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From Home Furnishing Business

Coach's Corner: Good Advice That Helped Along the Way

I am fast approaching the 50th year of my post college business career. Most of the first five were in retail management and the other 45 years have been spent working for three companies in the furniture industry: Kroehler, La-Z-Boy and Impact Consulting Services. Over the years I played many roles and had a lot of different titles. During the first half of my career most of my responsibilities involved selling, developing, merchandising and marketing furniture products. Later my focus became more on teaching and training people about these areas in both the wholesale and retail arenas. I have had the opportunity to work with a ton of people throughout these last five decades, most of which had information to give, opinions to share or lessons to teach. But as my Dad indicated not all of them offered advice that was worth taking. Luckily for me, many of them did and over time I became better and better at figuring out who to listen to and who to ignore. I also realized that many authors and famous people have passed on a great deal of wisdom in their works that can help move the needle too. As a result, much of the success I have had was because I got good advice from people who knew what they were talking about. So, I thought that it may be helpful to those who take the time to read my column, if I offered a few examples of good advice that helped me win a few battles over the years.

Learn how to sell what’s in your bag My first position in the industry was as a sales rep for Kroehler Manufacturing, who at the time was the largest furniture maker in the country. I was probably a bit cocky, as new kids often are, and initially hung around with similar young reps in the “Bullpen” at markets and shows. We would spend our time criticizing the product line and complaining about what was missing, poorly designed or overpriced. Luckily, one of the “old-timers” took a liking to me. He pulled me aside one day and told me that he thought I had the potential to be a success, but I would never make it until I learned how to, as he put it, “sell what’s in your bag.” His good advice was to stop wasting time with losers talking about what we did not have and find some winners to teach me how to sell what we did have. That was a turning point for me, because with his help and the help of others, I was able to refocus my efforts and ended up setting some sales records, which got me moving up the corporate ladder. The lesson here is to resist the temptation to complain about or criticize what is not and concentrate on doing the best with what is.

Find out who to be important to and make yourself important to them My coaches also made it clear that you could not be successful trying to sell a branded line like Kroehler to every dealer in a market. If they all had it, then price would become the competitive weapon of choice and that would diminish the product’s value and kill the line. He told me to study each market in my territory and determine which would be the best store with whom to partner. Then do everything I could to make my company and myself important to that dealer. This is wonderful advice for whatever a person does because we all have to sell ourselves and our ideas to succeed and it is certainly best to make sure you are targeting the best people or companies with your efforts. The most interesting thing about this advice is that it was also the philosophy that Pat Norton brought to La-ZBoy when he began building that company up to greatness in the early 80s and that ended up being my next career stop.

Salespeople are more important than buyers and owners Another thing the “old-timers” told me was that even though it was critical to sell the buyers/owners on flooring and promoting my products, the most important target to win over was the sales staff. They are the ones that make or break the success of a line on the selling floor. If they do not understand or like your products you will fail. If they do not trust you or your factory to deliver as promised, they will avoid presenting your line. As a result, no matter how good a value it presents to the consumer, you will never maximize your sales in the store. Therefore, providing information, communication and motivation for the salespeople was ultimately the biggest key to success. Find out what they want and make sure they get it. That along with great donuts, bagels and pastries for the sales meetings proved to be the differentiator for me at many good accounts! The moral of this story is to always find the key people that will deliver the end result you seek and make sure all your bases are covered with them. Never ignore problems, they will not go away by themselves!

As an extension of the point above, I was taught that the sale does not end when you finalize the order. Indeed, a sale is an ongoing process that does not end until everyone in the process, particularly the end consumer, is happy with the result. You must take ownership of the process and the outcome to make sure that every step is completed on time. When and if a problem or delay happens, winners communicate and then facilitate the best result possible, while losers ignore the situation as if it is not their issue. There is no better way to lose the respect of a client than to run from conflict and leave them to take care of it. This is true not only in sales but in every facet of life – be a problem solver who steps up when needed and you will be a trusted partner.

