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From Home Furnishing Business

A Seamless Future

More than a third of retail CIOs surveyed in a study from the National Retail Federation are considering a single consumer platform to manage transactions across channels.

The study, released earlier this year and titled “Digitizing the Store—the Next Wave of Online and Offline Convergence,” found that integrating store and online operations is a key focus for retailers as e-commerce capable solutions increasingly supplant traditional point-of-sale and mobile technologies.

NRF teamed with research partner University of Arizona and industry partner Demandware, a leader in digital commerce, to survey more than 200 retail business and technology executives in the United States and Europe to quantify the convergence of POS and e-commerce technology, and its impact on digitizing the store.

Some 35.8 percent of retailers surveyed said they’re thinking of using one platform to manage all consumer interactions and transactions, whether online or in the store.

“The future of retail will envelope business platforms that enhance the endless opportunities that new technologies offer, such as systems that allow retailers to provide seamless, relevant and personalized interactions for all of their customers,” said Tom Litchford, NRF vice president of retail technologies in the report. “In this consumer-led industry, retailers are working overtime to keep up with the expectations and demands of their savvy customers, and are intent on integrating the digital shopping experience like never before.”

Specifically, a single platform would consolidate and manage key data elements and functionalities that historically have lived in multiple disparate systems to provide customers with consistent, on-brand shopping experiences no matter how or where they choose to interact with a retailer.

A WORLD OF DIFFERENCE The study found that customer expectations are driving retailers to carefully examine their technology spend and investments. Over the next three years, 80 percent of retailers surveyed expect to maintain or increase store technology investments, and 70 percent say their organization is currently deploying or planning to refresh its existing software.

Additionally, while traditional point-of-sale software has been a mainstay for physical stores for decades, many retailers recognize e-commerce software as an emerging and logical approach to evolve and establish the sought-after single platform. According to the survey, nearly four in 10 (38 percent) surveyed plan to leverage an e-commerce software platform for their next generation store software—twice the number that plan to use traditional point-of-sale software.

“It’s no surprise that retailers are increasingly looking to leverage e-commerce technology as the single platform for all commerce,” said Rob Garf, Demandware vice president of industry strategy and insights. “This provides retailers a great opportunity to reduce costs, improve operational efficiencies, and enhance the overall customer shopping experience in a dynamic consumer environment.”

The retailers defined four priorities technology vendors should heed: improving efficiency; attracting and retaining new customers; reducing costs; and increasing enterprise growth.

IMPROVEMENT NEEDED Mobile-enabled consumers are dictating and controlling the shopping process, and the study found that existing technological infrastructure, architecture and applications are straining to keep up with shoppers’ expectations for instant gratification; and that legacy systems were implemented originally to solve specific problems for specific channels.

The number of channels through which consumers interact with retailers has therefore resulted in:

·         Redundant data that increases the total cost of ownership from system maintenance and operations inefficiencies.

·         Inaccurate customer information that shows up in order, payment and service miscues.

·         Siloed systems (i.e., insulated management systems that don’t interact with other, related information systems) that stifle retailers’ ability to respond to market dynamics and execute growth initiatives.

Those barriers slow innovation, particularly at brick-and-mortar stores. Just 26 percent of surveyed retailers have capabilities to allow shoppers to interact and transact with their brand within the stores via their mobile devices. They’re farther ahead in Europe with such capabilities (31 percent of respondents there) than in the U.S. (22 percent).

The inefficiency of disparate technological environments within the same store risk customer dissatisfaction and lost revenue. That’s why so many retailers are considering a consolidated approach to their systems architecture to more effectively manage consumer engagement and transactions across all channels.

THE NEXT WAVE OF CONVERGENCE Forrester Research predicts e-commerce transactions will reach $371 billion—10 percent of all retail sales—by 2017 in the United States, an increase of 41.2 percent from 2013 levels. Forrester also estimates that the Internet already influences almost half, 49.5 percent, of total U.S. retail sales through some sort of shopping activity.

In addition, e-commerce functionality, architecture and extendibility designed for online shopping has surpassed in-store POS applications. The result is traditional POS, call center and mobile technologies touching the consumer are being supplanted by e-commerce to establish a single consumer transaction platform.

That’s why almost 40 percent of surveyed retailers are considering a single platform to manage all consumer interactions and transactions across all channels.

Because of its more modern and flexible architecture, the study found that e-commerce software is emerging as the most logical approach to establishing a single platform. They already are the backbone of many call centers and mobile-friendly sites.

