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From Home Furnishing Business

Setting Priorities

Commitment to Service, Selling Value Instead of Price. Have De Young Interiors All in For The Long Haul.

By Powell Slaughter

Ask most furniture retailers for their best sales day week in and week out, and a lot will answer Sunday.

While most furniture stores depend on a full weekend to meet their goals, most people out there in the world take Sunday as a day to be with their families and worship as they see fit (or maybe even shop for furniture). If you work at De Young Interiors in St. John, Ind., you can enjoy that day as well. Though it shuts the doors on Sundays, De Young is still thriving after 87 years in business.

“We are a faith-based company, and we are closed on Sundays,” said Co-Owner John De Young. “We’ve been able to thrive and survive.” It also helps make for happier employees.

“A very large store in our area closed, and I knew the sales manager,” De Young said. “I was talking to her about a job, and I told her, ‘You won’t be able to make that kind of money here because we’re closed on Sundays.’ That’s our church and family day.” While the woman had children and would have liked the time with them, she still wasn’t sure about the money issue. She ended up giving it a shot at De Young Interiors. “Three months later I asked her how she was liking her Sundays off, and she said she loved it,” De Young said. “In our industry, we push and push and push, and we get burned out. My grandparents set these standards and we carried them on.

 … We have a sign at the front of the store, and one of the things on there is “Closed Sundays, See You in Church. “People tell me they appreciate those values. I’m not going to push religion on anyone, but this does serve as our ‘silent’ witness.” Customers seem to like the store as well—it won the region’s “Best of” in the furniture store category this year.

4 GENERATIONS—SO FAR

Nick and Cora De Young started the business when they opened a joint furniture store and funeral home in South Holland, Ill., in 1928—a common business pairing at the time, when the makers of fine furniture also made caskets. The store’s emphasis on building relationships in the community it serves dates back to the Great Depression years, when the De Youngs would let people pay their bills when they were able to, a little at a time. That built a spirit of trust and friendship with their customers.

The De Youngs opened a second location in nearby Lansing, Ill., in 1939; and soon committed to the furniture only, bringing their customers more brands and a larger variety of products.

Upon retirement, Nick and Cora De Young turned the business over to their three sons: Gerry, Arnold and Sidney. The brothers ran De Young’s until their retirement in 1993, when the stores passed to their sons and sons-in-law; Jerry and John De Young, Bob Scheuneman and Tom McGehee.

De Youngs closed their South Holland and Lansing locations and, in 2005, the company opened De Young Interiors in St. John, Ind. De Young’s had made a decision to put all its efforts into a single, strong location.

“The demographics were good, and it’s a growth area,” said John De Young of St. John, located along interstates 30 miles south of Chicago in northwest Indiana. “Our town just got rated by CNN as the best place in Indiana to raise a family. The store is right across the street from Lakes Central High School, with 4,000 students. They’ve had a $140 million expansion.

“We’re on a very busy highway, U.S. 41, and that school is a landmark, with parents going to events there. It put us in a highly visible area.”

AN EAR TO THE GROUND

The four partners in De Young Interiors each have 40 years of experience in the business.

“An owner is always on site,” De Young said. “Any time we have to make a call on something to get a customer satisfied, it’s coming from the highest authority—one advantage of a family business.

“My office is right by our counter.

I have two open doors, and I can hear the interaction. It’s going back to what we were doing in 1928, with third, fourth and fifth generations of customers.” Some family owned retailers have closed up shop because they couldn’t get the next generation interested in continuing on or family squabbles.

“The foundation of priorities and how we treat each other is huge, because some families don’t get along,” De Young said. “We disagree sometimes, but we all are committed to the business and each other.”

CARVING A NICHE

De Young Interiors positions itself firmly in medium to upper-middle price points.

“We don’t deal with low-end product, but we have some priceconscious items, and we don’t go crazy at the high end,” De Young said. “That’s where we hang our hat. Customers have come to know us and trust us because of the good brands we carry and the service we offer.”

In May, De Young Interiors was voted “Best in Region” for furniture stores by readers of the local paper.

“We’d won that award in the past, but hadn’t last year,” De Young said. “We won again because we’ve worked a little harder.”

