Monthly Issue
From Home Furnishing Business
April 1,
2013 by Powell Slaughter in Business Strategy, Industry 
Traditional Furniture Stores Continue to See Competing Channels Emerge.
It doesn’t look as if there’s any end in sight for new consumer alternatives to traditional home furnishings stores.
For instance, high-end furniture retailers that haven’t lost sleep over different ways consumers might find the sort of product they carry might want to check out Chairish.com.
The online consignment shopping site for upscale home furnishings launched in late February specializing in good condition, upper-end furniture, accessories and accents.
A browse through the site indicates the concept can move product—a fair amount of what you’ll see already is labeled “sold.”
Chairish aims to meet two needs in the marketplace. First, well-to-do and wealthy consumers who are moving or giving their home a makeover have a vehicle to get some cash out of their old furnishings versus giving them away or storing them.
Second, it makes gently used, but high-style furniture available at a savings to aspirational consumers, or those who while well-off, still want a value.
Think about how the value of that new car drops the moment you drive it off the dealership’s property. (I know I’ll probably never buy a brand-new automobile again.)
The site serves customers anywhere in the United States who have a major credit card, and offers white glove-shipping as well as a standard 48-hour return policy on all items.
For sellers, Chairish offers to levels of service: first, a standard service anywhere in continental United States. Sellers complete an online form, share the story behind their piece and upload photos. Once Chairish curators approve the listing, it is posted and ready for purchase. Listing is free, and Chairish receives a 20 percent commission upon sale. There is a $250 minimum listing price per item.
The second seller-service level, Concierge, is currently offered in the San Francisco Bay Area, where Chairish is based, and will roll out in additional major markets. With this service, a Chairish representative comes to the seller’s home, inspects the furnishings, writes the listings, take the pieces from the home via white glove movers, puts them into secure storage, and professionally photographs the items. When the piece sells, Chairish manages payment, shipping logistics and only takes a 40 percent commission. Listing is free.
The site brings plenty of e-commerce experience to bear, with its founding team includes entrepreneurs from places such as Hotwire, TripIt, Yahoo, Expedia, eBay, and Levi Strauss & Co.
A DEVELOPING STORY
Chairish is one of the latest examples of how people are finding furniture in new places.
Greensboro, N.C.-based furniture marketing consultant Joe Carroll has long maintained a list of distribution channels for furniture.
His updated list, which he shared with Home Furnishings Business, stands at 86 now, same as last year, but it has changed slightly, losing “computer specialty” stores and gaining a new category, “sleep specialty” stores.
“Sleep specialty used to be under ‘product-specific specialty stores,’ but bedding specialists are one of the fastest growing channels within that group, so they rated their own listing,” Carroll said.
With retailers such as CompUSA no longer in the picture and consumers now purchasing office furniture at other electronics outlets such as Best Buy, Carroll felt the computer specialty channel had pretty much gone away.
“I’ve talked to a lot of people, and they say computer stores just aren’t carrying furniture anymore,” he said.
WHAT’S HOT
Along with “sleep specialty” stores, Carroll said he’s seen most growth in the “multi-regional chain,” “regional chain” and “national chain” segments among furniture stores; “online furniture retailers”; and “flash sales sites.”
“Online furniture retailers also have divided into three kinds: furniture retailers selling on line, wholesalers like Amazon selling online and the Internet-only dealers like Wayfair,” he noted.
Flash sales sites are a permanent part of the home furnishings distribution picture, he added.
“Flash sites are reminiscent of the ‘80s when catalogs came on, or when Internet sales began,” Carroll said. “Everyone said those would always be a small part of furniture sales, and now the Internet has $5 billion. Flash sales sites are growing, and they’re here to stay.
“That turned out not to be a ‘flash in the pan.’” HFB
April 1,
2013 by Sheila Long O’Mara in Business Strategy, Industry
As of press time, the country was just going into the Final Four weekend of March Madness of the NCAA championship. The four teams—Louisville, Wichita State, Michigan and Syracuse—have made their way to Atlanta, soon to be followed by ardent fans of the sport.
I absolutely love college basketball.
Some of that love comes from growing up in North Carolina where passions run deep and rivalries are hot. Back in the day, who could argue with the strength of Tobacco Road, and its majestic cluster of basketball powerhouses? Much of my love for the sport comes from spending my college years in Chapel Hill, N.C., at THE University of North Carolina. (The REAL Carolina, for all my friends in Columbia, S.C.)
