From Home Furnishing Business
Retailers and Vendors come together to carve out ideas on tackling e-commerce in home furnishings.
By Powell Slaughter
Take four home furnishings retailers seasoned with varying degrees of experience in e-commerce. Add six furniture vendors active in online channels. Toss in a dash of technology experts and consultants. Stir with questions about their thoughts on the challenges and opportunities facing our sector when it comes to selling furniture online. Cook thoroughly in a daylong discussion. Serves: Anyone looking for ways to think about how online commerce is affecting their business. That was the recipe for “The Future of Furniture Retailing,” a gathering last month of vendor and retail executives at Internet marketing technology vendor MicroD’s office in Hickory, N.C., where they took part in a roundtable discussion of e-commerce in the furniture industry. Key takeaways from the event: Data and information, product delivery, pricing and defining a brand are challenges facing the home furnishings industry as it ventures onto the online playing field. Participants hashed out their online initiatives and the challenges they face in bringing the home furnishings sector up to speed in e-commerce. “MicroD is in a unique position of serving both sides—the retailers and the manufacturers,” said MicroD CEO Manoj Nigam. His goal in the meeting was to “get a group together to start a dialog on how we should be doing things. “E-tailing is not just e-commerce. How do we get the products online? How do we engage consumers? How do we bridge the gap between retailers, manufacturers and consumers?”
Roundtable participants said organizing product information and presenting it in a manner that’s easy for online shoppers to use is one of the toughest things about e-commerce. Walter E. Smithe Furniture in Chicago was set to go live this month on an e-commerce platform developed with MicroD. President Walter E. Smithe said getting data is a huge headache. “A tiny sliver of our vendors are truly e-commerce compatible at this point,” he said. “Some kind of industry standard is necessary for it all to work. It seems like MicroD could become the default for the industry.”
The industry could learn from other sectors when it comes to standardizing data formats, said Richard Sexton, founder of Concord, N.C., retailer Carolina Rustica. “The lighting industry does a much better job. The industry accepted American Lighting Association standards for e-commerce data,” he pointed out. “The downside is its further commoditized the lighting industry. Every Web site looks the same. It’s a good guideline, but if you’re serious about e-commerce, you need to personalize it with your own descriptions, your own photography.” Access to data is extremely important at Boston, Mass.-based online home furnishings powerhouse Wayfair.com “We track reasons people contact our call center,” Mike O’Hanlon, vice president of corporate and business development. “Number one is ‘Where is my stuff?’ but number two or three is product information.” Getting that information online demands time. Colfax Furniture’s biggest Web-related challenge is integrating the store’s point-of-sale system on the Web site, according to Mandy Jeffries, general manager of the Greensboro, N.C., retailer. To do that, she wants vendors’ support. “Our information on the Web site is only as good as what we get from the manufacturers,” she said. “Our biggest challenge in resources is that our industry is so far behind, our point-of-sale system, for example. We tried SAP, but that was like driving a Mercedes in an alley. I had to settle for a POS that was furniture-related. … Every package has its own pros and its own cons.”
VENDORS WANT STANDARDS TOO
As a fairly young company, a lot of the technology solutions Four Hands brought to its retailers were homegrown. “Doing that costs a lot, and we’re looking now to partner, moving from proprietary platforms to more widely adopted ones,” said Mike Bullock, vice president of marketing. “Second, we bring out 600 new products a year. Getting all that data together, building the discipline to do it is something we’re working hard on. We’re working on ease of ordering, a consistency in the process, providing the tools retailers need.” Sherrill Furniture focuses heavily on custom finishes and fabrics as part of its high-end value proposition, and that creates complex information needs.
“How do we bring our 600-plus styles, our 3,000-plus fabrics into focus for our retailers who are going into e-commerce?” said Tim Bohon, executive vice president of sales and marketing. “How do we get our customization capability to the masses without getting redirected off a site? They want seamless access to what’s on our site without leaving their selected brand. A Walter E. Smithe is the brand, we’re the vehicle. “We have so much data —10 brands, nails, fabric, shape, traditional—and no way to get to it. We need to slice and dice our data.”
