From Home Furnishing Business
While there are some interesting trends that give the industry pause, such as the increasing tendency of households to value free time more than income and the consideration of leasing instead of purchasing, they are a direct contradiction of our acquisitive society. From a merchandising perspective, the industry creates the “it” product that awakens the need to acquire and own.
From a historical perspective, writers have broken time into periods of homes, furnishings, transportation, and clothing that defi ne the extravagance of civilization. In the last decade, the possession of “devices” of communication captured the imagination of the populous. The result was everything Apple became an instant must-have. However, now that has begun to fade as the thing to possess.
Now, the defi nition of “must-have” is travel to that unique destination that will fuel social media content for months, even though the resulting photography never matches those used in the advertising that motivates the consumer to delay their furniture purchases for fun on distant shores.
The fi rst chart below is a list of fi ve areas in which consumers might make major purchases. Ranked from 1 to 5, with 1 being most important and 5 being least important, the graph tells the story.
Note closely that it is the younger consumer that is focusing on furniture while still preferring travel.
These observations all point to the fact that it is not the consumer, but the industry that is failing to entice the consumer to purchase.
As for merchandising, design and quality are the most important to both young and old consumers as can be seen from recent research in the chart below. The second chart is a list of motivators that infl uence a purchaser of furniture. Consumers were asked to rank each in its importance with 1 being “most important” and 6 being “least important.” Again, the data tells the story.
Therefore it is in your hands, merchandisers, to drive the industry. Please note that it is not about price.
On another note, we are pleased to announce our newest feature, Bedding Boardroom. Each quarter we will dive into the matt ress/bedding category to bring you insight backed with current research refl ecting shopper behavior. This month we explore why bedding product has underperformed furniture in the last fi ve years. Here's a hint: The failure to develop and diff erentiate new product is a factor.
One thing is for sure Generation X doesn’t want the “brown furniture” of their parents. Just call a consignment shop to inquire about purchasing your 18th century Henkle Harris dining room group. After the insult for what they would pay if they would buy it, you realize that your furniture has not appreciated in value the way your home has in the last 35 years.
The lifestyle of the Baby Boomer while in their 30s was all about presenting the image of success and prosperity. That is as it is today, as indicated by the recent national research conducted by FurnitureCore, the research arm of Home Furnishings Business.
As can be seen from the table at the bottom of the page, by the time Baby Boomers reached retirement age, their attitude had diminished and had become more practical. The takeaway is, consumers have not changed when they are beginning to furnish their fi rst home. The fact is home furnishings is important, but just not the style or look of their parents.
The research indicated consumers are unfortunately stuck in I want to change my style. The research provides the most recent input.
Compared to last year, statistically there has been litt le change except cott age increased 9.44% to 13.2% and mid-century fell 8.15% to 5.0%. However, if we compare the older Millennials (25-34) we can see the coming tsunami.
The challenge for established retailers and manufacturers is how to serve the existing consumer base while addressing the taste of the consumers that are entering the market. This is the opportunity for the new manufacturer or retailer of a direct-toconsumer manufacturer to launch a new company. This opportunity is obvious from the research presented.
Obviously, contemporary and industrial will be the style of choice for the emerging consumer in their twenties.
Starting with the manufacturer that develops products to be sold by the retailer, it is diffi cult to translate a “style” term to a specific look beyond the very basics. In other words, style is in the eyes of the beholder. New styles evolve from the successes of the past 12 months.
The issue for the manufacturer is that they are two steps removed from the consumer. While the retailer’s web presence importance is well established, with 73% of consumers visiting the retailer’s website, the manufacturer’s web presence is not as integrated into the consumer’s buying process. What bett er way to obtain input on style from the consumer than from the manufacturer’s website? La-Z-Boy solicits input from the consumer by using a style quiz— specifically, DesignCliq, a proprietary product of FurnitureCore. After answering ten questions, the consumer receives an output that clarifies their style and offers La-Z-Boy products that represent the particular style designation. The consumer has an opportunity to agree or disagree — a surprising number (92%) concur. What better feedback for the manufacturer? If you have been in a La-ZBoy showroom recently, it is evident that the furniture is not reflective of the consumer’s parent’s product.
