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From Home Furnishing Business


Signing Off


By Sheila Long O'Mara

The bittersweet time has come. After 112 print issues, 103 digital publications and too many e-newsletters to count, I’m signing off from the editor’s desk of Home Furnishings Business.

This month’s issue is my last, but rest assured, the magazine and the information it delivers will continue. The magazine was founded on one simple premise—create a strategy magazine for retailers about retailers and throw in a touch of edgy to keep things interesting. I remain steadfast in my belief of that vision as the industry becomes more challenging, and consumers more finicky.

Information is king, and the power to inform crucial to success.

Over the years, so many of you have taken the time to share your success stories, your struggles and even your failures so that others could glean nuggets that may be applicable in their businesses. For that, I thank you.

Thank you for believing in us along the way, as the magazine grew and prospered. Thank you for listening during those early days as I shared the dream of what Home Furnishings Business would be and how it would grow. Many of you watched—and often chuckled—as we found our sea legs. Over the last decade, there were times I’m sure you thought we’d gone overboard. Perhaps, we did just that, but only in the pursuit of crafting tales to inspire a better industry.

Sitting in this seat for more than 10 years has put all my dreams to shame. It’s been an amazing ride, but it’s time for me to head off in pursuit of another adventure.

I’m remaining in the furniture industry, and I’ll continue to write stories about a place that has become part of my fabric. As has been the case in this seat, I’ll be sharing stories and working diligently to connect companies with one another and with their consumers. I’ll just be doing it from a different vantage point at a public relations and communications firm.

You’ll find me at the High Point Market, and when you see me looking somewhat dazed and confused, give a shout. I’ll be the one searching for my sea legs once again, as I learn how to wear a different hat in a familiar ocean.

As for the magazine, I’ll continue reading each month, and I’m sure you all will, too. The search for a new editor is underway, and I look forward to seeing the magazine continue to evolve and blossom under his or her leadership.

Thank you all for being readers and business partners in this amazing ride. My glass overflows thanks to many of you.

On a personal note, feel free to stay in touch via slomara14@gmail.com, and the phone numbers will remain just as they have been for more than a dozen years.

 


Editor's Note: Marketing Magic

Here in the steamy South, our schools are back in session. Summer vacation, teamed with the furniture industry’s various events, makes for quite a hectic, crazy few weeks. Some weeks, I can’t wait for that school bell to ring. Other weeks, I think I may dread the school house openings more than the youngsters in my house.


I’m pretty certain the kids were barely drip dried from their first dip in the ocean this magical summer before an onslaught of commercials touting back-to-school sales starting playing in loop. As sick as I was to hear the constant din of the magic of the latest fashions for kids, the buy-eight-get-two-free composition book promotion and the Microsoft Surface tablet, it started my marketing mind to churning.


The Staples and Office Depots, the discounters like Target and Walmart, and the youth clothing chains like American Eagle and the Gap are marketing machines. Those guys are on the radio, on the television, in the newspaper and popping up in my mail box AND inbox with ads and promotions to outfit missy and junior with everything they could possibly need. It’s a constant, seemingly never-ending message targeting parents with kids headed back to school from pre-kindergarten through college.


Then, take a look at Bed Bath & Beyond, Pier 1 Imports and The Container Store. Those guys are beating the marketing drum in hopes of furnishing and outfitting those cramped dorm rooms. Come to think of it though, I hear from friends who are sending kids off as fresh-faced freshman that the cramped dorms of my college days have changed dramatically, which means more goods to be sold by those home stores.

 

So, while we often hear complaints of summer selling and the slowdown the industry undergoes, there’s money out there to be had. The question becomes whether or not furniture is top-of-mind for her as she’s going about her normal schedule. Shout it loud and proud, frequently and throughout a variety of media and chances are that replacing the tired, worn-out sofa will become much higher on her priority list.


By the way, because I know you’re dying to know, I took advantage of the composition book deal. Three young O’Maras just plunged back into school for the 2014-2015 year. A lot of paper will be used, and I’m pretty certain come second semester in January, we’ll need more paper, pens, pencils and stuff.


Happy back to school for each of you affected, and here’s wishing all a boisterous fall selling season bolstered by smart marketing.