Another concern is making sure that seamlessness applies to the devices consumers are using to shop online. “My biggest concern is the integration of all devices, from desk top to mobile,” said Bohon. Responsiveness to current technology is one thing, but it’s important to think ahead. “We’re talking about tablets, mobile devices. We have to think about where it’s going,” said Kevin Walker, president of Right2Home, the division of Home Meridian International that specializes in drop-shipments for e-commerce sales. “How do I get this site to work on a watch?” Right now, Walker said there are gaps between what vendors have and what types of information they need to deliver, both with sales initiatives and data. “How will you differentiate yourselves online? How will you define product value? It’s hard to differentiate promotional versus high-end from a picture without more information,” he said. “We have to get our data uncovered, organized and be able to feed it with EDI or an automated data feed. It takes time to get it on the site—Wayfair’s loading 7 million SKUs.”
Keeping product information up-to-date on the Web site was a big challenge at A.R.T. Furniture as it grew its business in the e-commerce channel. “Sales reps weren’t being fed the information properly, and (e-commerce channel) is a difficult animal for them,” said Bill Sibbick, senior vice president of sales and marketing. “It’s changed how we operate. Videos have become extremely popular, but when you do one for a retail salesperson, it’s completely different from what you’d do online for consumers.” Sibbick noted that one customer told him getting better information available online can help boost sales: “He said, ‘I’m not getting as many ups, but I’m getting a much higher rate of closure.’ That’s because that shopper has learned what they need online and are more ready to buy.”
The growing importance of e-commerce could make the industry improve its data management. “Retailers like Wayfair have raised the ante for the additional data requirements needed to interest the customer and increase conversion rates,” said Ron Carpenter, principal of Greensboro, N.C.-based management consulting firm Strategic Marketing Solutions. “I think you’ll see vendors change their product development process to capture that data at that point. We’ve been dealing with (e-commerce data requirements) by exception. What happens when you have 300 customers who want that data?”
Nigam noted that MicroD is building software to help manufacturers create a product catalog: “If you house your data with us, we’ll make it available to anyone you authorize.” “One of the things e-commerce is forcing us to do is make every element of the shopping process relatively simple,” said Samson Marketing CEO Kevin O’Connor. “Consumers are confused by such a big assortment of product that’s indistinguishable to the untrained eye.” That’s why retailers have to pay special attention to information management on their Web sites. “In talking to a lot of our retail customers, they think they’re in e-commerce because they take (a vendor’s) picture and put it on the Internet,” O’Connor said. “And a lot think (e-commerce) will be a passing fancy. Running a Web site, getting all the information in is a cost of doing business, and they’re asking ‘Do I want to make that investment?” He added that reps at Samson Marketing companies were encouraged to open accounts among e-tailers: “They needed to, because so much of our traditional retail channel went away. The amount of furniture sold through the traditional channel is half what it was seven years ago. We do restrict our e-tail business to those e -tailers who ‘play fair.’”
ONLINE PRICING ISSUES
Hooker Furniture is focusing this year on its proprietary e-commerce platform for retailers, P3. In addition to aggregating data online, Vice President of Corporate Marketing John Albanese, a former retailer, called “a complete disconnect with regard to minimum pricing policies” the biggest challenges facing furniture with regard to e-commerce. Hooker’s e-commerce platform relies upon an “Internet Minimum Price” versus Minimum Advertised Price (MAP). “We set what we thought was a reasonable cost for our Internet minimum price,” Albanese said. “Some stores might sell it for less inside the store. Our I-store lets the retailer make an additional note that ‘additional savings my be available at the store.’” Albanese did note that Hooker has “discontinued selling certain product to certain retailers” over pricing issues. “We haven’t had anyone who stopped doing business with us because of that,” he said. He suggested that vendors protect pricing by having customers sign documents to receive product data that indicate how it should be used; and for pricing policy. “If you violate policy, you lose rights to images and product information.” It might surprise traditional furniture retailers, but Wayfair.com is fine with pricing policies. “People buy from us because of convenience,” O’Hanlon said. “We have MAP. We have a lot of margin requirements, so we’re big fans of manufacturers having a pricing policy. The worst case is having a policy and not enforcing it.” Wayfair has some built in controls that in effect penalize vendors who don’t pay attention to pricingpolicy slips. “All our product rankings are driven by an algorithm,” O’Hanlon said. “It’s very complicated, but two important components are margin and popularity. If we can’t make margin, it falls, and if we’re too high in price due to non-enforcement, our conversion rates go down.”
