From Home Furnishing Business
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.
Here’s one you probably don’t hear often: Imagine a store that, when it doesn’t have what a customer is looking for, refers them to a competing retailer.
That’s exactly what Martin’s Town & Country Furniture, a longtime seller of bedding and furniture based in Canby, Ore., does. It’s one of the many ways the retailer will go the extra mile to ensure that customers are well taken care of, whoever they ultimately end up buying from.
“We don’t want to close the sale today and give somebody something that might not be what’s best for them just to get a few dollars in the till today” said Martin’s owner/president Neil Martin. “We want to get something that’s right for them, and if we don’t have (it), we’ll look it up online and find where they can get (it).”
This philosophy pays off in the long run, he added: “They’ll remember that. They’ll remember the honesty, and, I think, the integrity, and come back and see us when they do have something that we can help them with. So those are the long-term relationships that we’re trying to build and keep going for generations.”
Runs in the Family
Generations are something Martin knows about—he’s part of the third generation of Martin family members to work in the Canby store, which will celebrate its 50th anniversary this year.
The business actually began in 1947, when Martin’s grandfather Walter opened his first Martin’s Furniture and Appliance Co. store in Molalla, Ore. During his daily commute to and from his home in Canby, a plot of property in his hometown caught his eye. He bought the land, and in October of 1963, a new store, Martin’s Town & Country Furniture, opened.
Walter’s son Robert joined the business in 1965, as did his brother Neil eight years later. When the store’s longtime delivery person retired in 2000, Robert’s son, also named Neil, joined the family business, which he now owns. While the Mollala store has closed, the Canby location continues to serve the rural community of Canby and its surrounding area.
Martin’s is a full-line furniture store, but the company has done well with bedding by keeping its offerings in this category sharply focused. The retailer has carried Sealy for, in Neil Martin’s words, “as long as I can remember,” but added Tempur-Pedic in 2004.
This has been a successful move, in Martin’s opinion: “It’s a good line and we’re happy to have it. Everybody seems to be really, really happy with their purchase. We’ve had two comfort returns in the last five years and one was not really a comfort return—it was just a size return, the twin was too small and (the customer) wanted to go to a full. The other, the fellow was commenting that he loved the bed, thought it was very comfortable but he was just having a little difficulty turning. So I said, ‘Why don’t you come in and try that new Tempur-Weightless collection—it’s like your Cloud Supreme on the top; it just has that Tempur Float layer in there.’ So we switched him out and he called a few days later and said ‘It’s perfect—exactly what I was looking for.’ We’ve had a couple of switches in the last five years, but they haven’t switched to another brand in the line.”
Going the Distance
Martin takes the concept of “going the extra mile” literally. Not only does the business offer free delivery on beds and other furniture, but Martin and his co-workers have been known to go great distances to take care of customers.
“We’ve had deliveries that were over 250 miles one way,” Martin said. “A lot of the deliveries that are farther out are maybe people that live closer but have a second home in central Oregon over the coast. But it’s not uncommon to have folks from 30, 40 or 50 miles out come in because they’ve seen an ad or heard about us from a friend. They come in and give us a shot.”
While shoppers may come from far and wide, Martin still attributes much of his store’s staying power to his loyal, local customers.
“We have a real supportive community,” he stated. “It’s not really big—maybe 16,000 people. We’re just about halfway between Portland and Salem, about 30 minutes from either. It’s just a little community here, but there are a lot of outlying communities, at least another six or seven ZIP codes within a 15-mile radius, so we have a pretty big area that we service here.”
Tradition is important to Neil Martin, and his fidelity to his family elders influences his store’s bedding sales approach.