Power Rooms

Bedrooms — either master or secondary — continue to increase in importance in today’s homes.

As the world whirls around at lightning speed, everyone craves a welcome retreat in which to recover from the everyday hustle and bustle. Today’s bedrooms seem to be busier than ever, and people are looking for their rooms to be functional, peaceful and welcoming.

In Home Furnishings Business’ most recent survey in which we talked bedrooms with 536 consumers who have bought bedroom furniture within the last 18 months, consumers are nearly split between traditional and contemporary styles.

For master bedrooms, 37.2 percent of the consumers are traditionalist, while 36.3 percent opt for more contemporary looks. For guest or second bedrooms, 40.5 percent of the consumers lean toward traditional and 35.7 percent took the contemporary road.

Other style families like European country, Mission, cottage and the middle ground transitional each garnered less than 8 percent of the thumbs up from consumers for either bedroom.

The consumer insight lines up with what is happening within the vendor showrooms throughout the industry.

Traditional and contemporary seem to get the most play, while suppliers looking to reach across the aisle continue to offer updated traditional or softer contemporary styles, and transitional remains a buzzword throughout industry speak although it likely doesn’t hold much meaning for consumers.

John Iasiello, vice president of wood products for Emerald Home Furnishings, sees bedroom styling trending a bit more streamlined. Still traditional, he said, but a cleaner, slightly smaller traditional for Emerald’s target consumer.

One of Emerald’s top sellers is the Riviera group in a linen finish and laden with molding and dramatic curves. Iasiello said the company isn’t likely to leave that business behind, but it is tracking to capture a younger consumer with a cleaned-up design spectrum.

Brian Edwards, president of Fairmont Designs, points to the company’s Grand Estates collection as an example of the continuing trend of traditional bedroom.

“In bedroom furniture, our retailers are looking for proven winners,” he said. “When they land on that tried-and-true group, they tend to stick with it.”

While traditional continues to lead the parade at Fairmont, it’s not your grandmother’s traditional. The latest bedrooms throughout the industry are loaded with creature comforts to make unwinding, sleep and work—as a number from our consumer panel say they do—easier.

Winning bedroom suppliers have tricked out nightstands with power strips to accommodate smartphones, tablets and other devices that have replaced many alarm clocks. Some beds are also equipped with soft, touch lighting to help guide people through the middle-of-the-night treks to the bathroom. Dressers and chests have morphed to accommodate televisions, DVRs and other electronics.

Bedrooms are no longer quiet sanctuaries in which consumers retreat to restore and reconnect with partners. Instead, as our survey shows, those rooms are being used as family entertainment hubs (26.5 percent), reading stations (30.4 percent), comfy work spaces (25.9 percent), and more.

Our consumer panel — both those who bought master and second bedroom — tended toward all wood beds for their purchases. On a scale of one to seven with seven being very appealing and one being not all appealing, the master bedroom buyers rated an all wood bed with a 6.07 and second bedroom buyers gave all wood a 5.52 rating. Second for both groups were metal and wood beds— 3.54 for master bedrooms and 3.88 for second bedrooms.

 

 

 

 

Want More?

A more in-depth report on the bedroom category is available for purchase at FurnitureCore.com—Industry Info—Industry Reports—Bedroom, or by calling Natalia Hurd at (404) 390-1535.


Publisher's Letter: A Blessing or Curse?

The benefit of a historical perspective of the Internet in our industry could provide some insight into the question of whether or not the Internet is a blessing or a curse. Some may remember the dotcom start-up FurnitureFan, a portal that allowed consumers to search for great pieces of furniture by style or room or manufacturer.

Subsequently, the consumer was directed to a retailer in the area where he or she lived. While conceptualized by industry insiders with venture capital funds, it did not result in success during these dotcom years. I became personally involved at the end attempting to restructure an idea that was before its time.

In the summer of 1992 at the American Home Furnishings Alliance marketing meeting in Hilton Head, S.C., I presented consumer research reporting only 2 percent of consumers visited the Internet before shopping for furniture. Luckily, I said we would continue to monitor it since we believed it would increase. We did, and the most recent statistics show that 73 percent of consumers now visit the Internet as a first step to shopping for furniture.

