FurnitureCore
Search Twitter Facebook Digital HFBusiness Magazine Pinterest Google
Advertisement
Ad_40_Under_40

Get the latest industry scoop

Subscribe
rss

Monthly Issue

From Home Furnishing Business

Looking Good, Making Money

What are the elements for blending eye appeal and a profitable product mix on your floor?

“Non-traditional” competitors for consumers’ disposable income for home furnishings such as Arhaus, Crate and Barrel and Pottery Barn, perform quite well on much smaller product assortments shown than in the traditional home furnishings retail store.

How do you stack up against that competition?

Naples, Fla., retailer Clive Daniel Home’s floor is decidedly large at 85,000 square feet. Management decided early on that its merchandising scheme, which might not work for a lot of retailers, would have definite appeal for its high-end clientele.

The strategy requires an abundance of attention from the retailer’s merchandising team. Attention that the owners feel is warranted and with a big floor, there are lessons here for other retailers when it comes to creating their own, distinct space. 

“Out of the gate, what we continued to do is have a very eclectic approach—we’ll mix and match manufacturers on the floor, show one’s table with another’s chairs,” said CEO Daniel Lubner. “That’s difficult to do, but we have an exceptional merchandising team, and Clive (Lubner) to this day is the greatest visionary in the business.

“We took (eclecticism) a step further by putting architectural salvage and vintage furniture on the floor. We have a lot of single-turn items—once they’re sold, they’re gone. For managing the showroom it makes merchandising much more difficult, but it gives the client a one-of-a-kind feel and design. It just feels right for us.”

 

POINTS OF INTEREST Retail consultant Bob Phibbs said the furniture industry in general doesn’t do a very good job of engaging shoppers from a product standpoint on showroom floors.

“Too often, (vignettes) look like a model home where nobody lives,” he said, “or it’s a boring line-up of brown.”

That’s one reason Dallas, Texas-area retailer Stacy Furniture & Design has been shaking things up of late, adding more color and cleaner lines in a market that’s traditionally been geared toward safe looks.

“We create points of interest, and we try to do a better job featuring individual items,” said Dorian Sims, president.

 

IMMEDIATE IMPACT 

What are some tips for merchandising for visual impact, encouraging consumers to actually buy, creating aspiration?

“You have to mix it up,” Phibbs. “Choose a bold piece that gets someone talking, maybe smaller groups, a chair with a table, not as many whole rooms.”

Phibbs is a bit contrarian when it comes to the idea of retailers creating aspiration on their floors: “There’s no one size fits all. If I walk in the door I’m aspirational, I’m looking for something.”

One of the biggest issues furniture retailers face is a failure to connect the consumer’s purchase of the products they sell to the most important result or benefit they get from those products—greater happiness with both their home and lifestyle, according to Tom Zollar, practice manager with Impact Consulting.

“Next to family, the home is the most important thing in most of our customer’s lives and our mission is to deliver the style, comfort and livability that they,” he said. “Therefore, the better we merchandise and display our products in our stores to help the consumer visualize the result in her home, the more successful we will be at helping them fulfill their aspirations and thus deliver on our mission.

“To do this, our store must be visually exciting and inspire them to fulfill their dreams—it is absolutely critical.”

 

WHAT’S YOUR SIGN? 

Phibbs said in-store signage is an area where a lot of furniture retailers fall woefully short. He described many of his experiences in the furniture universe as boring and drab.

“You need compelling signage,” he said. “Signage is one of the most overlooked things in furniture retailing.”

Why not step up your point-of-sale messages with messages along these lines? Say you’re selling recliners: “Can you see yourself watching television in this?”

Do you have an intimate vignette, say a comfortable chair and table? How about: “Can you see yourself reading a book by the fire here?”

 

FIRE UP YOUR STAFF 

As if inspiring you customers isn’t enough, eye-catching merchandising can help excite your staff about what they’re selling.

“You look at some of these stores and it’s no wonder (employees are) bored,” Phibbs said. “The merchandise can’t do the heavy lifting—it can only catch the eye. If you have some guy standing there with a calculator that’s not going to inspire customers.”

Try using a color scheme throughout particular vignettes, said retail consultant Connie Post, CEO of Connie Post International and Affordable Design Solutions.