A more digital approach used by some manufacturers is social media. While receiving great input for the product development process, it also creates the opportunity to build brand. Houston-based Classy Art, a resource for wall art and décor, has been using an atypical strategic selection process for items that make entry into their product line. It is a three-step process for all items they are considering. “I got really sick of spending a large amount of valuable time and resources to unload items that were under performers, because it did an injustice to our customers and our warehouses,” says Gabriel Cohen, owner of Classy Art. The first step is to review the potential items with their major accounts to see how each item would fit into those programs both current and future. If an item does not fit, it is removed from potential consideration at that time. For the items that make it through this round, the company then turns to their consumer focus group for step two. Classy Art has nearly 1500 members that review the remaining items using Facebook. Each member reviews the overall style of each item and casts their votes using likes and comments. After the items have been reviewed by the focus group, they evaluate the exact number of likes that item received. After the second round of judging comes the final cut. If an item was well liked, however it did not carry the value of both size and cost that the market supports, then it is eliminated. By implementing this process Classy Art found that items hit the ground running faster and harder. In addition to the testing on the front side of launching an item, they also cut 20% of the bottom performers in each category, each quarter. Rarely are they promoting items that do not perform well, according to Cohen.
Another updated approach to focus groups is also handled online. FurnitureCore, a dynamic web application aimed at the furniture industry, has an online focus group application that can solicit input from the manufacturer’s targeted consumer receiving 400+ national completion.
These results can be drilled down to specific demographics. Additionally, with today’s AR/VR capabilities, the products can be viewed in 3D with illustrated functionality.
While the look is important, the price point is the next barrier. The manufacturer must understand where the new product price falls in the retail price curve. The positioning of the product is important. The graphic above presents only middle price points.
To enhance graphic presentation, the premium price point ($2,000+) has been excluded. These statistics were at retail based upon the manufacturer’s target margin/multiplier based upon distribution channel.
We should stress that the product design element of the merchandising process is very much an art inspired process. Note the comments sprinkled throughout this story from those in the industry that are involved in the process of merchandising their product lines.
According to Lisa Cody, vice president marketing at Twin Star Home, their product development process is fueled by a disciplined approach to understanding who their customers are, what makes them tick and what their unmet needs are. Consumer insights play a continuous role in product design and innovation and come from a variety of formal and informal sources. “We validate what we’re doing in terms of product design before, during and after a product launches. In order to develop products that are relevant to consumers, we use research to understand how they live in their homes, what their homes are like and what they need and desire to live in comfort. We capitalize on those insights to kick off our process and drive the form, function and features of any given product.”
Cody says once products are in the early stages of development, they check back in with the consumer to validate they are on the right track and use their feedback to make refinements. “After a product launches, we monitor consumer reviews, comments on social media and details gleaned from customer service calls to find out what consumers love…and don’t love about our products so we can implement refinements and improvements.” What they learn is shared and leveraged cross functionally so that everyone can take action on what was heard.
Michael Lawence, VP at Najarian Furniture says, “Our approach is to work closely with our retail partners and engage in dialog to ensure our finger stays on the pulse of what shoppers are looking for at retail and design accordingly. Our niche has always been, and continues to be, unique, classic, timeless designs. Though we incorporate trendy, transitional styles... classic, timeless designs are consistently our sweet-spot."
Based on Consumer research conducted by FurnitureCore, Inc., the research arm of Home Furnishings Business, consumers were asked ‘how long did you shop before making a matt ress purchase.’ The study found that only 36.36% of consumers made a matt ress purchase in less than a week, while 54.54% of consumers made their purchase in under a month. 9.09% of consumers pondered their options before their purchase for up to 3 months! Clearly, this purchase decision came with a lot of thought. Bearing in mind that there are endless options in the category, from manufacturers promoting organic product to hybrid solutions and beyond, there is a lot to consider.
Manufacturers are aware of the time consumers spend assessing their matt ress purchases and are actively working toward solutions for quality rest at varying price points. Says Jon Stowe, managing director at E.S. Kluft & Company, “Consumer awareness of the role sleep plays in well-being continues to grow and with that, so does interest in high-end bedding. We see consumer interest in quality craftsmanship, innovation and exceptional materials continuing to grow in 2020. That’s good news for consumers and also for retailers who have the opportunity to boost their profi t margins if they have more luxury product on their floors.”
While off ering luxury items is appealing to some consumers, Onney Crawley, Serta’s vice president of marketing, advises against alienating other consumers by instead off ering a wide range of options to the sales fl oor. She says, “The matt ress category is a rapidly evolving and competitive space, with both traditional manufacturers and direct-to-consumer brands competing to understand consumer’s needs. It’s important now more than ever that matt ress retailers adopt a consumer-centric business model in order to deliver innovative products that appeal to a broad range of people.” This mattress merchandising strategy is sure to bring customers to the sales floor to test the product variations; however, retailers will use varying strategies based on their targeted markets.