The logical expansion of the Internet into e-commerce led to the next challenge for the furniture industry. This development allowed industry outsiders, such as Wayfair (formerly CNN Stores) to bypass the slow-to-adapt industry and go directly to the consumer. I am sure that if we check the DNA of Wayfair we will find some kinship to FurnitureFan, both of which are Boston-based.

This is not to say all of the industry ignored the potential of the Internet or e-commerce technology. Unfortunately several early adopters, recognized retailers, adopted the e-tailer strategy and ultimately failed. Now another group of well-established retailers are pursuing the same opportunity. The results are too early to report. This stroll down Memory Lane is relevant only to say that the Internet is no different from any other technology that emerges and is embraced by the consumers we serve.

We are not encouraging furniture retailers and suppliers to change their business strategy to an Internet strategy. The preceding has illustrated the pitfalls of following approaches without the technical expertise or capital to succeed. Rather it is to encourage retailers and suppliers to address the reasons consumers are embracing the Internet and to understand how their business models can be modified to deliver the same experience. Consider addressing these reasons.

 

·         The consumers’ ease of finding what they are looking for — 26 percent of consumers will leave a brick-and-mortar store because they can’t find the desired product.

 

·         No selling pressure, only information — the younger consumers under the age of 35 dislike pressure selling. Just give them the facts.

 

·         A total home furnishings solution, not merely the major products — consumers are looking for a lifestyle solution, not just a sofa.

 

In conclusion, the Internet is not a new distribution channel, but it is the way a growing number of consumers want to purchase furniture. What is the solution for traditional brick and mortar retailers who do not want to become e-tailers? Make your in-store retail experience appeal to the needs and the desires of that consumer who walks in your door.


Marching On

E-commerce’s impact on the furniture sector shows no signs of slowing—and that affects all retailers, whether or not they sell furniture online. Based upon FurnitureCore's national consumer surveys conducted last year, of the consumers who purchased furniture, 17 percent purchased in on the Internet. 

Of all consumers purchasing, 40 percent did not consider the Internet for the transaction, but that left 60 percent who did.  Of the 60 percent who considered, 12 percent did not shop; 31 percent shopped, but did not buy.  Still, that left a significant 17 percent who did purchase online.

To compare how the above consumers fared with independent furniture retailers, check out the accompanying “National Market Performance” graph from FurnitureCore.

Of all consumers purchasing, 48 percent did not consider an independent furniture retailer (excluding regional chains); 21 percent considered, but did not shop; 22 percent shopped, but did not buy; and only 10 percent purchased from an independent store—neither regional chains nor department stores.

 

NOT STANDING STILL There’s plenty of action among furniture stores moving into the online channel.

Take a look at Blueport Commerce, whose customers include brick-and-mortar retailers who want to extend their reach into e-commerce. Blueport recently announced that its sales are up more than 150 percent through 2014’s first two quarters compared with the first half of 2013. Sales for its Furniture.com e-commerce Web site are up more than 400 percent, comparing the same periods.

Part of the growth is attributable to a number of big name retailers who have joined the platform.

This year,  $1.3 billion Canadian retailer The Brick signed up. Seffner, Fla.-based Rooms To Go has joined Furniture.com, and Ontario-based Leon’s plans to invest in Furniture.com and extend its Blueport contract for another seven years.

Those are just a few examples of how the big boys in furniture retailing are making moves. Such investments in time and money speak volumes about the present and future potential of the e-commerce channel for furniture.

 

FIRST STEPS Andy Bernstein, founder of Internet marketing and Web site services vendor FurnitureDealer.net, has seen growth in e-commerce’s importance in furniture retailing as consumers grow more accustomed to making online purchases.

In its business, Furnituredealer.net is focusing on two aspects to help clients address e-commerce: First, making it easy for consumers to use the site and buy online with a pure shopping experience; and second, communicating to consumers why they should buy from their client versus an online retail specialist.

“Ease of use means less clicking, easier navigation,” Bernstein said. “Second, is getting prices on the site.”

Regarding pricing online, retailers need to consider two aspects: inventoried product and special orders.

Manually pricing products is labor intensive. Bernstein pushes his clients to create Web sites that feature seamless access to price information through a store’s operating system.

