Daily News Archive
Brought to you by Home Furnishings Business
November 15,
2012 by in UnCategorized 
By Home Furnishings Business in on November 2012
The good news for home furnishings retailers with an assortment of bedding on their floors is that Baby Boomers present an opportunity on the higher-priced end, a bedding industry that Specialty Sleep Association (SSA) President Dale Read describes as a dumbbell.
Home Furnishings Business asked Read for his take on how well vendors are doing in first, addressing health/ergonomic issues with boomers; and second, how well and truthfully theyre telling their value story, and how thats translating at retail. Overall, he said pretty well.
I think it depends upon the dollars the consumer has to spend(vendors) were moving strongly to addressing the health issues and benefits before the economic collapse, Read said. Now, the bedding department is a dumbbellat one end, the low end, you have the $399, $499, $599 mattresses. ¦ Theres a portion on the other end of the dumbbell of $2,400, $2,500 and up beds that have addressed ergonomic and structural health issues. The middle$600 to $1,200 bedshas faded a lot, and that used to be the heart of the business.
Boomers remain a prosperous demographic relative to others, and more of them are feeling their age, which is good news at the upper end.
If they have the health issues, if they have the disposable income, theyre willing to pay more, Read said. They want products that address the ergonomic health issue and the green/safety issue. In the green area, 15 percent will pay more, substantially more.
There are two different issues, physiological versus do I have a healthy item in our house, he said. Boomers who want to shop and find the right solution, and have the disposable income, they can do it.
ERGONOMICS AND HEALTH
Read identified three aspects to ergonomic/health factors in bedding: the products fundamental support structure (i.e., coils, foam); conforming to the body (surface pressure, tension); and overall comfort aspect (does it absorb sweat, cool easily?).
Your choices are all over the place, and manufacturers are pretty open about telling you what they offer, he said. And the whole notion of better sleep can translate well at retail.
Beware overselling a mattress for its health benefits, he cautioned.
While better sleep is an important part of health, youre not going to cure cancer with these beds, Read noted. A person isnt going to suddenly feel better if they already have other chronic health issues. Better sleep will help, but (a mattress) is not a health product per se.
THE GREEN QUESTION
Environmental-friendliness is an important factor in a mattress purchase for, if not a majority, a significant number of consumers.
Our research shows around 70 percent of the market doesnt see having a green product as an important part of the purchase, Read said. But that leaves 30 percent who do, and half of those said they would pay more, considerably more.
If you ask the broader question in the context of what consumers, particularly baby boomers, are interested in, they do want a healthy, quality and green product if they can get it. Its hard to answer in light of the economy.
One problem Read sees is that with the exception of those who really specialize, a lot of retail sales associates dont really know how to tell that part of the story.
Most retail sales associates do know their productstheyre forced tobut there was a time people walked in and said heres my soy bed, and it turned out the oil content was 15 percent soy, Read said.
Hes hoping the SSAs truth-in-contents labeling program will help both sales associates and their customers.
Two years ago, SSA created a two-step label and seal that appears on mattresses from participating manufacturers that inform the consumer about the minimum environmental and safety compliance levels the particular product adheres to, along with a label that lists components in the mattress.
Manufacturers in the program pay a fee to the SSA to use the label and seal, and complete an extensive application process with documentation that backs up claims.
Consumers wanting further information beyond the seal and label can go the SSAs Web site, SleepInformation.org, for more detailed information and can contact the organization if they wish to learn more about a specific manufacturers component filing.
To display the Level I seal, a manufacturer must meet all federal safety flammability requirements; provide a warranty for the product; meet all safety requirements for childrens products if applicable; disclose material construction with a descriptive label content; participate in an annual survey to identify carbon footprint issues and that it has committed to continuous improvement; and meet standards set by the Montreal Protocol Act, when applicable, for reduction or elimination of ozone depleting substances.
For the Level II seal, a manufacturer must meet all the requirements of the first threshold and in addition: meet California Section 1350 testing for low VOC emissions and validate that the mattress textile covering contains no harmful substances.
To find out more, visit this link:
SleepInformation.org/environmental.html.
Read is hoping more manufacturers will participate.