“Bedroom and dining presented in a color-block story is a great way to get attention,” she said. “Color blocking is using one color through out the vignette ... It simply creates a ‘wow,’ and it is also an opportunity for smaller dealers to appear on trend.”

What Does "Wow" Mean?

Retail consultant Rick Segel thinks retailers constantly on the prowl for interesting and different products may overrate their reaction to the goods.

What if they've already seen them at another store or online? It's no longer a "wow" to the customer.

"When it comes to exceeding expectations, we tend to think there’s this line—above it lies 'wow' and below it lies disappointment," Segel said. "We treat meeting expectations like there's no middle ground. We feel that we’ve either exceeded expectations or failed them completely.”

Segel, principal of Rick Segel & Associates, said customers sometimes have neutral attitudes to furniture—neither impressed nor disappointed.

"Obviously, we strive to constantly create that wow factor, but we if don’t, that doesn’t mean we’ve failed,” he said. “All it means is that the customer has seen our new product elsewhere. It’s still a good thing that we carry the product."

Disappointment is often out of the retailer's control, but one way to create "wow" is to leverage the element of surprise.

"The element of surprise works on everyone because there are no expectations involved," Segel said. "For example, if a young lady’s boyfriend buys her a one-carat diamond ring she wasn’t expecting, you better believe she’ll be wowed. However, if she’s been dating her boyfriend for two years and is expecting a diamond ring, that same one-carat ring probably won’t wow her. She expected a bigger diamond. She expected more."

Rather than seeking to exceed customers’ expectations, Segel suggests focusing on surprising the customer.

"Do things differently than you have in the past—and different than your competition."

 

 

What Sells: On the Move

Before Jim Muffi put the motion into sofas, consumers were forced to argue over the one or two bubba recliners in their family rooms when watching television.

Prior to Muffi’s 1979 founding of PeopLounger in Mississippi, sofas, sectionals and loveseats did little other than offer a place to sit. Today, 35 years later, motion upholstery has transformed the way many families congregate to watch movies, play games and become all out sofa spuds.

The category has come a long way since those early days, and today’s offerings boast gadgets, power reclining mechanisms, massage options and storage space, not to mention improved styling and design across the spectrum.

While hitting middle age, the category continues to resonate with consumers.

Total motion upholstery sales for 2013 were $10.02 billion, 14 percent of all furniture sales. When broken down and considering only upholstery sales, motion upholstery accounted for 36.4 percent of sales in 2013. For the first quarter of 2014, those percentages remained steady.

Home Furnishings Business and its parent company Impact Consulting Services/FurnitureCore recently conducted a consumer survey of 259 people who had bought motion upholstery within the last 18 months. The survey revealed relatively pleased customers when it came to their purchases.

Of our consumer panel most (61.4 percent) bought a reclining sofa and or a loveseat, and 82.3 percent of them fell in the range of five to seven. The scale ranged from one to seven with seven being “very satisfied” and one being “not at all satisfied”.

While in the industry we’ve seen quite a bit of improvement in motion upholstery design, our consumers see more room for improvement in styling. More than half — 57.6 percent — said the style of motion is an inhibitor to purchasing. Keep in mind however, that our group all bought some piece of motion upholstery so they must have found something they liked well enough. It only says motion designers could spiff things up a bit in the eyes of consumers.

Despite the focus of manufacturers and retailers to gravitate toward power merchanisms for reclining in higher-end models, consumers in our panel say they prefer the hand-operated style. More than 52 percent preferred lever mechanisms, while 28.7 percent opted for power recline and another 19 percent chose press-back reclining.

Speaking of those power mechanisms. Consumers are pretty tight-fisted on their willingness to cover the cost of them. Almost 70 percent (70.6 percent) said they’d only pay $100 or less to get power recline in their motion sofa or sectional. Forty-one percent said they’d be willing to pay only $50 more for a power mechanism.

Ensuring the product lasts and doesn’t breakdown, consumers are adamant on warranty options for motion upholstery. Nearly 70 percent said they have a warranty on their furniture. When asked of the importance of warranties, 75.2 percent scored them a five or higher on our one-to-seven scale with one being “not at all important” and seven being “very important”.

 

Want More?

