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From Home Furnishing Business

Eye on Consumers

By Powell Slaughter

LANDING CONSUMERS INTERESTED IN “GREEN” HOME FURNISHINGS CALLS FOR EDUCATION, CAREFUL LANGUAGE.

With issues such as formaldehyde emissions from furniture and hazardous fire retardants in upholstery and mattresses making headlines, consumers are indeed more concerned about environmentally conscious purchasing when it comes to home furnishings. And some are willing to spend a little extra to ensure the goods they buy are more earth friendly. Those are among the key takeaways from the 2013 Green Home Furnishings Study, conducted last spring by Impact Consulting and underwritten by Mitchell Gold + Bob Williams for the Sustainable Furnishings Council. Nationwide, 460 consumers took part in the survey. Almost three-quarters, 72.5 percent were age 25 to 54; 62.3 percent reported income between $50,000 and $150,000; and 54.3 percent plan to spend the same or more on home furnishings in 2014.

Important conclusions from the study include:

·         Style, quality, and price are the top factors for consumers when they make their next furniture purchase. That is, “green” product still has to fit those other considerations—eco-friendliness isn’t enough.

·         42.9 percent of respondents shop the Internet before going to a furniture store. Education of consumers about living green, a key take-away from the study, has to take place online as well as in the store.

·         Two factors indicate that consumers are adapting their lifestyles to environmental awareness: 76.3 percent are replacing light bulbs with compact fluorescents; and 75.5 percent are recycling in the home.

·         There is still a price concern about eco-friendly product: 58 percent of respondents believe that if a product carries a “green” claim it will probably cost more.

·         Highlighting the continuing need to make consumers aware of environmentally responsible home furnishings, less that half of respondents, 46 percent, were unaware of any “green” home furnishings; and 45.2 percent would be definitely interested in buying such furnishings as long as the styling and cost were about the same as non-green alternatives.

·         Half of respondents, 50.4 percent, were “definitely interested” or “very interested” in purchasing wood furniture that was certified as “legal” rather than wood furniture that did not carry this certification.

CONSUMERS NEED TO KNOW

SFC Executive Director Susan Inglis said there’s a growing amount of goods made in North America (lower fuel impact), certified woods and recycled materials in just about any furniture store. The problem is, a lot of consumers just don’t know it.

“There is a great deal that sales people can talk about,” Inglis said. “The consumer, of course, always wants their style at their budget. But these ecoattributes are available in all styles and at all price points, so retailers stand to gain by simply talking them up. Consumers respond to what they care about; when they are given their favorite ‘feel good’ as well as their style and price point, they are more likely to buy immediately.”

A high percentage of Minneapolisbased Room & Board’s 15 showroom floors nationwide comprises product sourced in the United States; or has another green story, such as certified wood. It doesn’t come up a lot from consumers, but the retailer has plenty of talking points for those who are interested.

“From a consumer standpoint, there’s a percentage—not a big one—who will ask how eco-friendly a product is,” noted Steve Freeman, vendor resource manager at Room & Board. “… There’s more on the radar now with the health issues around chemicals and foam. Mitchell Gold, co-founder and co-chairman of Mitchell Gold + Bob Williams, which operates retail stores in addition to selling high-end upholstery wholesale, hopes eco-friendly product eventually will be a given. Remember “dolphin-safe” tuna? You don’t see the designation on cans anymore because it’s become a standard for tuna sold in this country.

“Consumers would pay more, but they think green should be par for the course throughout the industry,” Gold said, adding that retailers looking to tie in to a growing green consumer base, they still must “communicate what they have and do.”

THIS JUST IN

During follow-up surveying in December, Impact Consulting found a couple of areas that had changed significantly since the original April survey for the SFC.

Following is a sample:

·         54.3 percent respondents in April said they plan to spend the same or more in home furnishings in 2014. Where respondents were queried in December, that percentage was up to 75.3.

·         When asked to rate from 1 (very important) to 7 (not at all important) the importance of “good for the environment ” in making their purchase, 34.2 percent respondents answered 1 or 2 – in December the percentage offering that rose to 44.7.

·         Overall, concern about various environmental issues (1=very concerned; 7=not at all concerned) remained about the same or even. Respondents concerned about global warming fell from 26.7 percent to 21 percent in December; and the percentage that doesn’t believe in it rose from 18.9 to 24.


 

 

 GREEN BUYING TRENDS

The importance of education and making consumers more aware of green purchase options was reflected in a couple of changes in survey responses from April to December. For example, the percentage of respondents who say they have purchased green products in nine consumer categories ranging from automobiles to paper products fell for all sectors, including a drop in home furnishings from 10.4 percent in April to 6.4 percent in December. Consumer objections to purchasing eco-friendly home furnishings remained roughly the same with couple of exceptions that bode well for the availability and look of such goods: “not available where I shop” fell from 18.9 percent to 13.7 percent; “did not suit my style” dropped from 12.2 to 7.7 percent. And consumer interest in green furnishings improved over the course of 2013. Survey respondents “possibly”,  somewhat,” or “definitely interested” ticked up from 39.5 percent in April to 43.7 in December.

