 34

Company: Natuzzi
Position: Natuzzi Editions Brand and Merchandising Manager–North America

Lydia is an energetic and enthusiastic leader who comes from outside the industry. But that didn’t stop her from transitioning from a sales rep to brand manager in under three years. Her entrepreneurial confidence and tenacity to embrace risk and change launched her into a successful first year in sales followed by an opportunity from the CEO to onboard with the leadership team and move to Italy for a full company immersion and leadership development program. She is now the central point of collaboration for product marketing and e-commerce. Lydia undertook the tremendous task of designing the product mix for the April 2018 High Point Market, and also partners with the Italian merchandising and product development team to identify trends, ideas and interpretations of business opportunities that help set Natuzzi apart.

Lydia won the CACI Encore Achiever Award in 2010 for exemplary customer service. She completed the Natuzzi Leadership Development program in 2017. She volunteers for the VCU Massey Cancer Research Center for event planning and fundraising and is also a Richmond SPCA running buddies volunteer. She continually seeks to maintain philanthropic giving and volunteering. Lydia is bilingual in English and Russian.

Julia Marks, 40

Company: Picture Source Somerset
Position: Chief Visionary Officer

As the chief visionary officer, Julia helped propel the 40-year-old firm into one that dazzles designers, specialty retailers and commercial clients. She has discovered ways to accomplish so much through her organizational skills, creative intelligence and her determination to succeed. Julia helps set the creative course each year by providing insight into trends. She oversees the operational management and the admin and production staffs on both coasts. She is self-driven, highly competent and eager to accept tasks and completes them with a high degree of excellence. Under her guidance, the company produces a comprehensive inbox education series for retailers and a cross-platform social media and blog program. Julia’s leadership has led to a high level of productivity, improved morale and a team-focused philosophy.

Julia joined the Hospitality Industry Network Board in 2003 and the International Board of Director of Conferences in 2006. In 2015 she was honored with the WithIt’s Future Leader Award. Julia has worked with NEWH to give over $5 million in scholarships to 2,164 students. She participated in the Susan G. Komen 3-Day, walking over 60 miles, raising a total of $7,500 for research.

Molly Mays, 26

Company: Rizzy Home
Position: Textile Manager

At 26 years old, Molly oversees the growth and development of the Rizzy Home textiles division. She assists sales reps by providing tools and programs while assisting with textile development and proprietary products for specific customers. Molly is extremely talented and works very hard. She is kind, dedicated, has a heart of gold and always shines. At such a young age she has achieved many successes, such as being a two-time winner of the AmericasMart Visual Display Awards, recognizing her excellence in visual presentation, use of space, product placement and overall composition.

With a seat on the board of directors for ART, Molly is also on their membership and conference committees. She is also on the advisory board for High Point University’s design school, where she graduated cum laude. In addition to volunteering for homeless veterans causes, Molly also initiated a mentoring and internship program with the HPU design school to help students become more involved within the industry.

Shawn McKnight, 40

Company: STORIS, Inc.
Position: Director of Product Database Design

In his 20-year career, and with his remarkable blend of character traits, Shawn McKnight has grown from his first role as a support technician through four other managerial roles before being promoted to his current position as director of product database design. Shawn is the leader of the NextGen taskforce, which spearheads the modernization of STORIS’ software solution. He is one of the youngest members of the leadership team, a role he earned thanks to his forward-thinking and ability to execute on delivering functional software to retailers in the industry. Shawn’s main responsibility is to make the foundational decisions for STORIS software’s upcoming web browser user interface, which will be a critical product release. With his impressive abilities, Shawn is one of the groundbreaking developers for future software solutions and has reinvented how STORIS developers personally engage with clients.

Shawn has passed on his love of knowledge as a key mentor to future developers at STORIS. He is an avid supporter of the Book Barn, which supports farms that supply natural produce for St. Claire’s hospital and assisted living residency.

Nate Obray, 36

Company: Malouf
Position: Software Development Manager

At Malouf, Nate oversees a team of nine software and web developers for all of Malouf’s internal software. He directs the team’s efforts integrating software to offer quicker, more efficient and more accurate orders and shipping transactions. He leads continuous improvement initiatives, and manages web development. Nate has a big-picture, long-term view of the company and its goals and understands the importance of hard work to provide an unmatched advantage to operate at top efficiency. He took on the task of developing an inventory management system that automates orders while eliminating errors, lowering costs and vastly improving the capacity for shipping items in a day. This was a huge accomplishment for Nate and his team.

Nate donates his time to the Malouf Foundation by building custom systems that are used in fundraising efforts, which are also lent to non-profit partners to save them the cost of paying for fundraising software. He also donates time to Operation Underground Railroad, a Malouf Foundation partner that rescues and provides aftercare for survivors of child sex trafficking. When Nate is not working or volunteering, he is involved in supporting downtown development in Logan, Utah.

Yavar Rafieha, 36

Company: Abbyson
Position: President & CEO

Recognized as an award-winning professional with a track record of success in business management, operations, merchandising and brand development, Yavar is a leader with broad, diverse experience in organizational growth, product design, manufacturing, e-commerce, change management, logistics and distribution. As a visionary, he foresaw the retail economic downturn and developed (and manages) an award-winning drop-ship program—one of the fastest growing in the U.S. He also implemented technology upgrades, keeping the company competitive within the e-commerce sector. Driven by passion and perseverance, Yavar embodies the essence of Abbyson with his unbridled dedication and commitment to always setting the bar high.

Yavar has many specialties, including international communications, motivational speaking, succession planning and performance coaching, and international business and culture. He is a Five-Star Accreditation Business Chamber Board member. Yavar is also very active in the greater Los Angeles community through his support of numerous charitable organizations.

Michael Revah, 35

Company: ZUO Canada
Position: CEO

ZUO Canada’s CEO Michael Revah has accomplished in eight years what few U.S. brands have been able to do with crossover business success including distribution throughout all Canadian territories. The company’s success and growth is a direct result of Michael’s ability to drive sales, develop product and oversee distribution while establishing ZUO as a lifestyle brand for Canadian retailers, online stores, designers and other trade professionals. Through his youthful approach and abilities in sales Michael has expanded brand recognition and led the company’s Canadian growth and success—as they celebrate their tenth anniversary in Oct. 2018.

Outside the business, Michael is a world-renowned professional DJ and music producer.