While my beloved Tar Heels fell to the Jayhawks of the University of Kansas in the third round of play, I’m still watching. My bracket, chosen through loyalties to the ‘Heels and the Atlantic Coast Conference, started to fall apart weeks ago. It’s pretty much disintegrated now with none of my chosen four anywhere near Atlanta. Every year, I say I’ll fill in the bracket without following my heart. THAT isn’t likely to happen—EVER—and even if it did, given this year’s topsy-turvy, unpredictable month of games, my picks still would have gone down. I might could have improved my chances of winning the pool had I collected a few quarters and opted for a heads-or-tails strategy.
That’s the beauty of March Madness. Short of my team winning it all, the craziness and excitement of the unknown keeps me tuned in for “just one more game.”
I’m sure you’re wondering what the heck college basketball, March Madness and the Final Four has to do with the furniture retailing business.
The way I see it, retailing, like college basketball, is an extremely competitive sport.
To succeed and play well, it takes practice, the right tools and of course, some information on who your competition is. I have no doubt that each of the teams playing in the Final Four in Atlanta have been studying and reviewing the other teams to decipher their strengths and weaknesses in an effort to develop the most effective game plan. Coaches and assistant coaches are all poring over strategies that have been successful in previous games, but to do that, they must know their competitor.
Preparation is the key to success. Knowledge is power.
Who is your primary competition in your market? Is it Amazon? Your neighborhood pharmacy? Walmart? Target? The local bookstore? The Best Buy in the local shopping hot spot? Look around, you’re likely in the fight of your life with someone other than what we think of as a “traditional” furniture retailer.
Duking it out for those elusive consumer dollars, and the consumer’s time and attention.
So jump in with both feet, figure out who your competition is and be ready for the big win. Find the tools that make the most sense and put them to work in your operation. You’ll be thankful when you come out on top.
Now, back to basketball.
Thank goodness for Cinderella teams, underdogs, enthusiastic players and coaches with the desire and will to win. Going into the weekend of play, my heart lies with the Wichita State Shockers—a fabulous mascot given the circumstances.
April 1,
2013 by Trey Whitehead in Business Strategy, Industry
So, who are your competitors? Seriously, think about this a minute before reading further, list them in your head. You probably named the traditional retailers in your area, but did you think of your local grocer or drug store? They didn’t make my list either, but after doing a bit of research and reading a rough draft or two of articles appearing in this issue, my list would be a lot longer.
I could list a few more for you here, but will let you uncover that information for yourself in later pages.
We all know the importance of real estate on your showroom floor, and I would imagine it’s the same in the grocery industry, so why is the widest aisle in my local Kroger the one with furniture and accessories?
I don’t believe it’s for the convenience, heck I’ve never said let’s run by Kroger real quick and check out those recliners. I’d like to know who has. I mean really, how would you get it in you basket and through the 20 items or less lane? I joke, but the only reason they would give up this floor space is because they are making profit on these items.
The same thing is happening at my local CVS. Now they haven’t ventured into furniture, but they have a few accessory products that could appear on your retail floor. Granted the quality is probably much different than what you offer, but my point is consumers have options besides the traditional furniture retailers today. In my opinion, these places seem very strange for a furniture purchase. I don’t believe
I would ever take a serious look at either location when shopping for something new for my home. That said, others must be purchasing items from them if the merchants are willing to give up the floor space to feature the products.
Traditional brick-and-mortar furniture stores are facing more competition than ever before. The days of being the only game in town have long past. It’s up to you to find a way to reach your customers and get them in your door. It can be done, you just need to point out your strengths and tell them why you are the better selection for making any furniture purchases.
Your core business is furniture and it always will be. You have a vast selection of products and designs to fit any home. You have the fabric and color selection that will allow them to have a custom piece in the home. Your staff is knowledgeable and can answer any questions or help with overall room design. Your delivery and customer service people will help them if needed after leaving your showroom. None of these items can be said for a grocer, drug store or most any other non-traditional competitor you might name.
This issue of Home Furnishings Business magazine takes a look at all the channels retailers face daily while trying to conduct business. After reading this issue, you will have learned a few things from other retailers and how they are positioning the traditional furniture stores to remain the first choice for customers.
Are you the first choice for home furnishings in your marketplace?