A more indepth report on motion upholstery is available for purchase at FurnitureCore.com—Industry Info—Industry Reports—Motion Upholstery, or by calling Natalia Hurd at (404) 390-1535.

 

Retail Detail: Different Strokes

Clive and Daniel Lubner didn’t sit on their hands after failing to acquire rights to the Robb & Stucky name after the retailer liquidated in 2011.

Clive Lubner had built the Fort Myers, Fla.-based operation into a $280 million paragon of high-end home furnishings retailing before a credit crunch led it into Chapter 11, then closure. But by October 2011, the Lubners were back in business in nearby Naples, Fla., with a new model, Clive Daniel Home.

Originally, the Lubners hoped to find an enterprise buyer, retain rights to the Robb & Stucky name and continue on.

When that fell through, they took a different tack.

“We continued to speak to potential investors to re-establish the company,” said Daniel Lubner, CEO. “During that time, we rebranded our hospitality business as the Lubner Group. We had several large projects that we continued to work with. That allowed for immediate cash flow and the confidence to bring in our merchandising team. By May 2011, we’d brought in our top five merchandisers (from Robb & Stucky) and made plans for a new store in a location to be decided.”

The Lubners negotiated taking over the lease for the Robb & Stucky Naples store, which Lubner said was the old retailer’s most profitable market.

 

A TOTAL HOME APPROACH

“We went about the new store a little differently,” Lubner said. “We decided the market needed a total home approach to design.”

For Clive Daniel Home, the Lubners focused on their traditional strength in interior design, and supplemented that by bringing in specialists for things such as home automation and landscape architecture in order to offer complete, comprehensive services for everything in and around a home.

“We have demonstration kitchens and smart home systems,” Lubner said. “That allows us to walk our clients through what a new construction or complete renovation should look like.”

Clive Daniel Home also does significant business in the contract and hospitality arena, but the retailer segregates those from its residential segment.

“Residential and hospitality are two completely different specialties,” Lubner said. “Instead of having designers straddle the line between the disciplines, we have dedicated staff for each.

“Our focus and philosophy is to take care of one very important person—my designer. If I proved the complete managerial support and logistics, they can concentrate on the project and not get caught up in the minutiae. If we do that, the client will win every single time.”

 

LEAN AT THE TOP 

Starting anew with a single store, the Lubners decided they wouldn’t load up on management.

“We loaded up on merchants,” Lubner said. “We’ve invested our dollars into making sure that the floor is filled with talent.”

Led by Melinda Antonucci, who is also in charge of product placement on the showroom floor, the merchandising and design team consists of six full-time employees.

 “We also have an exceptional logistics team. Because of all the support we provide, we have designers who are exceptional at creating an entire design scheme,” Lubner said. “We’ve had clients exceed $1 million on a single project, though we also have excellent clients who buy one item at a time.”

In the store, customers get the high-impact, eclectic appeal that Robb & Stucky was known for, plus a big selection of one-of-a-kind items such as vintage furniture and architectural elements. Lubner noted that Clive Daniel Home is among the sites to see in Naples: “When clients have friends visiting in town, they’ll bring them by the showroom.”

 

TRUE BRAND ORIENTATION 

How does Clive Daniel Home express its total home retail vision in marketing and advertising? By walking to a different drummer for one thing, and a true emphasis on brand building.

“That’s my passion. We’re a little unintentionally counter-cultural when it comes to our branding. There’s no conventional wisdom for us,” Lubner said. “We create 100 percent of our advertising internally. We have our own original photography, and we feature our designers in all our ads.”

Clive Daniel’s approach is to create campaigns, not single ads that talk about percent off on a particular item. Those run in print, glossy publications and on television.

Lubner noted that while many manufacturers do a great job with photography, Clive Daniel’s use of its own shots help set the store apart.

“You might see ads for different stores that show the same photography,” he said. “We’d rather have our own original voice.

“Our branding is truly that—very rarely do we have a call to action in our campaigns. It seems to work for us—we have clients coming into the showroom who recognize the designers we feature.”

 

HANDS-ON APPROACH 

Since opening, the business has grown steadily, and so far in 2014 Clive Daniel has been trending 30 percent ahead of last year—June was up 70 percent. Hands-on management has been key to that success. It’s one advantage of starting again with a single store.