Sascha Roth, 37

Company: Urban Country
Position: Owner/General Manager

As the owner and general manager of Urban Country, Sascha oversees all of the day-to-day operations, including managing the financials, HR duties, business development, marketing and branding. She successfully project-managed a build-out of a brand-new store location and the move from the existing location, and negotiated a 10-year lease for the space that will help ensure future success. Sascha continually works to improve operations and jumps in where needed to keep things running smoothly. Despite challenges, Sascha leads the charge to evolve with the changing times and is proud to have increased sales every year.

Sascha and her team have hosted a number of charitable events in the store, including a silent auction that benefited The Power of Pink. She serves as committee chair for the fundraising group and helped to raise $10,650 at the event. She also supports the Warrior Canine Foundation and the Race for Hope, which raises almost $2 million every year for brain tumor research, in honor of her father.

Alexander Rubin, 28

Company: Bernie & Phyl’s Furniture
Position: Web Coordinator and Merchandise Buyer

Alex stepped right out of the classroom and into the boardroom, so to speak. He has sparked new energy and innovation into the family owned business. His fresh approach and ideas are resonating within the company and employees are embracing his ideas with appreciation that a new generation is making its mark. Alex’s main responsibility is managing all aspects of the e-commerce business, including maintaining product on the website. He attends trade shows with the buying team and participates in store visits discussing selling strategy with salespeople and store management. He attends Performance Group meetings and the Young Leadership Conference to learn, grow and connect with other young leaders in the industry.

As part of the Jewish Big Brother program, Alex regularly spends time with his "little". He is also on the board of the Boston Chapter of the National Multiple Sclerosis Society. Each year, Alex walks with his family in the Boston Marathon Jimmy Fund Walk to raise money for the Dana Farber Cancer Institute.

Randi Schachter, 39

Company: BILTRITE Furniture Leather/Mattresses
Position: Store Manager/Sales Manager

Randi is not afraid to take charge! She may be small, but she has a big personality and is proud to be a leader in a male-dominated industry. As a fourth generation family member and at the ripe young age of 5, Randi would accompany her father to the family’s store on Saturdays to dust, greet customers and learn about the family business. Today, she does a little of everything, including focusing on managing the sales team, store displays and marketing initiatives. “Randi K”, as she is often referred to, has become somewhat of a local celebrity as the on-air and online spokesperson for the store and she still finds time to sell and handle in-store interior design tasks. She shows incredible dedication in her efforts to keep the independent store vibrant, successful and profitable.

Randi is very active in multiple networking groups including Furniture First, and their Next Gen group, as well as non-profits like The Grand Avenue Club and the Make-A-Wish Foundation. She is a strong supporter and leader for the Young Jewish Adults of Milwaukee organization.

Eric Sinclair, 39

Company: Montgomery’s Furniture
Position: President

As the leader of this fifth-generation family owned business, Eric oversees all operations for the three Montgomery’s stores in South Dakota. From operations to marketing, merchandising to human resources, and everything in between, Eric consistently drives the business forward. He is never afraid to step outside the box and try new things in order to improve. He demonstrates a fierce passion for furniture, family and community. Following his parents’ family rule to “ … get a college degree and work for someone else before you have a job in the family business,” he became a sales rep for Rowe Furniture, where he landed the Rep of the Year award.

Eric is in his fifth year of serving on the board for Furniture First and was instrumental in leading the group through personnel changes, growing vendor relationships and establishing a peer review group. He also aided the South Dakota Retailers association in their work to even the playing field with regard to online retailers and sales tax exemption while continuing to run his family’s business. Each year, he and the store donate thousands of dollars to local charities. Eric also sat on several local community boards of directors to help better serve the community.

Emily Stalvey, 30

Company: MicroD, LLC
Position: Digital Marketing Specialist

As a digital marketing specialist, Emily makes sure retailers and manufacturers are increasing their sales and profits. She helps to build online and digital strategies and is adept at analyzing customer data to help them make smart business decisions. She lends her expertise on SEO, SEM, email, social, content marketing, and conversation rate optimization. A true leader and mentor, Emily has a passion for the industry and possesses a rare combination of successful qualities. She was one of the pioneers in the company who worked toward offering digital marketing services and helped build and execute the program. She has developed lead nurturing campaigns and implemented a marketing automation tool. She successfully works in the B2B and B2C arenas.

Emily facilitated MicroD’s involvement in a Toys for Our Troops volunteer and collection effort. She also works with the Cystic Fibrosis Foundation and led the collection and publication of a local philanthropic guide to the arts in Charlotte, N.C. Emily is also a WithIt member.

Abbey Steger, 24

Company: Steger’s Furniture and Mattress
Position: Assistant Upholstery Buyer/Website and Social Media Manager

A driving force at Steger’s, Abbey is responsible for all aspects of website management, including updating product, pricing and design. She also handles all social media, including planning and executing posts, promoting page engagement and responding to inquiries. A recent software conversion would not have been possible without Abbey. She works with buyers and manufacturer's reps in the selection of merchandise and assists the visual display staff with placement of merchandise. Abbey monitors rate of sale and manages a mark down/clearance program.

Abbey recently completed the Pekin Area Chamber of Commerce Leadership Academy. She also works with the Pekin Community High School dance team choreographing and helping to teach the team their state competition routine. Abbey recently joined the Tazewell County St. Jude Golf Committee to help organize an annual charity golf outing.

Paige Tamada, 33

Company: Lamps Plus
Position: Leadership Development Manager

Paige has been with Lamps Plus for only one year and has solidified their manager-in-training program and talent management strategy. She works collaboratively to design, develop and deliver leadership and employee development programs and to support talent management processes and programs. She evaluates the learning and development needs of the organization and implements solutions that are aligned with strategic objectives, mission, vision and values. Page conducts follow-ups to determine applicability and effectiveness of programs and provides consultative services to management on specialized leadership programs using Adult Theory Learning Methodology.

Paige has been the recipient of several Make MAGIC awards. She was an Amsterdam Merit Scholar in 2008-2009.

Lisa Tan, 39

Company: Reverie
Position: Chief Marketing Officer

Instrumental in building Reverie’s brand vision and strategy, Lisa leads the company’s marketing team, developing plans that are driven by extensive digital testing and insights. She built a marketing team with deep experience in creative, account management, digital and social media.

Lisa is passionate about helping people live better lives through better sleep and wants to change how the mattress industry thinks about selling and servicing the end-customer. She spearheaded the launch of the Reverie Sleep Coach program. She is an example of how women can be successful in the male-dominated mattress industry. She developed the Sleep Advisory Board, a group of scientists and doctors active in the field of sleep science who advises the company on product development and helped develop sleep health strategies for the Sleep Coach Program.