There are so few participants in the SSA program that you would have to say the mattress industry really isnt educating the consumer about what theyre bringing into their home, he said. Weve failed to communicate well enough to retailers that they dont need this label on every product in their store ¦ but for that 15 percent, they can get substantially more money. People will pay serious money for organic products if they believe youve substantiated the products claims.
When talking comfort, versus health and green, the bedding sectors doing well.
What I hear is the coolant, the gels are huge in the mattress industry, and the heavy marketing behind things like the Serta iComfort has it out in front of people, Read said. The mattress industry is always searching for the next big thing, and even the low-end guys are responding to gel, but thats not a health issue, its about comfort.
November 15,
2012 by in UnCategorized
By Home Furnishings Business in on November 2012
There are some big questions floating around in Retailville centering around whether or not the consumer is back.
The industry has nosedived from $19.62 billion in sales in the third quarter of 2007 to $15.34 billion in the second quarter of 2009, resulting in a loss of nearly 38 million customers in slightly under two years.
Have those 38 million consumers decided that, even though the dining table is scratched and the chairs are unstable, they will never buy dining room furniture again? Is it their resolve to be content to sit on chairs with lumpy seats and torn upholstery for the rest of their lives?
Likely not. Instead, many of those lost customers are out there wandering around in that desert of indecision.
On the positive side, since that time, the industry has gradually climbed upward, but in a fashion that bears a strong resemblance to a mountain range, full of peaks and valleys.
The aim for the retailer is to find the best way to push that orange line in Figure 1 higher and smooth it out over the quarters as much as possible. The problem, however, is a sticky one.
Were not selling bread and milk here. Furniture is a purchase that is not consumed on a weekly basis, is not constantly used up, and can have a really long lifespan.
At Impact Consulting, we tend to be research geeks, so we set out to look at the overall consumer landscape and then our goal was to determine the best ways to get the consumer into (or back into) the stores to buy. With us, this naturally led to contacting consumers and asking them questions, which we did via consumer surveys conducted online on a national basis.
To ensure we acquired the most up-to-date input, we asked our survey participants the timing of their most recent furniture purchase. The consumers who took part in our survey were active furniture shoppers. This is supported by Figure 2, which shows that almost half of the survey participants48.3 percenthad bought furniture within the last year. Half of that number27 percenthad bought within the past six months.
Another 18.8 percent had bought furniture 12 to 24 months before the survey. Therefore, with 67.1 percent of our survey participants in the furniture retail arena within the past two years, we would consider them market-aware furniture consumers.
An important path to our goal involved defining the shopping stages that a consumer goes through when shopping for furniture. This allows us to determine if there are more effective ways for retailers to attract consumersthat is by using different methods to communicate different messages to different consumer shopping stages. The chart, shown in Figure 3, presents the breakdown of these stages by consumer percentage. It compares the information gathered in our 2009 survey with the 2012 survey. Using our segmenting process, we are able to place the furniture consumer into one of the four stages: Active, Considering, Living With or Passive.
We know there is a small group of consumers in an active buying mode. This group has already made the decision to purchase, has done the research, completed the major shopping, and chosen the product to purchase. The only step left is actually going to the check-out lane. Thats what takes place in this stage, the shortest phase. We have found that most people consider this the Shopping Process and this is why consumers will indicate that they shopped for two weeks or less.
A larger group consists of consumers who have furniture shopping in the back of their minds, but its not their main concern. Let Thanksgiving or Christmas roll around, however, and suddenly urgency raises its head. Family celebrations are going to be at their home this year and they really need a decent dining table and chairs to accommodate the relatives. In other instances, some have finally decided they cant look any longer at the sofa with the torn upholstered arm and the skirt that the dog chewed. Self-respect wins over lethargy.
These become the Considerers. In this group, need or desire changes from a laid-back state to a more energetic one and now the shopping begins. The consumer will do research on the Internet, browse stores, examine product displays, and look at pictures and articles in shelter magazines. Included also are advertisements found in the media, such as newspapers, radio and television advertisements, direct mail pieces, and interaction within the social media framework. In this Considering stage the consumers are, in fact, shopping the market.