“Forty percent of our clients (have sites) that are hand-shaking with their inventory management system,” he said. “It allows them to: one, communicate (to consumers) which products are in stock or in the store to see; second, it allows them to price it out” for special orders.

The hard part is up front, getting the Web site data set to match the store system’s data. Bernstein gave an example of the issues involved: If you’re selling a three-piece sectional or a seven-piece dining room, the shopper sees that as one “item,” while your store system sees an assortment of SKUs.

If a retailer is using photography from manufacturers online, it should match what is being sold. For instance, a vendor’s dining room image might show seven chairs, while a retailer sells dining groups with five chairs.

“Once you put a price on it with a picture, it gets tricky to make sure you get it right,” Bernstein said.

Custom orders pose a particular pricing issue for selling online, but progress is being made there, as well.

“We’ve been working hard on publishing manufacturer price lists that retailers can go to and put on a multiplier to get a price,” Bernstein said.

Manoj Nigam, president and CEO of Charlotte, N.C.-based Internet marketing and services vendor MicroD, believes a time will come when e-commerce won't be an option for furniture retailers, but a necessity.

"It's not a question of if, it's a question of when," he said. "E-commerce in our industry is in the same spot where Web sites were some years ago. Today, nobody questions the need for a Web site that shows your location, the products you carry, the services you provide."

Other retail sectors have created new online expectations for consumers that furniture stores must eventually match.

"The consumer expectations today are 'I can see it anywhere' and 'I can buy it anywhere,'" Nigam said. "When you are serving customers in any retail environment, you need to do it in an omni-channel way. That means the customer can see products in the store, go home an make a decision and purchase online; or find the product online and then come to the store to see and feel it, and make the purchase there."

Take a look at what other retail sectors are doing on line. Electronics, apparel and a host of others are meeting consumers' "see it anywhere, buy it anywhere" expectations.

"If you’re are going to be a retailer of any size, protect your market share, and come across as a company that's keeping up with the times, it's almost a requirement that you provide a click-and-mortar model," Nigam said.

Nigam does believe traditional furniture stores bring some advantages to the table.

"The online retailers' ticket size is typically smaller than that of brick-and-mortar retailers—for now," he said. "If you notice, Amazon is not in furniture in as big a way as appliances and other categories. Furniture is still one of the unique categories where consumers want to touch and feel, and that's a brick-and-mortar advantage.

"Big online retailers have created an awareness and expectation in consumers' minds. What (brick-and-mortar) retailers need to do to compete is to advertise and market in the channels people expect them to be like Google and social media, and promote their advantages" over online-only retailers.

For example, an online retailer can't hold in-store consumer events, and doesn't have a physical store where shoppers can experience the products in person. Retailers should tout their service stance and immediate, local recourse for consumers should problems arise.

"If you look at what's selling online (in furniture), it's mostly simple case goods, and not much in the high end," Nigam said. "If retailers sell specialized (custom order) upholstery, they need to promote that, along with the validation in the showroom of what shoppers see online. It's a huge advantage.

"Whether you sell online or not, advertise the fact that you're local and that you service what you sell."

How can retailers translate their store merchandising for a more impactful Web presence? Nigam had some suggestions. First, instead of single products, why not use a high-quality photograph of showroom vignettes? The items should could be sold as a package, but also allow shoppers to add individual items to their cart. This calls for a Web site robust enough to provide all the necessary information with a click.

"If you merchandise a group setting online with accompanying accessories and rugs, most sophisticated Web sites allow you to not only show that photo, but also have information on the individual items in the group," Nigam said. "We just launched a program with Havertys that allows you to slide in another rug and add that to the shopping cart. … The key is having a Web site robust enough to support your in-store merchandising and create a bridge to online merchandising."

Don't expect an immediate increase in sales once you step into e-commerce.

"I would say that having an online e-commerce presence is insurance in preserving your market share," Nigam said. "You might not have a lot of immediate sales, but not having the (online purchase) option is detrimental in customers' eyes. Hayneedle is selling every day in your market, and if you don't have the presence, you aren't even in the game."

And remember that a Web site with a shopping cart isn't the whole store for e-commerce. Your organization has to support inventory, delivery and after-sale service on items ordered online.