People make decisions based on what they value A common piece of advice presented at every leadership course I took or seminar I attended, dealt with the fact that it is what a person values that drives the decisions they make. Good values tend to lead to good decisions. As a leader, one of the most meaningful things you can do, is to make certain every member of your team shares the same core values and that their goals are in line with those values. Everyone in the group may have a different role, but if they share the same values, the team has a much better chance of being successful because each person will make better decisions throughout the entire process. This is also critical to being a parent. In a very real sense, your main task as your children grow from baby to toddler, then adolescent and teenager, is to instill in them the right set of values so that when they leave home and you are not there with them, they will make the right decisions and have a good life as a result. I can’t think of a more critical role that we play in life than that!

Good judgment comes from experience, and a lot of that comes from bad judgment This piece of advice came from cowboy philosopher, Will Rogers. I believe this statement is right on and reflects a basic fact about how people can learn and grow from mistakes. Life is full of ups and downs, good days and bad days, plus successes and failures. There are many great quotes from Edison to Einstein about picking yourself up after you fall, learning from your errors and growing as a result. What Will is specifically pointing out is that we will all make bad decisions, but out of them will come new knowledge and positive outcomes. I have used this in the signature on most of my emails since I became a consultant 15 years ago, because I think it is our role to help our clients use good judgement, so they avoid bad experiences.

If you find yourself in a hole, stop digging This is another piece of advice from Will Rogers. It is pretty self-explanatory, but I think the bigger message is to always know where you are and where you are going. Should you find you are not where you want to be, stop, look around and decide what you need to do to get going in the right direction. Do not be too stubborn to go back and start over either.

General Schwarzkopf’s Six Points of Leadership
As a special bonus, here is some great advice shared by this famous leader at a seminar on leadership I attended. This was in one of my columns a few years ago but is worth repeating!
1. Things will not improve until you admit that something is wrong.
2. Set Goals – Pick goals that everyone can understand and know their roles in achieving them.
3. Demand High Standards – Let people know what is expected from them. People will rise (or sink) to the standards you set.
4. People work to succeed – Let them know how success will be measured.
5. Recognize Success – Also accept mistakes, “Latitude to learn, NOT Freedom to fail”.
6. Power Down! – Do not tell people how to do their job. Give parameters, give standards, give authority— tell them WHAT to do, then let them do it. Weak leaders lack confidence in themselves and thus their people.
Those who are too proud to accept advice when it is offered, will never maximize their results You will never be so smart that you cannot listen and learn. A final piece of advice from yours truly.

Editor's Letter: It’s Time for the Sprint

The obvious question is, “What happened to furniture stores’ share of the rebound?” The answer is that it is in the BACKLOG. At the end of September, on average, stores had a 10-15% backlog. In other words, you just need to ship.

You just thought to yourself, “easier said than done.” While enduring all that the last six months has delivered you need to sprint to the fi nish line to make your year. The task of securing merchandise while minimizing cancellations will be more of a challenge than coping with the shutdown and subsequent reopening. Finding and motivating a workforce will increase in diffi culty. However, the industry is up to the challenge. While facing this challenge, we should consider why the other distribution channels that have a 52% share of market already have recouped last year’s shipments and more. A topic for further discussion.

Cover Story: SHOPPING BEHAVIOR EVOLVES AS THE PANDEMIC CONTINUES

Slowly consumers returned to shopping at regular home furniture stores, not so much in quantity, but with a commitment to purchase leading to higher close rates and average tickets.

Higher WRITTEN SALES
averaging more than 50%— and at times doubling the same week last year—created an exuberance along with a fatigued sales team. Beyond what was obviously pent-up demand, there was a feeling that consumers had rediscovered their homes and would continue to allocate disposable income to home furnishings. The statistics supported that optimistic outlook. According to consumer personal expenditures (CPE), furniture has rebounded, recapturing the loss in March/April.

To better understand this shift, FurnitureCore, Inc., parent company to Home Furnishings Business, conducted a national survey of consumers who purchased furniture after March of 2020 to those that purchased in 2019.

Without a doubt, the COVID-19 pandemic caused a seismic shift in the consumers’ lifestyle. In general, our focus moved toward the home and away from travel. The benefi - ciary of this shift has been furniture along with other large purchases that had “stay at home” appeal. The most immediate need was home computers to address the transition to virtual learning and working from home (56% increase) and communication (29% increase). Leisure travel declined (3%), but not as much as the purchase of new cars. Table A compares the ranking of importance with “1” being the most important of five major purchases.

The belief is that once the immediate need for computers and communications are met, there will be a continuing shift to the importance of furniture.