Sherrill Furniture doesn’t want its businesss in the e-commerce to alienate its existing brick-and-mortar distribution, and its pricing policies play a role there. “How to we get through to the merchant without upsetting them, that this is where we need to go--together?” Bohon said.
To that end, the company will have strict distribution limits on what can be offered online--and a very strict Minimum Advertised Price policy: “Two strikes and you’re out,” Bohon noted. “If they cross the line we cut them off for 90 days--and they come back. If we get too greedy with distribution, margins go down, there’s no bottom line.”
It remains difficult to fully to enforce MAP pricing. “It’s impossible to enforce with a heavy hand—it’s hard to have those pricing conversations without raising legal problems,” said Right2Home’s Walker, adding that “crawling” software lets e-tailers automatically drop a price if it finds something lower. “Do you drop the one who started it, or drop everyone?” (Wayfair’s O’Hanlon pointed out that with MAP-applicable products, the retailer’s pricing decisions are not automated.)
SERVICING THE BUSINESS
Fulfilling delivery and meeting customer expectations is critical to providing a good experience for the shopper whether they buy in the store or online. It might be even more important in e-commerce, since no matter how good your Web site, an online sale can’t be as hightouch as in the store, and that delivery might be the most personal thing about the online sales process.
“And now consumers are enabled with ratings and reviews to talk about your brand,” Walker said. “Think of the money you spend to get them to the point of purchase, and they see a bad review.” Right2Home is creating three-way partnerships among itself, its customers and the carrier. “Our goal is to get all of our customers to follow our white-glove shipping policy so it’s a level playing field,” Walker said. “We’ve ID’d our most (commonly) damaged SKUs. We’ll take them off your Web site if you aren’t using (specified) carriers.” Hooker’s P3 relies on retail partners ability and experience in delivery.
“We ship it to the retailer the way we would any product,” Albanese said. “We’re leveraging the infrastructure they already have in place. With our 21 (live) sites, we’ve exposed our product to 12 million more customers than we would have otherwise.” Bohon at Sherrill Furniture believes customer relationship management sometimes takes a back seat in online sales.
“They seem to be defaulting to the old ‘I made the sale so it’s over,’” he said. “On the e-commerce side, the sale is were CRM begins. I spend more time vetting the last mile than I do for anything else related to the e-commerce channel.” Carolina Rustica is willing to give some when it comes to returned merchandise. Fortunately, the retailer’s return rate is less than 1 percent. “You have to have a fairly liberal return policy, or people will go elsewhere,” Sexton said. He added that sometimes a product was clearly damaged in the plant, not in transit, but Carolina Rustica rarely goes after a vendor.
“It’s so much work for us, and we want a good relationship with manufacturers, so we eat that a lot,” he said. “We don’t get a lot of claims, though.” Consumers are used to fast, efficient service in their online purchases, and furniture retailers need to meet those expectations.
“Amazon has created expectations online that impact our industry. Our mantra is ‘fast, on time, clean,’” said O’Hanlon at Wayfair. “’Fast’ is that people see a good chunk of our assortment leaves in one or two days. ‘Ontime’ means you make sure when you say it goes, the customer expectation, matches reality. ‘Clean’ means managing the last mile.” He added that expectations created in other sectors are just about impossible for furniture, noting shoe e-tailer Zappo’s willingness to take return on multiple pairs of shoes no questions asked: “I think people get that they can’t order even sofas and the return six you decide you don’t want.”
That’s one reason the quality and depth of information available to the shopper online is so important. Say a shopper orders that sofa, but it didn’t look they way she thought it would after she saw it on a Web site. “We’d rather turn down a sale than sell something that’s awful for them and awful for us,” O’Hanlon said. “If it’s a distressed item, make sure the customer knows what that means. You don’t want something returned because it looks the way it’s supposed to look.”