And while average tickets for online furniture purchases might not meet those of brick-and-mortar stores, expect that gap to shrink as consumers become more comfortable with big-ticket purchases via the Internet. MicroD manages Bassett's and Ethan Allen's online custom-order upholstery package.

"We've seen a steady increase in that sort of order online, and volume has steadily increased," Nigam said. He didn't give an exact figure, but the increase "is enough to where they've continued to support the channel."

 

THINK MOBILE An e-commerce Web site is more than a sales vehicle, it is today’s most valuable digital channel for driving traffic in to a physical store, according to Lance Hanish, co-founding partner of SOPHIS Integrated Marketing Innovations.

In developing that site, make sure to incorporate mobile-friendliness.

“Did you know that mothers turn to mobile when in store to save money?” Hanish asked.

If a retail site isn’t mobile friendly, consumers aren’t going to stay in the store long when browsing on the phone.

With e-commerce becoming more important, consumers have more ways to buy. If they use their phones in your store, make sure your mobile presence stacks up well with the competition.

“Today, everyone has a smart phone,” Bernstein said. “Every product has hundreds, if not thousands, of companies who can deliver it to (consumers), and they are operating inside your four walls through peoples’ smart phones.”

Suzy Teele, COO of Snap Retail, which has 2,500 retail clients across the United States and also works with designers and vendors, noted that starting last year, more online sales came over phones than computers.

“Does your product look good on the phone?” she said. “Use an app for mobile, or build a Web site that’s responsive, that readjusts its size automatically to fit the screen it’s appearing on.”

 

RETAILER RELEVANCE One way traditional retailers looking to take on e-commerce to compete with pure e-tailers is to do what they do best—talk to customers.

Bernstein is big on a full-service “assisted” shopping cart process.

“We see assistance from the retail associate as the most important part for the local retailers we deal with,” Bernstein said. “Our focus is not on the national-shipping part of e-commerce, but helping retailers do business better in the local market.”

That said, national shipping e-commerce players are a major competitive problem for retailers.

“Amazon wants to be the place where people buy everything,” Bernstein said, adding that a company such as home furnishings retailer Wayfair has the reach to get manufacturers to store product in their warehouses.

“The key is how do we communicate (online) why people should do business with our clients? What are your values, beliefs, services, community involvement? It requires a mind shift for us, because most of that information today resides in people’s heads, it’s not always published,” Bernstein said.

Most retailers tout their great service and knowledgeable, helpful people, along with selection or pricing, as reasons for consumers to shop and buy from an establishment.

“Get into the specific types of services you offer, the types of sales you do that differentiate, the types of financing you offer,” Bernstein said. “And tell them (online) why that matters to them.

“The Internet is going to commoditize a lot of products, and we have to communicate what value the retailer brings.”

Retailers should endeavor to build relationships and trust online. Retailers strive to do that in stores already?

“There’s going to be a huge need for retail salespeople and designers who can listen and help people solve problems online,” Bernstein said. “These people need to become experts at assisting customers over the phone and via chat and must have the tools they need to do that available.”

 

DEDICATING RESOURCES Do online shoppers browsing an e-commerce site see just the store’s telephone number, or are they directed to a dedicated call center when they want to buy or learn more?

The latter may be the better option. Think about it. Will a potential online customer wanting assistance call the store or go to the store?

Retailers showing particular online sales growth have established dedicated call centers for that segment. That way, the customer doesn’t get put on hold when she calls while the operator looks for the right person to field the inquiry.

“If you talk to the customer, that’s the moment of truth, and some of the best salespeople aren’t comfortable with the technology,” Bernstein noted. To compete with pure e-tailers, “our clients need to try to get people to talk.”

Del Sol Furniture in Phoenix decided to create a dedicated call center for its online sales, which the retailer started last year.

Alex Macias, vice president, had decided to spend time taking Web site-generated calls himself and realized how important they are. After the first day, he realized Del Sol needed to invest in an online sales team and service department.

“Those customers who come to our Web site are as valuable as those who come into the store,” he said. “If your Web site is an online store, today’s online customers have a high expectation of service.”

The first key to staffing such a call center is finding someone on your sales force that truly understands your company. It could be someone who isn’t doing that well on the showroom floor. That person might thrive in an online sales environment.

