From Home Furnishing Business
Cover Story: Creating the Dream
Merchandising: one of the most confusing responsibilities in our industry, both at retail and wholesale. A simple concept by definition, the activity of promoting the sale of goods at retail, but complex in its execution.
“Planning involved in marketing the right MERCHANDISE at the right PRICE at the right TIME in the right QUANTITIES and the right MESSAGE.” – American Marketing Association
THE RIGHT MERCHANDISE
The manufacturer’s merchandiser is not typically the product designer. However, many entrepreneurs in the furniture industry have a background in furniture design. Often this becomes a challenge as the company becomes a success and grows. Bill Becker, founder, CEO and Design Director of BDI, has faced this dilemma. “I founded BDI with the belief that great design has the potential to enhance the way people live and work. Design-driven entrepreneurs are most successful when they lead with their strength while surrounding themselves with individuals who bring varied areas of expertise to the organization. While I come to work every day passionate about design, I realize that in order to lead a successful organization, I must have equally passionate people in all roles— from operators, to marketing, to customer service. There’s a true excitement for an entrepreneur in building an organization that consists of a diverse team from a variety of disciplines. I feel we have successfully developed a team that shares our company’s passion for design and innovation, while bringing a wealth of knowledge and experience to the table.”
However, the merchandiser must give direction to the product designer. Today, as the consumer has moved from a preference, to a distinct style, to a more eclectic look or lifestyle, defining this direction can be a challenge.
In recent research confined to urban areas (markets $100M+ in furniture sales) in order to capture more diversity in style direction, we found some interesting perspectives.
It should be noted that the term “transitional” was not used because it is an industry term that has allowed the consumer to accept the confusion of no style. We have been “transitioning” for 20 years.
This lack of definition has created a problem at the retail level when the consumer cannot communicate their style. In fact, in the just completed research, only visuals were used.
There is a distinct dividing line between the younger furniture purchaser (<45 age) and the older furniture purchaser (>45 age). The graphic below provides the comparison.
As would be expected, the younger consumer has embraced contemporary and midcentury. However, the merchandiser must anticipate using the overused quote, “know where the puck is going, not where the puck is now.”
In the same research conducted by FurnitureCore, the research arm of Home Furnishings Business, the question was asked about the consumers’ “dream style.” The following presents the findings.
Looking to the future, we see the driving force will be those consumers under 45.
The traditional furniture industry is in a race to the bottom in terms of price. The pending tariff (25%) if implemented will increase prices by necessity, but if the industry follows the past tendency, it will begin to find ways to reduce prices—unfortunately at the expense of quality/design.
The manufacturing merchandiser must create product at price points that the retail merchandiser is seeking to maximize sales to the consumer. This collaboration between manufacturer and retailer is critical to success. Unfortunately, much is missing from this collaboration. The result is the race to the bottom.
Comparing the retailer and manufacturer’s selling (not list MSRP) price point to the industry is critical. FurnitureCore shared the current (2018 YTD Q3) information for standard sofa / fabric / independent retail chain.
Currently, the industry is underselling this consumer based upon the percentage of units sold to households with incomes over $100k. From FurnitureCore, we received the following data for 2018.
As can be seen from the table, when over 50% of all fabric sold under $399 is purchased by consumers with household income over $100k, the industry has a marketing problem. We cannot continue to excuse those sofas are for the playroom in the basement.
RIGHT MARKETING MATERIAL
The once elaborate catalogs produced by the manufacturers have all but disappeared. Unfortunately, timely photography has as well. The marketing material provided by the manufacturer provided inspiration for the marketing to the consumer. Did the inspirational spreads in Southern Living drive the success of Broyhill’s Fontana or Bob Timberlake’s Lifestyle Rustic Collections?
Currently, messaging from traditional retailers are focused on price and financing with an assortment of product shots. In comparison, lifestyle retailers such as Restoration Hardware and Pottery Barn sell the dream of a beautiful home.
The current dominant furniture purchasers is Generation X (35-45 age group) which is motivated by visual images, but as important as the look is the information of how to execute. Per FurnitureCore research, printed materials that present the product without the price/financing hype is more effective.
The visual display of the product in furniture merchandising is critical to creating the dream for the consumer. The success of the warehouse display, pioneered by Levitz’s in the seventies, declined as consumer in the nineties wanted to see products displayed in room vignettes. This consumer demand resulted in the creation of manufacturing galleries with space allocated to a specific style/collection.
Today, the consumers’ first step in shopping is research on the internet. Retailers are battling to communicate to the consumers, translating what the consumer likes to a definition of style is a challenge.
An attempt to accomplish this is being pursued by a new computer application, Shoptelligence. According to Denise Mahnick, Co-founder, “Not all shoppers have an impeccable sense of style, and most will readily admit that which is why shoppers crave assistance when furnishing and decorating a room. Shoptelligence makes it easier for shoppers to find inspiration and relevant merchandise that matches their individual tastes and preferences.”
