From Home Furnishing Business
Editors Note: What's the Problem?
by Bob George,
It has been a good year with traditional furniture sales up 20%+ and gross margin up two points. The results of this has been a “windfall” profit that the industry has not seen in my career span. I am not saying that this gain was easy. The issues over the last 12 months have been significant. Product availability, coupled with lack of personnel to deliver to consumers that are still not ready for delivery, have resulted in full warehouses.
Retail management copes and continues to execute change as the retail model evolves to the new normal: higher inventory, higher wages, changing consumer interface and necessary true “partnerships” between suppliers and retailers. With these changes have come new ways to manage. As discussed in the feature article: IS LESS MORE IN A POSTPANDEMIC INDUSTRY? We are moving from “endless aisles” to a curated assortment to a targeted consumer segment.
And we see a change to INITIATING THE CONSUMER ENGAGEMENT on the phone (voice/text/chat) integrated with the retailers’ website, moving to the store with an appointment. All this requires retail sales associates with different sales skills. A MOVE TO NEW KPI’s as increased prices inflated previous measures, are sales per retail sale associate, sales per delivery truck and so forth.
As we focus on managing the challenge, we need to remember the source of the bottom line – the increased contribution margin created by increased volume and increased gross profit as illustrated below.