Breaking The Summer Doldrums

April 30, 2006  by in UnCategorized   

By Home Furnishings Business in Advertising on May 2006 When the weather turns hot and the kids are out of school, not many consumers have furniture on the mind, and in an age when furniture retailers find competition with ever-more outlets for disposable income, getting shoppers in the door is even harder during summer months.

It might be a good time to clean house. Spring cleaning is a longtime household tradition, but for retailers, doing that chore a couple of months later could be just the fit for prepping floors for new goods ordered in the first half of the year.

Clearing the floors to make room for fall merchandise does two things, said John Egger, chief executive officer of Profitability Consulting Group. It generates cash flow during a typically slow sales period, and makes room for fresh goods for when consumers are mentally prepped to redecorate.

“In the fall, when people are getting back into their house from summer, you want your floors looking good for when they’re actually thinking about what they want to buy for their interiors,” he said.

Philip Gutsell, owner of Gutsell & Associates, counsels his clients to hold a floor sample sale at least twice a year to correspond with their major market ordering patterns for new merchandise.

“Why not hold a floor sample sale during the summer months, and make room for the new goods ordered in spring and at the same time generate summer traffic?,” he said. “Most people do those sales in only January.”

Gutsell said retailers should lay out summer sales promotions as part of an overall sales strategy well before the doldrums hit.

“You need a year’s general sales plan in advance anyway,” he said. “And I’m always planning sales events out in detail for the next 120 days.”

A good summer sale involves at least one of what Gutsell calls the “Three Rs: remerchandising, remodeling and reorganization of management.”

“Do something that gives you an opportunity for remerchandising in the store,” he said. “I like to attack the doldrums with a spectacular special event.”

Remodeling even a portion of the store can create new interest for shoppers.

“You might even hold a remodeling clearance to make room for the remodeling,” Gutsell suggested. “Do that before you begin the remodeling work since you don’t want the store torn up while you’re holding the sale.”

If a family-owned store is about to reorganize management through passing the torch to the next generation, summer is a great time to hold a sale in honor of the retirees.

“You’re having a ‘retirement celebration’ that could have a lot of appeal in the community,” Gutsell said. “I’m always looking for positive reasons to hold a special sales event.”

Egger said two particular summer events are proven winners for furniture retailers.

“The two most productive summer sales events in the country that I have seen over the years are the ‘Christmas in July’ promotion, where you can let your imagination run wild; and ‘Hot August Nights’ which is usually associated with a tent or side walk or warehouse sale depending on your location,” he said. “Neither of these are exactly brand-new, but they’re proven successful promotions.”

For the Christmas theme, Egger has seen clients run it with a lot of decorating, and actually bringing in Christmas promotions like an in-store Santa Claus.

“If you start doing that promotion, people get used to it—they look forward to it, and they know it’s a time when you’re moving a lot of merchandise,” he said. “People run summer clearances all the time, but when you think about it, July’s the half-way point to Christmas, and people enjoy that feeling.”

“Hot August Night” events—self-describedly—are best held in the evening, when temperatures fall, and even more important, potential shoppers have free time. They also bring the store to the street, as it were.

“I’ve seen retailers run open-til-midnight events like this with great success,” Egger said. “It’s a great thing to line up with a classic-car exhibit or a barbeque. The more stuff you do to make it a real event, the more business you can do.”

Those nighttime promotions are particularly dependent on a store’s location.

“If you’re in a center city area and can do the permits, you might have merchandise out on the sidewalks, or in a parking lot if you have enough space,” Egger said. “It’s also a great atmosphere for setting up a tent. You can even run it out of your warehouse if it’s conveniently located. With this, or any promotion, you have to use your store’s best physical attributes to create the event.”

A critical factor in such summer sales is having the right information at hand.

“You have to run aging reports on your inventory so you can know which goods to move,” Egger said. “It’s amazing to me how many (retailers) don’t have their aging reports available.” HFB