Again, on the need to make consumers aware aware of their options, the percentages of respondents who’ve heard of these green options in home furnishings—certified wood, reclaimed wood, rapidly renewable resources, latex or bio-based foams, organic fabrics, recycled content, Energy Star-rated, social equity code of conduct—declined in all cases.

WATCH YOUR LANGUAGE

The Green Home Furnishings Study also found that while some consumers are interested in eco-friendly product, there are words you want to use in describing attributes and words you don’t. In both April and December, respondents were asked their preference for terms that could be used to describe products that are good for the environment, with 1 being their favorite and 6 their least favorite.

From top to bottom, the list remained the same: “Sustainable,” Eco Friendly,” “Environmentally Safe,” “Green,” “Eco Conscious,” and “Pro Planet.” Apparently consumers still have “radical” connotations for the terms at the bottom of the list. In a nutshell, don’t beat them over the head. And with so many terms floating around, the SFC’s Inglis cautioned retailers not to add to the confusion with “greenwashing,” that is, promoting misleading or unsubstantiated environmental claims for products.

“Where does the confusion lie? A lot of companies make claims without knowing what it is they’re claiming,” she said. “I think there is a lack of clarity about what’s a valuable claim to sustainability.” Cotton, she pointed out, is a “natural” material, but one whose cultivation and processing has a high environmental impact. Fabrics incorporating bamboo—a rapidly renewable resource—sound good, but the finished product often has high rayon or other content.

“It uses a lot of water and harsh chemicals, though some have modified the process to make it an eco- friendly product,” Inglis said. “Or someone might say ‘It’s made with MDF, using recycled materials.’ That industrial waste wasn’t going to the landfill anyway—useful industrial waste is going to get used. What you have to ask is, “Is it post-consumer recyclable material?” HFB

Environmental Report Card

By Powell Slaughter

HOW DOES OUR BUSINESS STACK UP IN TERMS OF RESPONSIBLE ENVIRONMENTAL CITIZENSHIP?

October 2001. Anyone who was there might remember that High Point Market as something of an out-of-body experience. People wondered how they could worry about selling furniture in the aftermath of terrorism’s worst strike on where we live.

The nation and the industry were in a stunned mode, but that was when Gerry Cooklin, CEO of now-defunct vendor South Cone—and a native of Peru, a country torn by terrorism long before it invaded our space—issued a call to the furniture industry when the company hosted an anniversary party at High Point’s Spring & Splinter Club. Cooklin had long been concerned about the furniture industry’s environmental impact, and the importance of sustaining the forests that provide the bulk of its raw material.

He spoke of balance and harmony with the earth. That all sounds pretty touchfeely for an industry that looked with horror upon mahogany protesters hanging banners from the High Point’s International Home Furnishings Center during the 1990s, but Cooklin’s call eventually led to the establishment of the Sustainable Furnishings Council, which today counts a fair share of old-school furniture names among its membership.

As an issue and as a talking point for the industry, sustainability is here to stay. A decade-plus later, how do we stack up when it comes to watching out for the resources we use; our impact on the communities surrounding our operations; and the consumers we serve?

A LOT OF PROGRESS

In addition to activities at the SFC, which includes vendors and retailers, the American Home Furnishings Association has worked hard this millennium to encourage sustainable practices among its membership. Pat Bowling, vice president of communications at AHFA, said there are two ways of looking at how well the furniture industry is doing with regard to sustainability and eco-friendliness.

“Are furniture companies making progress in terms of sustainable operations, and, as an industry, are we producing and marketing eco-friendly products to meet consumer demand?” she said. “AHFA primarily concerns itself with the first aspect—developing ways to help furniture companies move toward more sustainable operations. We promote environmental awareness and improved environmental management among manufacturers as a ‘best practice’ within our industry. These are ‘best practices’ because environmental stewardship is a key ingredient in being a good corporate citizen.”

Those best practices steps reduce waste and lead to greater efficiency, which leads to greater sustainability. While AHFA has many member companies working to produce and market ‘green’ or ‘eco-friendly’ products made from eco-friendly components, its work, as an organization, has been more on the sustainability front. “Have we made progress?” Bowling said. “Yes. Fifteen years after its introduction, AHFA’s environmental management program (EFEC—Enhancing Furniture’s Environmental Culture), continues to grow. As of this month, 14 companies have implemented EFEC in 79 different facilities, including one La-Z-Boy facility in Mexico.” Counting the Heritage Home Group companies separately, all of which have installed EFEC in at least one domestic facility, that total is 23 companies. Seven of those companies have taken their commitment a step further with AHFA’s Sustainable by Design program, which extends EFEC’s culture of environmental stewardship throughout a company’s global supply chain.

