Since this is an article about markets, some memorable ones come to mind. How about early 60’s when the Furniture Plaza Building just opened and I was running back and forth from Bernhardt in Lenoir, over to High Point depending on the flow of major buyers. We were sitting in Kingsley space listening to the progression of the Cuban Missile Crisis! Needless to say, it was hard to focus a customer’s interest on a $150 sofa. Or how about 1987 when the stock market dropped 20% and was predicted to go into depression? Talk about tough sledding! There are so many other interesting little tidbits. I was representing Silver Tables when the news came during the early days of the show that their new plant in Knoxville had burned to the ground. That actually led me to be recruited by John St John to join Pilliod Cabinet Company. From that association I joined the Progressive team and never looked back. A couple of other tragic surprises were when the Berkline sales force showed up to find that the private equity folks had drained the company and shut the doors. Once again, the good news was Bob Bruns made lemonade from lemons by combining with Mark Holmes to start the world leader in mas-sage products: Cozzia. So most of the 120 or so Southern markets are rather commonplace, but thought you might like to hear some of the more exciting chapters! Anyway, as always, I am charged to be with friends on both sides of the distribution chain in another exciting week in High Point, NC.
Here we are another market edition of RootNotes. Emmet talks about his early days going to 120 or so NC markets so my 35 years is pale in comparison. But it’s still a long time no matter who’s counting.
There’s been lots of changes over the years but I don’t think I have seen anything like the rapid changes we have seen this past 24 months. Retailers think about what they need to do to compete with the Inter-net players. Factories have to drill down efficiencies to compete for relevancy with major retailers. Faster deliveries, no questions asked returns, unlimited se-lection seem to be what young and old buyers expect. Delivering on those promises while still trying to be competitive and earn a little money on the bot-tom line is a real challenge in a stagnant sales environment.
As I try to envision what the retail climate looks like 5 years from now it is probably going to be very recognizable in some areas of brick and mortar stores. Those retailers that communicate a consistent message to a targeted audience of buyers providing a value product will be doing fine. People will still need to buy furniture. However these same stores will have made investments and infrastructure improvements so that their logistics and processes align with how the consumers want to do business. Whether it be mobile commerce, ecommerce, or some new method, these retailers will be competing to capture and retain a loyal customer base.
As Amazon and Walmart duke it out for consumer mind share online it only furthers the emergence of a multi-platform expectation from consumers. Though Amazon is not in the brick and mortar business in a big way yet, the trends of them buying Whole Foods and experimenting with specialty stores show that five years from now brick and mortar will be a portion of their strategy. If customers want to buy a product in a store, they have that option. If they want to buy it online, that is seamless. They are training the customers on expectations and forcing all others to ramp up their game or be left behind.
At Furniture Sales of Mid-America we have dealt with all types of customers from big to small, mass merchants to specialists, internet only retailers to brick and mortar only. We have seen lots of best practices. What I am constantly amazed at is how little any traditional retailer ever asks what we see that is working. We are viewed strictly as reps. Occasionally they want to know what products are selling, but rarely do they ask us how others are solving problems. And then when they do decide a course of action it takes a long time to change the system.
Contrast this with Amazon who one year ago at this October market decided they wanted to see how a furniture operation worked and in particular a furniture distribution warehouse worked. They asked for our help in arranging a visit which we did. They sent 8 people to the factory tour all with different functions within Amazon and many of who had never met each other. Buyers, structural guys, managers, and ware-house logistics. Within 6 months from the time of the visit, they redid their DC’s to handle large products (not just furniture) based on what they learned on this factory visit. There is only one other company we work with that moves that fast and they too are dominating their markets.
So as I consider what retail looks like in five years I have to say that it’s going to be Fast… fast action, fast delivery, fast decisions. In our repping world we will also see changes based on what technology can help enhance how we service our dealers. Trying to adapt to the needs of the consumer will keep us all on our toes more so than at any other time in my 35 years or Emmet’s 120 or so Southern markets. I look forward to continuing this discussion with you in a couple of weeks at the High Point market.
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With fall selling season moving in there is a clear sense of anticipation with both retailers and suppliers. The summer lull was profound this year as everyone complains about lackluster traffic. There were just not bodies coming through the doors. It could be a malaise in the buying public towards furniture which is a highly discretionary purchase. Some say that Hispanics which constitute quite a buying force in many markets are all not spending money because they don’t know what’s going to happen on the immigration front. One of our astute local dealers indicates that the buyers come into his store and claim product in all stores in his market look the same. When queried further he finds out their real problem is everyone is advertising the same stuff. In his words the consumer thinks the product is bad based on online reviews so they just don’t bother looking in the store.
