Daily News Archive
Brought to you by Home Furnishings Business
October 31,
2010 by in UnCategorized 
By Home Furnishings Business in on November 1, 2010
I love consumers. I love to ask them questions and I love to hear their answers. They fascinate me because, while many times they follow the norm, there are times when they totally surprise me. That is the fun part.
The Consumer Intelligence application on FurnitureCore allows us to show graphically the results of surveys we conduct which delve into the attitudes of consumers about their homes and home furnishings. The following screens from FurnitureCore present some of their thoughts on the furniture-shopping process. I am sure you will find some things that will make you happy. I am also sure you will find some things that will give you pause. You may even find a few surprises of your own.
What would you say is the most significant barrier to your shopping for furniture?
What is keeping the consumer from shopping for furniture? Two factors stand out as external obstacles in the minds of 70 percent of consumersthe issue of lack of money to put toward a furniture purchase, and the problem of What am I going to do with the old furniture?
Obviously, the money issue is heavy on the minds of consumers, with 61.5 percent giving this as the reason. The concern here is how the retailer can get these consumers into the store merely to take a look. The problem of getting rid of the current furniture is a major nuisance to around 9 percent. While this is not a huge number, retailers may want to investigate ways the store could make it easier for the consumer to discard the old so she can bring in the new.
The other barriers are internal issues. Often the sales associate may not at first recognize these hidden issues. They are uncertainty and fear. Thirty percent of consumers are grappling with these hindrances. Of the two, uncertainty is a problem with 22 percent of consumers who indicate they dont know what they want. They are unsure about the style and the look. Its hard to pull the trigger when this is the situation. Another 8 percent are afraid of making a mistake. This lack of confidence can cause these skittish consumers to avoid the buying process altogether.
If you had a free afternoon, what is the likelihood that you would spend it in a furniture store?
Another area we looked at was the likelihood of visiting a furniture store just for fun. We asked consumers if they had a free afternoon, whats the chance they would spend that time in a furniture store? This was on a rating scale of 5 to 1, with 5 being very likely and 1 being not at all likely. The average of the responses for all the responses was a 2.9a rating barely above the halfway mark.
However, when we segmented our consumer respondents by Lifestyle cluster, we found that Style Awares were much more likely to enjoy an afternoon in a furniture storea rating of 3.4 of a possible 5. In Impact Consultings proprietary database of Lifestyle clusters, Style Awares are those consumers who have a heightened sense of style and are very motivated by how things look. They spend a good part of their leisure time actively shopping and surveying what is in the marketplace. Therefore, not only are they comfortable in a furniture store, but they like being there.
Which word or phrase most accurately describes your last furniture shopping experience?
Exactly how did the consumer feel about her last furniture shopping experience? Prepare for medicine that may be somewhat bitter.
Forty-one percent thought it was ho-hum or negative! It was either frustrating (16.6 percent); it accomplished a goal and nothing more (17.8 percent); or it was forgettable (6.5 percent). Forty-eight percent said it was nice (pleasant), while ONLY 11 percent said it was exciting!
If the consumer is in the furniture store, its highly likely that she is in the market for furniture. Apple has firmly established the idea that shopping for a phone can be so exciting, people will stand in line for hours or days to buy the latest. Who says shopping for the home couldnt also be exciting?
OK, so furniture shoppers probably wont stand in line for hours in the pre-dawn waiting for your front door to open.
Even so, give some thought to what type of first-rate shopping experience you could offer them that would make them eager to see whats happening on the other side of that door.
Complete the following sentence with the phrase that best describes your reason for wanting new furniture: I want to change my room because ¦
Our experience has shown that Replacement is the most frequently ¨cited reason for wanting new furniture. The consumer has looked at the worn upholstery on the sofa about as long as she can stand it and has decided to do something about it. This is the need factor. In the same vein, Function is only slightly less often given as the reason to shop for furniture (31 percent). With this consumer need also is seen as a motivation to purchase.
Desire is exhibited in the Comfort issue (11 percent). The furniture may be in perfect condition so there is no real need to replace it. However, if it is not meeting the comfort requirements of the consumer, desire for comfort will drive the purchase.
Style is the motivator for 23 percent of reasons for wanting new furniture. Outdated color or style, the desire for more formal styling, or a wish for more informal styling are all internal motivations for a consumer to begin to shop for furniture. These internal motivators can be the strongest of all motivators. We often see an outwardly expressed need for change may simply be a cover for an inner desire for furniture.