April 1,
2013 by Powell Slaughter in Business Strategy, Industry
Thinking of Incorporating Mobile Technology into Your Operation? Read on for Issues to Consider.
Got a smartphone? Next time you have a few minutes, run a search on the App Store for “shopping apps.”
You’ll find a lot of companies already on the mobile technology bandwagon. Best Buy, Walmart, Toys r Us, Overstock, Amazon, Zappos, Office Depot, Staples—the list could fill a lot of this page.
In home furnishings you’ll see names such as One Kings Lane, Ballard Designs and Ikea—no big surprise there—on the App Store, but for the most part furniture retailers are playing catch up with other consumer products sectors when it comes to granting their customers access to their products and services via mobile phones and tablets.
Sales of those units are growing every year, and there’s a generation of consumers entering their buying years that has never known a world without digital mobile technology.
Just when we were getting used to shoppers heading first to the Internet, it appears that not too far into the future, they’ll be heading for their smart phone or tablet instead—a lot of them already are. When that time comes, will they find you?
OPPORTUNITY & CHALLENGE
Mobile technology presents both opportunities and challenges to retailers, said Myriad Software Principal Carolyn Crowley. The San Diego-based home furnishings retail automation specialist made mobile the centerpiece of a couple of sessions at its user conference last month in San Antonio.
With so many consumers using their smartphones during the shopping, and sometimes purchasing, process, Web sites optimized for mobile users and in-store mobile-friendly features for product information and such can be a competitive advantage.
Crowley pointed out that Lowe’s is deploying iPhone-based mobile POS to compete with Home Depot. Furniture retailing, she pointed out, has some catching up to do.
“When you go to places like Best Buy, the capability of what you can see and do online is better in other industries,” she said in a phone interview after the conference.
One reason is that furniture retailers looking to put information onto customers’ phones face challenges unlike, say, an airline selling tickets or taking reservations via mobile.
“That airline controls what it’s selling, its own tickets,” Crowley said. “The challenge a furniture retailer has is that you’re working with products that aren’t yours, you’re getting them from a lot of different vendors.”
Take QR codes that could be on product in your store.
“Does that QR code lead the consumer to the retailer’s Web site or the manufacturer’s Web site?” Crowley said. “Manufacturers need to make the information available on the retailer’s Web site. That’s an initiative that needs to happen.
“From a technology provider’s standpoint, the more connections we can give the retailer to the manufacturer’s information, the more the consumer will come into the store.”
She added that from her clients’ feedback, she believes manufacturers are more comfortable driving traffic to their Web sites versus the retailers’ sites.
“The customer’s often already doing the shopping on line and knows what they want, but not all retailers carry the all the product they see on the manufacturer’s Web site,” Crowley said. “Wouldn’t it be great if the retailer could tell the customers (who visited the manufacturer’s site) we don’t have that particular product in the store, but we can tell you everything you need to know.
“It’s a challenge that some of the retailers can’t show (a manufacturer’s) product on their own Web sites because the customers are driven to the manufacturer’s Web site.”
At a Best Buy, a shopper can know for sure via her smartphone if the product is at the local store, and maybe go ahead and pull the trigger on a purchase.
While with furniture, especially something like upholstery or bedding, the customer is more likely to want to come into the store for a “touch-and-feel” test, having a shopping list on the customer’s phone when she walks in the door is just one example of how mobile can make the furniture buying process easier.
“Wouldn’t it be great if you could walk them around your store with their mobile device—you don’t even have to ask them what brought them into the store,” Crowley said. “Technology service providers like us should work with our clients’ manufacturers to get as much of that information available at their fingertips as possible. Ultimately, we’re trying to sell that manufacturer’s product line, and the more a Myriad or other service provider can provide to the retailer, to arm them for the consumer walking into that store, the better off we’re all going to be.”
GETTING MOBILE-FRIENDLY
Myriad brought an expert in mobile applications to its conference to give retailers advice on how to make the most of mobile. Scott Gamble, vice president of digital solutions at Alliance Data Retail Services, is accountable for all the Columbus, Ohio-based company’s consumer-facing digital initiatives in the areas of the Internet, mobile, e-commerce, social media and e-mail. He and his team are responsible for the development and execution of the Alliance Data mobile strategy, which has led to multiple industry-first products in the areas of mobile marketing, payments and service.