Lisa is a member of the board of Sweet Dreamzzz and the Princeton Alumni Association of Michigan. She is also active in supporting women’s rights and environmental issues.

Justin Vandagriff, 31

Company: R&A Marketing
Position: Vice President of Client Services

As vice president of client services for just over a year, Justin is adept at strategic planning, media and market research, promotional strategy, budgeting and digital marketing, working to advise clients at retail furniture stores to help them achieve success. He directs the work and service provided by all account managers at the company. He has been a critical part of the success and growth of R&A Marketing and rose to his position of leadership after four years with the company. He has shown great passion for his work. Justin takes responsibility in all he does as if he were an owner. He’s the kind of team leader every business owner wishes they had on their own staff.

To further increase his knowledge of the industry, Justin attends furniture markets, tradeshows and conferences every year.

Morgan VanValkenburg, 31

Company: Malouf
Position: Order Fulfillment Manager

Morgan oversees the fulfillment of all orders that ship out of Malouf’s distribution facilities whether they come by phone, email or online. She manages a team of 17, ensuring they have the training, support and communication skills needed to provide exceptional service to clients. Her top priority is timely fulfillment of all orders. In addition, she manages relationships with shipping carriers and travels to warehouse locations to maintain strong relationships with warehouse leads. She ensures payments are collected and accounts are up-to-date. Her team processes between 2,500 and 3,000 orders each day.

As a respected leader, Morgan holds high standards for herself and her team. She is an excellent mentor and has created a women’s support and development group within the company. Through the Malouf Foundations, Morgan takes great pleasure and pride in processing orders to ship products to homes where they are most needed. She also spearheads delivering comfort kits to cancer patients as part of an initiative for Breast Cancer Awareness Month. She helps coach a high school tennis team, works with children in a local Head Start program and teaches a class of four-year-olds at her church. Perhaps the most fun part of her job is party planning the many company events Malouf holds.

Taylor Ward, 30

Company: LC Direct
Position: Vice President of Sales

After leaving college, Taylor Ward worked in furniture retail for a few months before transitioning to independent sales. He partnered with his brother on a new domestic bedroom line, K.I.T.H. Furniture. The line quickly grew and attracted other lines such as Hughes Furniture and Bernards. After one year he was approached by the owner of Hughes and offered the position of national sales manager. At Hughes, he raised the company’s overall sales by over 25% within two years. After three years he was offered the position of vice president of sales for LC Direct. Taylor’s main responsibility is to oversee all sales and manage the sales force, working with retailers to maximize sales and distribution. He has created sales tools for internal and external uses to improve sales for his customers and the end-consumer.

Taylor donates his time and money to a Denton, N.C., charity called Project Santa, which was founded by his grandfather. He is described as “an incredible human being” and has great compassion for everyone he comes in contact with. His love for what he does is evident in all of his endeavors.

Daniel Wieczorek, 35

Company: Amber Engine
Position: Leader, Business Development & Marketing

Dan has spent over 10 years devoting his skills to broad-based sales in the home furnishings sector and has a proven track record. He opened up the possibility of offering services within one retail store to another, with a “store within a store” model for Best Buy and Gardner White—a first of its kind endeavor. Dan was an integral part of signing on one of Amber Engines first clients to the platform. He helps clients share data easily and helps reduce pain points. In his first year in a VAR sales role, he was asked to take on a bridge role as vice president of marketing and exceeded expectations. Dan gives 150% to everything he does and is well-respected by the home furnishings community.

Dan is very involved with causes near to his heart, including the autism gala at the Las Vegas Market. For years, he has donated to the Fur Ball and Humane Society of Livingston County in Michigan. He plays in charitable golf tournaments for Gardner White and participates in community days for organizations such as Forgotten Harvest and Fous:Hope. Food for Hope

Joshua Yauger, 37

Company: Furniture Fair
Position: Systems Administrator

The main responsibility for Joshua Yauger is to plan, coordinate, and direct all computer-related activities for 10 retail stores. He analyzes goals and implements computer systems and applications to meet those goals. Josh was instrumental in implementing a fiber network with voice over IP phone system throughout the company to include wifi, which led to a new platform for mobile point of sale software. Josh also manages the renovations at all 10 stores. His prior experience in civil engineering provides an advantage for Furniture Fair in that regard. His thoughtful analysis of how the company can improve their locations and optimize performance while reducing overhead surpasses expectations. He plans to enroll in accounting courses to eventually migrate into the accounting department.

Josh has been a youth baseball coach for five years. He is also a project manager on various initiatives at his church and is on the Educational Review Board for his kids’ school.

Cover Story: Retail Metrics for Furniture Retailing

June 14, 2018   by HFBusiness Staff in Business Strategy, Industry   

Meanwhile growth in the total furniture industry continued to be slow, but steady, hovering around 4 percent the last two years — 3.9 percent in 2017 and 4.0 percent in 2016 — according to Impact Consulting Services FurnitureCore.com Industry Model. First quarter 2018 has improved to 4.5 percent over the same quarter of 2017 (Figure A).

Figure A. Industry Sales 2009 to 2018 Q1

This is the fifth HFB report on Retail Metrics for Furniture Retailing providing a comprehensive look at financial performance in the home furnishings industry via comprehensive data collected throughout the year by HFB’s parent company, Impact Consulting Services. This data is collected through Impact’s FurnitureCore application, Best Practices, which provides an ongoing monthly measure of a retailer’s performance. This subscription-based online application allows retailers to compare themselves to other home furnishings retailers and devise a plan to better manage store operations. No individual retailer’s numbers are shared, only composite percentage results. (See Methodology for additional criteria used in the Retail Metrics report.)

The focus of this article’s financial comparisons is two-fold. Results are provided for All Participants and reflect the performance of the entire sample compared to last year. In addition, the Top Quartile results are presented in four retailer size segments for performance comparisons based on revenues – Under $5 million, $5 million to $25 million, $25 million to

$100 million, and $100 million and over. The Top Quartile includes the top 25 percent in performance. It should be noted that retailers participating in FurnitureCore’s Best Practices application are retailers focused on improving their company’s performance and does not reflect the industry in total.

The sales ranges not only reflect size of retailer, but in turn the differing operational characteristics the company size brings to profitability. The Under $5 million retailers are the surviving Mom and Pops who have developed niches and strategies for staying in business. Retailers with sales $5 million to $25 million have often emerged from Mom and Pop stores and are usually very owner-focused in operations. The larger $25 to $100 retailers may also reflect similar ownership, but have also developed more tiered management operations adding professional managers, for example in warehousing/delivery functions. The largest sales group, the Over $100 million retailers have accounting practices that are often driven by tax strategies.