In a time in the industry where traffic counts are not what they used to be, boosting profit margins at every available opportunity should be seized. For this reason, Eric Holmstead, national sales manager at Malouf, believes, “The mattress category is the most important in the industry. It gets the highest average ticket price, creates the most noticeable improvement in your customer’s sleep, and allows for high margins. A real opportunity comes from attaching product like adjustable bases and accessories to the purchase.” Higher average tickets will make up for fewer customers shopping in stores.
In this highly competitive category, manufacturers are working hard to create solutions for consumers of every body type, preference, and price point. Read on to see the creative solutions sure to satisfy your customer’s need to stop counting sheep and drift off to sleep.
It’s not that he lacked mattress industry experience when he was hired last year for the top job at Englander – he spearheaded marketing efforts for Leggett & Platt’s bedding group for five years – but he hardly followed the traditional path to the CEO suite.
After his successful stints in television and radio in Joplin, Missouri, he progressed through a series of marketing, advertising and public relations agency posts, and then was hired by Leggett & Platt in early 2014. He was named president of Englander in January 2019, and the CEO title was added six months later following the retirement of veteran industry executive Kevin Toman.
The 38-year-old Kinsley has been putting all of his marketing and product development skills to good use for the past several months planning the re-launch of the Englander brand at this month’s Las Vegas Market – the mattress industry’s most important trade show. He recently spoke with Home Furnishings Business about Englander’s reboot, the disruption caused by online mattress sales, and the popular Dos Marcos podcast he does with Mark Quinn, his friend and former boss at Leggett & Platt. (Quinn left Leggett in 2016 to become co-founder of highend mattress brand Spink & Co.)
HOME FURNISHINGS BUSINESS: What is Englander’s strategy to stay competitive with direct-to-consumer brands such as Casper and Purple, as well as legacy brands such as Simmons, Serta and Sealy?
MARK KINSLEY: One of the major things we’re doing is taking the brand up-market. The online marketplace is very commodity-oriented, which is driving unit growth, but when people are making a more considered purchase, they still want to touch it and feel it. So, we decided to take Englander up-market with retail price points of $1,000 to $2,000 and above. At this time, we’re not going to try to play in that mosh pit (of lower price points).
The Las Vegas Market – where we have completely remodeled our showroom -- will also mark the launch of Englander’s first true national line in over two decades. That gives us consistent product across the country. So, if you love it, and you live in New York, you can recommend it to your Mom who lives in California.
From a retail standpoint -- and this is a huge issue -- we haven’t had the same product on our website that you can see in stores. But by developing a national line, all those products will be represented on our website, along with all the selling materials you will see at retail. We know that has been a very big friction point in the selling process.
HFB: Are your licensees fully supportive of this change?
KINSLEY: Yes. Operationally, we are very sound. It is the foundation for us to really grow our business. We’re a little different than the other licensing organizations in that our factories own the Englander brand. We have three owners, and among those three owners, we have 12 factories. We can cover the entire United States. We have all of our territories defined, so we’re truly set up well from an operational standpoint to cover the U.S. Our distribution does not overlap. We keep it very clean.
HFB: Brick and mortar retailers get about 15% of their total sales from mattresses, but that figure may be trending down. What are you doing to get back some of that market share?
KINSLEY: We surveyed retailers to get an idea of what they needed to be successful, and overwhelmingly, they said they need imagery, video and digital assets in the social and digital marketplace. So, we’re going to provide those assets for them. We want to provide them with creative ideas and become a hub of creative activity that inspires their thinking.
We have a real connection with our retail partners. We listen to them. Consumers are often confused. They don’t know if they’re getting a good deal. They don’t know what mattress is really good for them.
We also have to emphasize what makes us uniquely Englander. We were the first company of any size to launch latex. We did it way back when we were owned by Goodyear Tire and Rubber Company, and we’re still known for latex in the marketplace.
When I talk to friends in the industry, they overwhelmingly tell me they sleep on some combination of latex. So we’re going to tell people they can sleep on the same material that mattress industry insiders sleep on. And here’s why: It feels phenomenal, and the mattresses are very durable.
