Mini-Markets

April 30, 2008  by in UnCategorized   

By Home Furnishings Business in High Point on May 2008 Picture yourself in a furniture showroom, but take out the crowds of buyers, the harried sales reps and the fear you’ll be late to your next appointment.

That’s the situation you’ll find yourself in at a single-vendor event that generally last only two or three days. Vendors have been inviting top buyers to special events in High Point, Las Vegas and resort locales for decades, but, in recent years, manufacturers have been attracting large numbers of furniture store owners and buyers in less familiar locations such as Tacoma, Wash., or Tigard, Ore.

“They offer some tremendous deals to entice you to come,” said Gordy Wallenstein, president of the 28-store Furniture Outlets USA, who has visited High Point in January three years running for the Lifestyle Enterprise event that attracts 700 to 800 buyers. “Also, you can get a jump on products that everyone else hasn’t seen yet. We also have an opportunity to visit some (High Point) showrooms we normally wouldn’t plus some (vendors) we are buying from.”

Wallenstein and other retailers say they aren’t, necessarily, looking for new additions to their market calendars, but many see appeal in events that offer bargains, fun social events and a chance to strengthen bonds with a trusted vendor.

Staying In High Point

James Riddle, Managing Director of Lifestyle Enterprise, said the Forbidden City Furniture Show was launched when the company opted not to join the thousands of furniture companies that set up showrooms in Las Vegas. The company pays the travel expenses of buyers and also hosts a dinner with entertainment and gives away two sports cars costing as much as $50,000 each.

“We felt we could host a show in January, and it wouldn’t cost us as much as Las Vegas,” he said. “Needless to say, it cost more, but we feel it’s been highly successful for us,” he said, adding that original projections didn’t factor in bringing in so many retailers or giving away cars.

In Portland, Ore., MasterCraft Furniture now hosts twice-yearly events instead of showing in Las Vegas and San Francisco, where it once had showrooms. Owner Marty Olson said the Open House works better for the upholstery producer that is focused on about a dozen Western states. He said a nearby competitor, Madison Furniture, holds its own event at the same time, and some customers visit both factories.

Discounts, Not Airline Tickets Bring Buyers

Taking a no-frills approach, MasterCraft uses special discounts to attract retailers and doesn’t pay for their travel expenses. He said about 40 dealers come to a typical two-day event, which often includes a dinner cruise on the nearby Willamette River. “It’s very effective with a captive audience and very targeted to the customer we’re focusing on. At the show in April, were were offering a sofa-love seat combination for three sets for $1,000 and we were selling a $299 sofa at $199. It’s definitely a recognizable value, and it brings people in for us to show our new lines.”

Discounts are also a focus at Lifestyle. A year ago, company Chairman William Hsieh told HFB the company has spent millions of dollars on its January event, with incentives such as free floor samples costing far more than the car giveaways or the airfare and hotel expenses the company picks up for customers. What the show delivers for Lifestyle is new buyers and increased attention from West Coast retailers, Riddle said recently. “We had several Top 100 accounts in this past January that had not (ever) been in attendance in the past. ... We had a number of people who came to our January show who do not attend market in April or October, and we even had an eight-person buying team from the largest retailer in South Africa.”

Al Lyons of Lyons Furniture, Mount Vernon, Wash., said substantial discounts attracted him to the 2007 event. “They had great pricing up front, but the second container was another 25 percent off, which basically paid for all the freight charges,” he said. “Another advantage as that there a number of other (vendors) who open during that time in High Point, so you have ample time and opportunity to visit a couple of others while you’re at it.”

Lyons said the less-hurried pace of visiting Lifestyle’s showroom in January—versus April or October—also was appealing. “You can focus on that one vendor and what’s available. At Market, there are a lot of distractions.”

Golf In Combination With Sales Increases

On a smaller scale, Emerald Home Furnishings brings about 120 dealers to its Tacoma,Wash., headquarters and showroom each April and October for a two-day event that’s heavily focused on networking and fun events such as a dinner cruise in nearby Seattle, but also offers time to preview new furniture introductions and take advantage of deep discounts on a few items. The event President David Beckmann calls “Open House” is a tradition that dates back to 1988, but has grown since 2002. “It has evolved into an (event) where we can spend a little extra time with each other, and the relationships that evolve from that transcend what can be accomplished during a typical (market) or by sitting across from the buyer at a desk in a store.”