Another common theme we hear and read about in retail magazines and articles is that consumers have no need to go into a store to shop when they can do all that online before buying. They look at various sites, read reviews, research manufacturers sites, etc. This obviously keeps door swings down.
No doubt, web sales are on the rise as evidenced by all financial numbers we see reported. Wayfair’s insatiable appetite for goods from many suppliers I talk to, Amazon’s increased emphasis on big tickets, the Walmart – Hayneedle merger and the internet IS stealing sales from traditional stores. In spite of this, many brick & mortar merchants have sharpened their stores, improved their mix and put an urgency to the efforts of their staff. This plus retailers beginning to aggressively use the internet themselves has led to a mini revival in their fighting attitude. We are working with many to help beef up their online assortment and if we can help please give us a call to share what’s working online. Some categories are definitely better than others.
Until proven wrong I still contend that the female buyer (who is our bread and butter) would still rather touch, feel and be romanced by the merchandise and a professional sales associate. Use the internet to show them what you got and then reel them into your store for the purchase. This year vow to make that customer love your establishment and reward you with strong sales and bottom line profits.
If you have read my columns for any duration of time, you know that my columns deal with ecommerce and emerging technologies. My perspective is slanted as I work with the largest ecommerce accounts in the industry. I gain the insight on to where they are focusing their efforts and where they believe their customer is going.
We can all agree that technology is changing the way that we approach business.
There is another emerging trend—specifically with new companies targeting millennial buyers: the role of old fashioned, brick and mortar shopping experiences.
Recently published in daily retail newsletter Casper, the hottest mattress startup, is looking to add 15 “Pop-up” store fronts in the USA. The reason for the pop up stores: for customers to see, feel and experience the product. This will allow them to build loyalty, reduce returns and further drive online sales.
I recently attended a conference where companies in other industries are reporting similar findings. Millennial customers are wanting great experiences—both physical/live in person and digitally. It seems that Millennials are very infatuated with vintage. What is old is new and what is new is old.
From a marketing point it was discussed that millennial customers are really responding to targeted, well crafted, direct mail pieces. This traditional marketing experience is coming back in vogue and generating results for “New Age”, digitally focused companies.
Quick Side Note: An interesting point that was mentioned at that conference was ecommerce only brands will not exist in five years. The customer wants both the physical experience blended with the digital experience.
One last point for you to consider—it’s your job as a retailer (or even a manufacturer) to meet the customer where the customer is. It’s not the customer’s job to meet you. Figure out how to speak their language and you win!
My uncle Bill Fitzgerald died last week after a three year struggle with cancer. He was a mentor, an inspiration, a family man, and a role model. He was my mom’s younger brother, my dad’s best friend and everyone’s favorite uncle. Over his years he showed us how to live a good and fruitful life in service of God and others.
Bill was highly successful personally and financially. He started out in a family run savings and loan only to grow it beyond most dreamers wildest expectations. Over the years, he held leadership roles in more than 28 nonprofit organizations, leading fundraising efforts benefiting religious organizations, health care, elementary and secondary education, the arts, and social services agencies.
The President of Creighton University for which he served on their Board for over 40 years said this about him: “He was equally as successful in the professional sphere as the philanthropic one, was a compassionate leader in the workplace and at home, and gave selflessly of time and talent, be it in service to an employer, family, or the community at large.” The Head of the Chamber of Commerce summed it up perfectly when he said “Omaha is a better place because he was here”.
What I appreciated most about Bill is he always stayed grounded on guiding principles of his faith, doing good for his family and community, and integrity in everything he did. He went out and lived his life to the fullest. Along the way he never grew tired of helping people achieve their dreams.
As I reflected on his life’s work there are three things I would like to share with you about Bill that you may find useful either personally or professionally.
First, Bill was inducted into both the Nebraska Business Hall of Fame and the Omaha Business Hall of Fame in the early 2000’s. He had several other accolades throughout his long career from all kinds of organizations. And yet, two weeks before he passed away when he looked at all the family members around he told me in no uncertain terms that all the fame and financial success didn’t mean anything in comparison to that mo-ment when all his family was together. His subtle message was don’t get so caught up in work or community endeavors or whatever else steals your time at the expense of spending time cultivating relationships to those most important. As he was in hospice with just days left to live he was at peace. If you have just a week to live it is a very clarifying vision of how unimportant money or fame in this world are. But if you make difference in other people’s lives, that lasts an eternity.