I talk to a lot of people who have made an online mattress purchase, and 100 percent of the time they say, “It’s all right.” Nobody has ever said, “It changed my life.” So we’re going to create product that gives people that life-changing experience. We want them to say, “I didn’t know there was anything this good.” We want to attract people to come back into the marketplace, including people who have purchased an online mattress but are wondering if there’s something better. Our overall objective is to simplify the product, simplify the selling process, and make a product that (our retail partners) are not going to get a phone call from an angry customer.
HFB: So it’s safe to say we won’t be seeing any Englander bed-in-a-box product anytime soon?
KINSLEY: Not anytime soon. But if the marketplace pushes us in that direction, we’re going to have to respond. For now, we’re firmly committed to growing our retailers’ business -- local, regional and national accounts. We’re not really focused on online sales now, but we’re realistic, and we realize what is happening in the online space.
HFB: Has being the youngest CEO in the mattress industry – by far – worked against you?
KINSLEY: No, it hasn’t worked against me. People have been encouraging and welcoming. What I bring to the table is being more plugged into what is happening in the digital world. But the real test of any person in a new position is results. We’re getting ready to relaunch the brand with products, new logos, new marketing materials and a new showroom. Our ability to push those into the retail environment will be the real test.
HFB: What led you to start a podcast?
KINSLEY: I told my friend Mark Quinn (my boss at the time) that we should do a podcast. It’s the medium for the modern age. People can listen while they’re working out or cleaning the house or driving to work. And they can do it on demand.
His reaction was “a Podcast? What it is going to be about?” And I said it will be about the mattress industry, but we’ll have a little fun with it. With my broadcasting background, I was familiar with the technical side of things, so he said “whatever” (laughter), and we ran with it. Now we look up and we have recorded 135 episodes over the past four years. And we actually have sponsors now -- PureCare and Nationwide Marketing Group. Nationwide is very much in line with the goals we have and Englander, since both Nationwide and Englander are focused on independent retailers.
We now have about 1,000 subscribers per episode. It’s not a huge audience compared to a lot of other podcasts, but it’s the right sets of ears. It’s high impact.
HFB: Since you and Mark Quinn are now competitors, has that changed the dynamics of the podcast?
KINSLEY: Although we both head up mattress brands, we compete in different segments of the marketplace. His product line at Spink & Company is basically $3,500 and up, so even though Englander is moving up-market, we don’t step on each other’s toes. And we even try to promote each other when it makes sense.
Mark was actually my boss at Leggett & Platt. He was the one who got me into the mattress industry. He introduced me to everybody, and it just took off from there. So when he left the company to start the Spink brand in the U.S. market, I took over his position at Leggett.
In my March 2018 issue article entitled, “Words Matter, So Be Careful Which Ones You Choose to Use”, I talked about using stronger words, with a more positive meaning in our selling process to help customers better understand or visualize your message. A good part of the column was spent presenting alternatives to words we commonly use that actually have negative connotations for many of our target customers. One paragraph briefly touched on the concept of using words that help you “romance” your products, to get the customer connected emotionally with them and as a result, desire to own them. Here is what I said:
Sales people historically spend too much time and effort talking about the nuts and bolts of a product as opposed to the things a consumer really wants to know. Most often it is the aesthetics and function of an item that are their main priority. The proof is that the vast majority of people will not buy a product for their home, that they do not like the look or feel of no matter how much you discount it! Therefore, we need to “romance” the product and discuss what it does for the emotional wants of the customer, along with satisfying the practical needs they have. Words like gentle flowing lines, softly contoured back, generously padded arms and luxurious pleated English arm, make you sound professional and add value to the product. In addition, we do not recommend you use the words “special order” or “custom order” when referring to pieces you order specifically for a customer. While we understand what they mean, those are not necessarily positive terms for them. We suggest that you tell customers you will “have one made for them”. This creates emotional ownership of it when you write the order and is much more positive as a concept to most consumers.
While trying to determine what my message to you should be for this issue, which is devoted to Merchandising, I remembered this previous reference to finding better words to use during the selling process. I also recalled how much fun I had and the positive results I experienced during the retail training sessions when the group dove into this concept and tried to come up with glorious ways to describe products and vignettes in the client’s store. Back then we mainly used the staff’s experience as well as shelter/design magazines or books to find better words to use. What I realized, is that today we have much more available to us, including HGTV-type design focused programs, well over one hundred lifestyle centered magazines devoted to the home and of course the biggest reference library ever on the Internet. All of these can help us discover new, more colorful and emotionally powerful words to use in any conversation.