“Since the day we opened, Clive and/or I have been in the showroom every single day, working hand in hand with clients and designers,” Daniel said. “We’re fighting it out for every chance of a residential or contract sale. It hasn’t been easy—starting from scratch, manufacturers who’ve chosen not to supply us. It’s been a sea of challenges.”

There’s no shortage of competition in the Naples/Fort Myers market, but the Lubners prefer to concentrate on things within their control.

“We’ve received several accolades mentioning us as the best showroom in the area, but our real focus from day one has been ‘what is the consumer looking for?’” Daniel said. “If we were buying a single piece of furniture or outfitting a whole home, what would we be looking for?”

He also credits Clive Daniel’s service personnel for its success.

“The unsung heroes in our business are our delivery team,” he said. “They were all hand-picked from our previous company. Our drivers are career guys, and they take exceptional pride in making sure the delivery goes smoothly.

“Issue do arise, and when they do, we have who we think is the greatest service individual in the business—Maria Peña. She’s worked with Clive the past 25 years, and she’s a difference maker.”

 

LOOKING AHEAD 

What does furniture retailing look like to Lubner, and what does that future hold for Clive Daniel Home?

“I’m a bit of a furniture outsider, and I don’t really pay a lot of attention to what others are doing,” Lubner said. “Our future is to continue to focus on our brand, and continue to seek out the best manufacturers. It’s all about the three P’s—product, price and people.”

He also likes Clive Daniel’s positioning, especially when it comes to a large showroom such as the retailer’s 85,000-square foot floor.

“The big boxes either need to be really good at selling low price points, or be proficient at selling complete interior design,” Lubner said. “And the latter is where the vast majority of people will fall short.”

 

Life after Robb & Stucky

When Fort Myers, Fla.-based Robb & Stucky closed in 2011, it shook up the furniture industry.

On paper, it looked as if the retailer was doing all the right things—beautiful stores, soup-to-nuts design assistance. Home Furnishings Business asked Daniel Lubner, CEO of his and Clive Lubner’s new incarnation, Clive Daniel Home, to discuss what happened, and what they learned.

Lubner didn’t want to go into too much detail, but essentially, Robb & Stucky fell victim to the same thing that sank a lot of retailers in the wake of the recession—lack of accessibility to credit.

“What did us in was a fatigued banking relationship,” he said

In early 2011, the Lubners had hopes of continuing on with Robb & Stucky.

“We were looking originally to save Robb & Stucky. Had we been able to continue in that final year, we would have been profitable,” Lubner said. “We went into Chapter 11 on Feb. 18, and by March the company was being liquidated. Our focus was to find an enterprise buyer and continue the company. We continued to speak to potential investors to re-establish the company.”

The Lubners had hoped to gain the intellectual property rights for the Robb & Stucky name, however, Samson Holdings CEO Samuel Kuo, acquired those and relaunched the brand.

“We ended up losing the rights, which was upsetting, but we’ve always focused ourselves on marketing, and we figured what’s in a name?” Lubner said. “What did Shakespeare say: ‘A rose by any other name is still a rose.’”

Hence, the new Clive Daniel Home brand. They also learned a valuable lesson.

“This new company is private equity,” Lubner said. “Cash got it started, not the good graces of a bank.”

What Keeps You Awake at Night?

Clive and Daniel Lubner started Clive Daniel Home from scratch, and the challenges involved there—garnering vendors, getting the right people in place—made for a challenge.

These days, though, what keeps CEO Daniel Lubner awake at night is when the mental wheels start turning on strategy and building the business.

“That late night when I’m not sleeping is typically when the next great idea for an advertising campaign might come to mind,” he said. “Thinking about new and innovative business development initiatives, that sort of thing.”

One thing not on his mind late at night? The competition.

“My grandfather, who started a furniture business in South Africa, had a saying: ‘Never worry about your competition, because they don’t buy from you,’” Lubner said. “Of all the things we worry about, the competition is not one of them.”

 

Are You a Merchant?

What Does Your Store Sell? Furniture, or Solutions That Meet Your Shoppers' Aspirations? 

Merchandising is an art. It’s also a vital function of a retail store’s profitability.