This year, AHFA will roll out its new carbon calculator; and soon after will start publishing industry best practices, followed with an annual Furniture Industry Sustainability Report.

There is far more awareness throughout the industry of the importance of sustainability issues, according to Susan Inglis, SFC executive director. Those include problems of toxic waste pollution such as carbon monoxide emissions; poor indoor air quality; and good management of wood and other natural resources. “But there is still a lot of confusion in the industry that does sometimes lead to ‘greenwash,’” she added. “Consumers are pretty clear that they want environmentally safe furnishings and they are often more clear than the retail sales staff about what that means.”

Take the recent “Toxic Hot Seat” HBO examination of fire retardants in furniture as an example. Such reports are what a lot of consumers are bringing along when they walk through a retailer’s door, and retail sales associates need answers in hand when questions arise about a product’s safety.

“SMALL BUT IMPACTFUL”

Inglis believes that while progress has been made toward sustainability, home furnishings as a sector hasn’t caught up with larger industries such as construction, paper and tourism. The good news is those sectors have laid plenty of groundwork. The SFC incorporated initiatives begun in those other industries in its list best practices for furniture companies to follow when looking to increase their sustainability quotient. And since so much of our sector’s raw material depends upon natural resources that must be sustained, the industry can have an impact beyond its dollar numbers relative to other areas.

“Those larger industries have laid a lot of the groundwork so there is a lot of low-hanging fruit for manufacturers and retailers to seize, including new non-toxic and low-impact materials, and also greater consumer awareness,” Inglis said. “We can take advantage of what they’ve done, because those industries have been an impetus for the increasing supply of responsibly sourced raw materials.

“Manufacturers need to be asking their suppliers for non-toxic and lower-impact alternatives to the materials they need for manufacturing our furnishings products. Many more excellent alternatives are available now than were on offer even just a few years ago.”


 

A SIMPLIFIED APPROACH

SFC board member and Co-Chairman of Mitchell Gold + Bob Williams Mitchell Gold gives the industry a “B” for the improvements it’s made in the past 15 years. “Yes, (we’re) doing better,” he said. “Consumers are demanding a greater attention to preserving the environment and safe products so many companies are trying more than ever—some kicking and screaming, and some embracing it.

“Every company, wholesale and retail should join and support the Sustainable Furnishings Council, and that is not the case now,” Gold said. “The SFC is constantly updating best practices for the environment, and factory and home safety.” SFC recently reformatted its standards for vendors to qualify for under organization’s “Exemplary” status in sustainable product. (The new format can be found online at http://tiny.cc/8ezb9w.) Inglis said the length of the old form might have put off companies that were in reality making strides toward sustainability. “We wanted to make it easier to recognize companies that are doing good things, and to get other companies excited about doing good things themselves,” she said of the new form. “It’s a shorter document, and you can attach documents that prove what you’re doing. We hope this will make a difference, and encourage more companies to participate.

“In the new format, manufacturers see the requirements laid out first—that they are public about their commitment, that they are measuring the reduction of energy use, that they are looking out for their suppliers as well as their employees, that they are careful in materials choices and procurement procedures. Then they can earn Exemplary recognition at the Bronze, Silver, Gold, or Platinum level depending on specifics around their operations, their products, and their outreach. We are excited that many more deserving companies will be able to earn the recognitions now that it is all laid out more clearly.” HFB

 

“Manufacturers need to be asking their suppliers for non-toxic and lower-impact alternatives to the materials they need for manufacturing our furnishings products.”

SUSAN INGLIS
Sustainable Furnishings Council

 

New Measurements

AHFA IS DEVELOPING “CARBON CALCULATOR,” SUSTAINABILITY REPORT

The American Home Furnishings Association has spent several years developing a standard reporting system to collect data from companies participating in its EFEC program. This reporting system will lead to the development of an AHFA annual sustainability report, which will highlight the achievements of the industry as a result of implementation of AHFA’s sustainability programs. “One of the keys to generating this report has been the development of an AHFA ‘Carbon Calculator,’” said Bill Perdue, AHFA’s vice president of regulatory affairs. “We are refining this tool to enable companies to accurately report reductions in common greenhouse gas emissions. It also records reductions in water usage and waste, as well as recycling achievements. The result is an accurate carbon footprint.

The calculator gives companies the ability to track, measure and reduce the overall environmental footprint of their facilities while realizing immediate cost savings.

“With this tool, we will be able to recognize and document the achievements of the industry. AHFA member companies over the past several years have not only embraced sustainability, they continually press forward seeking incremental improvement.” The goal is to help AHFA member companies tangibly reduce their environmental footprint by implementing proven reduction strategies. “One of the primary tenets of the EFEC program revolves around the axiom ‘you don’t do what you don’t measure,’” Perdue said.

Final Destination

By Powell Slaughter

80-YEAR-OLD RETAILER DISCOVERY FURNITURE RE-INVENTED ITS BRAND AS FURNITURE MALL OF KANSAS.