The overall financial performance of All Participants is shown in Table 1. Each portion is further compared to the Top Quartile in each size segment with more in depth analysis.

 

Gross Profit

Sales Expense: The largest component of selling expenses is the cost of the sales associates, along with the cost of managing and motivating of them. Included in Sales Expense (Figure E) is the sales associates’ commission, as well as sales management, bonuses/contests and similar activities. Overall, Sales Expense was up only slightly, which matched the pattern of increasing salaries across all industries. In 2017 Sales Expense totaled 9.3 percent of revenue up compared to 9.1 percent in 2016. Last year these costs were consistent across the sales ranges for the Top 25 percent of each group.

Information Systems: Technology costs are still well under 1 percent for the total group as well as the Best Performing retailers (Figure F). Even smaller retailers are embracing the implementation and ongoing maintenance of systems necessary to run a business smoothly understanding these systems are critical to profitability. The larger retailers investing more in information systems have achieved an advantage in processing the customer order after the sale, often by transferring the process to sales associates.

Figure H. Net Income Before Interest and Taxes (% of Revenue)

Summary

The progress made collectively by the traditional retailers in our total group in 2017 was disappointing, but the Top Quartile performers, regardless of size, finished with double the Net Income of the combined group. Savvy retailers are make changes and more are coming.

Furniture is still one of the premier products the consumer still wants to reach out and touch before purchase, which would suggest a positive outlook for furniture stores. But e-commerce companies are getting that loud and clear and are on the edge of entering the storefront business. This threat is not just to furniture stores, but to all other local furniture channels. In this issue of HFB, Statistically Speaking updates the progress of these furniture e-commerce retailers and the lack of progress of traditional retailers in the Internet arena.

Keep in mind our numbers are only guidelines to stimulate thought and discussion of how to profitably run a retail operation. We caution any specific retail figures, to be comparable, must be compiled to conform to these classifications.

We believe an ongoing focus on a company’s statistics is the path to high performance. It is not achieved in a month, but is part of a continuing process. Such a process is greatly enhanced with membership in a retail performance group that allows for open and frank discussion with peers about the barriers to achieve certain objectives.

While the overall industry statistics show slow growth, many retailers are achieving exceptional results. We challenge you to be one of those. Home Furnishings Business is committed to providing input to your process.

Cover Story: Build It and They Will Come

May 10, 2018   by HFBusiness Staff in Business Strategy, Industry   

But life doesn’t always imitate art. The stores have been built, the doors are open, sales associates are waiting … all that’s missing is the shoppers. Furniture retailers have built it, but consumers have failed to do their part.

Fortunately, though, furniture stores haven’t overbuilt, either because of strategic insight or lack of capital. Destination stores for furniture retailers are fast becoming a fading memory, as time-strapped consumers elect to allocate their free time to soccer games and family pursuits. In fact, 82% of consumers drove less than 25 miles for their last home furnishings purchases.

This trend—consumers driving fewer miles to buy furniture—has forced retailers to locate their stores in more expensive shopping areas, eliminating real estate accumulation as a strategy for building wealth.

            Old best practices have been modified to evaluate advertising expenditure and occupancy as one factor, recognizing that a good location offsets the need for additional advertising—a concept that some retailers have trouble accepting.

So where does sales management begin? It’s often difficult to define. Does it occur when the consumer walks through the door, or is it when they visit the retailer’s digital store—its website?

We know, from FurnitureCore research, that 72% of consumers visit websites for research before visiting the retail store, with 49% first visiting stores before going to a retailer’s website.

Where the frustration lies for traditional retailers is the difference between unique consumers visiting their site and traffic into their store, often between 70% and 80%.

The question must be: Where did the consumer go?

Several vendors are addressing this question by engaging website visitors to obtain contact information. 

PERQ intercepts the visitor with a message offering a drawing for a product or an offer of shopping assistance. The risk of irritating the consumer is measured by an increased bounce-back from the retailer’s site.

“PERQ is an AI-based online guided shopping solution that, when applied to a retailer’s website, turns their website into their best salesperson,” says Scott Hill, co-founder and executive chairman of PERQ. “This can be done with any website and requires no work from the retailer. It’s easy to implement with just a simple line of code.”

The resulting leads, if followed up, could drive traffic to the retail store. According to Hill, the results for retailers have been significant.

“When someone engages with our technology, the average time on site lift is three times,” says Hill. “Most of our customers see visitors actually spending an average of 12-14 minutes. When a retailer’s website is helpful, consumers are more likely to stay on site than head to a competitor’s site.”

This is a significant improvement over the industry average, as shown below.

“All of the consumer data we capture enables the industry to start leveraging marketing automation options, which further increases lead to sale conversion,” he adds. “Our exclusive partnership with the industry’s only dedicated CRM—Who’s Up—and our ‘Nurture’ automation solution can be used to increase results by creating processes to help take advantage of the website leads.”

According to Impact Consulting (parent company of Home Furnishings Business), with a properly designed website that includes pricing—a necessity—the number of inquiries from consumers have been reduced to 1-2% of the unique visitors.

A microsite on the retailer’s website, DesignCliq offers a friendly approach to intercepting the consumer by offering a style quiz—a less-invasive way of intercepting these invisible shoppers. In fact, the quiz’s questions don’t mention furniture at all.

According to Fred Starr, DesignCliq’s president and founder, of the consumers who engage in the quiz, 95% or more complete it and 40% or more provide contact information. And, most importantly, more than a third make a purchase—sales ticket averages run more than 25% higher due to increased customer loyalty.

“DesignCliq is a unique, highly effective way for the retailer website to bring the consumer and retailer together for a personal shopping/purchasing experience,” says Starr. “The friendly, personalized DesignCliq quizzes give retailers special ways for the retailer to serve customers as the home furnishings expert and establish immediate loyalty.”

At the end of the style quiz, the consumer is presented with a graph showing what styles they like—and what styles they don’t like. “Upon completion of the quiz, we have a page that comes up and asks them to register,” says Starr. “If they do, they get the graph, and some of our retailers offer an incentive [such as a discount or style help from an in-store decorator].”

Starr says that more than 75% of consumers shop for home furnishings without an understanding of style options and their likes and dislikes. “They’re flying blind,” he says. “And overall consumers establish an immediate trust and loyalty with the retailer offering overall home furnishings expertise. Style quizzes give the retailer an especially high level of expertise to respond to this major need.”