Marty Cramer of Cramer’s Home Furnishings, a five-store chain in Ellensburg, Wash., is a regular attendee, and said the social aspect is one of the major reasons he attends twice a year, especially for the spring event’s golf tournament. products they’ve only seen in the catalog. ... Every time we take a manager, the sales from the Emerald catalog in that store increase. ... For items we don’t carry, the manager can tell the customer, ‘I saw this, and I think it’s gorgeous,’ so we definitely see an increase in special orders.”

Beckmann said he once began scaling back the Open House, but quickly reversed course and expanded the event because the retailer response was so strong. Emerald added more entertainment offerings and began donating part of the proceeds to local charities. He said dealers like to attend “simply to spend time with their counterparts from other areas, sharing experiences and frustrations and taking the temperature of other dealers’ businesses.” Cramer regularly attends similar events by manufacturers like those sponsored in the Portland, Ore., by MasterCraft, Madison and Furniture Factor, which no longer have showrooms at major markets. “All three companies have an event during the same three days in March, so we’re able to go down and see everything at once,” he said.

Time Versus Money

Cramer said other manufacturers have offered to fly him to California and other areas for factory tours or events, but he almost always declines. “If it’s not a company I’m doing a significant amount of business with, I just don’t have the time.”

Asked if a retailer is more likely to fly to an event if the vendor is paying travel expenses, Wallenstein said, “Probably. The biggest decision is to commit the time, but it makes (my decision easier” when the vendor pays, he said.

Jim Hanley of National Furniture in Spokane, Wash., jokes that when Emerald pays for his trip across the state for an Open House, “they get it back ten times over from what we buy.”

Greg Follett of Follett’s Furniture, Lewiston, Idaho, said, “It definitely helps when they want to foot the bill,” but added he’s most interested in the chance to meet up with fellow retailers. “I live and breathe furniture, but in the same place. It’s nice to change locale sometimes and talk to other retailers.”

The Retail Angle

Major retail networks like La-Z-Boy, Badcock and Bassett Direct also hold their own shows or conferences that combine educational opportunities with social events and, in the case of Badcock, a large exhibition area featuring major vendors.

At the La-Z-Boy Furniture Galleries Conference, virtually all of its 100 dealers attended the most recent national conference in Las Vegas two years ago. The manufacturer and retailer holds the event every two years, but has held annual regional meeting since 2005. At the events, La-Z-Boy executives discuss new retail initiatives, and dealers are able to share successful strategies with one another, according to a spokesman.

Badcock, which has a network of 330 stores, expects 600 to 700 dealers at its upcoming annual event August 22 in Richmond, Va. In addition to Badcock executives providing business updates, there are workshops on topics such as product warrenties. In addition, more than 125 manufacturers supplying Badcock stores will have displays at the three-day event.

Getting Salespeople Involved

Over the past couple of years, Follett has attended events sponsored by companies such as Englander, Lane and Simmons. The Simmons event included a tour of the company’s new factory in Sumter, Wash. “It was so informative that we got them to agree to foot the bill for us to also send some of our salespeople” later. “I think when (store sales associates) are more involved in seeing things like how the mattresses are made, they feel closer to the business, so it was a big help to us in that sense,” Follett said. “We definitely strengthened our ties to Simmons by going to the events we did, and I think it’s helped us have a better relationship” since the events.

Woody Whichard of Midtown Furniture Superstore in Madison, N.C., said the January Lifestyle show in High Point offers the chance to see new collections before competitors see the new furniture in April. “We’re able to have the product on our floor before some of our competition and sometimes even before they purchase it. We can beat them to the punch.”

Madison Furniture started inviting a small group of customers to its Tigard, Ore., factory last year after pulling out of major markets like Las Vegas to focus on direct sales through its network of sales reps in the region. Owner Bob Cohns said that as a regional upholstery supplier the event can be a success if 15 retailers show up. The one downside, he said, is that customers can’t walk across the hall to another vendor when their rep is busy. “It’s good and bad in that way because there’s no place else (a buyer) can go.”