PLAYING CATCH UP
Nigam said MicroD wants to make the ecommerce roundtable a regular event. He also suggested an online forum on the topic. “It’s not too soon, it’s almost too late to have this discussion,” Albanese said. “Gen X and Gen Y have said they don’t want to shop in a traditional furniture store. This isn’t a cutting edge conversation, it’s not bleeding edge. It’s healing edge. Only if (vendors and retailers) do it together will it work for the consumer. I think of how much of this business is moving to other channels because we’ve been slow to react.
“We’re past the point of a long-term study, or we’ll be like the last livery stable guy. He survived longest, but he still went out of business. Like it or not, consumers don’t care if we survive.” HFB
TRANSLATING, PROJECTING YOUR BRAND IN THE ONLINE WORLD
Cooking with E-tail
The sheer number of eyes that can see a brand through an online presence creates both opportunity and challenge. The plus side is the exposure to potential new customers. The challenge: Those shoppers could be anyone from bargain basement price shoppers to a couple planning to create the home of their dreams. How do you tell your story online to attract the customer that’s right for you? Four Hands, for instance, has built its brand as a hip company largely through its market showroom atmosphere, which many retailers like to replicate on their on floors, according Mike Bullock, vice president of marketing. The company wants to figure out how to do the same thing on the Internet. It’s a work in progress.
“We’ve experienced a lot of growth by nailing down our showroom experience,” he said. “When people in the industry walk in, they get it, but doing that online is a very different proposition. “How do we take that showroom experience, where we’ve developed a strong skill set, and translate that (online) to inspire consumers?”
Sherrill Furniture has multiple brands in all categories, and offers a huge range of custom finishes and fabrics. The company looks to protect—and build—its brand online by teaming with retailers who will honor its pricing policies and work to project its custom story. Sherrill looks at what high-end brands outside the furniture sector are doing online as well. “By being online with the right partners, we build our brand presence,” said Tim Bohon, executive vice president of sales and marketing. “There are going to be winners and losers here, and we approach that from every angle. We look at BMW and see how they present themselves online.” Hooker Furniture feels having its goods available online is critical to its long-term success, but wanted to leverage relationships with its retail partners and help them establish an e-commerce presence.
“We decided that whatever we did had to help our retailers make the transition to e-commerce,” said Johne Albanese, vice president of corporate marketing. “Our product had to be on sale online through pure-players or traditional retailers. “Independent retailers were shrinking, and we felt part of that was because they didn’t take advantage of their proximity to the customer, who usually likes to buy locally … Forrester Research reported that 83 percent of consumers who can’t find a price on a Web site just leave.” P3’s reliance on retail partners—who have the infrastructure to service the sale—also protects Hooker’s brands. “Our focus was to acknowledge a retailers control of their ‘ground space’ and give them control of their ‘air space’ locally,” Albanese said. “I can say as a former online dealer that nobody bought a stick of furniture they hadn’t seen somewhere else.” A second belief central to P3 was the importance of education— a knowledge and understanding of the real cost of managing on online business, and offering a way to manage that business.
Albanese also would welcome the participation of other manufacturers in the P3 platform. “You can have seven guys in the same town doing e-commerce,” he said. “We have a way to get these retailers engaged in a local-focused, omnichannel program.” A big surprise during the development of P3 was how many retailers had no digital media presence. “When we got them to do digital ads, site activity increased 10 times; and cart activity 50 times,” Albanese said. Samson Marketing CEO Kevin O’Connor observed that a brand can’t be everything to everyone; and that whether a retailer or manufacturer, working with the right partner—store, vendor or carrier—will affect the way consumers view your brand.
Consumers don’t depend on advertising for inspiration, Four Hands’ Bullock said, and furniture companies have to get proactive in that regard. “They’re getting it from a global perspective,” he said. “How consumers make their decision is dramatically different from in the past. … They’re influenced from all over the place. How do we become an influencer?” He noted that many companies in the furniture industry traditionally gauged success by the sheer number of accounts sold.