A next effort for DesignCliq, Starr says, will be to create a series of email blasts tailored around the consumers’ style preferences. “Maybe once or twice a month mailings where we emphasize their style—if their style is contemporary, we have a contemporary product shown and content about contemporary,” Starr says.

Another method to engage website visitors is a “chat application” that allows the consumer to interact with knowledgeable sales associates about the products they’re seeking. This is an essential requirement for e-commerce retailers, with more than 60% of all sales involving chat. It has proven difficult for the traditional retailer to execute insofar as to whom to assign the responsibility; sales associates often believe these contacts to be poor opportunities to make a sale.

Podium has launched its Podium Webchat, a service that enables businesses to convert website visitors into customers by taking them offline into text messages. According to the company, empowering consumers to text a business from its own website allows both the consumer and the business the flexibility to respond, helping initiate offline, in-person interactions. Podium Webchat’s interface allows business owners to manage and respond to all webchats from a single dashboard, consolidating SMS/text, Google Business Messaging and Facebook Messenger conversations into the Podium Inbox.

Outside distribution channels are impacting sales management. The advent of online design assistance, such as laurelandwolf.com, is interfering with what has traditionally been a service offered by furniture stores.

Commonly called “home plans,” the close rate increased by two times and average tickets by four times when consumers were offered these services. How can the traditional retailer be more proactive?

Moving the consumer from the digital world to the real, brick-and-mortar world is the next step.

Over the last decade, the cost of creating the store visit (ups) has increased, now an average of $25 per UP.

 

While advertising for all retailers is averaging 5.6% revenue, Impact Consulting believes that is understated and should include 3.4% of the revenue that is the cost for outside financing.

Traffic through the door has only been a conflict between store management and senior management. Overhead reduction has eliminated the receptionist in most stores, which ensured that the mailman did not influence the traffic count.

Impact Consulting still favors self-recording by sales associates, turned over to the sales manager to enter into SalesWorks, an online management tool that has been around for 25 years, and double-checked by a simple door counter.

“While not as sexy as the facial recognition software, the daily discipline of accessing individual sales associate performance is essential,” says Tom Zollar, vice president of retail operations for Impact Consulting.

“By keeping that score on a daily basis for each individual person, and the store, then you know which people are performing at the store average and which people are performing below it,” he says. “It’s a constant improvement process, and as we say so often, data doesn’t give you answers, it just lets you ask better questions.

“The only reason you look at the numbers is so you can track it and improve it, and the only reason you track and report them the way we do is so you know which salesperson you have the best opportunity to improve and which ones will give you the biggest return when you improve them.”

The key overall metric of sales management is revenue per UP, or simply the sales generation for each buying group through the door.

Revenue per UP is a component of close rate and average ticket; focus is needed on both in order to see improvement.

“Revenue per UP is basically a result, and you can’t coach a result,” says Zollar. “Average sale and closing rate are the two things your salespeople basically deliver to you. Revenue per UP becomes a great red flag because it’s basically a very measurable number that tells you how well you’re doing in the store with the traffic you’re advertising.”

Traffic was down more than 7% in 2017, even though industry sales of total home furnishings was up 4.7% and furniture stores was up 1.9%. The reason: increased close rate and increased average tickets from better informed (better researched) consumers.

Who’s Up is a new application to monitor UPs status for retail sales associates.

It's three main components—UP-List, CRM, and analytics—provide automated sales team rotation and customizable workflows, push notifications for salespeople and managers, the ability for salespeople to capture contact information on their smartphones, daily emails to show active deals and scheduled follow-ups, and reports for managers and owners showing the information needed to measure, track, and improve their sales teams’ performance.

“Who’s Up provides valuable analytics that help managers measure and improve the performance of their sales teams. As the Up-List is being used, we capture data on how many UPs, be-backs, and other activities salespeople are taking, and how long they are spending with customers,” says Brad Eaton, co-founder of Who’s Up. “After finishing up with a customer, we ask the salesperson for information on what happened—whether they made the sale, and if not, what was the objection or reason the customer left the store without purchasing.”

This data, says Eaton, is provided to managers and owners in reports that allow them to see how each of their salespeople stacks up against the others. The reports also show how many UPs and be-backs they’re taking, how much time they’re spending with customers, what objections they’re struggling with, and how often they’re getting contact information and following up with customers to make the sale.

“Retailers are seeing happier sales teams with a lot less chaos and disagreements around the rotation system,” says Eaton. “Their conversion rates are improving because they’re armed with the tools to measure and coach. And, they’re more empowered to follow-up and nurture the relationships with customers going through their buying process.”

Another challenge for retailers is attracting good sales associates, especially with low unemployment in many markets and a younger demographic with an aversion to commission sales. However, unemployment projections indicate a decline of retail employment.

A case in point is the recent bankruptcy and liquidation of Bon-Ton stores, which has displaced more than 1,900 experienced furniture sales associates.

The value of a sales manager is something that cannot be overstated. The role—and often the process—is often delegated to the store manager or their assistants.

“When somebody says, ‘I have sales managers, but they sell too,’ or ‘I have a sales manager, but he manages the store and takes care of the operational issues too,’ I say, ‘In order to be a successful salesperson on your floor, you need to work full time, right? In order to be a successful sales manager, don’t you need to work full-time too? Which job is not a full-time job if you have the same person doing both?’” Zollar says. “And the truth of the matter is for most stores that have five or more salespeople, managing them is a full-time job if you want to make a difference.”

The more “other” things you give your sales managers to do, such as taking care of customer service or dealing with other issues in the store, the less likely they are to not spend enough time coaching the sales force, Zollar adds.

A major complaint of consumers is that the retail sales associate pounces on them when they walk in the door. Are we now, with modifications to the retailer’s website, invading the digital store in the same way?

Consumers today want to shop and buy on their terms; they don’t want to be “sold to.” Shelter magazines, at one time, served the purpose of letting the consumer dream about what could be; is the website now the place to not only dream, but conduct research?

Some retailers are eliminating the UP system, allowing the consumer to self-select—a major fear for traditional retailers. But consider: If the consumer has already researched what they want before walking in the door, what is the purpose of the retail sales associate? Maybe just to help them imagine what could be.

Cover Story: Competitive Battlefield

April 11, 2018   by HFBusiness Staff in Business Strategy, Industry   

The industry is expected to grow 4.1% to $107.4B in 2018 (Table A).