The next frontier is traditional store-based POS, which while a longtime reliable and efficient tool in brick-and-mortar stores, is proving difficult to extend its functionality across multiple channels. Often, these systems are closed, require heavy customization and are designed for a single location.

Twice as many retailers surveyed plan to leverage e-commerce (38 percent) than traditional POS (19 percent) for their next-generation store software. Only 23 percent of U.S. retailers surveyed, 13 percent in Europe, are thinking about traditional POS for their next-generation POS software. While that trend varies by retail segment, it’s clear that something’s afoot in terms of direction.

THE GOOD NEWS Retailers already are extending e-commerce functionality into stores to give staff and customers the same product, order and customer data that’s used online for browsing purchasing and service.

Store associates armed with extensive customer intelligence are more effective ambassadors of the brands they represent. Retailers shouldn’t miss out on the opportunity to apply the sophisticated analytics found in the digital shopping experience in their physical locations.

Surveyed retailers also rated inventory search and store fulfillment as important digital functionality in stores—especially since consumers are browsing among channels during their shopping process and want access to the same information they found online once they’re inside the store. With that information ready to hand, a store’s sales associates can keep sales from walking by providing customers with inventory visibility across the enterprise and complete secure transactions on the sales floor.


The NRF report “Digitizing the Store” analyzed the next steps for retailers as they begin to take advantage of new technologies that help them understand and meet consumer demand.

·         Understand the market and internal landscape. 

Retailers should examine current technology solutions for both stores and e-commerce teams. 

Two-thirds of retailers surveyed indicated that all of their district/regional managers and store managers will or already use mobile devices in the field over the next three years.

A key here is learning to navigate the vendor landscape. A third of retailers surveyed said they are hedging on a single platform playing a role in their technology strategy because of concerns about a nascent technology and risks related to organizational change. Their main worry about a single platform is that software vendors may not have a comprehensive, proven solution. Retailers should talk to vendors to understand their vision and make sure it aligns with their business model.

·         Establish a technology roadmap. 

This should define success, support business initiatives and identify a path with clear milestones.

This effort should include considering the cloud as a means to centrally manage consumer-facing systems. The survey found that three in 10 retail executives are currently considering cloud options for their point-of-sale software applications.

·         Mobilize and empower store associates.

Even tech-savvy consumers still rely heavily on the physical store experience as part of the purchase process.

Retailers should arm store associates with the same information that consumers have, provide training and incentives, and empower them to leverage information capabilities as the store goes digital.

·        Invest in wireless to leverage initiatives such as guided selling, “clientelling” and endless aisle.

While two-thirds of retailers surveyed indicated that management do use or will use mobile devices in the field over the next three years, only one-third said their sales associates had access to those devices.

Currently only half of retailers use smart phones and one-third use tablets to access POS software in the field. Adoption of such hardware, though, is pivotal in the transformation to a single consumer transaction platform.

·         Drive continual innovation by creating a culture that allows employees to test and learn quickly.

Consumer demands are changing rapidly, so innovation and speed are not one-time events, but should be standard operating procedure.

·         Extend capabilities to channels, devices and geographies so the business can innovate quickly.

Employees should have the chance to experiment quickly and extend capabilities without the traditional costs due to administrative and system complexity.

As part of this evolution, retail executives should drive speed into their business, accelerating the time from inception to delivery into live operation.


The Future is Bright


I’ve seen the future of furniture design, and it is very, very bright. Scorchingly so, I might add. On a recent, hot day last month, I joined 10 of my industry friends on the campus of High Point University to judge the annual Pinnacle Awards for the American Society of Furniture Designers. The makeup of the room is a good mix of retailers, designers, media and association executives.

We start early—first thing in the morning—and lock ourselves into a board room to pore over photos of products. Our goal: Select design winners in a number of categories. No one leaves until we’re done. It’s serious business. Much as I imagine the Academy of Motion Picture Arts and Sciences approaches voting for the Oscars.

OK. Perhaps I exaggerate a wee bit, but the day and the task involve deliberate work.

This year we went through 138 entries from 43 companies in 17 different categories. Categories include bedroom, dining room, upholstery, motion, leather upholstery lighting, decorative accessories and on and on. Each year the number of entries varies. This year was a pretty good year. Some years are lighter than we’d like. Often times, we find ourselves lamenting that some of the great design-leading companies haven’t entered pieces, collections or designs that we’ve all seen at a Market.