As with most major purchases, the acquisition satisfi ed an internal need as well as an external statement to friends and acquaintances. After the pandemic, the external satisfaction has become more important. As can be seen from TABLE B, the external statements have become more important, such as refl ected by the consumer’s sense of STYLE and PROSPERITY.

Over the past twenty plus years, acquiring home furnishings has migrated from the “lady of the house” to a more joint endeavor. Interestingly enough, with time on their hands, the male has pursued furnishings with a passion. Table D compares the before and after.

This trend could be significant considering that males are more inclined to purchase online. There has been a sizeable shift in who initiates the furniture purchase. Again, the male leads the way as can be seen in Table E.

This is a signifi cant change that will impact how furniture is advertised. What are the advertising messages that will infl uence the male compared to female? All of this will be addressed later.

With this shift in the buying process, was there a change in the basic motivation for the home furnishings expenditure? The change in lifestyle dictated by the pandemic has created a surge in home purchases. As can be seen in Table F this surge has been refl ected in purchases instigated by recent moves and remodeling.

A special note should be made in regard to a signifi cant increase in buying for the second home. Free from the constraint of working at the physical offi ce, consumers escaped to the mountains and the seashore.

Following the trends of the previous fi ndings, the male overwhelmingly ventured out into the new world of shopping using a mask and following social distancing recommendations. Table G presents the statistics.

The survey fi ndings supported the anecdotal evidence that consumers turned to the Internet to conduct research before venturing out to the stores with 56.37% indicating the Internet was the fi rst step in the buying process, up from 47.98% the year before. Traditional advertising, such as television, newspapers, and magazines declined to be replaced by recommendations from friends and relatives. Table H contains the breakdown.

This finding was substantiated by a national sample of traditional furniture retailers’ unique visitors to their website.

However, note the trending down of visits to the Internet after Labor Day. Should we have concerns? After the initial shock of being sidelined by being designated as “non-essential” independent retailers fought back and retained their share of the consumer demand. However, the Internet gained a signifi cant share of the market. Table J presents the statistics.

It is interesting to note the loss in the lifestyle stores and regional chains. A contributing factor could have been the length of time stores were closed initially. Owner/operators are more driven to keep the doors open. Contrary to popular thought, after the pandemic shutdown the online home furnishings customers were not first-time online purchasers based upon this national survey.

No matter the experience level of the online purchaser, the concerns were the same, but the inability to “see and touch” was amplifi ed during the shutdown.

The impact of the pandemic has not been refl ected in how far the consumer is willing to travel to purchase furniture. However, in recent years as furniture retailers have added locations to make it easier for consumers, the concept of furniture shopping being defi ned as “destination” has all but disappeared. Across the nation in large and small markets 10-24 miles is the norm. Table M illustrates.

If the distance driven has not signifi cantly decreased, the time spent shopping has begun to decline. With 57% of consumers fi nishing the process in less than two weeks, this indicates the furniture retailer must be prepared to close the sale. This points out the growing necessity to begin the selling/ buying process on the phone with a more interactive retailer website using “chat” and email. Table N illustrates.

This reduction in time spent shopping has been driven by a reduction in the number of retailers shopped. The trend to fewer retailers shopped driven by increased pre-shopping research on the Internet will be accelerated by the pandemic as can be seen from Table 0.

In this period of intense demand, the reputation of the manufacturer has surged in importance (15.4% – 21.89%) and is indicated as most important while perceived quality and design declined as a purchase motivator. Price increased slightly. Table P provides the statistics.

It should be noted that general merchandise retailers, such as Big Lots and Target, are selling reputed brands like Broyhill. Obviously with the disruption, new requirements have become necessities. In the retail experience, consumers ranked the importance of these new requirements and confi rmed that the use of masks was most important compared to the other requirements. Table Q summarizes.

With all the noise around the signifi cant changes in everyday living, furniture retailers are perceived to be doing a good job by more than 50% of the consumers. However, we should have some concerns when we compare independent furniture retailers to the Internet.

Our challenge is to reestablish brick and mortar to provide the best consumer experience. Systematic changes provide opportunities.