Powered by machine learning algorithms including image and natural language processing, Shoptelligence enhances a retailer’s basic product data by adding over 900 style attributes. The style platform makes it easy for retailers to dynamically and automatically merchandise to the individual shopper in their context while increasing average order value (AOV), site engagement and customer loyalty. The technology automatically and dynamically serves contextual cross-category room décor ensembles, helping retailers deliver a seamless and rewarding shopping experience that boosts a customer’s buying confidence. The technology acts as a trusted style advisor that assists the customer throughout the buying journey and seamlessly connects online inspiration to in-store purchase.
Other applications, such as DesignCliq allow the consumer to pursue to process of self-discovery by defining their lifestyle and the application suggesting their style DNA.
RIGHT INSPIRATION: 2019 DESIGN DIRECTIONS
Each season as buyers and designers strive to predict consumer buying patterns, the role of trend identification and forecasting becomes essential. From color and material to shape and style, knowing what’s on-trend in home and interiors makes it easier to create showroom vignettes consumers can’t pass up. Here’s a look at some of the directions you’ll see more of in the coming year.
Interior design has evolved into a means for homeowners to express their unique point of view. As a form of personal expression, the concept of the ‘well-traveled home’ has emerged. Home furnishings have adopted the role of storytelling as consumers surround themselves with individual pieces reflecting their perspective and experiences. Matched suites of furniture have given way to thoughtfully chosen combinations of distinctive items with a shared connectedness.
No longer are interior spaces limited to only one style such as traditional, cottage, modern or industrial. Instead, the newest looks are multi-layered to create visual appeal. For example, an editorial feature in a current shelter magazine showcases a classic living room primarily furnished in an updated traditional style—punctuated with a modern cocktail table and contemporary artwork. Similarly, global and ethnic design influences are now mainstream and seamlessly blended with vintage and current elements. As consumers curate spaces that reflect their individuality, the high-low effect of combining expensive and inexpensive furnishings has taken root.
Craft + Function
At one end of the spectrum, handmade and artisan-inspired looks have never been more popular. Furniture and accessories reflecting weaving and hand-craftsmanship boast widespread appeal. Textiles featuring chunky textures and visual dimension are giving new life to classic furniture silhouettes while helping homeowners create cozy environments. Looks that mirror embroidered and hand-pieced constructions are also in-demand. The direction dovetails the prominence of earthy furniture design directions celebrating organic shapes and natural materials such as raw woods, roots, and stone. Rich textures, natural imperfections and effortless elegance are all hot themes.
In contrast, the demand for innovation and high-tech furnishings shows no signs of ceasing. While consumers love the appearance of a natural-wood end table, they can’t do without it when it has an integrated USB charger. A stylish accent chair in a shearling-like cover is a statement piece that becomes a must-have upon first touch. Products featuring integrated technology, versatility, and mobility are thriving across all home furnishings categories while comfort is just as essential. Performance fabrics that are durable and easy-care are quickly outpacing traditional options. And, multifunctional furnishings designed for smaller spaces are finding favor with consumers just starting out as well as those downsizing.
Color & Pattern
Whether in wall colors or textiles, a general warming of color continues. Yet, there’s no one singular direction, as illustrated by the forecasts of leading color experts. Pantone announced Living Coral as its 2019 Color of the Year (COY). A peachy shade of orange with a warm undertone, it’s a hue the company says conveys optimism. Metropolitan, a soft neutral grey, is the COY for paint resource Benjamin Moore. Described as: calm, composed and effortlessly sophisticated, the barely-there shade is the epitome of understated. Sherwin-Williams identified Cavern Clay as its COY, a shade mirroring the warm reds emerging in home furnishings. This warm terracotta with elemental roots is described as having the soul of the American Southwest while giving a nod to Mid-century Modern style.
In textiles, the top color stories include warm reds and terracotta, Gen-Z yellow, leafy green and emerald, and indigo—with the blue family maintaining its status as the perennial favorite. Millennial pinks are migrating to a warmer, blush undertone. Fabrics artfully combining warm and cool tones, such as taupe and gray, offer a transitional solution for homeowners who only recently updated their home décor palette to gray. Look for patterns with faded edges, graphic overlays, and metallic highlights. This blurring of elements continues as the definition of what constitutes global, tribal and handcrafted relaxes. While florals haven’t departed, they’ve been reinvented with modern interpretations, multi-layered techniques, and unique colorations. Hand-painted and watercolor looks are trending as well as vintage motifs inspired by antique rugs and animal hides. Fabrics emulating natural stone or marble remain popular while ombre treatments and tonal shading effects add fresh appeal to classic constructions.
Merchandising may be the key to the future success of the traditional industry. With the familiar Wayfair jingle in our ears – Wayfair- we got what you need – we may need to take heed.