“You’ll be forced to make choices, and then it becomes a less complicated problem than trying to be everything to everybody,” he said. “Who you choose as your partner, whether you’re a manufacturer, a marketing company or a retailer, is critical to your brand. You need a shared ideology.”
Pop up locations show potential as a model for home furnishings.
By Powell Slaughter
So-called pop-up locations, temporary installations in high-traffic shopping areas such as malls, have proven highly effective in various consumer goods categories. Sometimes they work as actual retail shops, whether seasonal—think gifts during the holidays—or to build excitement and sales for athletic equipment or clothing lines. They also can serve as a lure to a permanent store with enticing displays or promotion of new merchandise. “It gets people to think about you,” said John Egger, CEO of furniture retail management consultancy Profitability Consulting Group.
“It’s a representation of your store in a high-traffic area—it’s like an interactive billboard.” The technique represents a huge opportunity that most of the furniture industry has yet to understand, said Connie Post, CEO of retail and trade showroom design specialist Affordable Design Solutions.
“Retailers could go into malls and drive holiday traffic to their stores,” she said. “People like Nike and other athletic equipment brands have put out shipping containers and turned them into a retail space. Other parts of retail worldwide are doing it. We in the furniture industry are very slow with new ideas.”
She pointed to West Virginia and Kentucky retailer Big Sandy as an example of a furniture retailer employing a pop-up.
“They had a kiosk for the holidays that did quite well,” Post said. “You can use those as a model to sell specific categories.”
Now you sell it
The pop-up model is central to promoting the HGTV Home Furniture Collection, produced by Bassett Furniture for the network’s consumer products segment. By the end of the year, six pop-up stores around the country will have promoted the HGTV Home Furniture brand to customer in locations outside traditional furniture store fronts. “It’s an HGTV initiative to create consumer awareness about the home line of products,” said Renee Loper, vice president of independent retail development and marketing for Bassett. “Because this is a new endeavor, consumers weren’t aware HGTV even has these products.”
The HGTV Home Pop-Up Shop was a way to increase consumer awareness about the home line of products. “The goals are engagement and consumer awareness,” she said. A pop-up location was in downtown Chicago through Sept. 22. This month, a location opened in Tyson’s Corner, Va ., on the seventh and will run through Nov. 10.Later that month, a pop-up is set to open in Santa Monica Place in Los Angeles on Nov. 25. Next year, HGTV Home Pop-Up Shop are scheduled for the King of Prussia Mall in the Philadelphia area; Atlanta; and the Mall of America in Bloomington, Minn.“Chicago is the first location where we’ve had a retailer carrying the line (Darvin’s Furniture) in very close proximity,” Loper said. “We are doing a coupon that’s handed out in the pop-up shop for the store. Anecdotally, I hear Darvin’s has seen some additional traffic. Traffic at the pop-ups has ranged from 5,000to 6,000 per location.”
Robin Ulrich, senior vice president of consumer products at HGTV, said the HGTV Pop Up Shops are designed to inspire ideas with categories to match the biggest projects. “By bringing all our partners together in one space, we can show how it all works together,” she said, adding that tying in with local stores carrying the goods is a priority—goods on display in the pop ups are not for sale, but for display and inspiration only. Belfort Furniture in Dulles, Va., for example, is counting on the HGTV pop-up location in Tyson’s Corner, a suburb of Washington, D.C., to build excitement for its launch of the HGTV Home Furniture Collection.
“They’re launching at the store, Nov. 9, and Genevieve Gorder will be there,” said Robin Ulrich, senior vice president of consumer products, HGTV. “We make sure when consumers come to the store we have a retailer in the area for all of our product categories listed on a take-away.” Those range from lighting to flooring to HGTV’s paint line with Sherwin-Williams in addition to furniture. “It’s important that if we’re in that market, we want to make sure visitors know they can buy the products they see (in the pop-up) locally,” Ulrich said. With the furniture line, “we’ll really push our local retailers, be it a local independent or a Bassett store.” HFB
A Take on Other Models Furniture’s getting sold in all sorts of ways, and traditional furniture stores could learn from some of those models. Profitability Consulting Group CEO John Egger offered his take on several.
