January 12,
2015 by in Display, Industry 
A company’s image can make or break its branding strategy.
Both in our personal lives and our businesses, image is a determining factor in our success.
Are you driven? Tenacious? How about helpful and kind? Just how does the world view you?
Take it a step further into the business world.
When you consider your business, what are the key words that pop into your mind? Better yet, what descriptors are your customers likely to evoke when they hear or see your store name?
Nordstrom means service; Walmart means low prices; and FAO Schwarz means fun and smiles. Neither is wrong; neither is right. Each retailer has staked its claim on those priorities, and consumers tend to think in those two directions when the names of Walmart or Nordstrom or FAO Schwarz come up.
In a crowded marketplace, it’s imperative that companies develop ways to connect with consumers all while sharing with them what it is they stand for, what they believe in and the manner in which they conduct business. A clear corporate image can do just that for your company.
Think about the message your share with your customers or potential customers.
Are you telling them you care about the community in which you operate? Are you involved in sponsoring the arts, sporting or other events? Do you promote literacy or give back to the schools with time and funds? Do you support the local United Way campaign?
Note one of these is RIGHT, and not one of them is WRONG. They’re just ideas to churn your brain while you contemplate your company’s image and brand. How should your store brand resonate with your customer?
Branding, imaging, public relations, marketing and advertising all fit together in one big package. Sometimes it’s neat and orderly, and sometimes it gets downright messy. The fact is that you can’t have one with the others and remain successful for very long.
In this our first issue of the new year, we examine the connection between image and branding and all the other pieces of the pie.
A number of experts have weighed in and several retailers have shared their strategies that have been successful.
Here’s to a great 2015 and to all of us boosting our images and brands.
Happy New Year!
December 4,
2014 by in Bedding, Product
By: Powell Slaughter
Don’t expect record-breaking growth overall in 2015 for home furnishings, but sales at least should pick up a percentage point or more over the current year.
FurnitureCore, the research arm of Impact Consulting Services, forecasts $90.6 billion next year in sales of furniture and bedding, up 3.7 percent over 2014 full-year projections. That estimate predicts 3.6 percent growth for furniture and 4.4 percent from bedding following FurnitureCore’s projections of 2.6 percent and 3.9 percent growth, respectively, for the categories this year.
Furniture sales ticked up a notch in 2014 despite one of the nation’s most severe winters on record this year impacting a lot of potential first-quarter business.
“People are going to be surprised we got 2.6 percent this year because of the terrible weather in the first quarter,” said Impact Consulting CEO Bob George. “Basically, we’re treading water. The economics just aren’t there. The middle price-point customer has not returned to buying furniture. They’re looking at college tuitions, food prices. The middle class is getting squeezed right now.”
George recalled talking to a reporter who asked him why a value-priced retailer such as Bob’s Discount Furniture is locating stores near affluent neighborhoods.
“People are considering lower price points,” he said. “It’s part of the winnowing down of expectations for the middle class, how they view their lot in life, and that’s a shame.”
Consumer confidence has historically been one of the top five indicators for home furnish- ings sales. However, this year it lost some of its cachet and impact on furniture.
Toward the end of last year, consumer confidence was expected to jump from the 75-point index in 2013 to a more vibrant 82-point mark. Instead it leaped to a 95-point reading, but didn’t push industry sales significantly.
“The variable that typically gives us a lift is consumer confidence,” George said. “It’s the highest it’s been in seven years, but it didn’t really do anything for furniture this year. Housing starts and home sales didn’t meet last year’s forecast, but had little impact on 2014 sales, but the usual indicators aren’t really impacting us either way.”
Industry analyst Jerry Epperson, director at Mann Armistead & Epperson, Richmond, Va., is more optimistic about 2015.
“I think (FurnitureCore’s forecast) is a little low,” he said. “If we hadn’t had the bad winter, 2014 would have seen 4.3 or 4.4 percent growth. As long as we don’t have a really bad winter, we’ll have a better first quarter, which will be a boost for the rest of the year. I think we’ll do between 4 and 5 percent.”
Mann Armistead & Epperson is still working on its forecast for the coming year—it had just received the University of Michigan economic forecast, which factors into its 2015 outlook for home furnishings, when we talked with Epperson.
RETAILERS SHIFT TO HIGH GEAR
The outlook for next year is good enough for some pretty sharp home furnishings retailers to make some significant moves. Ethan Allen, for exam- ple, is gearing up for the 2015 in a big way—it’s in the process of changing out 70 percent of its prod- uct offerings, according to Chairman and CEO Farooq Kathwari.
“We’ve been hiring people, adding manage- ment and growing internally,” he said.
Kathwari believes there’s no one thing that would make or break the furniture retail sector next year. Even if bad news pops up, consumers hear so much that’s negative that external factors don’t matter as much as they once did.