De Young Interiors’ floor staff is a mix of interior designers and sales consultants who have no design background per se, but all are highly trained on the products they sell. The store develops skills through mentoring; and relies more on selling value versus price alone.

“Take Smith Bros.’ construction—our sales consultants know how to say, ‘You may see the same fabric on a less expensive model, but the quality underneath this is better,” De Young said. “Our industry made a mistake by going cheap, cheap, cheap all the time instead of selling value. We have flourished because we’re selling better product and explaining the difference to customers.”

PRESENTATION ON THE FLOOR

Time was, De Young tended to buy the sorts of products he wanted, but that’s changing. There’s more designer input involved now.

In addition to the designers on staff, De Young’s son Kyle, who is sales manager, has a degree from Savannah College of Art and Design. His new bride as of this month has a degree from Harrington College of Design in Chicago. “Since we have more designers on staff, we’ve gone to more of a committee approach to buying decisions,” De Young said. “Kyle helped bring that to the table.

We’re combining the experience of management with the input of designers and sales managers.

“We’re very heavily accessorized—presentation is everything if you’re going to help people visualize how it will look in the home.”

CUSTOMER COMMUNICATION

A knowledgeable staff combined with a new emphasis on direct mail and e-mail blasts to give De Young Interiors what De Young “the best first quarter we ever had.”

“We’re continually trying to improve how we communicate to the customers,” he said. “We’ve done television and local cable, and radio in the past, but what we hang our hat on now is our mailing list— direct mail and e-mail.

“I don’t really understand social media, but Kyle does. We’re trying to market more on the social media side along with direct mail pieces. I’m convinced a lot of people aren’t reading newspapers.”

Direct mail and e-mail are especially effective because of the relationships De Young Interiors has built after 87 years in business. De Young shared an anecdote. “In 1928, my grandfather started the business, and in the early ‘30s he bought a hardware repair shop,” he said. “A local roofer bought nails from my grandfather.

“In 2004, I was moving records and came across a ledger with this roofer. When I moved to northern Indiana, the man at the end of the block turned out to be the owner of that roofing company.” De Young shared the ledger with his neighbor, and in addition to getting his business, “he sends his kids to me. You can’t buy that kind of word of mouth.”

GETTING OVER THE HUMP

Like most retailers, De Young Interiors faced a lot of challenges during the recession and the economy’s slow recovery.

“I think the economy in general has made everyone do a selfcheck,”

De Young said. “We had to do cut-backs, but we’re adding people again.

“We had built a new store and were on a real roll when the economy tanked. We keep talking about it on a daily basis.” While De Young Interiors isn’t resting easy, the immediate future does look promising.

“We had the best first quarter we ever had, and my warehouse is jammed with sold merchandise,”

De Young noted. “I think the rest of the year will be good, but I don’t know if it will be great.” Since De Young Interiors moved to St. Johns, 15 other furniture stores serving the market are no longer in business. The key to the store’s prosperity is Business 101, but apparently not everyone can pass that course.

“The amount of business you can get on the front end, you can lose on the back end,” De Young said. “We watch the doors on both ends, pay attention to detail and minimize expense.”

And despite a lot of multigenerational customer relationships— maybe even because of those relationships—service and satisfaction remain paramount.

“Ours is not a guaranteed approach,” De Young noted. “You have to keep earning that business.”

HFB

"The amount of business you can get on the front end, you can lose on the back end. We watch the doors on both ends, pay attention to detail and minimize expense".

- JOHN DE YOUNG

De Young Interiors


Next Generation

De Young Furniture is setting up for another generation of family management Kyle De Young, sales manager at De Young Interiors and son of co-owner John De Young, represents the furniture retailer’s fourth generation of management.

He brings a fine eye and a competitive personality—Kyle went to Savannah College of Art and Design on a baseball scholarship where he graduated in 2010 with a degree in visual communications with a concentration in design. He’s getting married this month, and his bride Carolyn has a design degree, hers from Harrington College of Design in Chicago.

It’s not where he visualized being, but the family business has provided an outlet to match his skills. A poor job market made working in his field a tough prospect; and after attracting the attention of a number of professional baseball scouts for his middle-infield and outfield play, a shoulder injury left Kyle unable to throw. “My whole life, I’ve been able to draw and paint,” he said. “I also had played baseball my whole life. …

My dad had always said (furniture retailing) is hard, you don’t want to work here,” he said. Still, Kyle had worked in the store’s back end as he grew up, and he was determined to get a job.