After you have made the decision to purchase home furnishings, what are the steps you take in your shopping process? List in order with 1 being the first step, 2 being the second step, etc. Use each number only once. Do not number any steps you do not use.
By far, the first step that consumers take most frequently is Internet research. This consumer will come into the furniture store armed with information. She has seen a large selection of products and gotten ample product information when researching Web siteswhether manufacturer sites, retailer sites or other information sites. She is definitely an informed customer.
Looking at the furniture on the retail floor is the second step in the process. When she comes into the furniture store, she has already seen a broad assortment of products (probably on the Internet) and most likely will be a consumer aware of what her options are and decisive in her choices.
The third shopping step is saving newspaper articles and ads. According to our research, theres nothing more satisfying to the furniture consumer than to curl up with the Sunday furniture supplement. This is true even for those consumers not currently in the market for furniture, those who just want to keep up with whats out there.
How long did you shop for the product before you made your most recent furniture purchase?
We live in a ramped-up world. Consumers, especially younger consumers, have become accustomed to a world of conveniencefast foods, the speed of technology, the rapid pace of travel. Making quick decisions based upon the expectation of large number of choices is the norm to todays furniture consumer. While they have spent additional time pre-shopping via the Internet, newspaper ads, etc., more than 75 percent of consumers only shop a month or less before making the furniture purchase.
If we look back to research Impact Consulting did in 1994, we see the results of the changing times. This earlier consumer spent more time in the shopping process.
Fifty-two percent spent a month or less shopping before the purchase; 26 percent spent one to three months; 11.2 percent spent three to six months, and 10.5 percent spent six months or more shopping for furniture.¨¨Check one or more of the following that helped you decide to purchase this product from this particular retailer.
To no ones surprise, Style/Design is the leading factor in the consumers decision to purchase furniture at a specific retailer. If she doesnt like how it looks, she wont buy the product. Therefore, the fact that the highest percentage of consumers (37.9 percent) gave this reason is no revelation to us. We also note that the second most mentioned influencer was Price (23.3 percent)another given.
The third was Product Availability (18.1 percent). No waiting around for this consumer. Remember, she has shopped the Internet and has seen that amazing selection of available products. She lives in that world of immediate gratification.
Therefore, she does not want to wait to get into her home that fabulous sofa she has told all her friends about.
As most retailers are aware, a vast majority of consumers are not limiting their shopping to one retailer. They are in the market and they shop multiple stores. Heres that statistic: The fewest consumers (only 5.5 percent) said they shopped only one store. You cant count on Mary Jones to always be your customer. She may give you first look, but you can bet shes shopping the marketplace. Make sure her shopping experience at your store will bring her back when shes ready to buy.
Without a doubt, consumers have very definite opinions about the furniture shopping process. Your task as a retailer is to identify, based upon the demographics of your marketing area, the consumer most likely to purchase from your store (your primary consumer) and to consider any barriers that consumer has to shopping for or buying furniture.
Equally important are identifying those external and internal motivators that will drive her to regard you as a retailer to shop and pinpointing the most effective methods you can use to get her into your store. Finally (and this may be the most important task), you must give her a shopping experience that will keep her coming back. HFB
October 31,
2010 by in UnCategorized
By Home Furnishings Business in on November 1, 2010
These are interesting times, and retailers and manufacturers alike are feeling the squeeze. Accordingly, Info Retail thought it would be appropriate to perform a mass survey during the Summer 2010 Las Vegas Market in order to keep its finger on the pulse of market attendees.
We interviewed roughly 200 manufacturers and retailers. In this article, we review how attendees responded to two of our survey questions, as well as offer our perspective on what these results may mean for the industry.
Do consumers want more or less products at retail? According to 63 percent of the survey respondents, consumers want more product choices at retail.
Info Retails perspective: Maybe, or maybe not. Under some circumstances the consumer may appear to be asking for more products. For example, suppose a customer comes into your store looking for a sofa. At first glance, all she may see are brown sofas. One has high legs, one has low legs, one reclines, and another has gold rivets on the arms. But they are all brown. This customer might ask if you have any other sofas besides what she sees on the floor. The logical conclusion would be that she would like more products from which to choose.