As a result, I decided to offer some ideas to improve your selling vocabulary with more romantic words. Here are some activities that salespeople and store employees can do that will help them find examples of words that will enhance their product presentations to customers.
What the store can do to help staff learn to romance the products they sell:
- Each store vignette should have a name that describes it in colorful, design- relative terms, so the sales staff has a good starting point. These should be created by the buying team with input from staff designers and the rest of the sales team. Many online sites are great at using names to get their style message across. Be descriptive and fun, using phrases like Modern Minimalist, Vintage Elegance or Vivid City Vibes.
- Saturday morning sales meetings should include a floor walkthrough to present new merchandise and discuss which customers it is targeted to and how to talk about it in the best way possible. Often, I see these presentations being done by staff members or teams that have been assigned by the sales manager. This is a great way to get new products launched and also improve the sales of specialty products and even slower selling vignettes. Sometimes products don’t sell on a floor because salespeople don’t know what to say about them, so give them the right words to use!
- Train and coach the staff to use the right words to describe products and never to use manufacturer’s model numbers when referring to them. Teach them instead to use the name the manufacturer or store has given each product. I often hear salespeople start a presentation with something like: “this is the 99367, it is one of our best sellers”. The number provides no positive energy for the customer and calling everything you present a “best seller” is not good either. While that used to provide positive feelings for a product to generations past, it no longer carries much weight and can be a negative to some customers. It is just a lazy habit we tend to develop over time just to have something to say. Try something like “many of my more discerning clients have found this exquisite chair to be just what they want”, but only if it is actually true.
- Bring in outside design trainers to improve your staffs design knowledge and learn new ways to talk about your products. Then have the sales manager follow up by coaching them and making sure they are using what they learned. Set up teams in the store to get inexperienced people working with the more design focused staff members in your store. Have them role play presentations together. Have contests to determine who does the best job each month and celebrate their success. This is a great way to help move your culture from just sales centered to design and sales focused. What the Individual can do to improve their ability to romance the products they sell:
- There is no doubt that most accredited designers have learned how to use the right words to make a product exciting and memorable for their clients. But I have also seen many regular salespeople who have taken design courses either in person or online, who can also make a product dance in the customers’ eyes with the way they talk about it. It is not where you get the knowledge that matters it is how you use it to help potential clients get emotionally involved with your products and room layout solutions. No doubt, the best way to improve your ability to help customers find answers to their needs and wants for their home, is by gaining design skills and knowledge any way you can. You do not have to be a certified designer to be successful, but it sure doesn’t hurt!
- Watch HGTV type programs focused on the home. I know you are probably already doing this, but are you really listening and learning or just being entertained? It may seem like a distraction, but I have found that many top salespeople actually take notes while viewing these programs and then work to apply what they heard in the store. It sure seems to work for them, so I recommend you give it a try.
- Purchase and study books like: The Dictionary of Furniture by Charles Boyce and Furniture Facts by Annette Wagoner. Both of these great reference books are must haves for any furniture professional and are available on Amazon.
- Review vendor catalogs and websites during your downtime at the store. Most manufacturers today put a good deal of effort into telling you what you need to know about their products. Since their websites are also aimed at your consumers, most do a pretty good job of using words you should study and incorporate into your presentations.
- The role of the manufactures rep has changed greatly in the last few decades, but the best ones are still a wonderful source of information about their products and how to sell them. Pick their brains for insight into each product and what words they hear people using to describe them.
- Read and study magazines for the home. These have always been a wonderful resource for learning about up-to-date design terms and trends. Keep them in the store, pass them around and see what catches other people’s attention. Chances are it will grab your customer’s attention too.
- Visit other stores and websites to learn from the way they present products and how they describe them. Restoration Hardware, Pottery Barn, Wayfair and most of the niche online sites are great at finding new and exciting words to describe their products.
- Do research online to find new, more colorful and exciting words to use. All I did was Google “words to describe furniture” and I was provided with hundreds of interesting links to try. Many like MyVocabulary.com and describingwords.io gave me great word lists and ones like fieldstonehilldesign.com delivered not only great words, but also basic design education. One thing I have found is that words that indicate what feeling or visual sensation a product or vignette delivers, are the most meaningful for the consumer. So, take some time to expand your vocabulary and upgrade your ability to paint a verbal picture for your customers when talking about your products. It will most certainly improve your sales performance and you may even have a little fun doing it, I know I did!