 

Re-invention is a tradition at the Topeka, Kan., Furniture Mall of Kansas, which opened this past Labor Day weekend. The destination concept arose from Discovery Furniture, which itself is an umbrella brand established in 2000 by Winter Furniture, a family owned retailer with roots going back to 1933. The thought process that led to the mall began when another area retailer, Marling Furniture, had closed in November 2012. Discovery believed the

Marling name still had cache and acquired rights to the brand, but already operated several stores carrying multiple brands, including Discovery and Roommakers for furniture; Mattress Headquarters for bedding; Abbey for flooring; and a separate Ashley Furniture Homestore. Furniture Mall of Kansas opened in Topeka’s Westridge Mall this past Labor Day weekend in an 180,000-square-foot space that was formerly a Macy’s location.

FULFILLING A VISION

The site, which Discovery bought, was a good fit for the Furniture Mall destination concept, designed by Martin Roberts, with two floors and five entrances that helped define the various brands with different entrances for different brands. The mall grew from Discovery’s vision to be the best at answering three questions:

What do customers want?

How can we give it to them?

How can we make it better?

“This line of questioning is what led us to open competing stores and what has led us to combining all our store brands into one easy to shop furniture mall,” said Co-Owner Jeff Winter. “The vision is translated into all areas of our company through constantly asking those three questions and putting the answers into our best actions—and then doing it over and over.” Examples include the retailer’s move to iPads in the store so that sales associates—called “home specialists” at Furniture Mall of Kansas—don’t have to leave the customer making them wait.

“One thing customers want is speed—quick answers or not to be left waiting to write a sale or get a special order price,”

THRIVING ON COMPETITION

Furniture Mall of Kansas isn’t the only furniture “destination” in its region—Nebraska Furniture Mart has a location not far down the road in Kansas City. “Of course we have competition, but if our focus is on competitors our customers lose,” Winter said. “Our focus must be on customers and what we can do to be the best at giving them what they want—and that is more than a full time job.” Winter pointed to several keys in how Furniture Mall of Kansas differentiates itself.

“We do lots of training for our home specialists so they can truly be their best at helping customers,” he said. “Most customers appreciate genuine help from a knowledgeable specialist in making the best decisions for their home, but none like to be sold.” The store also belongs to the Furniture First buying group. “That helps us buy like we are a billion-dollar store, while still allowing us to individually pick items that are fashion right for our customers,” Winter said. “They also provide many learning opportunities and relationships with other furniture retailers that keep us at the cutting edge of retail and how to give customers more of what they want.”

It’s a given that a good retailer must put a lot of effort into display and accessorizing room groups so customers can better visualize how things can look in their homes, but Furniture Mall of Kansas didn’t stop there. “This led us to help fill the need of our customers to better accessorize their home by offering seasonal design classes,” Winter said. “The attendance continues to grow, and our three “Holiday” classes had an attendance of 990 women.”

Finally, the furniture mall blends five individual stores in one easy to shop location with a hands on, family based approach to the business. “Our customers want a large selection to choose from, but don’t want it to be overwhelming, while still wanting personalized attention and service,” Winter said.

NO COMMISSION

Winter believes a big part of creating a friendly shopping atmosphere was Discovery’s decision in January 2008 to move from commission to non-commission compensation for its sales force of “home specialists.” “Our focus on the customer is what drove the change,” he said. “Pros are better customer experience, willingness of specialists to work together as a team including training new specialists; and better staffing to traffic by using part time specialists on the weekends.” The challenges are that non-commission demands closer management, better measures and feedback to help grow customer experience.

“Sales cost as percent of sales is not fixed but a variable expense, and therefore has to be managed,” Winter added. “We determine pay rates and raises in annual reviews based on the specialists performance in three areas: happy customers, team work and contribution level.”

LONG FAMILY TRADITION

What’s now Furniture Mall of Kansas had its beginnings in 1933, when Ben and Eva Winter opened the “Howdy Come In” lunchroom, gas station and frozen homemade custard shop west of Emporia, Kan., on Highway 50.

The furniture operation began the day a hitchhiker stopped at “Howdy Come In.” One of his two suitcases carried the man’s cabinet-making tools; and the Winters hired him to build a chifferobe for their new son, Bobby (who still works in the business as a co-owner), and a partnership was born.

The Winters soon converted a dairy barn to Winter Furniture, where they sold new and refurbished furniture; and moved the store into Emporia several years later.

Bob Winter and his wife, Joyce, moved to Denver, Colo., where Bob worked as a furniture buyer. The couple returned to Emporia as partners in Winter Furniture and moved the business to Topeka in 1995. Jeff Winter, grandson of the founders, and son of Bob and Joyce, came in as a third-generation owner along with his wife, June, in 2000. Jeff had worked as an engineer and manufacturing executive at Maytag for 16 years before returning to help open Discovery Furniture by Winter that year.