The final two stages are those consumers who are not currently in the market to purchase furniture. They represent two distinct groups that we may call out of markets. The first are those consumers who are living with their furniture. They recently bought furniture and are temporarily out of the market. This is not to say that they wont be back soon. Their absence may only last from six months to a year. In this stage they are still a viable consumer target, especially for the sales associate who handled their most recent purchase. This underscores the importance of sales personnel staying in touch with their customers. Once they decide its time for more decorating, they will go back into the Considering stage and are again in a shopping frame of mind. It is important to keep working with this consumer because, if they do not begin the shopping process within a years time, they will be placed in the largest consumer classification, the Passives.
Our fourth stage contains our problem crowd, the out of markets. They are the largest group representing 51 percent of all consumers and 52.3 percent of our 2012 survey takers. They are Passive about the whole furniture-buying process. Definitely not ardent furniture fashionistas, these consumers are inclined to ignore the furnishing landscape of their homes until, for whatever reason, they are forced to confront the obviousthey need to liven up things a bit, perhaps a little redecorating. They may be tired of, or bored with, the way their homes look and short of buying a new house, they find that a less expensive way to change things up a bit is to get the ugly out and bring the pretty in. We know there are times that a consumers I really need to replace some of that old, worn-out furniture really means Im sick of looking at this stuff and I really want new furniture. This Passive stage contains these two conceptsNeed and Desiremaybe at a relatively low level of urgency, not as high as the Considering or the Active, but there just the same.
The task of the furniture retailers and manufacturers is to evaluate the most effective way to target these current and potential customers at each of these shopping stages, especially the Considering consumers. In Impact Consultings Advertising Report, we have looked in depth at the way the consumer reacts to various methods of advertising from e-mails to print ads to social networking. We will briefly look at two methodsthe influence advertising media has on the consumers intent to purchase and the advertising method that would encourage the consumer to go quickly to a retailer to shop for furniture. The results are part of a larger survey conducted in the fall of 2012.
INFLUENCE ON
INTENT TO PURCHASE
In order to make those advertising dollars count, it is critical to understand what arouses the consumers interest and makes him or her think of opening the wallet. We looked at five message vehicles that are most frequently used to influence the consumers intent to purchase. They were e-mail, local newspaper ads, direct mail, television and radio ads, and social networks. We asked consumers to rate each on the influence it would have in making a furniture purchase. Next we segmented the responses by the shopping stage of the consumer. The top three messages for each stage are shown below. Figure 4 presents these findings graphically.
There is no doubt that newspapers continue to have an important role in attracting the furniture consumer. It is found in each shopping stage and is obviously a requirement in the information-gathering process. It is not as crucial in the Active stage, however, since one would expect that the shopping decision had already been made.
Direct mail is also a key player in advertising. It is in the No. 2 position for the Passive and Considering consumers and No. 1 in those living with their purchases. It is an important tool to stay connected with the customer.
A magazine is the most important vehicle to attract an Active consumer to purchase (No. 1 position). It is also found in the Considering and Living With stages. Such magazines could be national home decorating/design magazines or style catalogues (such as magalogs) self-published by manufacturers or retailers. It is a way to attract the Living With back into the market within that all-important year.
ENCOURAGING A QUICK
SHOPPING CYCLE
Everyone wants a quick sale so we asked our consumers what advertising method would cause them to go to a retailer and shop for furnitureand do it QUICKLY! And now we know. Look at your direct mail list and put it to work.
Consumers in all shopping stages mentioned direct mail as either the most important way or the second most important way to get them to the store. It was voted the No. 1 way by those in the very important Considering stage. Remember, these are the people who are currently out in the market doing the picking and choosing.
The Active consumers showed no favorites giving No. 1 position to both the swiftness of e-mail AND the mailbox presence of direct mail. For the Passive and Living With consumers newspapers were the most important methods with direct mail in second position.
The message of this article is Forget the shotgun. Use the rifle instead. Throwing it up against the wall and seeing if it sticks is old school. Whether its the focused vehicle, such as direct mail or e-mail or the local newspaper for reaching a wider market, the message must be a targeted one that seeks to bring those 38 million prospective shoppers back into the stores.