“There are really only five people who have worked on the sales floor in the whole 50 years,” he recalled. “We’ve never had any commissioned salespeople on the floor. I think that creates a different approach right there, because we’re not worried about getting a sale today. If we don’t and (the customer) comes back tomorrow or a week later, maybe (another staffer) gets a part of that. … It seems like the different positive comments we get about the store are related to the fact that they can come in and look around, do their research; we’re here to answer their questions but there’s not pressure. So when somebody walks out and doesn’t buy something, I don’t look at that as any kind of failure or lost opportunity. If we’ve done our job, we’ve answered their questions and had the time to get to know them a little bit … I figure when they’re ready, they’ll be back. I really think our ‘be-backs’ are somewhere around at least 50 percent.”
This care and respect shown for consumers doesn’t just occur in the store—it also is the way Martin’s does business in customers’ homes.
“When we deliver a bed, we often vacuum the floors when we pull the old mattress set out, help them clean up,” Martin said, “because it might be another 10 or 20 years before they get under there again. Any little thing that we can do to help them get that (good) feeling—many stores used to do this naturally, but it’s harder and harder to find customer service at the level that we try to maintain. … So I really don’t see much competition in the way of stores like us. There are other stores that sell the lines that we have. … But with our service, and with our (low) prices—my (family owns) the building and property, so our overhead is very low, so all things considered, it creates an unusual business model.”
The Next Generation
Is there another generation poised to carry on taking care of Martin’s customers in years to come?
Neil Martin may have a few contenders: “I have a four-year-old son and a newborn son about a month old. We’d love to see this go to a fourth generation. … Certainly, once I got here and got to know more about the business, and then take ownership in it, it’s something I take a lot of pride in. … I feel grateful and blessed to have the opportunity to be here.” HFB
By Powell Slaughter
An eye for opportunity and continuing development of new market segments and services has Stacy Furniture & Design staking a claim in the highly competitive Dallas/Ft. Worth market for home furnishings.
Last year, Stacy racked up more than $42 million in sales at its Grapevine and Allen, Texas, namesake stores, an outlet store at its Flower Mound distribution center, and another location at a
former Robb & Stucky store in Plano.
Since incorporating as a retail operation in 1991—prior to that it was a wholesale furniture distributor, serving dealers in Texas, Oklahoma, New Mexico and Louisiana—Stacy has grown into a full-service home furnishings resource, building its price points into the middle and upper end, and offering full design services.
FROM WAREHOUSE TO SHOWCASE
The showrooms Stacy’s customers see today are a long way from its beginnings as a store. The retail operation opened initially in the warehouse that served the original distribution business, “selling in and through our racks,” said Dorian Stacy Sims , Stacy Furniture & Design president, and daughter of founder and owner Rick Stacy .
“This proved to be cost effective but made for very difficult conditions for our customers,” Sims said. “The heat in a warehouse during a typical Texas summer can be grueling.”
Despite the less-than-ideal shopping environment, business continued to grow at a steady, dependable pace, helped along by a wave of home developments in the market.
In 1998, Rick Stacy, who Sims called “our leader, visionary, chief ‘dreamer’” decided it was time to build a “real” store, and construction began on Stacy’s Grapevine property. That store opened in July 2000.
“His vision was a one-stop shopping experience for our customer’s home furnishing needs,” Sims said. “The Grapevine property has 40,000 square feet on the first floor dedicated to other needs for the home that Stacy’s doesn’t sell. For instance, we have Carpet One, Morrison Appliance, Yard Art, a drop-in day care facility and a restaurant as tenants.
“The Stacy Furniture showroom is on the second floor featuring 90,000-plus square feet of stained concrete and carpeted areas displaying furniture in both category specific and lifestyle vignettes. Over the years we continue to evolve with our assortment, display and price points due to the ever-changing needs of our customer. In 2003, we opened a similar, one-story footprint in Allen, Texas, and have had great success with that expansion of the market area.”
When Gabbert’s decided to leave the Texas market in late 2005, Stacy looked at purchasing its Fort Worth facility. The structure, however, didn’t fit Stacy’s needs, so while it passed on the building, it expanded its own reach with consumers by hiring the former Gabbert’s Design Studio staff.
“We opened Dorian’s Interior Design studio in Fort Worth in 2005 to expand our selection in higher-end goods and design services,” Sims said.