What Sells: The (Home) Office

Based on a FurnitureCore, Inc. survey developed by Impact Consulting Services, parent company to Home Furnishings Business, 76.47% of consumers polled on what they feel is the primary factor that defines a home office is the activity performed there as opposed to the equipment or furnishings in the room at 23.53%. This finding coincides with the reality of blended spaces in the home being used for work, school, and the daily routines of life. According to Lisa Cody, SVP of marketing at Twin Star Home, the need for home furnishings expands beyond the obvious need for desks. “With the shift to most consumers working and learning at home, the spaces in their homes have become blended. The home office for many is also the dining room. The kitchen is also the classroom. We are seeing tremendous performance in not only home office furniture, like our adjustable height desk, but we are also seeing strong sales in home furnishings for other spaces in the home as well. We will continue to lean into creating furniture for home office to meet the needs of consumers.”

It is fair to note that there has been a swell of companies in recent years, even before the pandemic, leaning toward remote work given the numerous benefits: better productivity, reduced costs for employers, increased employee retention, and fewer gas emissions to name a few. According to Remote.co, a resource for businesses exploring remote work and best practices, this style of work has grown 91% in the last 10 years. Without doubt, the business demands that have arisen during the pandemic will drastically increase this statistic and the work from home movement will be here to stay. Eric Holmstead, Malouf national sales director, shares, “Since the pandemic has shifted so many people to a work-fromhome schedule, we’ve seen a huge increase in demand for office furniture. It’s clear that having a functional office space in the home will be essential moving forward.”

With the blended spaces in the home, it is more than likely that the entertainment area is steps away from the home office. In recent years, home owners have been embracing the viewfrom-home entertainment streaming options that began with Netflix and has grown exponentially.

Creating the ideal environment to view movies, binge entire seasons of shows, or cheer on a favorite sports team has become a focus for many consumers. Based on the same FurnitureCore, Inc. consumer survey, it was no surprise that 50% of consumers polled reported having a TV 55” or larger for prime views! These consumers want beautiful displays for their screens to match and storage solutions to complete the look of the room, which 87.50% reported is typically the living room or family room.

Read on to explore the bestselling home office and home entertainment solutions for today’s consumer.

 

 

Take 5: Eric Grindley

Now, at 38, Grindley is trying something entirely different — revolutionizing marketing in the home furnishings retail industry. After creating the advertising technology company Esquire Advertising in 2012, Grindley and his team of tech and marketing experts execute unique, hyper-targeted marketing strategies for furniture retailers across the country.

Grindley first became interested in the concept of marketing strategies through his role as general counsel for a large advertising firm. Since then, he has committed himself to the steady process of perfecting those strategies while combining them with the latest consumer technologies available. The approach has proven to be quite successful, especially in the furniture industry. The company has seen incredible growth, which recently earned Esquire Advertising several listings in the 2020 Inc. 500 list of Fastest Growing Private Companies, including number three in the state of North Carolina, number six in advertising/marketing, and number 56 throughout the entire country. Esquire has also become the preferred agency for many Top 100 Furniture and Mattress retailers.

Grindley recently sat down with Home Furnishings Business to discuss his company, the reason behind its explosive growth, the many changes taking place in the furniture industry, and how retailers can make the best of their particular markets.

HOME FURNISHINGS BUSINESS: Your background stems from law, and later, digital marketing. How did you find yourself so heavily involved with the furniture industry?

ERIC GRINDLEY: I was first introduced to digital marketing when I served as General Counsel for an Internet marketing company several years ago. I became very familiar with the marketing industry and how it operated, and in 2012, I decided to make the switch and founded Esquire Advertising. After a number of years, we became quite good at tackling key challenges that all retailers face, such as tracking and quantifying lead sales, targeting the right consumers, and more. This allowed us to grow and carve a unique niche for ourselves in the marketing technology space. We’ve created a proprietary system that allows us to solve these problems and we’ve developed marketing strategies that worked extremely well for retailers, especially furniture stores. Since then, we have followed that path and have been helping furniture retailers get better results with their marketing.

HFB: Esquire Advertising has grown by more than 5400% in the last three years by servicing furniture retailers - what is the firm doing to generate this type of growth?

GRINDLEY: We have had the pleasure of working with some amazing clients in the furniture industry, and we realized that the industry as a whole was overdue for an update – especially in how retailers were approaching their marketing strategies. Many retailers still haven’t really developed their overall digital strategy, and others may not know how to home in on key audiences or in-market customers.