“The advantage is that your design, floor display, marketing and merchandising are pretty much taken care of,” Egger said. “And you have name recognition. Some have leeway, some don’t.”
A disadvantage is that retailers are locked in since they don’t carry other brands. “Some of these brands don’t have bedding, and that’s something retailers need to carry,” he said. “Plus, some of the manufacturers aren’t great retailers. …You’re relying on one company.”
WEEKEND ONLY STORES
“I’ve worked with some of those,” Egger said. “Friday, Saturday and Sunday, that’s the core of our business, 80 to 90 percent of furniture retail takes place then.” There are some lower overhead and labor costs, especially if the operation takes a warehouse approach where the employees are more order takers than full-service sales associates. “There’s a perceived advantage among the public that they’ll have lower prices,” Egger said. “But even if you’re open three days a week, you still have to pay your rent and taxes; most and salespeople are on straight commission, so I’m not sure how much money you save. “It’s gimmicky, I think, but it’s a good advertising approach.”
The West Elms, the Crate & Barrels are where furniture stores can learn some lessons, according to Egger. “They’re in high-traffic areas, and they get great visibility,” he said.
“They’re always cutting edge, and they’ve got that young, upwardly mobile customer’s attention—It’s perceived as cool to be at West Elm.” In addition to great locations, appealing design and strong floor presentation, they offer lots of product that moves quickly. “They’re wide when it comes to product—towels, bath, candles,” Egger noted. “They are every appealing to shoppers in malls.
“We can learn from things they’re doing—some of their displays onto-go items are fabulous. That sort of thing can help build cash flow. I’d recommend that all furniture retailers spend time in those stores and look at what they’re doing with gift and other smaller items.”
Egger noted that the online model is making inroads even in what one might think are very “high touch” categories. “The thing that surprises me is bedding sales” online, he said. “How do you try out a QVC mattress unless it’s something you can find in a store?
The online sales potential is too big for furniture suppliers to ignore.
BY SHEILA LONG O’MARA
In case you were wondering, American bedrooms are used for much more than sleeping and, ahem, a welcoming space to “reconnect” with partners. Bedrooms are no longer just a safe haven for a peaceful night’s sleep. In fact, a Home Furnishings Business survey conducted last month of consumers who had bought bedroom furniture in the last 18 months reveals the bedroom as a mini-hub of the home. According to the 250 survey participants, reading, watching television and working on computers are the ranked as the top three activities consumers do in their bedrooms. It’s a busy room the households, and activities—other than the obvious—include paying bills, completing work from the office and doing school work. Knowing that all of those activities are taking place in bedrooms provides suppliers and home furnishings retailers insight into designing and flooring bedroom products that resonate with consumers and their needs. Nightstands with easy-to-reach power stations, for example, make sense for those plugged-in night owls. The category, which harnessed $8.8 billion in sales last year, has posted a cumulative growth of 12.7 percent since 2009. What may surprise some is that the category’s growth rate is the slowest among all categories, including dining room, which boasts a three-year growth rate of 13.06 percent. Bedroom represents 18.2 percent of furniture retailers’ sales, and it reigns supreme as retailers’ highest margin category at 49.1 percent.
More than 50 percent of the consumers in the survey report that their primary motivation for buying their bedroom was to replace their old furniture. Buying a new home came in at a distant second as motivation for buying with not quite 20 percent of the consumers citing their real estate purchase as the reason for a new bedroom collection. As one might expect, the showstopper is the bed. That’s the piece that a whopping 67 percent of our consumers were attracted to most from the collection of furniture they bought. The collection’s dresser was a distant second with a mere 14.7 percent.
It’s NOT the Price
While we as an industry tend to get bogged down on price and promotions that revolve around lowest, best pricing, consumers in our survey don’t appear to be driven by price. When asked about price expectations for a full bedroom suite with queen bed, dresser and mirror, chest, complete bed, nightstand nearly 84 percent fell in the price range of $1,000 to $7,999.