A new Trader Joe’s grocery leased that Fort Worth property in late 2011, and the Design Studio moved out, but design services for a higher-end clientele by that time were an established part of the retailer’s repertoire. And that meant a new brand to reflect Stacy Furniture’s abilities.
“This dynamic product assortment proved to be a very successful decision and a challenging one at the same time,” Sims said. “We began to incorporate more and more of the higher end lines, such as Henredon, Hickory Chair, Century and Sherrill into our existing Stacy Furniture stores until it became more efficient for us to incorporate the entire mix together and change our company name to simply, Stacy Furniture & Design. Today the customer experience at any Stacy Furniture & Design will host a wide variety of price points from Klaussner to Henredon, custom window treatments, whole house finish out and so much more.”
Stacy will be moving out of the Former Robb & Stucky location in Plano this year. The retailer had a short-term lease on the property, and while Dorian said that location has been successful, the landlord has contracted to demolish the building and replace it with multi-story office towers.
“At this time, we are currently running a moving sale event and negotiating details on another property in the North Dallas area,” Sims noted. “We’re hoping to make a ‘new home’ announcement very soon.”
The product selections between the existing Grapevine and Allen stores are primarily the same, but the feel of the two showrooms is different due to interior details. The Allen store, for instance, is a former Kmart location and has very high ceilings and carpeting. The furniture showroom segment of the Grapevine store has stained walls and tile flooring over much of the area.
“Since starting our moving sale from Plano, we’ve begun to remodel and enhance the displays at our Allen location,” Sims said. “By creating a more open feel in some areas while building smaller, power display opportunity areas the customer can shop the store with ease.”
UPSCALING THE MESSAGE
Stacy Furniture & Design’s primary advertising medium is television.
“Rick and I personally appear in our commercials and try to balance between event driven offers as well as informative messages about products or services,” Sims said. “We are doing more and more social and digital media but are still trying to find the best balance to reach our customer.
“For several years now, biannually we’ve mailed a 44-page Magalog (an upscale catalog) piece that has been very successful in expressing to our customers what we really offer in a format customers are proud to keep on their cocktail table for months to come.”
The retailer also is working on scaling up the brand image.
“Our trade line has always been ‘if you’re not shopping at Stacy’s your burning money,’ but that just is too price-oriented, and that’s not how we want to compete,” Sims said. “We’re working on our marketing and branding to expand and talk to the current customer we’re trying to sell.”
Sims noted that Stacy Furniture & Design is in a very competitive market with very astute independent retailers and successful chain operations.
“It forces Stacy’s to keep on our toes, stay ahead of pricing issues and marketing opportunities, and ultimately makes us better merchants,” she said. “We are different in the respect that we offer a wider variety of price points and opportunities to fully address any customer’s needs—no matter the budget. From the chain perspective, you can never replace the value of a locally owned and operated, family business dedicated to great customer service.”
Like most retailers, Stacy Furniture & Design felt the heat during the recession, but Sims is optimistic about the retailer’s prospects.
She said Stacy’s had been on a consecutive sales growth pattern for 17 years until late 2008.
“While Texas was slower to feel the fall out of the economy than other areas, we have felt it,” Sims said. “Sales did drop, significantly at times, and we had to make many changes to our operation costs and cut expenses wherever possible.
“I think the most important thing we’ve learned is, most likely, you can always keep evaluating expenses and overhead to reduce waste, and it should be a priority, not fall to the back burner. For the customer, we continued to partner with manufacturers that have shorter lead times to help manage our inventory costs but also provided the customer with a quicker delivery fulfillment.”
Sims said she’s hearing good things about the housing market picking up in the market Stacy’s Furniture & Design serves.
“By continuing to expand our advertising and fine tune our product mix message, we feel we are doing a better job at reminding them how important it is to make their house a ‘home’” she said. “Boiling it down, we are continuing to advertise as much as possible to remind people that new furniture is a good thing.” HFB
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?
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.”
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
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
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.