So, once we started to focus on furniture retailers, word of mouth began to spread and we found ourselves closing exclusive deals for companies like Ashley HomeStore and Tempur-Sealy International, among others. As we continued to pick up steam in the furniture space, we have developed new ways, in terms of both technologies and strategies, to deliver higher returns on advertising spend and communicate key insights for our clients. This provided an enormous boost to our overall growth.

HFB: What makes IP-targeting such an effective and unique approach for marketing in the furniture industry today?

GRINDLEY: Having experience with every form of digital marketing, we have found that IP-targeting is one of the most effective ways to target in-market shoppers. Unlike more traditional marketing methods, device-matching and IP-targeting allows retailers to focus in on customers down to the individual level. They also have the chance to glean deep insights into their customers and service them directly with ads for products that they are actively looking for.

This approach also opens the door to some very creative techniques that can greatly expand a retailer’s customer base in meaningful ways. For example, targeting specific IP-addresses of customers lets retailers reach neighbors who share similar demographic and income profiles. This method of marketing is relatively new in the industry and takes a much more calculated approach to connecting with customers than the traditional “spray and pray” method of the past.

HFB: Advertising and marketing are essential for retailers to maintain and grow their businesses, but you say that many are drastically overspending in this area. Why is that?

GRINDLEY: Across the board, we have found that most retailers overpay for their marketing operations. The conventional wisdom is that the more money you pour into marketing, the more people will see your ads and the greater results you will receive. But in reality – this simply translates into your ads going to people who are not interested in purchasing your products, which can be extremely costly.

Adjusting the marketing approach alone can be a real game changer in this area. We have found that retailers can typically reduce their marketing budget by a significant margin and expect to see an even higher level of sales if they apply a more targeted strategy.

HFB: What are the most important elements furniture retailers should incorporate into their marketing strategy to see greater ROAS results?

GRINDLEY: Improving ROAS starts with having a complete understanding of your marketing operations, and then calibrating for greater returns. Whether it’s a local mom-and-pop store, or even a large retail chain with co-op campaigns – many retailers remain in the dark as to specifics of how their budget is being spent, who they are targeting, and the efficacy of their campaigns. Naturally, this leads to overspending and less informed campaigns.

With that in mind, retailers should seek to obtain a crystal-clear picture of their operations from start to finish. Improving capabilities to identify and target customers allows retailers to get their ads directly in front of the people that count. Tracking marketing campaigns and matching them directly with in-store sales gives retailers a foundation for understanding their customers, how their ads are performing, and allows them to fine-tune for better results. Using techniques to improve these aspects of a retailer’s marketing strategy yields substantial increases in ROAS.

HFB: Why would you argue that a digital-first approach to marketing is better than traditional advertising?

GRINDLEY: In the 21st century – digital platforms are king. Customers increasingly spend more time online, they use more online platforms, and they provide a wealth of valuable data for marketers to use. More traditional advertising methods like TV/radio, newspapers, flyers, etc. can be successful, but a well-executed digital marketing strategy will likely provide higher traffic and higher rates of conversion. This is because with a digital marketing approach, your ads are served directly to customers who are interested and likely to make a purchase.

HFB: COVID-19 has forced many retailers to temporarily close, or significantly reduce their operations. What should retailers consider when reopening to ensure that they will be successful?

GRINDLEY: Depending on individual factors like location, local restrictions, and the severity of the virus’ impact in their area –reopening stores can definitely be a financially sound move for some retailers. After almost six months of restrictions and quarantine measures, there is a lot of pent up demand from the general public, and our analysis shows that consumer foot traffic is much higher than most retailers would expect.

HFB: Do you have any insight for how retailers on how they can tap into new audiences or reach new customers?

GRINDLEY: Even with COVID-19 continuing to affect retail stores in many areas of the country, there are a couple of new streams for furniture retailers to tap into. For instance, home interest rates are at historically low levels, and there are massive interstate relocations taking place across the country as residents of big cities are trying to escape the ongoing pandemic. Depending on the area, there may be large influxes of new homeowners and movers that can be fantastic demographics to target for furniture needs.

Additionally, as people are staying home more often, internet usage has skyrocketed over the past several months, which can be fruitful for retailers targeting online shoppers who are in-market.

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