How well does a store blend eye-catching floor appeal with a product mix that brings dollars to the bottom line?

Home furnishings retailers can blend aesthetics with dollars and cents to boost the bottom line.

The execution of merchandising covers a broad range of disciplines including what stores display from a style and price point perspective to how it is displayed. The starting point is determining how much of the selling space is allocated to a product category.

The accompanying graphic shows FurnitureCore participants’ floor allotments through this year’s first quarter, excluding bedding. The point is, analytics will never make a poor merchant great, but they can allow an average merchant to approach that threshold.

 

UPHOLSTERY RULES IN FURNITURE 

At stores reporting to FurnitureCore, upholstery accounts for more than 51 percent of furniture sales; case goods almost 42 percent; and occasional, almost 9.5 percent. Accessories and outdoor furniture have 3.5 percent and 3.4 percent, respectively.

We asked some retailers about their hottest categories, and their responses lined up pretty well with those overall numbers.

“Upholstery is what is working right now and we are devoting more floor space to upholstery,” said Peggy Burns, queen bee at Circle Furniture in Acton, Mass.

“For us, it’s stationary upholstery, then bedroom and bedding on account of the extra activity with power bases,” said Dorian Sims, president of Stacy Furniture & Design in Grapevine, Texas.

Sims is expanding its reach in the category, as well.

“In upholstery, we’re introducing different lifestyles and concentrating on more fashion at our price points—a little more color, a little cleaner lines than what we’ve traditionally done in the Texas market,” Sims said.

 

PRESENTATION ISSUES 

Within the designated product areas, an allocation must be made to both price points and styles. If a retailer focuses on one price point, it is simpler.

As an example, a middle-price retailer might display fabric sofas at retail price points between $399 and $899, which addresses more than 50 percent industry sales. The decision to venture into upper price points—sofas ranging to $2,000, for example—might target another 25 percent-plus of industry sales.

The question here: Can the retailer allocate 25 percent to 35 percent of the department to provide a proper selection?

At the next level of detail is the percent of slots by price point. Instead of relying on a “feel,” take a look at industry sales—look at the accompanying graphic for percentage by units and dollars of middle price points.

This retailer’s sales, we should note, are skewed to the $599 price point at the expense of the higher price points. The following graphic compares the hypothetical retailer’s slot allocation to the industry average.

“Obviously, with more than 47 percent of the floor assortment allocated to $500 to 599, that is where the majority of the sales occur,” said Bob George, CEO of Impact Consulting the parent company of FurnitureCore. “Would allocating more slots to higher price points improve overall sales? We believe so.”

 

SMALL-STORE ADVANTAGE? 

Sometimes smaller footprint stores perform better than the 200,000-square-foot behemoth. Why?

In a smaller, say 45,000-square-foot space, retailers have be more judicious in product selection. It requires them to really know their customers' tastes—a rifle versus shotgun approach, let’s say.

Circle Furniture’s stores fit that smaller category in terms of footprint.

“We tend to use a broader range of bold color than most stores and we are known for our floors using color,” Burns said. “Of course, not everyone can relate, as they would prefer a neutral pallet, as it is easier to envision it in their home.

“We have really terrific designers who will work with the customer and create a beautiful room in the customers vision.”

Stacy Furniture & Design has two 90,000-plus-square-foot stores, along with a 42,000-square-foot location. The latter has a distinct merchandising scheme.

“Our strategy there has been flooring our best-sellers for the most part, but we rotate items in and out faster” than in the larger locations, Sims said. “That floor space is too valuable to leave product out a long time for testing.”

 

VENDOR CHANGES 

Making a major vendor change in categories you floor is a challenge when it comes to merchandising. Beyond the training and advertising issues involved, re-structuring the showroom floor can make for headaches.

Circle Furniture is pretty lucky in that regard, Burns said.

“It is a major undertaking to add a new upholstery vendor because of all the fabric samples,” she said. “We are very fortunate right now that we have some great vendor partners, and we don’t need to add another vendor today. We would have to have a very specific need to add a major vendor today.”

At Stacy Furniture, Sims said they have a predicament when it comes to flooring new vendors.