“We’re confident about next year because our business is vertically integrated,” Kathwari said. “We’re changing our product line dramatically, and we’re bringing more manufacturing to North America, so we have more control.”
Furnitureland South is gearing up for in- creased business expectations in the coming year, opening its third new gallery of the year in November—the 62,000-square-foot “Ground Floor.” Ground Floor gathers mid-price furniture in a single area, fully outfitted with accessories, wall décor and carpeting.
The Jamestown, N.C., retailer is still just half- way through a $4 million renovation plan for its 1 million-plus square feet of showroom space.
Why all the activity now?
“We very much believe in the showroom experience, so we partnered with our vendors to freshen up the world’s largest furniture store,” said Jess Harris, CEO. “We have about 25 new manufactur- er galleries underway or in the works.”
Those will have “storefronts” on a new 25-foot- wide corridor connecting the store’s north and south atriums that Harris called a “street of dreams.”
Furnitureland South also is revamping its Web site, which it’s using to set shoppers up for a more productive, efficient experience within the vast store.
“Customers are going online first, looking for inspiration and the best place to shop,” Harris said. “The No. 1 question people ask when they call in after going online is ‘Can I see this item, can I sit on it, and check the quality’ in the store.
“We differentiate ourselves from everyone else online with the size of our showroom,” he said. “You can come in and see exactly what you were looking at online. Our strategy is to inspire people online, and then to engage them with our design consultants—before they come to the store.”
To that end, Furnitureland South created video biographies for every design consultant. Shoppers can view those on the Web site to see who they’d like to work with when they come to the store. That way, the consultants can start working on a game plan to help the customer navigate and make the most of a visit to the huge showroom.
“There’s a lot of work that can be done before you come to the store,” Harris said.
Part of Furnitureland South’s renovations includes a redesign of the front entrance, an- chored by Lexington Home Brands, the popular Tommy Bahama line in particular. A video wall will prep arriving customers for what they’re in for going through the store, the size of which can be overwhelming to the first-time shopper.
“We stress that we have to help you with the experience,” Harris said. “The role of our design consultants is to help you through the entire pro- cess. It saves time, energy and helps guide you to the best values. Ultimately, it can save people money.”
And in Ohio, South Zanesville -based Coconis Furniture opened its third location in Heath, Ohio, 20 miles east of Columbus. The new store is in a high-traffic area between the communities of Newark and Heath.
Connie Post Cos. Designed the interior and exterior of the new Coconis Furniture and Mattress First store.
The Heath showroom has 25,000 square feet, and an additional 8,000 feet of showroom and clearance center will be added to the rear of the store. Those additions should be completed early next year.
Two pre-existing buildings behind the new store will be used for warehousing and storage. A separate entrance to the store will allow customers to enter the Mattress First area of the store (See Sidebar, “Building on Bedding).
“We project with the new Heath store open in 2015 we will do $15 (million) to 17 million total for all three stores,” said President Randy Coconis. “That would be an increase of approximately 35
percent to 40 percent over 2014.”
EVERYTHING IS LOCAL
Coconis Furniture is a good example of the in- creasingly local viability of markets for home furnishings retailers—Ohio is home to five of the 10 markets with FurnitureCore’s slowest project- ed growth in furniture sales next year, based on household growth. And here’s Coconis expecting a big jump in 2015 business.
“We are situated in a more rural part of Ohio that doesn’t seem to follow the ups and downs of the larger cities in Ohio,” Coconis said. “Also the Utica shale oil and gas surge has helped so many in our area.”
That has helped lower unemployment in southeastern Ohio.
“We have also seen some nice business come from the oil and gas industry as workers move into our area,” Coconis said. “They say it’s here for at least the next 20 years.”
George said furniture retailers shouldn’t worry too much about what’s happening every- where else: “It’s that every market is local.”
He pointed to the Dallas market, where Ne- braska Furniture Mart is set to open a huge new store early next year. The marketing accompany- ing that event will increase furniture’s mind share among consumers, but stores currently serving the market need to keep their dukes up.
“That will increase sales, but the people al- ready there will lose some,” George said. “When a larger regional chain invades a market, it doesn’t destroy a retailer, but it’s like getting pecked to death by ducks.”
That said, the hottest markets for the next five years, according to FurnitureCore are Midland, Texas (13.4 percent growth); Austin-Round Rock, Texas (11.8 percent); Charleston-North Charles- ton, S.C. (9.2 percent); and San Antonio-New Braunfels and Dallas-Plano-Irving, each with projected 9 percent growth.
No wonder Nebraska Furniture Mart wants a foot in the door in Texas.