While the retailer may translate the consumers request into a desire for more products, what the consumer may actually be asking for is better choice satisfaction among the products already on the floor. Choice satisfaction is directly linked to the attractiveness of the assortment of options being offered. When the product options are considered more attractive and more easily understood, the consumer is satisfied with less choice. Less attractive assortment options may cause consumers to believe they need more products to choose from. In addition, if the consumer perceives that your store or assortment is of low quality, they will believe they need more products in order to make the best choice (Cherney & Hamilton, 2010). If your customers are asking for more product choices, it may be that your assortment lacks clear differentiation and option attractiveness, or that the consumer perceives your store as being of lower quality.
Changing from a product-centric to consumer-centric business model is key. We suggest having a clear product hierarchy that consumers can easily understand. This hierarchy should educate them on how to evaluate the differences between good products and the best products. We encourage manufacturers and retailers to understand dominant buying motivations and transfer that information into a clearly understood benefit to the consumer. We encourage user testing to fully understand what drives the consumer to either make a purchase, demand more options or leave empty-handed.¨Social media Survey results indicate that 51 percent of respondents use social media as a way to connect with customers.¨Whether or not to use social media is a timely, relevant question. Info Retail has created several social media strategies and campaigns for clients that have successfully allowed them to connect with consumers. In our research however, we uncovered many more ineffective social media campaigns circulating in the furniture and bedding industry than we did successful ones. A poorly executed social media campaign can actually decrease consumer advocacy and, in some cases, greatly distort or even destroy the brands message. Creating a fan page on a social networking site does not translate into a social media strategy; in fact, it may hinder the effort.
The first step to designing an effective strategy is to research whats currently being said about your brand, where its being said, and whos saying it. This knowledge should guide many of your campaign decisions. Next is the most important step:
Identify how your company will measure the success of each campaign. Success may be the amount of traffic the campaign drives to the Web site, or the number of people who consistently return to that site. Clearly identifying metrics for success will help frame the campaigns goals. For example, if your goal is to get 3,000 people to your Web site, the architecture of your social media campaign may be quite different than if your goal was to increase brand advocacy. While both are fair goals, identifying your priorities for consumer activity or sentiment will direct the development of content and the decision as to which social media channels to utilize.
Starbucks and Dunkin Donuts both use social media to interact with their customers. However, the results of their campaigns have been quite different. Starbucks uses its social media campaign to claim their superiority over other brands while Dunkin Donuts, who has 80 percent fewer Facebook and Twitter followers, takes a more advocacy-driven approach.
Dunkin Donuts uses its campaign to turn real people into online supporters. With social media, Starbucks voices its dominance and Dunkin Donuts creates consumer advocates. These two goals dont have to be mutually exclusive, but companies should identify what they intend to accomplish before they launch their strategy.
Several furniture and bedding manufacturers make use of flat social media. Social media is referred to as flat when the owner of the campaign does not allow consumers to interact with the campaign, like a Facebook page where interaction isnt encouraged. The positives of a flat campaign are that the manufacturer has more control over what is being said and less PR issues to address. The disadvantages are that it isnt allowing consumers to interact. In fact, flat social media actually is just another way to execute traditional advertising wherein the company talks at a consumer instead of with the consumer. In flat social media, the content becomes a pop-up ad in a place where social media is supposed to take place, and the resulting consumer perception is often quite negative.
We recently researched a bedding manufacturers Facebook page. The good news: They have accumulated hundreds of fans. (Keep in mind that the word fan when referring to Facebook does not necessarily mean an individual appreciates you.) The bad news: The wall is plastered with negative comments regarding its products.
Making matters worse is the fact that the manufacturer is not addressing the negative comments. If the manufacturers original goal is to attract fans to the page, the campaign could be considered a success. However, if the manufacturers goal was to showcase product quality and consumer satisfaction, the campaign may be perceived as a failure.
The result of the campaign could be entirely different if the manufacturer had spent less time marketing product, which is typically perceived negatively within social media, and more time addressing the negative comments. While the campaign may have resulted in a lower number of fans, it probably would have also decreased the number of occasions when negative comments were addressed publicly by fans. In addition, by publicly addressing the negative consumer comments, the company showcases their concern regarding consumer problems and their devotion to creating a satisfactory solution, thus turning a negative comment into a positive PR moment. Bear in mind that not all negative comments need to be addressed.