Discovery opened a 40,000-square-foot sister store, RoomMakers, carrying Ashley goods in 2003 in Topeka; and a 30,000-square-foot Ashley Furniture Homestore in Salina a year later.

After Bob and Joyce’s youngest son, Jamie, joined the business in 2010, the Winters opened a fourth, 45,000-square-foot location that included Discovery Furniture and Roommakers, along with a new Mattress Headquarters store, in Lawrence in 2010. Jamie had spent 16 years as an engineer and manufacturing executive for Motorola. That included living in China for four years with his family while starting and growing an automotive electronics factory.

PULLING IT ALL TOGETHER

The Furniture Mall of Kansas represents the fulfillment of a brand promise that started with Winter Furniture and continued with Discovery Furniture: friendly, trustworthy and expert assistance on the floor; and a big range of reasonably priced goods and categories. The closing of Marling’s Home Furnishings, which had served Kansas for 75-plus years, and Discovery’s acquisition of the name created an opportunity to pull its spreading brand position under one roof. Rather than open yet another store, the retailer pooled its assets.

“We know people are busier than ever and we want to make shopping easier and more convenient,” Winter said. “We created the Furniture Mall of Kansas to do just that.” The concept blended trusted regional furniture retailing names with a small-store comfortable feel and attention to customers; with the convenience of broad selection in one location. “Our desire is for our customers to have a legendary shopping experience—where they are wowed by the big selection, guaranteed low prices, and personalized high service,” Winter said. HFB

 

Furniture Mall of Kansas at a Glance

Headquarters: Topeka, Kan.

Founded: 1933

Six brands in three retail locations: 180,000-square-foot Furniture Mall of Kansas with Discovery Furniture, RoomMakers, Mattress Headquarters and Marling’s Furniture brands; a 45,000-square-foot “mini-Furniture Mall” with Discovery, RoomMakers and Mattress Headquarters brands; and a 30,000 square-foot Ashley Furniture Homestore in Salina.

Warehouses: 50,000 square feet in Topeka; 6,000 square feet in Salina.

Employment: 130 full- and part-time employees.

Key management: Co-Owners: Bob Winter, Joyce Winter, Jamie Winter, Jeff Winter, June Winter, and Jeanne Winter.

Revenue: $15-25 million

Web Site: FurnitureMallofKansas.com

Key Vendors: Ashley, Flexsteel, Thomasville, England, Southern motion, Amish Impressions, Tempurpedic, Serta, Sealy, Mattress 1st, Stressless, Aspen, Magnussen, Best Home Furnishings, Bernhardt, Universal, Legacy Classic, Mohawk, Shaw, Beaulieu, Daltile, Lexmark, Milliken and more.

Dining In

By Sheila Long O’Mara

Formal dining rooms and casual dining areas are being used for things other than simply eating and sharing meals. According to a Home Furnishings Business consumer survey conducted last month, people are using their dining areas as a central hub of their households. All sorts of activities are taking place around dining tables, including sitting around the table and talking, homework time, watching television, paying bills and catching up on office work. The dining area and the dining table, formal or casual, has become the work center for many households. The kitchen and dining table have become quite the hub.

 

 

 

According to our survey, families seem to be heeding the advice of the experts who encourage bonding over the dining table. Nearly 84 percent list table talk as their top activity at the dinner table in addition to dining. That chatter is followed by all the buzz of work time. Most likely as it’s an easy location for parents to keep an eye on studying children while multi-tasking with dinner and after-meal, clean-up duties.

A key marketing tool to growing sales in the dining category could be for retailers to emphasize other activities that take place at those all-important tables. Not surprisingly, nearly 70 percent of our consumer panel said the dining furniture they just bought was for a casual dining area, and not a formal dining room. More than 50 percent of them said the casual dining area in their home was a separate area outside of the kitchen.

About 45 percent of those casual dining area’s are now the proud home to contemporary furniture. Another 23 percent of the consumers bought traditional dining furniture, and about 14 percent of the consumers described their purchases as rustic country.

Most of the casual dining purchases were crafted of wood (78.1 percent) while another 21.9 percent were of mixed materials. Of consumers who classified their dining purchase as formal dining, more than 40 percent put it into the traditional category. The style classification drops off significantly to 28 percent contemporary; 15.6 percent rustic country and 9.4 percent European country.

Those buying formal dining, most (84.4 percent) bought wooden furniture.

 

 

Creature Comforts

When it comes to additional features and function available in casual dining tables, 64 percent of the consumers list a protective finish on the table top as the most valuable feature—one for which they’re willing to pay. That finish is followed by a leaf storage within the table at a distant second place with 42 percent. For the casual dining sideboard or cabinet, consumers weren’t as much in agreement as on features for the table. However, a few features rose to the top, including felt-lined silverware drawers (30 percent), built-in wine racks (23 percent) and hidden storage for small appliances (23 percent).