Traditional styling took a small lead ahead of contemporary designs with our consumers. Traditional designs eked past contemporary 38.2 percent to 33.8 percent. It is important to note that style preference is extremely subjective among consumer. Your declared contemporary could very well fall into some else’s traditional realm. While we in Furnitureland tend to seen a lot of upholstered headboards these days, it appears that consumers haven’t yet grasped hold of the trend. According to our survey, more than half—52.9 percent weren’t likely to buy a fully upholstered or partially upholstered headboard for their homes.
Sixty percent of the consumers surveyed said they prefer the look of wood over the upholstered headboards, and 23.3 percent said they didn’t even consider buying the upholstered version. Reasons varied from the concern of keeping the upholstery clean to fear of the style becoming dated too quickly to quality concerns.
What Suppliers Say
LEXINGTON HOME BRANDS
Tommy Bahama Home’s Ocean Club Paradise Point Bed from Lexington is a winner across all regions. With a suggested retail price of $2,529, the bed’s lasting success has a lot to do with its dramatic features—a woven rattan panel headboard framed by open fretwork design that continues down the side rails and footboard. The bed is a contemporary fusion of east and west with influence from islands of the Pacific Rim.
LEGACY CLASSIC FURNITURE
Evolution is Legacy Classic Furniture’s top-selling bedroom. Crafted in classic styling, the 9180 Evolution sleigh bed with dresser and mirror retails at $1,799. The bed alone is $799.
HGTV HOME AT BASSETT FURNITURE
European inspiration provides Caravan from HGTV Home at Bassett a casual, traditional feel. Available in a number finishes, like Midnight and Dusk. The collection features turned knobs with coin edging and oval ring pulls in an antique patina.
The Reflections bedroom is available from Vaughan-Bassett in six finish options, and the group is always in stock for quick delivery in any finish within six days. That flexibility offers retailers an entrée into the special order business without a lengthy consumer wait. Heavy moldings and bun feet convey a significant value to consumers. Retail on a queen storage bed is $799; $2499 for queen storage bed, dresser, mirror, and chest.
Old World, retail $3999. Talk about the sliding top nightstand with the concealed storage, drawer cheer has hidden storage in the parting rail below the top drawer. Gentle men’s vest has a valet on the RSF end panel - storage sells!
KLAUSSNER HOME FURNISHINGS
Klaussner’s LaSalle bedroom includes this contemporary bed featuring footboard storage and a two-tone espresso finish. Striking wood grains framed in black offer a modern design statement, and the hardware takes a nod toward contemporary. The bed retails at $699.
VAUGHAN FURNITURE CO.
Form follows function in Vaughan’s Simply Shaker Too collection available in master and youth bedrooms. A warm cherry finish accents cherry veneers, and a decorative molding of vine graces some pieces with metal knobs. Designs feature a deep cut base rail. Drawer fronts and top moldings are softly rounded for a clean, yet weighty look. Also available finished in white or black.
What Retailers Say
Be sure to check out our online gallery to see the bedroom products that a sampling of retailer say are their top sellers. You can find it at HFbusiness.com
By Bob George
If you are the typical retailer, as you read the feature article, your thoughts will center on your own operation and whether or not you should pursue the strategies.
What works for one retailer in specific markets may not work for another one in another.
The landscape is littered with the remnants of the next great thing. Strategies are the result of a thoughtful process that considers your company against the competitive setting in which it exists.
Often overlooked is the foundation upon which the strategy is based—the assumptions. Assumptions are defined as “those statements about probable developments which cannot be predicted with accuracy, over which the business may have limited control, and which may have a major impact on the attainment of goals and objectives.” Unfortunately, our assumptions are often ingrained in our thought processes over years of talking to ourselves. Do any of the following statements ring true to you?
· Consumers are price driven ignoring style and quality.
· The features and benefits that define quality cannot be communicated to the typical consumer.
· The only way to motivate the consumer to buy is a promotional message.
· Consumers will not buy without seeing, feeling, or sitting on a product.
Because of these deep-seated beliefs, we often miss the real breakthrough strategies. What was the source of the visions for retailers such as I.O. Metro, Room & Board, and Frontgate (yes, an online retailer)? I assure you that it was not from the assumptions above. Go to their Web sites to understand their assumptions and then compare them to your own.