“I’m very competitive by nature,” he said. “I asked if I could work in the business, and (my father) said ‘no’ at first. Suddenly, my cousin moved from a customer service position.” Kyle finally talked his dad into letting him give it a try. “I took it as a challenge to solve problems,” he said. “When people call in and they’re upset, it’s like they’re saying your family’s doing them wrong. I take that personally.

“People often feel they’re being taken advantage of, and with a lot of the retail experiences they have, I can understand why.” Proving that he could take care of some of retail’s trickiest and most emotional situations, Kyle got a shot at sales. John De Young challenged his son that he wasn’t up to sales.

“My competitive nature came out in sales,” Kyle said. “My goal is that our family is going to take care of the customer better than the next person. We’re going to inform you more than the next person, and give you the best price and the best value. “My goal is to be better each day with whatever we’re doing, and we have to do a lot of different things in a day—selling on the floor, creating settings, backing up the warehouse.”

John De Young said Kyle brought the passion that won him a scholarship to the store, especially in terms of reaching out to a new generation of customers.

“In the father-son relationship, it’s always been my goal to challenge my boys,” the elder De Young said. “Sports taught good communications skills, good people skills, and how to work with a team to make it all work.”

In addition to his work at De Young, Kyle puts his design background to work on vendor Whittier Wood Furniture’s design committee. “He helped make some changes in their youth line, suggestions he brought to the table,” John said. “You don’t see many people his age in the business doing that. Kyle has the passion for it—that furniture fever people get.

“I worked side-by-side with my dad, and it makes me very proud to have Kyle by my side. On a daily basis, we bounce ideas around about product, and Kyle brings his age group’s perspective. That’s helped our business. There are some things I don’t agree with, but he’s made the right call on many occasions.”

Free Time

When he has the time, De Young Interiors Co-Owner John De Young and his wife, Tamara, enjoy going “some place warm.” “It helps us personally and helps us refresh,” he said, adding, “Now that Kyle’s coming into the business, I can play some golf again.” Kyle is De Young’s son and the store’s sales manager. He has a big day this month.

“We’re getting ready for Kyle’s wedding in June, so that’s been keeping us busy,” John said.

In addition to a fulltime commitment to his family’s store, Kyle—who went to college on a baseball scholarship—is assistant varsity baseball coach at Illiana Christian High School.

“Both my boys received degrees on baseball scholarships, and their way of giving back is to help young players develop,” John noted.

 

Key Management

John De Young, Gerald De Young, Thomas McGehee and Robert Scheuneman, business partners and co-owners; Kyle De Young, sales manager.

Key Vendors

Canadel, Craftmaster, Hammary, Hooker, Kincaid, King Hickory, La-Z-Boy, Lea, Legacy Classic, Smith Bros. of Berne, Stein World, Thomasville, Vaughan-Bassett

De Young Interiors at a Glance

Homebase: St. John, Ind.

Stores: A 27,000-square-foot store dealing in mid- to upper-middle prices

Other Entities: A 20,000-square-foot off-site warehouse. In addition to furniture sales and interior design services, the store carries carpeting and flooring.

Staff: 30 employees, 15 full-time.

Revenue: Annual Sales of $4 million to $5 million

Web site: DeYoungAndSons.com

Frontier Spirit

By Powell Slaughter

A focus on bringing a fashion and design orientation to middle price points and making shopping there a family tradition has meant steady growth of Montgomery’s Furniture.

The fifth-generation family business just opened its third and largest location, a 60,000-square-foot store in Watertown, S.D., which joins existing stores in Madison and Sioux Falls.

“We aren’t the biggest stores, the biggest operators in the market, so our approach is to keep that family way of doing business, that family atmosphere,” said Clark Sinclair , who owns Montgomery’s Furniture along with wife, Connie, son, Eric and daughter-in-law Neala.

“We’ve kept it different by spending a lot of time on displays and accessories at all our stores. We look for unique, fashionable fabrics and accessories. The bigger stores in our area concentrate on high-volume prices and looks, so we merchandise away from them. Our niche is to do the things they don’t want to do, which involves looking for something a little more on the fringe, a little younger. We try to stay a little more on trend.