Set up an active follow-up program for that gold minethe Considerers who are currently in the furniture-buying mode and have shopped your store. Keep in scheduled contact with the Living Withs who purchased from you. One never knows when they will buy a couple of lamp tables to use with the sofa they bought from your store. And dont forget that large group of Passives who will eventually get tired of the coffee table that sports the magic marker drawings produced by their four-year-old Picasso.
Dont forget that everybody does need what you have to sell! HFB
November 15,
2012 by in UnCategorized
By Home Furnishings Business in on November 2012
Given its fourth-quarter timingand the intensive bedding focus of the upcoming January Las Vegas Marketone might not expect much in the way of groundbreaking news from the sleep industry at the Fall High Point Market.
But this seasons edition, held last month, saw the roll-out of some interesting new lines and products that could warm up cash registers this winter. Latex continues to grow in prominence, and gel-infused beds remained a popular offering among new products. Pillows and other top-of-bed products also were hot items at Market.
Here are some of the bedding offerings shown in High Point.
Simmons increased its presence in the ever-growing foam/gel hybrid market with the introduction of four new Comforpedic from Beautyrest beds that integrate the companys new TruTemp gel into its proprietary Aircool memory foam. The four new beds, which replace Simmons Comforpedic Loft line, will retail from $1,299 to $2,499. The company also rolled out a new value-priced Beautysleep line, with models including wrapped coils and Geltouch foam that will retail from $399 to $699.
Canadian bedding protection specialists Caber Sure Fit debuted Sneaky Sheets, a sheet set for bedwetters that comes with waterproof pads and has the companys Wet-Block leak-prevention surface.
FXI Anatomic Global showed its new Rejuvigel line featuring open-cell Visco foam infused with swirled waves of high-density gel. The gel is added into the foam compound as its made for increased durability and better overall support, promoting air and moisture movement while improving the bodys blood flow and oxygen exposure. Suggested retail prices for the line are $1,199 (11-inch), $1,499 (12-inch) and $1,899 (13-inch) in queen.
Value bedding provider Gold Bond announced the addition of two new models to its Latex Collection, including its first two-sided latex mattress The Platinum, along with a one-sided model The Gold. Both models have latex cores for shape-conforming body support and pressure relief. The models will range in price from $1,799 to $2,399 in queen. Gold Bond also debuted two additions to its lower-profile Sacro-Support Encased Coil series. The new beds include the 15-inch, 3,000-coil Duchess, as well as a 14-inch, 2,000-coil version of the same bed. Suggested pricing for these new Duchess models is $1,399 and $1,499 in queen.
Jamison Bedding rolled out its new eight-model Talalay Latex Collection (TLC) collection based around temperature-regulating latex with aesthetics that, according to the company, made the beds individual works of art at affordable prices. The line, which is toplined by three two-sided models (Monarch, Emperor and Leaf Wing), ranges in price from $1,399 to $2,599 in queen. Each model is available on an adjustable base or on the companys steel and wood foundation. The lines designs feature butterflies, as well as leaves and chrysalises.
Italian specialty manufacturer Magniflex announced the expansion of its green-skewing GeoEthic Collection with the introduction of the Linen Natursoft Deluxe bed, which includes a layer of foam infused with mallow plant extract known for soothing and healing qualitiesits been used to soften skin and reduce inflammation. The bed will retail for $3,999 in queen. Magniflex also showed its new Magnigel line of gel-infused pillows at Market. The line includes two 100-percent gel pillows ($183 apiece), a gel/foam model ($206) and a gel/latex pillow ($206).
Latex-focused specialty manufacturer Pure Latex Bliss showed its new ActiveFUSION Climate Control pillows, which, according to the company, are offered in a variety of configurations to help consumers sleep at optimal body temperatures. The pillows come in fast and slow response versions that mimic memory foams responses but are made from Talalay latex. The five-SKU line features two classic and two contoured pillows available in both responses, along with a two-side pillow offering fast response on one side, slow on the other. The pillow collection ranges in price from $129 to $149.
Celebrating its 120-year anniversary, Shifman Mattress Co. rolled out its Vintage Collection, which, according to the company, combines modern elegance with time-honored construction. The modern touches in the line include updated borders, damask ticking and metal corner guards. Shifman also announced a new, energized marketing program that will feature additional advertising opportunities via radio, direct mail and online.