A strategy for responding to negative consumer feedback must be developed, identifying feedback that needs to be addressed and how often to respond. If this balance is not established, a company can come off as being defensive instead of helpful.
The lesson here is that simply pouring content into a social media channel does not translate to a successful strategy. Remember, a social media strategy is the integration of appropriate and engaging communication channels in order to create a seamless flow of communication between a brand and consumers.
Its because of this that even more discretion and consideration is needed when developing the campaigns within a social media strategy than was required for a print media campaign, because social media is organic and evolves over time. Companies must consider how the dynamic evolution of the content in their social media campaign will invariably affect the perception of their brand.
While the industry continues to struggle through this time of economic uncertainty, the development of a strong, data-driven strategy for new initiatives is absolutely essential. Within each strategy, key performance indicators should be established as well as measurement metrics. These steps will insure that you will receive the absolute highest return on your investment. HFB
For more information about Info Retails Las Vegas 2010 survey, go to blog.inforetail.com/podcast or e-mail the company at info@inforetail.com
October 31,
2010 by in UnCategorized
By Home Furnishings Business in on November 1, 2010
An economy moving in fits and starts, and a mid-term election season as front-of-mind for consumers as many presidential campaigns has kept traffic spotty at many retailers across the country moving into the end of 2010.
While on paper, overall sales are ahead of last year, business is nowhere near making up ground lost in 2009. Part of the reason is that consumers worry about the slow pace of economic recovery, and joblessness remains a big concern as employers are slow to re-staff to pre-recession levels out of nervousness over their long-term outlook.
The Conference Boards Consumer Confidence Index more or less reflects the good week/bad week, good month/bad month activity in many furniture stores. After dipping to 46.4 in February, the index climbed three straight months to 62.7 in May, dipped twice to 51 in July, hit 53.2 in August, dipped to 48.6 in September, and rebounded slightly to 50.2 in October.
Still, the index remains high above its level in the 20s during early 2009.
Appetite for Furniture
A furniture-specific consumer measurement, the Furniture Buying Index from Americas Research Group, which gauges consumers intent to make a specific purchase, climbed steadily through June to 72 before dipping to 67 in August, rising back to 70 the next month and staying flat in October.
Consumers are thinking about buying furniture this fall, but with the economic conditions many consumers are putting furniture buying on hold, said Charleston, S.C.-based ARGs chairman, Britt Beemer, in comment on the October number.
Consumers basically are staying in place right now.
There are larger worries beyond a flat index, Beemer noted in a telephone interview.
In good times, consumers spend $500 or more six to eight times a yearin past recessions, thats gone down to four, he said. Whats scary about this last year is that its down to two or three times.
Say a consumer has to replace four tires on their car, and then their refrigerator breaks down. That might be all their big purchases gone for the year, or maybe theyll have one left. Thats one reason these television promotions have worked so well. A televisions something the entire family can enjoy, and in a lot of cases the shoppers are buying the furniture just to get the TV.
Furniture retailers in general are not nearly promotional enough in the current economic environment, he added.
Consumers are buying more and more on holiday weekends, and thats why Black Friday could be a big day for furniture, but for that to happen, you have to get down in the dirt and play the game with everyone else, Beemer said. Open the store at 6 a.m., have early bird specials. Theres no reason Black Friday shouldnt work for furniture, and if you do those things you can have a big day.
How about a look at a major market, New York state? Douglas Lonnstrom is professor of statistics and finance at Siena College in Loudonville, N.Y. Hes also founding director of the Siena Research Institute, which produces a monthly index of consumer confidence in New York.
The Siena survey asks consumers about their plans to make purchases in five categories: automobiles, computers, furniture, homes and home improvements.
Furniture has stayed quite flat since February 2009, Lonnstrom said. Its ranging from 15 to 21 percent for those saying theyll buy furniture in the next six months.
In September, the last month for which survey figures were available by HFBs press time, 17.6 percent of New Yorkers said they plan to buy furniture, up 2.3 points from August.
Its a fairly consistent figure, as low as 15 and as high as 21, Lonnstrom said.
Roughly one in five families in New York are planning to buy furniture in the coming six months.
We often see home purchasing and home improvement spending going in opposite directions, and furnitures been tending to move in a line with home improvement.