On the flip side, the metropolitan regions with the slowest growth potential for home furnish- ings, again, based on projected household forma- tions in the next five years are: Detroit-Dear- born-Livonia, Mi. (down 1.8 percent); Youngstown-Warren-Boardman, Ohio (down 1.4 percent); Cleveland-Elyria and Toledo, Ohio (down 0.3 percent each); and Akron, Ohio (flat).
MAKE OR BREAK ISSUES
So what could make or break sales for home furnishings retailers in 2015? The good news about a
seemingly constant barrage of bad news is that consumers appear to be getting a bit numb.
“I think we’ve become oblivious to the shenanigans in Washington,” George said. “We were just in this quagmire where we talked about sending troops to Syria—and the stock market doesn’t go down. In a 24-hour news cycle, one side will say it’s bad, and one side will say it’s good.”
Retailers shouldn’t bother themselves too much about things out of their control. Take the horrid winter this year.
“The sales opportunity you lost (from weather) in the first quarter didn’t go away,” George noted. “I don’t see anything outside the industry that will make a really big impact either way.”
Epperson said a make-or-break in 2015 relates to home furnishings retailers’ supply chain.
“If we have a longshoremen’s strike, that could impact the availability of product,” he said. “That hasn’t been a problem lately, but that could cause shortages and cause us to lose significant business.”
Consumer attitudes also are subject to measures such as gasoline prices, and that’s been nothing but good coming into the end of the year.
“I bought gas this past weekend at $2.41 a gallon,” Epperson said. “It’s been a pleasant experience for everybody, and it added to the outlook for the holiday season and retail in general.”
Another factor affecting product flow is transport stateside.
“There’s a shortage of trucks and truckers, so that’s a little bit of a problem,” Epperson said, adding that other factors are looking good.
“Transportation costs are going down, and we aren’t worried about inflation right now,” he said. “Housing figures are up, and there are 2.5 million more people employed than there were a year ago.”
Retailers need to look at where they operate, and find the opportunities in the consumer base they serve.
“We aren’t so much bullish, we just see oppor- tunities out there with an improved economy,” said Harris at Furnitureland South. “We see a lot of people who haven’t invested in their homes in several years, and we think they want to create a better backdrop for living their lives.
December 4,
2014 by in Furniture Retailing, Industry
The old mantra size matters couldn’t ring more true than in the home entertainment category.
Retailers selling and vendors supplying case pieces and consoles built to accommodate the ever-growing television screens on the market are sure to reap the rewards as consumers continue to upgrade their viewing habits.
The consumer electronics business has been on a steady growth trajectory over the last few years, and forecasts call for the increases to continue.
The Consumer Electronics Association estimates that sales of consumer electronics will close out 2014 with a 2 percent increase to hit record sales of $211.3 billion. Looking ahead to 2015, the association expects industry sales to grow by 1.2 percent, with industry revenues reaching an all-time high of $214 billion.
Televisions remain a key category as vendors continue to evolve their offerings with larger, crisper screens and other relevant features. What does all this mean for the furniture industry? It could result in a possible boost in home entertainment sales.
Innovations within the television category have brought larger screens and premium displays, which have piqued the interest of consumers and pushed many to upgrade their home video experience.
This year, television sales are expected to reach $18.4 billion. Specifically, ultra HD TVs continue to gain momentum, earning an estimated $1.9 billion by yearend, and the subcategory is expected to top $5 billion next year. Not too shabby for a category that barely existed three years ago.
Lest we’ve put you into a frenzy trying to figure out how to make a connection between televisions and entertainment centers and consoles, here’s a look at what consumers are thinking when it comes to outfitting their home theaters.
In the latest Home Furnishings Business consumer survey including 150 consumers who had purchased home entertainment in the last 12 months, report that size is a consideration when it comes to television screens. In fact, more than half (53.8 percent) said the primary television in their home was between 37 inches and 52 inches. More than a third (36.6 percent) said they own a television that is 55 inches are more.
When asked what size television they would consider purchasing in the next six month to a year, more than a third (34.3 percent) said they’d be in the marketing for 55-inch or larger screen. Just under a third (32.4 percent) said they’d opt for a television between 37 inches and 52 inches.
As televisions have gotten sleeker and sexier, they’ve pushed out the trend of hiding the screen behind closed doors. Armoires our definitely out — check out the products on the next few pages — and open walls and cool consoles are the styles of the day.
The trend meshes well with what our consumer panel shared on their preferences. Hide the television? Consumers said no way with 77 percent saying hiding their television was not important to them in the least. More than 60 percent (63 percent) said they’d prefer to put their flat screen television on top of a console featuring media storage. Just over 26 percent said they’d hang the television on the wall and forego home theater furniture.
Want More?
A more in-depth report on the bedroom category is available for purchase at FurnitureCore.com—Industry Info—Industry Reports—Home Entertainment or by calling Natalia Hurd at (404) 390-1535.