“We constantly search for the kind of products that aren’t safe enough for the big boxes, so we give our customers a completely different experience.”

ACCESSIBLE FASHION, DESIGN SERVICES
Montgomery’s Watertown and Madison stores carry middle price points, while the Sioux Falls caters to a higher-end customer.

“A lot of our sales people are degreed interior designers with a lot of years of experience,” Sinclair noted. “We have a very stable staff that’s thoroughly qualified to go into the home and help consumers with complimentary design service.”

That’s for all three stores, not just the higher-end Sioux Falls location. It’s in-home design service at very accessible price points. Stability among the sales staff—indeed, all levels has been key—and Sinclair believes it’s because the company gives its sales/design staff the support they need to do their job.

“We feel we’re providing an opportunity for them to run their own business,” he said.

“They don’t have to clean the store or buy for the store, that’s all done for them. We give them a lot of latitude to do their job.”

More than half of Montgomery’s 85 employees are in supporting roles to the sales staff: “We have all the support people—cleaning, delivery, customer service,” Sinclair said. “In some stores, the sales staff has to clean up, handle customer service.
“We make our own draperies in-house, so the designers can work with those accents with customers in the store.”
The store’s Web site highlights its design service with designer profiles; and a room-planning tool is front-and-center on the home page.

126 YEARS AND COUNTING
The business dates back to 1888, when the Dakotas were still a territory.
“George Montgomery was a cabinet maker from back East who came out as far as the railroad went,” Sinclair said. “He stopped at the end of the line.”
Montgomery set up as an undertaker and furniture dealer. His son took over the business along with a son-in-law, the latter of whose children formed the third generation of management.
“The two sons were partners, and one of those sons was my father-in-law, so I am the fourth generation,” Sinclair said.
The other brother also had a son in the business, but the two brothers split up their partnership, which included two stores at the time.
“My father-in-law sold my wife and I the business in Madison 25 years ago,” Sinclair said. That was 10 years after he’d begun working at Montgomery’s.
Seventeen years ago, Montgomery’s opened a location in Sioux Falls, an hour south of Madison, which carries step-up price points.
“We had two small locations (in Madison), an old downtown location with three floors, kind of hard to work with; and a discount store on the edge of town,” he recalled. “We closed those and opened a new, 40,000-square-foot location 10 years ago.”
In February, Montgomery’s opened its largest store yet, 60,000 square feet in Watertown, an hour north of Madison. That location carries the same mid-price selection as in Madison.
“With Watertown, we’re well located along the state’s eastern border,” Sinclair said. “By the end of the year, we want to feel we’re running on all cylinders there. We bought for it last (High Point) Market, and we’ll fill any voids.”
Watertown has a lot of synergy with the Madison  store.
“We’re advertising and merchandising the stores the same for more efficiency,” Montgomery said.
With those two stores carrying similar product, Montgomery’s now has the volume to order containers for these locations.
“We’re also going to carry patio furniture in all three stores,” Sinclair said. “We’ve been buying patio furniture in containers for the first time this year, since it’s for all three stores.”

SOME THINGS CHANGE, SOME DON’T
In his 35 years at Montgomery’s Furniture, Sinclair’s management techniques have evolved as the business has grown.
He said it’s far different running a single store with four employees—including himself—to overseeing three locations with some 85 employees.
“I used to manage by my gut when we were small, but now it’s all statistics,” Sinclair said. “We have a monthly meeting just on metrics—floor covering issues, perfect deliveries, sales, inventory levels—with each store’s management team.
“We’re looking at how to measure lots of different things—we’re going to institute a better way to track traffic.”
Montgomery’s membership in a performance group through Impact Consulting Services has pushed that along.
“The performance group really helps with that because now we’re comparing with our peers,” Sinclair noted. “When we see we have one of the lowest fabric treatment sales levels, we can figure out how to improve on that.”
The stores are moving to iPads, integrating them into their systems so sales associates don’t have to go to a computer when helping customers on the floors.
“It’s part of providing the tools they need,” Sinclair said. “There’s a lot of training and effort that goes into the tech side of our business.”
Montgomery’s also is shifting resources into e-marketing initiatives.
“My son is new-generation, so he’s really involved with this,” Sinclair noted. “He was a rep with Rowe for five years, seeing retailers of all sizes. Eric also belongs to a local group of young members of family entrepreneurial businesses.”
Regarding promotion, he added that the business is fortunate to be located in a where television advertising is affordable.
“As we’ve grown, we’ve been able to do more—that’s our biggest vehicle,” Sinclair said. “We also do newspapers, and we like local glossy magazines, because of the quality of the image we can show. We’re getting more involved in e-marketing and a little bit of direct mail and radio.”
The selling tools, the design orientation and the good working environment serve a goal that’s never changed.
“Our customers just expect more out of us in terms of quality and service,” Sinclair said. “We want to be the place to go if you want something fashion forward.
“I know of customers who are third-generation since I’ve been doing this.  We depend on those people. There aren’t enough people in South Dakota that you can count on a lot of new people coming in.” HFB