Politics Loom Large
Last months mid-term electionssome of the hardest-fought and most attention-getting campaigns outside a presidential election year in recent memoryhad consumers minds on things other than furniture. But Beemer pointed out a practical impact on retailers trying to stay front-of-mind among their potential shoppers.
Nationally, 54 percent of retail ads were getting bumped in October by political ads, Beemer noted. If youre a big television advertiser, fewer (furniture) ads were being seen from Labor Day moving forward. Political advertising is running this year at a rate you usually see during many presidential elections. There are fewer offers you can give the consumer.
There was a hope that once the elections are over, consumers will free up some mind space for things such as furniture shopping. Thats the take from Chris McCall, furniture buyer and a partner in Carthage, Tenn.-based retailer D.T. McCall & Sons, which has four central-Tennessee stores selling furniture, electronics, appliances, home and garden, and other home-related categories.
More so than anything, the November election will have a big impact on consumer attitudes, he said. Government spending has scared the American people into holding on to their dollars. If theres a big change in the house and senate, youll see a huge November and December selling season, and the stock market will go up.
While Democrats retained the U.S. Senate, Republicans did end up regaining the House of Representatives. On election day, the Dow Jones industrial average did rise 60 points, but as this issue went to press only a couple of days later.
Big Picture
The housing crash and ensuing recession have created a less mobile society thats tied to their current homes, and that has impacts furniture retailers in a several ways.
The foreclosure mess has precluded a lot of the normal migration youd see as people relocate to get new jobs, said Jerry Epperson, industry analyst and managing director of Mann, Armistead & Epperson in Richmond, Va.
Theres a double whammy at work: Its hard to sell a home to move, and there arent as many new jobs to inspire those moves.
Typically, our industry benefits from those moves, Epperson said. Not only that, homes are getting smaller, not as many MacMansions are going up. If we arent building these great big homes, we arent using as much furniture to fill them up.
Consumer demographic trends could pose problems the next few years, as well, particularly if the economic recovery continues on a slow curve.
First, Epperson noted a decline in births4.4 million in 2006 and falling for three years in a row. And there are issues with the generations ahead of those new arrivals.
The Baby Boomers are now 46- to 64-years-old, and weve aged out of that 30- to 45-year-old market, which is the biggest furniture-buying demographic group, Epperson said. And now, there arent as many in that rangeGen X has 47 million people.
There are 72 million of ourthe Baby Boomerschildren in Gen Y, but they dont have high enough income yet (at ages 11 through 29). Also, that Generation X is a plague on the real estate base. Our commercial real estate markets entire business model is geared for 77 million consumers. Gen X has 47 million, and thats not enough people to support it. HFB
October 31,
2010 by in UnCategorized
By Home Furnishings Business in on November 1, 2010
Perhaps the biggest challenge facing bedding retailers these days is getting a customer past the fear of making a purchase. With a tight economy resulting in consumers tightening up their purse strings, buying even a necessity like a new bed may be a toughand prolongeddecision.
One retailer thats been successful in moving shoppers past that reluctance is Verlo Mattress, based in Whitewater, Wis. A franchisor of company-direct bedding stores, Verlo has learned a thing or two about getting into the minds of consumersand finalizing salesin its nearly 30 years in business (Verlo celebrates 30 years of franchised stores in 2011).
Removing the Fear
We like to think that we take the fear and risk out of buying a mattress, stated Verlo Mattress President Kurt Schusterman, explaining his companys selling strategy. Buying a bed is a very personal experience, and our staff is carefully trained to determine the best sleep system for every customer.
Schusterman went into greater detail on Verlos sales strategy: Each Verlo store staffs at least one certified mattress craftsperson to demonstrate and educate consumers about how their mattress will be built. Verlo customers can rest assured that they are getting their best nights sleep possible because their bed was designed to their comfort level.
Reading the Mindset
Verlo also counts its ability to read the mindset of its customers as a key asset, one that evolves and shifts over time for the company.
Today we are transitioning our brand to a more experiential retail experience that is more female-oriented, Schusterman said. We are now concentrating more on the buying process and how we make it easier to find the right product for you as opposed to marketing just the box.
The Verlo sales mentality takes into account todays Internet-savvy bedding shoppers: We believe that the consumer is very knowledgeable when they come into our stores, Schusterman said. Most have done extensive research prior to walking in and have an idea of what is available in the marketplace. The Verlo proposition is that will custom-make a mattress to match your individual comfort needs, and that as you and your body change, we have the ability to make modification to your mattress to let you bed keep pace with the changes in your body.