This growth rate will place Home Furnishings in the top quartile of all retail distribution channels with an expected growth rate of 12.5% by 2019 (Table B). This growth rate is being driven by the demographics of the 25-44 year olds that are entering their prime home furnishings buying years.

While this is good news for the industry, there is a bad news component for the traditional segment of the industry. While the traditional segment share of the consumer’s furniture expenditure has declined, this opportunity will not be overlooked by other alternative distribution channels.

The independent dealers that had lost 11.4% of their market share by 2016 from 2011 will continue to decline. Impact Consulting Services, the parent company of Home Furnishings Business, believes there will be another 2% decline in 2017 once numbers are finalized.

 The reason for the battle is the attractive gross margin that remains in the product category compared to other consumer products.

While the gross margin is attractive for the traditional brick and mortar retailer at 48-49% for retailers over $10M, many of the invading distribution channels will be targeting the total margin between first cost and the delivered price to the consumer at 70-78%. This restructuring of the total channel has been a viable strategy for many years.

This trend to collapse the channel is a significant challenge to the traditional manufacturers/suppliers to the industry. Increasingly they will be forced to solicit business from the alternative channels at a reduced margin. As the traditional industry consolidates, the entire selling process, such as markets four times per year, and territory sales representatives, will be pressured to cover more territory. An alternative strategy could be to pursue becoming a manufacturer vertical, such as La-Z-Boy and Ashley.

UNDERSTANDING THE BATTLEFIELD

Now we should understand the battlefield. The total furniture/bedding sold can be segmented into 982 markets, however, 95 percent is sold in 402 distinct markets. This foundation fact is the key strategic element in developing a plan to capture market share.

Each of these markets, dependent upon size, has a furniture retailer(s) presence that pursues the consumer. While the industry assigns different descriptions to the varying distribution channels — mom and pop, lifestyle, regional chains — the consumer selects where they want to shop based upon product selection / value / retail experience, along with eleven other factors that influence their shopping and ultimately the purchase decision. The challenge for retailers is to entice them into the stores by anticipating the expectations of each age group. Table D illustrates the current performance.

As is obvious from the table, no distribution channel has a dominant performance.

As would be expected, the millennial gravitates to the Internet, but more so to the mass merchants which includes IKEA along with Target and Wal-Mart in the mix as well. As these retailers expand their offerings, as Target is doing, they will become a major competitor for the traditional furniture retailer.

However, Generation X considers mass merchants but has an allegiance to regional chains and independent dealers as a retailer of choice for their furniture purchases.

Baby Boomers, along with the Silent Generation still prefer the local independent furniture dealer along with the regional chains.

The challenge for the traditional retailers is to facilitate that migration from the Baby Boomers they have served for decades to their children, Generation X. Yes, they need to anticipate the change required to meet the needs of the Millennials but for the next decade Generation X will purchase 40% +/- of all furniture purchased.

Now that we have defined the terrain of the battlefield and the population that needs to be satisfied, we will discuss the combatants.

UNDERSTANDING THE PARTICIPANTS

Mass Merchants

                  For the purpose of the article, we will forego the discussion of the mass merchants and recognize that 38.8 % of all consumers will consider this channel; 13.8% will consider but not shop; 21.9% will shop but not buy; and 25.5% will shop and buy.

                  For those markets with an IKEA, the statistics will be 29.1% will consider, 17.3% will consider but not shop, 19.9% will shop but not buy, and 33.7% will shop and buy.

Manufacturer/Retail Verticals

Prior to the meltdown, Furniture Brands International (FBI) in 2017 was executing a plan to open in total 400 stores for each of its recognized consumer brands. The failure to execute could not be attributed to a failed retail strategy, but to a massive consolidation attempt. Ashley Furniture HomeStores has executed the strategy and now is the largest furniture retailer with 567 domestic stores, both corporate and individually owned operations throughout the nation (see map).

The basic differentiation of these retailers are that they design and produce their product either in their own plants or through contract plants that produce their exclusive product. There are four major players with the two major focused in the promotional/middle price points selling to consumers through their stores or with retail partners (Ashley only) under an exclusive distribution agreement.

Ashley, a manufacturer vertical, has 567 stores that cover 286 markets for a market footprint of approximately 74% of all furniture sold. Value City/American Signature, a retail vertical, operates 117 stores that cover a market footprint of 26% of industry volume.

In competition with these value driven stores are other retailers with a different business model — using a franchise model. Badcock &more participates in 141 markets covering 19% of the industry volume along with Slumberland with 86 markets covering 7% of the market. It should be noted that Art Van is utilizing this franchise model to expand into smaller markets while using company owned stores in larger markets.

The map illustrates the coverage and conflicts.

As can be seen (Map 4), the national presence of Ashley with competition on the East Coast with Value City and Badcock &more.

La-Z-Boy and Ethan Allen, retail verticals, focus on the upper/premium price points representing 28% of all furniture sold. La-Z-Boy covers 155 markets with its 299 stores and a market footprint of $80B in upper/premium sales. Ethan Allen covers 124 markets with 187 stores and a market footprint of $256B in upper/premium sales.

The opportunities for better end product should grow as the as the discount department stores (Target, etc.) commoditizes the product resulting in disposable product. Other upper end brands, such as Stickley Home Stores, may meet this need for better product. It will be interesting to measure the results of Furniture Rows venture into better goods.

                  The new distribution channel (lifestyle stores), such as Pottery Barn and Restoration Hardware, are the direct competition to these upper end manufacturer verticals.

Independent/Regional Chains

Together these channels are just over 40% of total furniture sales. We have broken these retailers into three segments- National Presence, Regional Chain Expending, and Regional Chains: Grow or Be Acquired.

National Presences (More than 53 Markets – Revenue over $100M)

There are eight independent/regional retailers that have achieved somewhat of a national presence.

Of these retailers both Farmers Furniture and American Freight have increased their market footprint in excess of 20%. Market share of Rooms To Go and Slumberland, control more than 10% of their market footprint (total market).

While other retailers have begun to expand into additional markets, both Rooms To Go and Haverty have proceeded with a deliberate pace.

Regional Chains Expanding (10-52 Markets – Revenue over $100M)

For those retailers in more than 10 markets with sales in excess of $100M, it has been a year of growth for some.

 Within this group, both Art Van Furniture and Bob’s Discount Furniture have accelerated growth. Art Van, via acquisitions and expansion, and Bob’s Discount through expansion.

Many of these retailers have market penetration in their price points in excess of 10%.

Art Van expansion has been significant as was Bob’s Discount in 2017. Chicago was the first market for direct competition between the two. However, with the acquisition of Levins and Wolf there will be more opportunity to compete.

