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From Home Furnishing Business

Coach's Corner: Where Have All the Shoppers Gone? Long Time Passing?

By Tom Zollar,

This month’s issue is dedicated to the people in the world that have the most to say about our success or failure - the consumer. By definition, this is a person who purchases goods and services for personal use. So, from a retail point of view, in order to become a consumer, an individual must first be a shopper who is seeking something. Once they find it, they make a purchase and then become a consumer. In our world they go from being a shopper to a buyer and then having completed those steps, they are a consumer.

Our very existence is based on the process of attracting shoppers and turning them into buyers. We often refer to these people looking for our products as traffic. On our websites that might be defined as clicks, whereas in our stores they would be called UPS. They are the most critical ingredient in our business because without enough of this raw material, we can not produce the sales we need to survive and prosper. Therefore, it is the consumers that we get to shop with us, or shoppers, that we really need to focus on. We like to talk about how to get more of them to visit, however, since most furniture stores (particularly smaller ones) are getting fewer then the year before, a very pertinent question might be where have all the shoppers gone?

Since I have been a musician and played guitar almost all my life, when this question popped into my head, it was quite natural for the title of a very popular folk song from my youth to come to mind. Where Have All the Flowers Gone? was written by Pete Seeger and made a hit by many others, including Peter, Paul and Mary, and The Kingston Trio in the early sixties. Seeger’s inspiration for the song came on the way to a concert at Oberlin College, which was one of the few venues that would hire him due to his politics during the McCarthy era. He read these lines from a traditional Cossack folk song: “Where are the flowers, the girls have picked them. Where are the girls, they have taken husbands. Where are the men, they are in the army”. He used these lines as the basis for his original three-verse ballad. In 1960, Joe Hickerson added the final two about graveyards and the return of the flowers, making it what’s called a “circular song”. Its anti-war message during the unpopular Vietnam War was widely embraced, and in 2010 it was listed as one of the top 20 political songs of all time.

While I am not trying to get too political here, I think it is fair to say that we as furniture retailers are currently at war, because each distribution channel is fighting for its share of the those that are shopping for home furnishings. Over the past few decades, we have seen the battle intensify as the consumer has been given more and more ways to buy the goods we sell. This huge increase in selection for both product and shopping experience has caused the demise of thousands of retailers. As people choose to shop elsewhere, revenue dries up and businesses must either change or go away.

This process has mostly impacted what used to be a once dominant main player of retail furniture distribution, the independent general furniture store. In the last ten years, we have lost roughly 21% of furniture storefronts, mostly from this segment. These entrepreneurial entities, many still family-owned, had as much as half of the business nationally in the latter part of the 1900’s, sank to 35% share in 2005 and now have roughly a third of that. Will they go extinct or will the lost shoppers return? Follow my rewrite of this great song to find out my opinion about it.

Where Have All the Shoppers Gone?

Where have all the shoppers gone? Long time passing

Where have all the shoppers gone? lLng time ago

Where have all the shoppers gone?

Small stores took them, everyone,

When will they ever learn, oh when will they ever learn?

Back when my parents first shopped for furniture, after World War II, the main destination for most people to get ideas and purchase furniture was usually a small store in their community. There were a few larger chain stores and the traditional department stores which catered mainly to the “carriage trade” or higher-end customers. Selection was limited, and this was a good solid business to be in for a long time.

Where have all the small stores gone? Long time passing

Where have all the small stores gone? Long time ago

Where have all the small stores gone?

Gone to big stores, everyone,

When will they ever learn, oh when will they ever learn?

As we moved through the latter half of the 1900s, the Big Box, category-killing stores became the place to go. Good selection, quick delivery of many in-stock items and promised savings based on their big volume attracted many who would have been smaller store customers. Regional and national chains grew their share substantially, as did Sears, Penney’s and Wards, mainly at the expense of the smaller stores. In addition, we saw the emergence of specialty vertical and branded stores like Ethan Allen and La-Z-Boy that drew even more good shoppers away from the local general furniture store.

Where have all the big stores gone? Short time passing

Where have all the big stores gone? Not so long ago

Where have all the big stores gone?

Gone to websites, everyone,

When will they ever learn, oh when will they ever learn?

With the turn of the last century and the rapid growth of the internet as a retail channel for virtually everything, an entirely new dynamic hit the furniture industry. Whereas in the past nearly everyone ended up purchasing their furniture locally, now they had the opportunity to shop outside their physical market and have it delivered. Previously there were several highly successful retailers that used mail-order catalogs and 800 numbers to do this, but while they did well, it was never a huge percentage of the overall business. More recently with the growth of dedicated home furnishings sites and the advent of Amazon throwing its substantial marketing/selling power at the industry, we have seen this channel grow from nothing to roughly 15% in a very short time. Big stores have jumped on board and found some success selling online. The last segment to get onboard with it for various reasons, has been the smaller retailers. How big will it get? Will shoppers buy a “pig in a poke” as far as color, size, finish and comfort goes?

Where are all the websites going? In no time passing

Where are all the websites going? Here’s where they’ll go

Where are all the websites going?

Going to small local stores, everyone,

When will they ever learn, oh when will they ever learn?

As good as it has been over the last few years for online only sellers, we have recently seen the huge year-over-year growth slow a bit, falling from 26% in 2015 to 12.9% last year. This channel is still far and away the fastest growing one, but have they begun to tap out their available market share? Are most of those willing to purchase big ticket items for their home on the internet already doing so? While it is a given that online sales will continue to dominate in accessories, flatpack furniture and other easy to ship items, will they gain a similar piece of the action for “real furniture” and particularly better goods? I think that the jury is still out on this, but there are some indications that the party may be winding down a bit. If the Amazon’s and Wayfair’s of the world think that all of their future growth will come from people buying online, why then are they building small brick and mortar stores? Why are successful online and traditional retailers like Target and Nordstrom’s reportedly investigating building boutique size stores in smaller markets?

Where will all the shoppers go? In the future

Where will all the shoppers go? Not too far away

Where will all the shoppers go?

Going back to small stores, everyone

When will they ever learn, oh when will they ever learn?

Because the best place to be in order to build long lasting relationships based on trust and value is still person-to-person and face-to-face, I believe that the local small stores will rise again! So don’t give up. Take advantage of who you are and where you are to sell the services you provide to the people you can reach out and touch. When will we ever learn that there is no place like home!

Oh wait, isn’t that another song?

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