If our talented sales team gets the opportunity to explain how this works, we can usually close a sale, he added. Our prices are very competitive and our quality, we believe, is superior to many other options. Getting our differentiation in the consumers mind is our true challenge.
A History of Service
The Verlo story began in 1958 when Guy Day and Dale Williams founded Wheeling Furniture Co. in Wheeling, Ill. Ten years later, they learned how to make their own mattresses and began selling them under the name Verlo Mattress Co.the Verlo name was a tribute to their wives, Verna and Lois.
In 1981 Verlo began to offer franchise opportunities, which it continues to do to this day, selling made-to-order mattresses, along with ornamental design beds, futon mattresses and accessories, bolsters and pillows in its current lineup of 42 franchise stores.
Bucking current retail trends, the company plans to expand in years to come, with new stores planned in St. Louis, Chicago, Philadelphia and Atlanta, along with a retooled effort to recruit new franchises.
Freedom of Choice
Verlos merchandising strategy is all about providing an easy, enjoyable and stress-free purchasing experience with choices to suit any consumer. Our standard floor line-up contains a progression of firm, plush and luxury plush comfort levels on varying support systems and feature-rich comfort layers, Schusterman explained.
Quality components always remain a top priority for us, as we recognize that we are creating customers for life.
Of course, given todays economic situation, price is one obstacle that all bedding retailers have to deal with. An emphasis on quality and value over bargains is Verlos strategy for overcoming this concernand standing out from the crowd.
Today the bedding retail world is a sea of sameness with price discounting, Schusterman said. People need to remember that they will spend one-third of their life for the next 10 years on the mattress they purchase, and should not let price promotion minimize their decision. ¦ Our biggest challenge is getting our story out so people can truly appreciate the value we offer.
To achieve that, the company is very active in social media, with a Facebook fan page for the company as well as individual pages devoted to many of its franchise stores. The company also encourages franchises to advertise through local print, radio and TV.
The Future
Schusterman only sees good things ahead for Verlo as the company continues to grow through additional franchises and increased market penetration. He believes a main key to that growth is a knowledgeable, well-trained sales staff, saying We have a lot of work to do, but the re-engineering effort is underway. Were in no hurry and are prudent in our desire to thoughtfully and carefully build our team with people who believe in our vision and want to be a part of a team that appreciates health and well-being. HFB
October 31,
2010 by in UnCategorized
By Home Furnishings Business in on November 1, 2010
Link Melley believes those who keep our country safe so its citizens can pursue the American Dream deserve to live that dream themselves.
Melley is CEO of Freedom Furniture & Electronics, a Norfolk, Va.-based retailer thats developed a fairly unique market nicheserving the furnishings, electronics and appliance needs of members of the U.S. military.
Now, an 11-store chain with more than $20 million in annual sales, Freedoms success arose from an appreciation for those serving in the armed forces and a dedication to making their lives better.
Link and his brother John Melley, chief operating officer at Freedom, know about the challenges facing military families. Their father was in the military, and they grew up with an appreciation for the sacrifices made by those in the armed forces.
Theyre underpaid, they work incredibly hard, and they take the ultimate risk, he said. When these people join the military, they dont own a lot of possessions. They arent used to shopping to create a nice lifestyle. Our goal was to help them get to the American Dream faster, and live it.
Adapting to the Market
Freedom Furniture & Electronics got its start 27 years ago as Freedom TV & Stereo. While the retailer has always targeted markets with a high military presence, as the original name implies, it hasnt always been a furniture store.
I was working in a different industry, but also within the military market, Melley said. It became obvious that this market was underserved, and we saw an opportunity to compete in this space and offer a better experience.
Freedom added furniture to its product mix around 1990, when the retailer had five stores.
We recognized our customers were graduating from us, Melley said. After theyd bought their electronics, there was nothing left to buy from us, and we realized we were passing them along to other stores. They were going to furniture stores to get the goods they needed when they moved out of the barracks and into apartments.
We changed from a store model for single soldiers to one that served married soldiers with families as well. ... Our goal is to deliver a better experience to the military customer. We had an appreciation for that customer and a passion for giving them a better life. Our tag line is The American Dream Starts Here.