In their formal dining table, consumers are a bit more demanding. Two expandable table leaves are at the top of their wish list at 56 percent, followed by leaf storage within the table (54 percent) and a protective finish for the table top (47 percent). When looking at the sideboard or china cabinet for formal dining, consumers top wants include a felt lined silverware drawer (50.1 percent), hidden storage for appliances (31.3 percent) and a built-in wine rack (25.1 percent).

What Retailers Say

 

THE HARTFORD TABLE BY


PALETTES BY WINESBURG

It’s made in the U.S.A. of solid cherry with high-quality, Amish construction. It’s an easy story to tell that the customer appreciates and understands. After the story is told, the customer understands the value that this heirloom quality furniture really is.” Maynard’s sells the table with chairs from the company’s Prestige collection. Table with six chairs retails at $2,599.

Alderman Maynard

Maynard’s Home Furnishings

Belton, S.C.

GO 400TK FROM

STEVE SILVER

“The mango color seems to be in right now, and it goes with a wide variety of dining room and home environments. This group has a great look for the money, an exceptional value.” The seven-piece set in mango retails at $798.

Dave Harkness

Harkness Furniture

Tacoma, Wash.


 

 

CANYON TRESTLE TABLE FROM KEVIN CHARLES

FINE FURNITURE

“Part of City Furniture’s propriety brand, this group’s classic design brings casual elegance to a dining space.” Retail is $2,299.90 for table, four chairs and credenza.

Vanessa Northrop

City Furniture

Tamarac, Fla.


Quail’s Run from Winners Only

“It is a light wood table set, offered in different colors choices, with multiple chair styles and table heights.”

Sheryl Ouimette

Rotmans Furniture

Worcester, Mass.


Selva’s Waldorf Table

“The piece embodies classic elegance and modern splendor that captivates the essence of hospitality,” said Philipp Selva, president and CEO. “The inspiration for the stainless steel base came from the Waldorf Astoria in New York. The clear lines of the table legs intentionally form the W of the Waldorf Astoria. It is a distinctive piece that captures the Selva touch in the design.”
Retail is $14,266.

 

Waverly From Cresent Fine Furniture

Industrial Modern design meets everyday durability in the Waverly dining collection,” said Richard Tomkins, director of sales and marketing. “Crafted in sustainably forested solid acacia with a wire-brushed finish, Waverly is perfect for growing families and the centerpiece of family get togethers. The versatile dining bench can also be used in other areas of the home where space is at a premium.”

 


Artisan Home’s IFD962

“This table’s value makes it a great success for us,” said Diana Zaldivar. “Solid poplar tops, hand-painted finish and wrought-iron base at a suggested retail price of $499.

  Universal Furniture's Paula Deen Home Kitchen Island

“Islands that offer accessibility from both sides work well in the open floor plans of today’s homes. More than ever, the rooms in our homes are used for many purposes, and there is a need for items that are also multifunctional,” said Kevin Miller, director of marketing. “For example, consoles and desks are often found in the living rooms as the homework or bill-paying center. Likewise, this kitchen island with pull-out table, tons of storage, and stainless steel top serves as a great place not only to prepare food but also to eat meals, do homework, crafts, etc.” Approximate retail is $1,299 to $1,699.

 

Somerton Dwelling’s IMPROV B

“The transitional dining group appeals to consumers across multiple tastes, regions and age groups,” said Rita Ho-Bezzola, president. “Key to its popularity is Somerton’s Freestyle Living concept. Eight basic units include open shelf cabinets, glass or solid door cabinets and chest units that stack and restack to form servers, china cabinets, display cabinets and non-traditional cabinetry showing up in home today. The optional teal shelves add an elegant color accent to Improv in B’s warm walnut veneers. Whether it’s all storage or all display or something in between, Somerton Dwelling’s Improv in B dining delivers a broad spectrum of options.” Suggested Retail for table, four side chairs and two armchairs is $1,795 to $1,995.

 


Century Furniture’s OMNI Dining Table

“The Omni dining table has been one of our best-sellers for years,” said Comer Wear, marketing director. “The combination of a beautiful, sweeping silhouette with the gorgeous veneer work across the top makes this table stand out. In addition to selling it as it is shown, we have built it custom over 50 times—at 220 inches long, round versions as well as custom veneers across the top. It really speaks to customers.”


 


The Aspen from Simply Amish

“The Aspen’s namesake was the town, not the tree. But the town was named after the tree, so it’s a bit ironic that our most popular dining table is available in red oak, soft maple, cherry, character cherry, hickory, maple, quarter-sawn white oak, and walnut, but not aspen,” said Charles Curry, sales manager. “The dining table top gets three coats of catalyzed varnish, all stain is hand rubbed, the bottom of the table is finished so you won’t snag your clothes; the chair has a comfortable scooped seat and lumbar profile, real inlay, and a style that implies rugged sophistication. Standard options like a butterfly leaf, ball bearing slides, self-storing leaves, along with a myriad of size and stain choices make The Aspen our most popular dining table.”