In addition to his 15 years with Alliance Data, Gamble has more than 20 years of experience in the retail payments industry, including management roles at GE Capital and SPS Payment Systems.
Things like virtual loyalty cards, optimizing credit programs for mobile users and “geo-fences” that alert customers to deals when they’re in a store’s vicinity are ways mobile can help retailers get consumers’ attention and build sales.
A NEW CONTEXT
Location-based marketing using geo-fences, for example, targets customers in a defined area around a store. It’s important to note that those customers have to opt in to receiving information from your store.
“That location awareness ties the context of knowing that it’s a brand I’m aware of that I’ve opted to receive information from and that the brand’s nearby—it ties all that together,” Gamble said. “The cellular networks will sell you that (locational) data for customer’s who’ve opted into receiving information from you.
“You can build a ‘fence; and be notified that one of your customer’s is in that fence—you can then send them a text.”
Consortia of non-competing retailers in the same area, for example around a mall, have made locational marketing using geo-fences much less expensive.
A key is getting those customers to opt-in, and mobile-optimized loyalty programs are one way to inspiring that commitment. It’s also convenient for customers to have that loyalty program on their phone.
“I don’t know anyone who has space in their wallet for another (loyalty) card or room on their key chain for another one of those tags,” Gamble noted.
Alliance Data research indicates that 18 percent of consumers agree that a mobile loyalty program gets more valuable as they have begun to expect offers to arrive; and that 31 percent of consumers agree that the program gets more valuable as it gets more relevant to their interests.
“Allow consumers to express preferences and filter those messages to correspond to that data,” Gamble said. “This context drives them to action,” adding that ADS found 52 percent of those on the program will visit the store’s Web site, and 50 percent will visit the store soon.
“Someone isn’t going to sign up for text promotions from 50 different brands. We’ve found they’re open to six or seven,” Gamble said.
MAKE THE RIGHT MOBILE
IMPRESSION
ADS research found that 61 percent of people have a better opinion of brands when they offer a good mobile experience.
Be careful here—if that experience is unsatisfactory, the reverse is true. Say you have a QR code shoppers can scan. Gamble related an anecdote of a retailer whose code generated a message telling shoppers they needed to view the target site on a computer.
“If you don’t connect the dots all the way to the end, it creates bad vibes from the consumer,” he said. “There are plenty of options for you to make your Web solutions mobile-friendly without spending a lot of money. Don’t do anything just to go mobile without tracking everything all the way through.”
Retailers can go out and buy an e-mail list, but they can’t buy a list of phone numbers for a texting campaign. Engage customers in the store and on your Web site to create that buy-in to what you have to offer.
“Create a database of mobile short-message service (that’s text in common parlance) users, and engage them responsibly with relevant content,” Gamble said. “Seventy-nine percent of active shoppers would opt in to store alerts for special offers and discounts; and 75 percent are interested in receiving location-based offers when near the store,” according to ADS research.
Above all, make sure the experience is mobile-friendly from end-to-end. Provide product information and add links for consumers to share via social networking sites. HFB
Inset Story
Quick Tips
Scott Gamble, vice president of digital solutions at Alliance Data Retail Services, offered these suggestions for retailers considering the use of mobile technology.
• Respect the mobile consumer.
More and more shoppers are taking their mobile phones into stores, and they’re expecting to be able to use them in yours.
• Understand that mobile is a shopping tool.
Consumers are using their smart phones to access product information, coupons and offers, comparison shop, purchase goods online and locate stores.
• Control your customer’s mobile experience.
Make sure your Web site is optimized for smartphone and tablet users.
• Build mobile-friendly in-store experiences.
Create a database of mobile users, and engage them responsibly with relevant content.
• Use barcodes to your advantage.
Deploy barcodes on your in-store merchandise that take consumers to your mobile Web site for more product information.
• Make sure your digital properties are in sync.
Audit your digital properties from end to end to ensure smooth transitions between channels.
• Mobile-optimize your credit program.
Introduce the account acquisition process to earlier in the shopping cycle to increase initial-purchase size; and educate customers on promotional offers and spending power while you can still influence shopping behavior.
March 1,
2013 by Howard Whitman in Business Strategy, Industry
At first glance, it may seem like Colorado-based bedding chain Urban Mattress is doing everything … well, wrong. The stores give a percentage of all sales to charity. They don’t do big promotions. They’re very selective in what they carry, avoiding most of the big mattress brands. They encourage employees to own their own franchises.