Freedom targets markets that have at least a 16,000-person military presence, so it eventually wants to build out to around 20 stores. Two, possibly three, new locations will open in 2011. The first, in Lawton, Okla., near Fort Sill, will open by March 1.
A Particular Set of Needs
One key to Freedoms success is a firm grasp on the ebb and flow of product and service needs among among its consumer base of military personnel and their families.
A new recruit, for example, might be making his or her first big-ticket purchase and may not have established credit.
The primary service we deliver is the availability of credit, Melley said. Its old-time, installment payments, no gimmicks. .... We carry our own paper, so they arent dealing with a huge bankwe know our customers, and the challenges they face, so it gives us the ability to be flexible when needed.
Melley knows that offering credit to inexperienced consumers builds loyalty.
My wife and I met a doctor on a mission trip in El Salvador, he recalled. It turns out this doctor was a customer of ours in San Diego, and was able to get furniture from us when nobody else would give him credit. People were so appreciative when you take a risk on them and you help get their life started.
Writing its own paper gives Freedom more leeway to work with its customers when problems arise.
They move a lot, and they get deployed, Melley pointed out. We work with them as well as we can, and when there are problems, we solve them quickly. Its easier for us to be flexible and understanding because we understand their problems.
Working with them includes flexibility on payment schedules, changing deliveries, or changing payment amounts.
Because theyre young and often not very experienced, we realize we have to take a larger role in finding out what the problem is and finding a solution, Melley said.
Serving a military market also means keeping tabs on whats going on in the soldiers lives.
Theres a different set of products they buy before they leave for deployment, and when they come back, Melley said. Laptops, for example are in high demand before deployments.
That becomes their everything machine, Melley said of when soldiers are far from home in an often hostile environment. Thats how they stay in touch with their family, e-mails or Skype, if they have that connection.
Deployed soldiers also can use that tool when they have the time or need to take care of business with Freedom Stores from overseas.
Theyll e-mail us and say, My wife needs a new washer and dryer, Melley said by way of example. Their e-signature allows them to make the purchase online.
Upon their return from deployment, or as they establish a career in the military and need to outfit a home, furniture, appliances and televisions move up on soldiers shopping lists.
We do our best to carry high-value product, Melley said. We have brands like GE Appliances; Sony, Samsung, and Toshiba electronics. We want give our customers access to first-line brands.
Freedom also wants its customers to have a first-class in-store experience.
It has to be more than chairs lined up in a rowthere has to be an experience, Melley said. We greet our customers with a Welcome to Freedom at the right time, so its social. We want our customers to have a good time. And, we want our employees to have a good time. Many of our sales and service people are former military, or have spouses in the military, so were all speaking the same language.
A Close-Knit Community¨Freedom promotes through its tag line, The American dream starts here, in its advertising, but the real way it builds mind-share among its customer base is deep involvement in the military community itself.
Were involved in a lot of charitable events every month, Melley said. We also have a regular monthly charityany time a person makes their quota for the month, we give $20 to the Special Operations Warrior Foundation.
That program, in support of SOPWF (specialops.org), an organization assisting soldiers injured in the line of duty started, around five years ago. In September, for example, Freedom had 20 salespeople reach gold status for sales performance, and nine collectors make goal for September.
That led to a $580 payment that month to the Special Warriors Fund, and brought the programs grand total to $42,860.
In the course of a month, a Freedom store might buy a table for the Marine Corp Ball at Camp LeJeune in North Carolina; outfit a USO center in Jacksonville, N.C.; or provide a new laptop computer for the National Museum of the Marine Corps near Quantico, Va.
Well make 300 different contributions over the course of the year, Melley said. It keeps us in touch with our customer.
Freedom also utilizes social media with contests on Facebook (facebook.com/shopfreedom).
We had an ugliest sofa contest where people sent in pictures and the winner got a free sofa, Melley said.
In October, Freedom ran a pet costume contest for Halloween, with the winner getting a Sony HD Bloggie camera.
The next couple of years bode well for Freedom Furniture & Electronics, where volume depends on whether the military personnel they serve are stationed on base or deployed.
We expect sales to increase 5 to 10 percent because theres been a draw-down (of U.S. military forces) in Iraq, and were looking at one next summer in Afghanistan, Melley said. Overall we expect double-digit growth in the next two years. HFB