“In the bigger stores, what works for me in bringing in a new vendor is going big,” Sims said. “If I haven’t dedicated six or eight new slots, it’s not a compelling enough opportunity for (customers) to learn more.

“And the larger the launch, it shows my commitment to the manufacturer. A lot of people cherry pick lines, and when I go big, I would hope that would help us when distribution issues come up. If I do it the right way, I should have a little more protection.”

She added that the cost of an unsuccessful buy seems much greater these days, especially when business is inconsistent.

“When I launch, I want to give it every opportunity to be successful from the beginning,” Sims said.

Smaller dealers should make the decision to stand for something as opposed to try being all things to every customer, said retail design specialist Connie Post of Connie Post International.

“By this I mean look at where the most return business is, and use more floor space to have a good selection to appear dominant in that category,” she said.

 

BOTTOM LINE: SALES PER SQUARE FOOT 

What are retailers doing to improve sales per square foot when it comes to merchandising, especially when they don’t have as much square footage to work with than big boxes?

It’s not rocket science: Look at product turns.

“We have very small footprints so it is important that what is on our floors is selling and earning the rent,” said Circle’s Burns. “If something isn’t working out we will take it our fairly quickly and try something new. We are constantly trying to ferret out the new best seller. We pay close attention to what customers are asking for should there be a need we cannot meet.”

Sims at Stacy Furniture & Design said it’s a must for product to prove itself on the floor at the retailer’s smaller store. Otherwise, the product is tossed from the merchandising mix quickly.

That particular store’s space is too valuable to allow a lengthy merchandise test.

Don’t forget supplementary sales, and the role merchandising plays there

“It’s all about accessorization and making each vignette its own unique story,” Sims said. “Adding the accessories and the rugs for easier add-on sales that build tickets.”

In smaller stores, retailers have be more judicious in product selection.

It’s indeed harder for a smaller footprint store to be “everything to everybody,” said Tom Zollar, practice manager for Impact Consulting. This requires retailers to really know and target their consumer’s wants and needs.

“The most successful small retailers do this with a combination of research, experience and what I call ‘customer intuition,’” he said. “Basically they watch what is happening in their market, they track what is selling in the store, they ask their customers questions and they listen to their answers. Salespeople, local reps, in-store events aimed at product feedback will all help you focus your merchandising decisions and increase your success rate.

“It all starts with knowing your market through quality research and analysis, then tracking and studying your results. But a consistently accurate ‘gut feel’ for what they want can be huge.”

 

DO SOME SURGERY

Bob Phibbs, the “Retail Doctor”, suggests going through a retailer’s product selection and doing some serious cutting.

“Cut your SKUs by 20 percent and give your displays some space,” Phibbs said. “The days of doing furniture like a department store are history.

“The consumer already has too much choice. The idea that you line up four brown recliners, maybe in a slightly different shade is old.”

Take a chance.

“Car dealers will find the most outlandish color, and that’s the first car off the lot,” Phibbs said. “Why not a turquoise sofa with a yellow pillow? Make some bold choices and stand by it—don’t discount it.

Appealing to various shopping demographics can be tricky. Different generations tend to prefer different styles and different store layouts.

Drilling down and really examining the different segments can make a difference in a retailer’s success—or failure.

Who's your customer? Who are you trying to sell? Does it matter for most retailers, and do they know the difference?

Do shoppers want a big selection of like product, or lifestyle vignettes? How do you make the call, and are there particular categories that lend themselves to the different approaches?

Target specific products to specific consumer groups. While typically 50 percent of a retailer’s assortment sells to all consumers, the other half is preferred by certain segments. Tailoring the store’s assortment to the store’s demographics is the next frontier for the traditional retailer.

First, do you know your best-selling frames? Do you know this by age and income of the consumer?

There’s often been an assumption that younger shoppers like lifestyle presentations, and older shoppers like categories lined up like soldiers to better compare. You’d best think before making that assumption.

Bob Phibbs, the “Retail Doctor,” disagrees that older shoppers like a line of like product. More than that, he believes the idea that you can sell to all generations is “a little off.”

“Who still controls most disposable income?” he asked. “The millenials are getting used furniture. Highlight the boomer audience and encourage it to take something home today.”

Tom Zollar of Impact Consulting also doesn’t agree that older customers prefer commodity products lined up like soldiers.