Bob’s Discount has taken the aggressive strategy, skipping over to the West Coast to engage Jerome’s, Living Spaces, and MOR Furniture For Less. While Art Van has limited expansion within six hundred miles to utilize existing warehouses/transportation, Bob’s Discount has established new warehouses to enable future expansion.

Big Sandy has moved outside of West Virginia, a state they dominate, to enter the Columbus, Ohio market. The existing competition of regional chain, Morris Home, and local independent, Front Room, will present a competitive challenge.

Grand Home Furnishings continues its growth with a dominant position in excess of 20% market share.

While shown as competitive, both Room and Board and Baers are major participants in the upper/premium market and do not compete with the more middle price point retailers.

Regional Chains – Grow or Be Acquired

                  Those regional chains that are in more than four markets with sales over $100M are faced with the dilemma to grow, defend, or be acquired.

Each of these retailers are powerhouses in their respective markets, having, in most cases, dominant market share. As the expanding retailers consider their expansion, each of these players will be a barrier to their expansion plans.

In Wisconsin, Bob’s Discount has entered several markets in competition with Steinhafel’s. Obviously, Chicago has become a hotbed of activity with both Art Van and Bob’s Discount entering the market in competition with Room Place and Darvin’s Furniture.

In the North East, Bernie & Phyls, Jordan’s, and Cardi’s Furniture are vying for the consumer furniture expenditure as indicated by the red shading on Map #2, Grow or Be Acquired.

In the last year Furniture Factory Outlet has increased their market footprint by over 130% along with Living Spaces with more than 120% with an additional expansion into Texas just announced.

While operated as separate entities, the Berkshire Hathaway companies when combined easily fall into the category of national presence with a presence in 20 markets and a market footprint of 14% nationally. With that presence they easily could be an acquirer and be included in the national presence category.

Regency Furniture is a silent participant, expanding by acquiring. From its base acquisition of Marlo Furniture, it has acquired Mealy Furniture and is continuing its growth.

Jerome’s has expanded from its San Diego base into Riverside and Los Angeles and will be a formidable competitor to the new expansion of Bob’s Discount.

City Furniture is continuing to expand in a very competitive market against Kane’s and Eldorado.

American Furniture Warehouse, a dominant player in Colorado, has entered the fray in Phoenix and just announced plans for Houston.

HOM remains a dominant force in the Minnesota market, sharing the space with Slumberland, Becker Furniture World, and Schneiderman.

Hanes Furniture, while having a traditional furniture presence in Virginia Beach, has a national presence with its The Dump brand. While a different business model, it is a significant competitor to both upper/premium retailers as well as the more middle market. 

We should not neglect to identify those powerhouse retailers that dominate their markets for any expanding retailer. These retailers typically, with more than 20% market share are difficult to unseat. The major retailers with a national presence with difficulty attain 5.8% market share. This fact should weigh heavily on the decision to acquire versus expand. Obviously, dominant market share is relative in relation to market size. The graphic is provided for strategic thought.

It is a critical time for retailers to decide their critical path. It is attractive to consider being acquired especially if there is no ownership/management identified. Likewise, it is attractive to expand to increase the potential value of the company. Expansion capital may be difficult to find without loss of equity. And the final thought is to stand a fight. All viable, all with risks and rewards.

Last Mile – Last Chance to Make a Lasting Impression

March 12, 2018   by Jane Chero in Business Strategy, Industry   

Now the last mile is under intense focus as the ecommerce boom makes delivery an important strategic focus. In all industry sectors, the last mile has become the highest growth sector in the logistics industry, as well as the most expensive.

Now logistics is becoming the front line of the customer experience as retailing takes a step back. In essence, can logistics effectively provide a great customer experience at an affordable price? Retailers are challenged to maintain control of the customer experience while losing in store contact.

Simply put, the consumer’s perspective is what I want – while I want – when I want. As recently quoted in a study on logistics, we are now in the age of the individual economy, “Iconomy,” for short. In the latest consumer survey by FurnitureCore, Consumer Intelligence, the demand for immediate satisfaction is evident with more than 24% receiving delivery of their order the same day and more than 65% receiving within a week.

The ability to achieve this objective is driven by the fact that most retailers strive to maintain an in stock position of the majority of their merchandise. From a consumer perspective this was achieved more than 70% of the time.

It should be noted that one of the largest retailers, Ashley with its 800 stores, has achieved that success by not promising same day delivery, but by fulfilling orders from its national network of distribution centers. They are able to accomplish this because Ashley is the manufacturer and can control both the production and logistics. One of the major strategic discussions in logistics across all industries is the DTC (direct to consumer) concept. Currently 52% of all last mile service providers offer DTC as a service. Will logistics providers begin to leverage their expertise with ecommerce customers to enable seamless DTC roll-outs for manufacturers?

The possibility of a manufacturer delivering directly to consumers for their retail partners could address several of the major furniture retailing issues: low inventory turns and obsolescence.

Any discussion of this leads to the fear that suppliers could skip the retailers entirely and sell directly to the consumer. For manufacturers it is a strategy worth considering because of the inability to achieve distribution in all of the 400+ markets (MSAS), especially in the upper/premium price points. Retailers with inventory turns of 3.3x (industry average) produces a poor return on investment.

Ashley is not the only manufacturer/retailer providing last mile services to their retail partners. La-Z-Boy, as well as several accessory and rug suppliers have implemented this model. One of the issues that brought last mile services to the industry’s attention is the ecommerce suppliers offering “free delivery.” But the truth lies in the detail with free delivery meaning to the garage/curbside. The perception is still there, however. The fact is, according to FurnitureCore’s most recent survey, the majority of all purchases were not charged a delivery fee.

Patrick Cory, president of home delivery powerhouse Cory Home Delivery, said white-glove delivery services can be a competitive advantage for brick-and-mortar stores, but it’s critical for them to make consumers understand the differences between white glove service and other types of delivery.

“If you’re taking a box and putting it in the (consumer’s) driveway or taking it to the front door of their house, that’s not delivery. That’s drop-off,” Cory said. “Delivery is when you bring the box – or multiple boxes – inside the home, inspect the product, assemble it in the room of choice, and remove all the trash and packing materials so the consumer can use it immediately.”

And he said it’s also important for consumers to understand that type of delivery can cost an additional $100 to $200.

“If you just have furniture in one small box, or maybe a couple boxes, drop-off could be okay,” said Cory. “But that doesn’t work for someone who just bought a $2,000 sofa or a $6,000 leather sectional.”

