Keeping Between the Lines

June 30, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on July 2008 More retailers are exploring the market-worthiness of developing their own in-store furniture labels these days. While the strategy builds on a longtime industry mantra that “the store is the brand,” private labeling has its challenges.

Obviously, the quality has to fit the expectations shoppers have for a particular store, and the goods must meet marketplace demands. The latter issue dictates that retailers taking the private-label route create looks with plenty of appeal that stand apart from what’s already out there—i.e., styles that sell, but don’t knock off what’s already in the marketplace.

Once an issue of concern mainly for vendors’ product development teams, avoiding infringing product now affects those retailers looking to create their own lines.

Most of the retailers contacted for this article wouldn’t even touch the subject (note to self: Don’t mention “knockoff” and “private label” in the same sentence when leaving messages and expect a lot of call-backs) but one that did, Atlanta-based Havertys, is perhaps the largest “traditional” furniture retailer concentrating on its own brand, making a major commitment to differentiating itself through private-label goods at its more than 120 stores in 17 states.

“I sold my first piece of Havertys-branded product in February 2000,” said Tony Wilkerson, executive vice president of merchandising. Since then, private-label goods have grown at Havertys to take a huge portion of all categories except bedding.

“With minimal exceptions, everything in our lineup is Havertys brand. ... Other lines are in single digits as a percentage. That does not include bedding, where we still carry national brands.”

HOEING YOUR OWN ROW

Havertys hasn’t run across any knockoff problems with any of its branded product, Wilkerson said. He credited a strong creative process between the furniture designers and the retailer’s merchandising team.

“We’re looking to brand something that everyone else isn’t carrying,” he said. “When you see a strong seller in the marketplace, there are generally very few key design elements. It could be the styling, wood or fabric combination in upholstery.

“We work directly with designers and give them elements we want in the product, and have them work with our merchandising team. If you see an element you like, you take it and figure out how to use it in a different way. Sometimes it turns into a new element. You need to address that customer who might be looking for a traditional poster bed.”

Havertys also is looking into registering many of its designs to protect the retailer from—get this—being knocked off by vendors or other retailers.

“You can’t nail down everything, but certain elements can be registered,” Wilkerson said. “You do have suppliers where their business is predicated on making lower-cost versions of product that’s in the marketplace. More companies are trying to protect what they have out there, and the more companies that do that, the better it is for the industry.”

KNOCKOFFS HURT RETAILERS

In the end, Wilkerson believed retailers carrying knockoffs that are lower priced than the originals can end up hurting themselves as much as anyone else. He questioned whether retailers can actually make money that way.

“A lot of retailers who followed that business model ended up in the bone yard,” Wilkerson said. “Say you have a $599 sofa, and an identical one comes out next Market at $499. Are you going to cannibalize yourself at less margin?

“You can carry excellent designs and still offer an outstanding value to the customer,” he added. “You don’t have to offer the same thing the guy down the street has and sell it for less. Consumers are smart enough to see value when it’s there.”



Finding Out More

Following is a list of some possible sources of insight into the issue of private labels. The list includes books, Web sites, Web logs and publications with a focus on private labeling, as well as commentary on branding and knockoffs. They cast a far-wider net than the furniture industry, but readers might be able to find out how other sectors have been affected by knockoffs and what they’ve done about them.

• The Psychology Behind Trademark Infringement and Counterfeiting by Judith Lynne Zaichkowsky.

Zaichkowsky writes about how new product developers need to consider the possibility of brand imitation. She looks to provide readers with ways to create differentiated, protectable product.

Available on amazon.com.

• brandchannel.com

Online exchange about branding. Offers tools and information including global listings for conferences, courses and careers, and links to other industry resources. Also features open exchange on the subjects of brands and branding from practitioners around the world through features such as online debates and white paper submissions.

• brandweek.com

Online extension of Brandweek magazine. Breaking marketing industry news and analysis, and commentary that puts that news into perspective.

• privatelabelmag.com

Web site for Private Label Magazine, which has been publishing since 1979 and targets manufacturers, buyers and retailers in various industries with information on private branding trends in a variety of product categories.

• blogcatalog.com

Check here with the search “private label” for a large number of blogs on the topic of private branding.

• privatelabelbuyer.com

Web site devoted to private label retailing. It includes information on merchandising and marketing private label products through in-depth features on leading retail chains, up-close category analysis and a focus on industry trends, all designed to help maximize quality and profitability in private label programs.

PL Buyer is a monthly printed magazine.

• counterfeitchic.com

A blog from Fordham law professor Susan Scafidi. The site focuses on fashion, an industry long troubled by knockoffs. Scafidi offers a course in fashion law, and has testified in Congress on fashion infringement law. In addition to plenty of commentary and information, the site also includes legal links.