 

Hail to Market!

I never aspired to become a writer and sometimes find it difficult coming up with the words to put in my monthly column. However, it’s a duty that comes with being publisher of Home Furnishings Business magazine.

I’ve tried to come up with an angle or story that I can relate to our discussion this month regarding metrics, but my mind and other responsibilities are focused on follow up from the recent High Point Market.

So, I will head in that direction.

I love markets. It’s like going back to school after summer break. I get to spend time with many of my friends who are retailers, service providers and manufacturers. It is also a time where you can make new contacts and form new business relationships. The energy, spirit and vibe of the entire event are enough to recharge about anyone’s batteries. I get to see what many manufacturers have been working on for months, and I love to see what new products they introduce during market. The grand showrooms are immaculate and many of the events are as impressive as the showrooms. The vendors put a lot of time and effort into catered breakfasts, lunches and parties in hopes of getting you to spend time with them.

Our team had a list of 30-plus events that we tried to attend during the five-day market. Some were top notch and some not so much. A couple that stand out are Stanley and Surya. When I arrived at the Stanley event I saw a line half a block long to get inside. The showroom, food, beverages and band were all very nicely done.

The second was Surya. If you’ve not been to a Surya party, well you should. The event they host is arguable the best at High Point Market. The huge showroom was packed with people. I heard discussions in the elevator the next day that more than 2,000 people were in the showroom. Now I can’t confirm this number, but would be surprised if they had less than that. The energy filled the spacious showroom. At one point, I saw a caterer’s table being moved (by party attendees) to allow more space on the dance floor. I literally felt the floor moving under my feet, and I was only one beer deep at that time, so it wasn’t the alcohol. Well done Surya, well done.

I hear talk all the time that we have too many markets and retailer attendance is down. If any of you were with me that night you would think otherwise. I saw the metrics and the fact is, these manufacturers found a way to get a lot of customers in their showrooms. This approach could work the same for you at the retail level. Generating traffic will only increase your opportunity to sell products. 
I know many of you host events in your stores. I’ve seen your pictures posted and information about them on your social media pages. By the way, like us on Facebook, and we will return the favor. Kudos to each of you for hosting events and then promoting them on social media. For those that aren’t maybe consider a customer appreciation day, team up with a local radio station and hold a food drive, give a kid a coat or some type of charity event. What about holding a ladies’ night and host an interior design seminar? Any of these could be excellent exposure for your businesses, show community involvement and provide content for you to use for marketing to you customers. 
We would love to hear your success stories; drop us an e-mail.

From the Editor : Retail Math 101

Numbers don’t lie, or do they? I’m a wordsmith, not a math whiz. Even given that, I know the basic numbers that are important in the business of furniture. 
Customers are steadily in your store or stores; employees busy and the cash register offers the frequent cha-ching as sales tally. (At least, I’m hopeful you’re hearing the ringing at your sales desk.)

We all know the importance in measuring same-store sales figures to last year’s revenue. The measurement tracks whether you’re growing or just maintaining. Comparisons are great, but what other components should be tracked.

1. Sales per square foot 
As most know, this data helps with planning inventory purchases. Dividing your total net sales by square feet of selling space—not including your warehouse or distribution center—gives you your store’s square foot of selling space. Sales per square foot is a great measure of return on investment. Are you buying the right product for your market? Lower than the industry average, your merchandise mix could be off and not keeping pace with your target consumer’s wants.