“If so we might as well be Walmart,” he said. “However, in many cases, displaying product by category can simplify the shopping experience for your consumer and that does have some merit.

“If you feel the need to lay out your floor in this manner, then the best thing to do is to create small lifestyle pods or mini-galleries within each category. Whatever path you chose, it is extremely important for both your customer and your sales staff, that the flow of product throughout your store makes sense and is visually exciting—tough, but doable if you think it through and plan it out in a war room first.”

Stacy Furniture is still figuring out how to sell home furnishings to various age groups, and President Dorian Sims said she has bigger fish to fry, particularly with the addition of Nebraska Furniture Market to an already crowded Dallas, Texas-area market.

“I’m trying to separate myself from my competition versus speaking to a specific audience and their buying habits,” she said. “My typical customer does tend to be older. When we expand to appeal to younger customers, I think they’ll be attracted more to a lifestyle experience. That’s what they’re seeing with catalogs and online.

“Lifestyle is the best way for us to go. Even if millenials have done their research and know what they want, they’re so used to (drilling) down on their computer that a huge amount of product in rows is overwhelming.”

Acton, Mass-based Circle Furniture doesn’t discriminate among customers.

“Our customer is anyone with disposable income who wants and needs new furniture,” said Peggy Burns. “Generally they are older, as our price points tend to be higher and furniture has not yet become an important purchase for the younger crowd. We do our display in more of a lifestyle vignette and space is tight, so it is often more crammed than I would like. I don’t like a lot of accessories, I prefer to have the furniture be the focus.”

Retail design specialist Connie Post of Connie Post International said the new rebranding of home décor retailer Garden Ridge to At Home is an excellent example of appealing to multiple generations.

“Special vignettes show products that are cross merchandised, while some areas are still racked and stacked to show dominance in categories,” she said. “This is not typically how big boxes handle their displays.”

Within the newly formatted stores, the retailer shows completely decorated room displays.

“These displays show consumers how to bring it all together inviting and stimulating guests to buy more,” Post said.

 

 

 

 

 


Publisher's Letter: Missing Merchants

 In the furniture industry, we have a title that doesn’t appear on any organizational chart, but that title is understood in the daily course of business. That title is merchant. Everyone understands and respects that title. Often the success or failure of an organization is dependent upon the ability of this individual or team of individuals.

Just who is this person, and what do they do? Such a person exists at both retail and manufacturing and, simply put, this particular person sets the strategic direction of the company with regard to the product consumers expect from a company. Deviate from that expectation and declining sales creep in. Thus, merchandising not only drives the top line in terms of sales, but also impacts product discounts and markdowns. Current data shows our loss in markdowns and closeouts exceeds our industry profit by four times.

The question then becomes Where have all the merchants gone? When retailing was smaller, buyers actually envisioned who their customers were and bought goods to satisfy those tastes. It was a time when we saw merchant and customer more closely connected; much to the benefit of each side. Now, however, retailing is larger, and we’ve undergone an industrywide consolidation.

The consolidation has made it more difficult for merchants to stay in touch with consumers. In today’s business, management’s days are consumed with everything—except for knowing who their consumer is. Both merchant and customer may have felt some pain. A myriad of new technology and analytical tools are now available to allow us to connect with often-frustrated consumers. How do we use those new tools?

Why should we be concerned? Herein lies the strategic advantage non-traditional retailers are using to gain market share. It is not that the young product managers with fewer than five years of experience successfully selecting product are more talented. Rather it is that they have access to more analytical tools. In the future, the organization with the best data — or insight — wins.

While analytics will never replace interaction with consumers, it can provide valuable insight for the retailer and manufacturer. It can also be the first step to connecting or re-connecting with the shopper. The ability to segment your customer demographically and compare your information with the industry will provide insight into who you are selling, but more important those consumers you are not selling based on your merchandising price point. In addition, the ability to compare your sales to the industry in terms of product category and price points provides a benchmark against which to measure your product lineup.

Analytical tools will never make a person a merchant. However, if we give these tools to that person with talent, a great merchant is a possibility.

 

Performance Groups
HFB Designer Weekly
HFBSChell I love HFB
HFB Got News
HFB Designer Weekly
LinkedIn