Perfectly timed for allergy season, health-focused specialty bedding company Spring Air International announced the launch of a satellite media tour focused on its proprietary Back Supporter Breathe line of beds for asthma and allergy sufferers.
Therapedic International showed newly enhanced models in its Kathy Ireland First Lady collection. The beds are made with multiple layers of latex at varying densities, providing a range of comfort levels. The line now includes four updated models: the 9-inch Alexandria, the 11-inch American Splendor, the 13-inch Romantic Elegance, and the Grand Luxury featuring a full eight inches of latex. The mattresses come with a stretch-knit, removable, zippered cover. Pricing for the line ranges from $1,299 to $2,999 in queen. HFB
November 14,
2012 by in UnCategorized
By Home Furnishings Business in Financial Reports on November 15, 2012
Canadian furniture retailer The Brick reported third-quarter 2012 sales of $368.5 million, a drop of 0.6 percent from the prior-year period.
The Brick, Edmonton, Alberta, which will be acquired by furniture retailer Leon's, saw net income rise 23.3 percent for the three-month period ended Sept. 30 to $18.7 million, when compared to the prior-year quarter; and corporate same-store sales were up 0.8 percent. Year-to-date same-store sales are up 1 percent.
Click here for the full release on The Brick's third quarter.
November 14,
2012 by in UnCategorized
By Home Furnishings Business in Financial Reports on November 15, 2012
Full-line furniture vendor Chromcraft Revington (NYSE: CRC) reported that third-quarter 2012 sales rose 3.4 percent to $13.7 million.
Chromcraft Revington, West Lafayette, Ind., lost $717,000 in the period ended Sept. 29, 31.2 percent less than the prior-year period's loss.
Through nine months of 2012, sales of $41.7 million were 5.6 percent higher than the first three quarters of 2011. Year-to-date net loss was $3.4 million, 16.2 percent lower than at the same point last year.
The reduced third-quarter net loss was primarily due to an income tax benefit of $0.2 million resulting from the final allocation of the purchase price of Executive Office Concepts Inc.; and to a lesser extent, an increase in gross margin resulting from higher sales. The reduced net loss for the first nine months of 2012 compared with the prior year period is primarily due to the gross margin contributed by EOC products, lower import sourcing expense and the income tax benefit from the final allocation of the EOC purchase price.
The increase in sales for the third quarter of 2012 as compared with the prior year period was primarily due to increased shipments of commercial furniture, in particular office suites and waiting-area furniture resulting from Chromcraft's acquisition of EOC. Residential shipments for the third quarter of 2012 were comparable to the third quarter of 2011, resulting from an increase in sales of home entertainment furniture offset by lower sales of dining room furniture. Residential furniture sales were lower in the third quarter of 2012 compared to the second quarter of 2012, primarily due to lower sales of dining room furniture.
The company continues to face the challenges resulting from weak consumer demand for residential furniture in its product categories and price segment, and ongoing labor-market struggles and reduced consumer access to credit. These factors led to a slight decrease in residential orders in the third quarter of 2012 compared to the second quarter of 2012. Commercial product orders increased in the third quarter of 2012 resulting in our highest quarterly orders since the third quarter of 2011.
Despite the continuing low consumer confidence in the economy and the very difficult retail operating environment, we increased sales in the third quarter of 2012 as compared to the prior year period, largely due to increased sales of our commercial furniture products to the health care industry, primarily through our purchase of EOC," said Chromcraft Chairman and CEO Ronald H. Butler. "The ongoing difficult operating environment in the residential furniture market will continue to be challenging into the first quarter of 2013. We believe the recent signs of marginal improvement in the housing market are tempered by the uncertainty over the outcome of the upcoming federal 'fiscal cliff' at the end of 2012 and its impact on consumer spending.
Our acquisition of California-based EOC, with its commercial product lines, especially an extensive health care line, complement our current product line of seating, tables, and waiting area furniture. In addition, the three year contract we were awarded late in 2011 with the Premier healthcare alliance is expected to boost our sales in this product line. The health care sector continues to grow significantly and we believe this alliance continues to position the commercial line of our Chromcraft division favorably for the future.