Thing is, these unconventional principles are working. The eight-store chain (with more locations in the works) is thriving, experiencing growth in a still-hurting economy, with no end in sight. How did they do it, and why is it working so well?
“The driving force behind what we do … our value system … it’s really about justice, fairness and humility,” said Steve Von Diest , a co-founder and franchise owner in Urban Mattress who also coaches new franchisees.
“How justice plays out in the mattress industry is fairly deceiving,” Von Diest continued. “The bait-and-switching, even the labeling of mattresses from the same vendor between two different stores is very different … so we said, ‘What products can we choose that are going to eliminate the three-to-six-year turnaround (between beds)?’ We focused on products that we believe (are) right for the customer. We may not see the customers back for 10 to 20 years. That may not necessarily be right for our bottom line, but it’s right for them.
“We’re very upfront. We don’t do sales (promotions) because we’ve noticed a pattern in the industry—sales are typically a markup with a dropdown … we’ve lowered our margins to as low as possible because we’re owner-operated and we can do that.”
As for the second part of the equation, mercy, Von Diest defined that as “the driving force for what we believe a for-profit business can do in the community. … We care about our customers—not just what their mattress feels like, but also what’s going on in their marriage, their lives, because it all fits into taking care of people.
“We also tweak their mentality on how they too can give back to the community. So our giving program is not just me and (co-founder) Ethan Rietma giving in the background. We’ve actually put it very upfront in our stores, so our customers know that 1 to 2 percent (of sales) is going to go to a local non-profit (charity), and our customer gets to choose the emphasis. … In each of our stores, there are four to five local charities that the owner or their staff is passionate about.”
Addressing humility, Von Diest said “I wouldn’t necessarily call the mattress industry a humble industry. There’s not a lot of admitting of fault and errors. Ethan and I know that many of our customers may know more than us. They’ve done research, so we’ll humbly say we’re sorry, we’re ignorant. We’ll also own our mistakes, and we’re going to make it right with the customer. If we’re replacing something, we want to be very upfront.”
A Chat Between Neighbors
Urban Mattress started out in 2008 as nothing more than a friendly exchange between neighbors. “Billy Williams, who owns the franchise, was my neighbor and a good friend, as was Ethan,” Von Diest recalls. “We all lived on the same street, and Ethan and I had done non-profit work, community development, we were former pastors. … Billy said ‘Hey, I’m going to start a mattress store and I’d love to have you and Ethan join me to infuse the non-profit values—caring for people, caring for the community—into Urban Mattress.” Williams launched the store in Boulder, Colo., with Von Diest and Rietma, who eventually started three more franchises.
To Von Diest, it was crucial that they bring in like-minded people to open new stores. He recalled, “What Ethan and I said was ‘We’re going to take on young guys—upper 20s to mid 30s—and we’re going to teach them how to do this non-profit value set/for-profit mattress business. … We’ll help them launch new stores of their own because I really believe that the owner-operated model allows for care and an opportunity to sell that’s really different than your big box stores.”
Select Vendors
The leaders of Urban Mattress bring their carefully thought-out mindset to their selection of products as well. “We’re an elite retailer of Tempur-Pedic, and we love them,” Von Diest said. “Most of our staff sleep on them. Also, we are an exclusive retailer for Vi-Spring out of England. … We carry Sherwood Bedding out of Phoenix. Those are our main manufacturers. We do carry Sweet Sleep out of Boulder, Colo.—she is the provider of most of our organic pillows and accessories in the natural world.
“We’re not in bed with Serta, Sealy and Simmons and some of the big brands, so it allows us to differentiate product in our stores. It’s very difficult oftentimes to find our product style and quality in the big box stores … we’ve chosen our product to give (customers) a wide variety.”
No Push, Push, Push
Von Diest and his fellow franchisees pride themselves on Urban Mattress’ no-pressure sales approach.
“Our new staff, we script them that ‘You have to talk very upfront,’” he said. “Let’s just use the idea that there’s going to be no additional add-on prices of delivery, set-up, removal. All of that is very clear: It’s free. … We talk about why we price things the way we do. … The product we carry is good enough to sell itself. I just want (customers) to discover the best thing for them according to their pocketbook, as well as what’s good for their body.”