Consider this: You can’t win if you don’t enter. Know this: The judges choose the winners from the entries we have. Just because all 11 of us have seen your XYZ Collection and think it’s the best major collection out there since Broyhill’s Fontana, doesn’t mean you’ll get a Pinnacle come awards night.

Now, I’ll step off my soapbox and get back to the future of furniture design.

This year’s awards added a brand new category. A student design category to foster and encourage those college kids who are aspiring designers to build their portfolios and share their vision with the industry.

First year out of the gate, we welcomed 10 student entries from a number of colleges, including Appalachian State University, Kendall College of Art and Design, and Savannah College of Art and Design.

We reviewed the student category toward the end of the day, and you should have seen the faces and heard the comments from around the room. We all lit up as if someone had delivered a pitcher of cool lemonade at the end of a hot day. The kids — those youngsters who are eager to come into our industry and create beautiful furniture — blew away a roomful of seasoned, hardened professionals.

One by one, as we flipped through renderings and sketches, we commented on the talent headed our way.

Talented designers with a fresh eye on home furnishings and how they’re used in the home are headed straight for us. How refreshing!

Be sure to snag a ticket for the Pinnacle Awards gala during the High Point Market Monday, Oct. 20. Trust me, you won’t want to miss seeing the winners in all categories, and you’ll be eager to see what the future of furniture design holds for all of us.

Child's Play

The youth category of home furnishings is in a bit of turmoil of late with two leading vendors either exiting or looking to exit the business.

Stanley Furniture Co. announced plans in April to shutter its Young America line, and about a month later, La-Z-Boy said it was seeking a buyer for its Lea Inds. youth business.

Those two business decisions have other youth suppliers feeling optimistic about future business for that segment of their portfolios, as the landscape continues to change. Based on Home Furnishings Business’ latest consumer survey, the category continues to resonate with parents looking to outfit their kids’ rooms with furniture. After all, the little people in the house need a place to sleep, study and play.

Our panel consisted of 125 furniture-buying consumers who had all purchased furnishings for a child’s room within the last 18 months. Most of those buyers—76.2 percent—bought furniture for children who were older than 3. In other words, they were out of the crib and into a twin or perhaps, a full bed.

The kids who were old enough were given some input into how their rooms were furnished. Almost 43 percent of the consumers said the children were “moderately influential” in choosing the type and style of product bought. Another 23.8 percent said their children were “extremely influential” in the purchase decision.

The takeaway here? Designing—and buying—somewhat from a kid’s point of view could help sway purchase decisions, as long as the designs aren’t too over the top for Mom’s taste.

From our survey, it appears that parents (and to somewhat the kids) were swayed mostly by product in the traditional vein. Almost 48 percent bought traditionally styled goods, followed by 34.9 percent with contemporary designs. While those two style genres led the parade, mission (9.5 percent), rustic (4.8 percent) and cottage (3.2 percent) all made it on the board.

When it comes to paying for the goods, our consumers were pretty certain on the amount they wanted to (and did) spend. Nearly 78 percent said they paid between $500 and $2,500. Breaking it down a bit further, 20.6 percent said they paid between $1,501 and $2,000 for a complete room; and 19 percent paid between $751 and $1,000.

Parents have their eye set on future use when acquiring furniture for use in kids’ rooms. Longevity is key when it comes to purchasing.

Only 29 percent said the purchase would only be for use during childhood. Almost 32 percent said they made the purchase in hopes that one day the furniture could be used in a guest room. Another 32 percent said they hoped the child could use the furniture either during college or in a first apartment.

Along with future use plans, our consumers didn’t skimp on furnishings the space. Almost 78 percent said they furnished the room with “stylish, good quality furniture.” That holds in line with the plan to repurpose the furnishings. Only 14.8 percent said they had given other rooms in the house higher priority for furnishings.

We Created Showrooming—Not Technology

Brick and mortar locations are obsessed with making Amazon their problem. The real problem is that we do not understand how to leverage the technology in front of us (or the resources) to help us sell more stuff.

OK, here it is … Amazon did $67.9 BILLION in 2013 in retail sales ($49.6 billion more than the next closest online retailer, according to Internet Retailer. If you ask Best Buy executives or Barnes & Noble executives they would tell you their showrooms act as the No. 1 sales vehicle for their good friends at Amazon. What if we told you that they are 100 percent wrong?