The retailers and manufacturers that will survive and prosper are those looking beyond their accepted assumptions and identify the emerging trends. For example;
· Almost 58 percent of consumers are willing to pay more for ‘sustainable’ product.
· The quality delivered by American-made “Amish built” is a value to a growing number of consumers.
· The retail experience delivered by certain lifestyle retailers results in margins 1.5 times those of the traditional independent dealers.
With a set of assumptions in place, the next step requires an honest evaluation of a company’s strengths and weaknesses in combination with an identification of your threats and opportunities. What do I mean by that? The definitions are below.
Strengths — Significant positive factors or competitive advantages within an organization that may be capitalized upon in the future.
Weaknesses—Significant negative factors or competitive disadvantages within an organization that may prevent that organization from achieving its goals and objectives.
Opportunities—Major external situations or events that may exist now or will occur in the future that, if exploited, could improve organizational performance.
Threats—Major external obstructions or risks that may now or in the future which should be avoided, minimized, or managed.
After this careful thought process, you can then begin to define the Strategic Elements of a plan. If the following are a part of your plan, go back to the beginning and start over!
· Lower prices for products that are designed to replicate similar higher priced products. Low average unit selling price on premium bedding, bonded leather, etc.
· Sales promotion that begin with 50 percent off and continue down the slippery slope to 60 percent and more off.
· New after-sale add-ons beyond delivery charges.
While this is frustrating to the consumer, it is not as bad as the airlines’ baggage fees … yet.
By Sheila Long O’Mara
Love ‘em or hate ‘em, mass discounter Walmart can sure turn some merchandise, and the retailer has figured out how to recreate itself every five years or so.
That’s part of massive Walmart’s overreaching strategy. Today’s Walmart is far different from where the chain was in 2008, and it’s quite likely the retail giant will be much different in five years from now.
In a presentation last month at a retail conference in New York, Bill Simon, Walmart’s CEO, said the retailer was constantly investing in all channels. Those channels—ship from store, ship to lockers, smartphone self-scanning, same-day delivery and store loyalty—are building on the company’s founding principles of everyday low prices and a lean supply chain.
The interesting thing to note of Walmart’s strategy is that all the layers on top of that foundation, are open for discussion. Nothing is set in stone and inflexible. Currently, the retailer is in the midst of a number of new initiatives revolving around “the convergence of the digital and physical retail worlds,” Simon said. Take a look at a few of the projects that have come online at the giant retailer in the last 12 months.
1. Ship from store. The volume of fast-moving items ordered from Walmart.com that are then shipped to customers from local stores is in the “double digits,” Simon said. Ship from store is out of the test phase and now a reality.
2. Pay with cash—ONLINE. That’s unique for thee-commerce world. Walmart has figured out how to accept cash via its Web site.
3. Lockers in stores. Walmart has established lockers in its stores so customers can order online, go to the locker at a convenient time and pick up their order. Convenience at its best.
4. Scan and go mobile payment. This option gives consumers an easy self-checkout using their smartphone.
5. Store-specific mobile app. The app informs shoppers of specials available in a specific store on a particular date.
6. Same-day delivery. The grocery option is up and running in San Francisco.
What the heck does all of that have to do with strategy for furniture retailers?
Well, first of all, Walmart is selling a pretty decent chunk of furniture; that elephant in the middle of your marketplace is one of your competitors. Like it or not, it is. Next, the retailer is thinking strategically about its future, and that forecasting has its executive team looking ahead five years. What will the future look like for retail? For furniture retail? While the above specifics may not be specific to furniture, Simon hinted at other promising initiatives the retailer has cooking on its back burner. Adult beverages, fresh produce, Walmart Express AND, wait for it … home furnishings.
Much of what the retailer touches seems to turn to silver, if not gold. Strategic thinking is in its DNA. A lesson all retailers, including furniture dealers, should take to heart. Planning and thinking about and for the future are building blocks for success and longevity. Let’s get started on those and make the next five years in furniture retailing a success while we set the gears in motion for five and 10 years beyond.
Happy High Point Market! We’ll see you there.