While Cory said 99% of his company’s deliveries are white-glove service, Schneider and a number of other last-mile carriers offer multiple levels of service from curbside to threshold to white glove.

“I think there’s some opportunity for misunderstanding (about the type of delivery service), but there’s also a lot of opportunity for the consumer to call for clarification before the delivery takes place,” said Bob Elkins, senior vice president and general manager of Schneider Dedicated Services. “I think it’s driven more by consumer choice.”

Schneider instantly became a major player in last-mile delivery when the company acquired last-mile major Watkins Shepard in June 2016, and Elkins said it continues to be one of fastest-growing segments of Schneider’s business.

What used to be a profit center for traditional retailers has become a loss of about a point on the bottom line. The graphic below presents the results of a recent survey of traditional retailers conducted by Impact Consulting, parent company of Home Furnishings Business.

Traditional retailers have responded to the ecommerce challenge by changing their delivery options. Customer pick-up has been a standard along with white glove installed. Now, many retailers are offering variations from threshold to inside the room of choice. A survey of furniture retailers conducted by Impact Consulting provides an adoption percentage.

What Type of Delivery Provided?

​If the consumer was charged for delivery, what was the charge? In the same Impact Consulting survey, the majority of retailers were charging $75-125 for white glove/installed. It should be noted that the variance between markets were substantial. Obviously from the results, it is a competitive element.

There was some variation in how the delivery charge was determined. However, the majority focused on distance.

Interestingly from a consumer’s perspective of delivery fees from all distribution channels, the fee was determined by purchase amount. Traditional retailers may want to consider this perception. In our experience, the consumer is often confused by a charge for a single piece versus a total room.

The most expensive type of delivery is white-glove service that is done same-day or next day. Delivery executives say it’s a popular option in a few hyper-competitive markets, but most don’t believe it will catch on nationwide.

Why? It adds 20 percent to 30 percent to the cost of the delivery, and also results in a higher percentage of mistakes in filling orders.

“I think urgency is important up to a certain point. The majority aren’t willing to wait three weeks … but somewhere between same day and three days is the magic number,” said Rob Davis, vice president of client solutions at Diakon Logistics.

Davis said he understands that part of the retailer’s motivation for pushing same day or next-day delivery is that is takes the consumer out of the market for furniture purchases almost immediately, and doesn’t give them a chance to develop buyer’s remorse. However, he said he encourages retailers to impress the consumer “with a high-value delivery experience” that doesn’t necessarily include same day or next-day service.

“We don’t believe Mrs. Jones has a hard time waiting three days,” said Davis.

Elkins agreed, but said there’s still no question that transit times are contracting and consumers “are wanting things sooner rather than later.”

“We used to deliver Monday through Friday. It’s now ‘I want it delivered after Mass on Sunday’,” he quipped.

The use of third party delivery services has grown exponentially in recent years. But, it is still below 50%.

However, there is significant opportunity for growth. When we asked traditional retailers if they would consider outside delivery, it was a positive response.

Would You Consider an Outside Delivery Service?

Those results weren’t surprising to last-mile delivery executives who spoke with Home Furnishings Business. All said their businesses were growing rapidly, and they believe the market for their services is nowhere near a peak.

“It’s still consistently growing,” said Davis. “Our business has seen about a 15 percent increase, year-over-year, for the last three years.”

Obviously, one of the drivers to using outside delivery is the retailer’s strategy as it concerns ecommerce. In the same Impact Consulting survey, it was obvious that ecommerce is on the minds of the senior executives with over 63% responding yes to the question, “If you do not have an ecommerce channel will you execute in the next 12 months?”

Cory, among others, thinks that strategy might work for a larger regional retailer, but said smaller retailers, especially those who operate in a single market, still have a tough time competing even with a vibrant ecommerce site. He believes the only way for these retailers to survive and thrive is to offer products not available from larger competitors and combine that with top-of-the-line personal service and heavy involvement in the local community. 

“If you’re a small retailer and you try to go head-to-head with Bob’s or Rooms To Go, you’re out of business,” Cory said.

Cory and other delivery executives said mattress deliveries – whether the product was purchased in-store or via an online “bed-in-a-box” company – also are becoming more complicated. In-store purchases take more time to deliver because as many as half of new mattresses are purchased with an adjustable bed base, while online merchants are often flummoxed by returns, which average 7 percent, according to recent research by Consumer Reports magazine.

“Adjustable bed bases are heavy, they’re more complex, they take programming, and sometimes they don’t work right,” said Davis. “We may have to cost out our mattress deliveries differently in the future because of all the adjustable bases.”

And for the bed-in-a-box retailers, it’s not only returns that cause headaches. Even the satisfied bed-in-a-box purchaser frequently doesn’t know what to do with the old mattress it is replacing.

“In most states, you can’t just set a mattress at the curb or take it to a landfill anymore,” said Cory.

As a result, he said some online mattress companies have shown interest in retaining a delivery service to pick up old mattresses or new ones the consumer doesn’t like. Some bed-in-a-box companies tell a dissatisfied customer to donate the mattress to a local charity, but it’s increasingly difficult to find charities that will accept used mattresses, he pointed out.

But after the delivery is complete, the need for a third-party provider may not end. There’s also increasing demand for third parties that handle service calls for retailers, and that plays into the wheelhouse of companies such as ServeCo., an Atlanta-based conglomerate of home furnishings-related entities.

ServeCo President Chris Schall, in fact, said third-party service contracts are the fastest-growing part of his business. That’s because retailers easily can become overwhelmed with all the details involved with executing a service call.

“We’re about protecting brick and mortar. They can have the service element that’s necessary for their success, but without expending too many resources,” Schall said. “We tell retailers they should be focused on merchandising, marketing and sales. Too many retailers get lost in service.”

He said ServeCo can handle damage claims, warranty issues, on-site repairs, and even process the paperwork for vendor chargebacks. Plus, the company operates call centers in Woodstock, Ga., and Somerset, Ky., that can handle service questions and dispatch technicians when necessary.

He said that relieves a retailer of the burden of, for example, managing a group of independent technicians and keeping track of billing them individually.

According to Schall, ServeCo clients typically experience a 20% increase in vendor chargebacks, but he stressed they’re not abusing the chargeback process. Retailers who try to do it for themselves often find the process too time consuming and fail to follow up properly, he insisted.

“That’s money that they were already owed, but it was falling through the cracks,” Schall said. “So in a lot of cases, our program pays for itself.”