 Greenington’s Currant Dining Collection

“Flexible in size with the extra leaf, the Currant’s clean design and smart scale fit well with many different home interiors,” said Mary Settle, marketing. “The beautiful grain and natural coloring of the solid bamboo make it a clear winner. Featuring elegant lines reminiscent of Mid-Century Modern, the collection is crafted in 100 percent solid Moso bamboo.” Suggested retail is $1,499.


Pastel’s Quanto Basta

 “The rectangular table with glass top features clean-lined Sonoma veneer wood frame and stainless steel base in a unique, yet simple design,” said Amber Chen, marketing coordinator. “The Quanto Basta side chair exemplifies handsome proportions and a bold design. With simple lines mixed with curves for comfort, this chair adds style and elegance to the dining experience.” Suggested retail for table and four chairs is $3,570.


The Zen Dining Collection from Creative Elegance

“It’s a clean and architecturally appealing design with a lot of options,” said Mark Popel, co-founder. “Since we make it in our own factory in Southern California, we do a lot of different size and configurations as well as offer a variety of woods and finishes.”
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Balancing Act

By Powell Slaughter

SALARY OR COMMISSION? NO ONE SIZE FITS ALL FOR HOW FURNITURE STORES PAY SALESPEOPLE.

Salary or commission, or some combination thereof? How you pay your salespeople is a question of your store environment, traffic and how your sales approach fits your business goals. Home Furnishings Business asked retailers and sales trainers for their thoughts on the topic—the former on what makes sense in their business model; and the latter on which compensation approach works for different sorts of retailers.

Short story: Commission is the best motivator for go-getters who want to hoe their own row; and salary—or some sort of guaranteed income—helps create a friendlier, less high-pressure environment for customers.

Which model, or combination of sure compensation and incentive, is a call you have to make on your own. Following are thoughts to consider when making that call.

Salary Vs. Commission

Home Furnishings Business asked several retailers which sales compensation they prefer—salary or commission. Read their responses throughout the following pages, starting here.

Commission

“To me, it’s the lesser of evils – in a perfect world, I’d love to have people work on salary, but the truth is we have a wide range of performance among our salespeople.

If I put everyone on salary, I’d have to pay my best people less. We do push in the element of a blend because we have a bonus system based on how well the store does.”

Richard Tubman
Circle Furniture
Acton, Mass.

 

Salary

“In my opinion, paying commission many times brings out the worst in an individual. When someone walks in the store, they know if someone’s working on commission.”

Bob Mills
Bob Mills Furniture
Oklahoma City

Base plus Commission

“The base is to compensate for the administrative tasks I hold them responsible for – we’re are fairly small and everyone has to do a lot of things.

“The sales commission is based on a minimum requirement of $30,000, when they get 6 percent. Once you $70,000 it goes up and so on. We pay 3 percent on closeouts – I gave up margin, so they give up margin.”

David King
DoMa Home Furnishings
St. Petersburg, Fla.

Commission

“We do a weekly draw and pay commission monthly. It keeps them hungry. It’s better for us and for them to have a sales force on the floor that’s motivated for high performance.”

Rick Howard
Sklar Furnishings
Boca Raton, Fla.

 

Commission

“We are commission. In sales, you are not paid to finish a job, the sky should be the limit. We want to keep the possibility of unlimited potential income out there for them. “The more you put into it, the more you get out of it.”

Jeff Selik
Hillside Furniture
Bloomfields Hills, Mich.

 

Base plus Commission

“We do a base and a draw against commission. The designers get more commission than the salespeople because they do the house calls and the big sales, and longer-term projects. “The sales team gets a base because they sometimes have to turn a customer over to the designers when it becomes obvious it’s a larger scale project that needs the extra service.”

Rosie Lebewitz
Rosenthal Furniture
Minneapolis

Salary

“We are a little bit of mutant in that regard. Everyone is basically salaried. In our operation people have lots of different jobs, and we don’t have straight salespeople. It can be difficult being focused on making the sale, but they have a lot of ownership in the business, and we tend to have very strong employees. We do have bonuses that are performance and sales-based, so we aren’t devoid of the incentive of getting a higher income.”

Jacob Harlow
The Century House
Madison, Wis

Commission

“We had been doing salary with a bonus, but our CFO has convinced us to switch to a commission-based plan as of January. We weren’t meeting our sales goals, and our sales expenses were high compared with the rest of the industry.

We needed to inject a degree of hunger into the equation, while retaining the quality of a friendly, helpful sales associate.”

Mark Binkhorst
Burlington Furniture
Burlington, Vt.

 

“We’re looking for the people to be entrepreneurs who rely not only on people walking through the door, but also on their own personal business development. Commission fits our culture and our goals in the organization.” – Garry Ikola, City Furniture.

