From Home Furnishing Business
Cover Story: Home Furnishings Business 7th Annual Power 50 Retailers
2017 by Jane Chero in Business Strategy, Economic News, Industry
By Larry Thomas
Even though furniture industry sales are projected to grow by a modest 4.1% in 2018, retailers who made the prestigious Power 50 list compiled by Home Furnishings Business undoubtedly will be disappointed if they don’t exceed that growth rate by a wide margin.
It will take an aggressive, play-to-win strategy to beat those industry projections, but that mindset is one of the factors that landed members of the latest Power 50 on the list in the first place.
But the list is not simply based on annual revenue – that’s why a handful of smaller independents made the cut. Instead, it takes into account factors such as market share, expansion, and social engagement.
Market share, in fact, is the most heavily weighted factor determining who makes the list, accounting for 46 percent of the total score. It is determined by dividing the retailer’s estimated sales by the estimated retail sales of furniture and bedding in each of the markets in which the company participates, whether it’s a metropolitan statistical area, micro statistical area, or a rural area. Sales of electronics, appliances and housewares are not included.
The list gives revenue the second most weight, accounting for 20 percent of the score. Revenues are compiled using publicly-available information or HFB estimates.
The factor getting the third most weight – social engagement – is the most complicated, but accounts for 19 percent of the score. It considers social signals, website metrics, and third-party scoring platforms to arrive at a list of home furnishings retailers with the strongest online engagement, as measured by 14 separate metrics.
Sources include Alexa, Facebook, MOZ, OpenSEO, Twitter and Pinterest. On Facebook, for example, the number of “check-ins” and “likes” were among the metrics, as were the number of Twitter followers, Pinterest “pins,” and Google Page Rank, just to name a few.
From that data, we used a basic ranking methodology, assigning a numerical value to the ranked list of each metric. (For example, the retailer with the highest number of Twitter followers received a “1,” and so on.)
Then, we arrived at 14 individual scores calculated for each metric. After dropping the two highest scores to eliminate any outliers, the statistical average of the 12 remaining scores was used to calculate the final social engagement score.
The final factor in the Power 50 ranking is retail expansion, which accounts for 15 percent of the total score. Using public records, it measures store expansion and expansion into new markets.
In addition to the Power 50, HFB compiled separate lists that ranked regional chains, large independents, vertically integrated retailers, and independents with sales of less than $50 million in a single state.