We utilize other’s access to technology as a crutch to make up for the fact that we do not want to leverage it to help us close the sale. The customer wants ease of purchase but that doesn’t always equate to purchasing directly online. She wants to have her questions answered, to understand why the sofa is $499 verses $199 or why the cost for delivery is $79 verses free from

If we are going to stay in business today we need to stop pointing the finger outward and start looking inward. Here are four sure fire ways we can equip ourselves to be successful and give Ms. Jones what she really wants today: a great shopping experience that keeps her coming back.


1.  Use Social Media
The only way for us to understand the impact social media can have on our business is for us to empower our entire store and ourselves to understand it, digest it and implement it personally. Follow your friends—and your competitors. They won’t tell the world what they ate for lunch, but they need to understand how Ms. Jones buys today.

2.  Buy Online
Empower your key people (operations, sales, buying, finances) to make one personal purchase a quarter from various industries and online sellers. Have them study the strengths and weaknesses of their personal shopping experience, from the product catalog, ease of checkout, delivery options, follow up and customer service. This will allow you to understand how you can make the customers experience better—plus find the loopholes to give you a leg up.

3. Get Ready for Y (and the millennial?)
Generation Y is coming of age. Born between 1982 and 2000, this is the largest generation of consumers ever (bigger than the Baby Boomers) and they will be the dominant consumer force for your future. Find someone at a local university or a local consultant to come in and educate your staff on what Gen Y is looking for. Just making conclusions based on their own experience (or yours) will only lead to the wrong sales approach happening.

4.  Know your market
Market research is an expensive investment, not an expendable expense.  The Ms. Jones that bought from you five years ago is gone, and a new woman has taken her place. To get the best out of your salespeople you need to invest in understanding who your customer is right now. Dig deep into why she buys, how she buys and where she might buy to equip your salespeople, delivery and customer service personnel with the script needed to sell her (and keep her) today.

Don’t use other resources as crutches to be the solution to your problems. Invest in your people to leverage today’s technology to ensure you are making money today … and tomorrow.


Customer Experience

If a retailer is losing market share it can be attributed to one or a combination of three things: merchandise, advertising or consumer experience. The last topic is, at best, vague.

In the past decade a new element in the buying process has emerged with more than 75 percent of all consumers doing research on the Web before visiting the stores. In other words, the consumer visits a retailer’s Internet store unannounced, wanders through the product selection and reads the statements stressing why the retailer is different from the competition, but has no real chance to engage directly with the retailer. More often now than in previous years, a certain number of shoppers buy online without ever visiting a physical, brick and mortar store. Unfortunately, the retailer the consumer purchases from may not have a physical store.

At least 85 percent of the consumers who initially visit a Web site will proceed to the store. However, the list of retailers that the consumer visits has declined to about 2.1 stores per purchase. As the industry is beginning to recognize, the traffic continues to decline regardless of the volume. It is crucial to understand the significant variance between what the new Millennials want and what the downsizing, but still-purchasing Baby Boomers prefer because it is at this point that the sales challenge begins.

This sales challenge can be addressed with retail technology. Time-starved consumers want to have reliable information unfettered by a sales pitch to aid them in arriving at the product that they desire.

How do they do this? They go online to begin and often complete their purchase. Internet advertising, store advertising and social media are means to direct them to the retail commerce site. Once there, a series of questions aid in profiling the consumer. Information gleaned will also lead to offered products. How focused is the consumer? Is he or she concentrating on one product category or wanting to see an overview of several products? Product presentation on the Web is critical. Retailers can romance that bedroom or sofa or dining room table so that the consumer can envision it in her home—a key to closing the sale.

After the consumer pinpoints one product or products, point-of-sale material becomes important whether online or in a physical store. It directly communicates with the shopper by offering additional product information that can secure the sale.

Once the shopper has made the decision to buy, the rest of the consumer experience is business. How this is handled online or in a store is important to capturing an ongoing customer, one who will return to your store for the next furniture purchase. At this point, consumers feel that they have managed the hard part and are ready to get the minutiae out of the way. Delivery scheduling, protection plans, and after-sale satisfaction now become the main focus. They want their order to be processed efficiently, and the delivery made at a convenient time that fits their schedule. To complete the consumers’ wish list is the expectation of a product that will never necessitate a return for any reason.

The main emphasis of this issue of Home Furnishings Business is to focus on the consumer experience and how technology can achieve the high standard that the consumer demands today for shopping and purchasing.

That standard is how products are shopped and purchased on Amazon is an online retailing giant, but it is the giant to which millions of consumers have become accustomed. How does your business stack up in comparison?




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