 

ENTREPRENEURIAL SPIRIT

Salespeople at Tamarac, Fla.-based City Furniture work on straight commission supplemented with bonuses.
“We’re looking for people to be entrepreneurs who rely not only on people walking through the door, but also on their own personal business development,” said Garry Ikola, vice president of sales. “Commission fits our culture and our goals in the organization.”
At City, salespeople are expected to essentially run their own business within a business, and the retailer goes to great lengths to attract talent who gravitate toward that model.
Commission works best in high-volume, high-traffic stores, according to Jeff Hiller, director of training for Chicago-based JB Training Solutions.
“If you’re a mid-size to big retailer you’re probably running pure commission, with a draw against commission,” he said. “That’s harder for smaller stores since the traffic potential isn’t enough.
“The big stores count on salespeople to sell maybe $800,000 a year, which (with typical commission) gives an income of $40,000 to $50,000 a year. If you’re awesome, you make 80 to 100 thousand.” At a retailer running $2.5 to $7 million dollars in sales a year, salespeople might be targeting $500,000 to $600,000 in sales, and Hiller worries that might not generate enough commission on a consistent basis to keep top people on hand.

“If I’m looking for a good person to work my floor, can they really survive or be inspired by making $30,000 a year?” he said. “What I like, is if you’re in that middle range, have a base that is covered, not a draw, say $26,000 to $30,000 a year. Add on a bonus system based on a graduated scale for monthly performance.
“That way, if I’m a salesperson hitting $800,000 in sales for the year and hitting bonuses two out of three months, I’m making $60,000. The balancing act on compensation is urgency versus complacency.”

Commission’s Incentive

Tom Zollar, practice manager of retail operations for Impact Consulting of Atlanta, is a proponent of commission since it ties sales team performance so strongly to compensation. “I believe that sales staff should be paid directly based on performance using some sort of commission structure and when possible, bonuses for hitting set goals,” Zollar said. “In some situations this may be on top of a salary or draw, but the greatest portion of their package should come from commission on sales.” He added that it’s not an all-or-nothing prospect between straight commission and some sort of guaranteed income.

“Here you have the options of straight fixed flat rate, variable sliding scale, or set step-based commission programs,” Zollar said. “All of which work great if they are properly administered and communicated. The key is finding the best one for your store culture and your client base.”

Atmospheric Conditions

Commission-based compensation is a definite motivator for salespeople looking to make their mortgage, but there is a downside. “If salespeople get behind on their draw, they get crazed, and customers pick up on that,” Hiller said. “What you want on the sales floor is gentle persuasion. My sense of customers is that they’re like horses. They can read a nervous rider, and if they sense a desperate, hungry salesperson they shy away. “The balancing act on compensation is urgency versus complacency.”

And whichever route you go on sales compensation, don’t forget that the sales manager— whether that’s you or another individual— also should be held accountable for what happens on your floor.

“My strong feeling is that anyone who is responsible for performance results within an organization needs to have a compensation program that includes some sort of ingredient that is tied to improving the results they deliver,” Zollar said. “It can be tied to actual performance numbers—i.e. commission—or the achievement of set goals and criteria—i.e. bonus—and can be in conjunction with a salary based on the total responsibilities the role includes.”

For sales managers, Zollar suggested they need a salary to carry their responsibility over staff members.

“However, a substantial part of their total package should be tied to how the people under them perform, based on history and goals set by upper management,” he said. “This additional component could be a small commission on sales above certain levels, a bonus based on hitting set volume targets and/or key performance index goals (i.e. gross margin or average sales) or a combination of these.

“The main thing is that those responsible for the performance of others understand that a meaningful part of their compensation is directly tied to how their team performs on a monthly or at least quarterly basis.”

The Conundrum

While Zollar is a big believer in the power of commission, he does understand why some retailers think a non-commission sales staffs create a better, less intimidating floor culture for their customers.

“That is certainly the case in most stores I have seen that use a salaried sales force, and as long as their total income is somehow tied to how they perform, I am not opposed to it,” he said. “From a psychological standpoint, in order for their compensation program to have any motivational impact on how they behave on a retail sales floor, most adults need to understand the WIIFME Principle (What’s In It For Me). “So if you tied their salary increases to performance results or gave them additional bonuses for sales achievement on a monthly basis, that would help fulfill this need in a noncommission sales environment.”

Basically, you want your staff to realize that the more they sell, the more they will make.

“All that said, I do believe that in most store situations the sales manager would have a far stronger motivational tool with a commission based sales force versus one using a salary-based compensation program,” Zollar said. “Both can work, but the innate motivation of tying a person’s income directly to what they sale is hard to beat.

“Of course, it also creates a variable versus a fixed ‘cost-of-sales’ financial consideration for the business, and we all know which one the accountants would prefer.”

While City Furniture is committed to commission, Ikola noted there is no single best compensation structure. “You have to find one that fits your goals, and commission has served us very well,” he said.

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