2. Sales by category
The furniture industry loves to talk about categories. Dining room, bedroom, upholstery, home theater, recliners, and the list goes on. Which categories are the workhorses on your sales floor? Do you know? Figure it out and it could be that the category you thought was the winner if floundering, at best. Maybe the upholstery selection needs to be winnowed and youth bedroom boosted.
Who knows? But, until you do the math, you could be missing out on a key merchandising element.
Divide your the category’s total net sales by your store’s total net sales. Analyze the numbers for each category and see if your floor is in line with the results.

3. Staff productivity
Folks get a bit antsy about this one, but let’s be honest. If your sales associates aren’t performing, you have a problem, and you need to fix it fast. Your business runs on sales—doh!—without them you are out of business. Most of your sales come from your floor associates. Be sure you have the most productive ones around.
Figure sales per employee by dividing net sales by the number of employees. Keep in mind that you’ll need to consider whether your sales asssociates are full-time or part-time employees.

4. Sales per transaction
Or sales per customer, this figure tells you your average ticket or transaction. Do the calculations and you may find that your sales team could do a bit better by selling consumers up. Decorative accessories and rugs, let’s say, add the spice needed to pull together the new sectional and swivel chairs Sally just ordered. AND, makes for a bigger ticket at the register.
Divide gross sales by the number of transactions. Figure out a way to encourage your sales team to upsell your customers and boost those tickets.

Those are a few of the very basic items you should track and measure. In today’s e-commerce and social media climate, you also need to take into account how your Web traffic and social media efforts are playing into your business. 
Inside, we’ve shared expert opinions on math that matters for retailers. If you happen to be a math whiz, well, let’s hope the inside offers you a few tips and ideas that you can put to work in your business.
Enjoy!

Marketing 101 : Traffic Conversion

Getting ups today is not good enough to grow your sales. Converting impressions into contact information is how you grow your sales.

The world has changed. This is not a news flash, but it has changed. Marketing messages and metrics have changed as well. Long gone are the days of “shotgun” approaches just trying to get impressions. Today, every advertising dollar is valuable and so are the eyeballs (or ears) that absorb it.

We need to focus on the idea of cost per lead and what that effectively can do to our bottom line.

Cost per lead is not a measurement of sales or closing ratio. Cost per lead is the measurement of did you get your advertising to effectively lead to an action. An action in this case is the following:

1. A Web site visit
2. A customer up
3. A social media interaction (Facebook like, Twitter follow, Pinterest follow, etc.)
4. An e-mail open and a click through
5. A text message sign up
6. Any thing that could result in a customer contact

For one of our retailer clients in the month of March the following data was compiled:

• Number of leads generated during the month: 2,860
• Advertising dollars contributed to those leads: $21,000
• Total Cost Per Lead/Opportunity: $7.32 per lead/opportunity

How do you begin driving down cost per lead and generating more leads? Direct the consumer to go some where.

Here are some awesome things you can do to help drive her somewhere:

1. Utilized paid search on the major search engines. The consumer is searching for items every single day. However, getting in front of her is not always easy. To have your ad showcased when a consumer is searching for keywords that relate to you can only help drive home a possible opportunity.

2. Have different traditional mass medium (newspaper, TV, radio, direct mail) drive to different pages on your Web site, social media portals or dynamic landing pages. This will help you gauge the overall effectiveness of your messaging and media selection in your marketplace. It will also allow you to experiment with giving different offers and promotions to different segments of people.

3. Make your e-mail marketing messages come to life! Just sending out bland images or your current ad does not allow consumers to shop. Most e-mail suppliers allow for custom designs to help drive activity to multiple areas on the Web that can help allow for tracking and costs per lead to go down.

Today’s consumer does expect an offer. However, she also does not mind having to find that offers through different avenues. Let your advertising drive Ms. Jones to different vehicles so you can start capturing information from the consumer.

Once you captured Ms. Jones’ information you have the opportunity to speak to her before, during and after the sale. Not getting any information means the conversation cannot occur and thus an opportunity has slipped through your fingers.

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