“Your best sales associates on the floor aren’t always the ones who have the skill for online sales support,” Macias said. “It’s a different skill set.”

 

A NEW CUSTOMER “There are a lot of people who have nice Web sites who don’t do e-commerce,” Macias said. “We consider our Web site to be our online store, 24-7, where the customers start the process.”

As it began selling online late last year, Del Sol had to make some adjustments. The store had catered traditionally to the Hispanic community with an emphasis on credit.

“That’s not the customer who comes to our Web site,” Macias said. While that traditional customer still leans toward in-store shopping, the online store attracted a much wider variety.

“Furniture retailers either get (e-commerce) or they don’t,” Macias believes. “Is your Web site just a Web site to you, or is it your online store?”

Even if you don’t sell online, it’s still a store.

“Look at leads coming in from the site. If they still think it’s just a Web site, they don’t get it,” he said.

 

ADDING VALUE ONLINE Furniture retailers have a depth of product knowledge sometimes lacking among pure e-tailers, and they need to make that resource available to online shoppers.

That’s one reason Sam's Furniture & Appliances in Ft. Worth, Texas, incorporates a live chat function on its e-commerce site.

“It's a great tool and gives customers another way to make contact with our stores when they have questions,” said Seth Weisblatt, vice president.

Consider incorporating e-mail marketing into your e-commerce strategy.

“I'm not talking about just e-blasts with promotions,” Weisblatt said. “We've started using prospect lead generation and it has had a great success. A customer provides their information to us via a pop up on the item page they are on, we will then follow up with targeted promotions for the products they were browsing for.”

Sam’s is constantly updating its Web site.

“From graphics, to product catalog, making sure every item has a price and stock availability,” Weisblatt said. “The ‘mission statement’ of our Web site is to provide customers the information they need to select Sam's Furniture as their place to shop.”

It’s all part of the retailer’s seamless shopping experience, whether the customer is in the store, on her computer, or using her smartphone or tablet.

“The more information we can provide customers the better our success will be online and in the store,” Weisblatt said.

 

SAVING THE DAY Goedeker’s, a furniture and appliance retailer in St. Louis, stepped into e-commerce after the recession hit in 2008 and crippled its business.

Owner Steve Goedeker said he launched e-commerce not as a grand strategy, but to keep the business afloat.

After starting e-commerce with 15 brands and around 4,000 products, the retailer now has more than 200 brands and a selection of more than 180,000 available items.

“We were just at the beginning of the recession in 2008 and were looking for a way to survive the challenges,” he said. “We started with a single table with two people, one who would answer the phone and one who worked on the Web site” adding and removing products.

As online sales increased, the Web site team went from two people seated at a table in the showroom to a separate, walled-off room with about a dozen people. The department moved upstairs when the online-employee count surpassed 20.

“Eventually we had to completely redo our building to accommodate more staff and inventory,” Goedeker said

Business grew to the point that two years ago, Goedeker’s converted 45,000 square feet of its 50,000-square-foot showroom into warehouse space and the hub of its online operations.

Selling online involved a tremendous cultural shift at Goedeker’s, with an explosion of information and an intimidating learning curve.

“It’s like starting all over again,” Goedeker said.

The Goedekers had no shipping experience and minimal knowledge of marketing.

“The challenges have been many,” Goedeker said. “From not knowing anything about how to start advertising, how to ship, how to deal with damages, hiring and training people. We literally were learning as we went along.”

There were also control issues. Along with delivery companies handling fulfillment came the need to hand over part of the business to an outside party.

 

SHOULD YOU SELL ONLINE? E-commerce represented 6.2 percent of total retail sales in first-quarter 2014, according to Snap Retail’s Teele, and is up 12 percent over the same period last year.

If there’s a single compelling reason to online for sales, she believes it’s that someone selling at least some of the product you offer is doing so online.

“A competitor might be supplying online the same item or service you do,” Teele said. “It might be a big-box retailer’s online (store) or an e-tailer with online sales only.”

She added that e-commerce is the No. 1 channel for electronics; No. 2 for apparel and accessories; and No. 3 for consumer packaged goods.

“It’s never flattening,” Teele said.