Second, Bill followed in his father’s footsteps at the Bank they built from a small savings and loan into a publicly traded Multi-billion dollar asset financial institution that was acquired 10 years ago. It was not easy & there were lots of ups and downs throughout the years like in any growing business. But the guiding principal for both men was reputation. They lived it in their lives and cultivated in their business. This reputation allowed their bank to grow to be the biggest in the region until they were acquired. Over their history, the bank occasionally got into business dealings with suppliers or customers that were not as concerned about reputation. A builder cutting corners, a fly by night borrower, and others who you didn’t know until it was too late. Those relation-ships did not last the test of time. In this era of social media some of these things can be checked out before-hand because it is even more critical that companies do business with credible resources.
The reputation of the company as determined by it’s partners relates to the furniture supply chain as well. A retailer may look online and try and manage their reviews which is smart. But in many cases a consumer will go online and research the product you are advertising. Online reviews, give the consumer information good or bad about the product and by extension your company advertising the product. Put some of your advertised brands or vendors into a search engine with word “reviews” behind it and see what customer’s say online about the product you are advertising. Is it what you want your store to be known for since you are now connecting your reputation online to your supplier’s reputation? My uncle told me I was a product of the people I hung around with. In today’s social media and online review world the same can be said about your store’s suppliers.
Third, there is no doubt that my uncle Bill sacrificed a lot to help make his community better. If he believed in something he would always lend a helping hand. He could have had a lot more free time, but he absolutely loved helping. His funeral had an outpouring of priests and lay people, family and friends, former employees from ten or more years back as well as waitresses from the country club. So as you live your life, as you work your business, don’t get so caught up in the minutia of the daily grind. Look around and see what’s really important, to make a difference in the world and for your fellow man.
Sorry to be on a soapbox this month, but reflecting on Bill’s example made me try to apply it to our biz. Hopefully through our time working together you perceive doing business with us enhances the value you bring to your customers. We work hard for our customers and factories to do right by them. If you ever feel that is not the case I want to hear about it immediately. Helping you personally / professionally meet your goals is how we have survived in business over 50 years. The next 50 years is only as good as our reputation we build serving you and others.
With the summer doldrums a little more pronounced, I had more time to spend with my grand kids at Lake Okoboji for a long weekend as well as I got to peruse industry publications. A couple of articles caught my attention, as they were in-depth studies on retail advertising and customer survey results.
The first article , by a couple of retail furniture consultants in Furniture World, discussed the plusses and minuses of digital vs. other standard media. Author talks about Ad Blocker and other ways digital is thwarted. Also, the number of people who block ads on Facebook, and blame the retailer are mam-moth. His pitch on direct mail is that in surveys over 90% of consumers (mainly women) want to peruse direct mail. 77% of people sort through their mail as soon as they get it! A little personal experience Fran gets out of her car and rushes to PO Box to gather 40 pieces of mail: 22 are political causes, 16 are charities and 2 are of interest!!
One thing that sticks in my mind is what used to be. The best sale twice a year was the preferred customer event by direct mail. In my days of selling, the promoters doing G.O.B’s their opening letter to customers of the store, going out of business sometimes did as much in 2 weeks of mailing that the account did the previous year!! Now I seldom see any retailer mining the rich ore of old, satisfied customers.
Print is still one of the main influencers when it comes to consumer purchase decisions. None of us really know how effective retail advertising is. Every moment of every working day, executives of major furniture companies strive to bring the best values to their customers. By circulars, direct mail, TV spots or social media, they are touting the benefits of shopping with them.
There is no silver bullet so a mix of all of the above will continue to be the blueprint of major furniture stores.
My second article was featured in HFN. An article about the millennials preferences in shopping for furniture. When I saw the opening page showing young buyers choice of favorite retailers in each region, I was immediately hooked! In all 4 regions: West, south, Midwest, and Northeast, IKEA was #1 and Target was #2 in 3 of the regions. Only in the South was a real furniture retailer ranked at #3, Ashley! Most millennials said they wanted to touch, feel, and see the furniture “before” buying, yet the internet is still the first choice of most buyers under 35.
One of the statistics which caught my attention about purchases of this group was the amount they spent last year: $600 and plans for next year $500. WOW, maybe you need to spend more effort on the baby boomers who actually have money! The Millennials will spend more on a new Apple IPhone in fourth quarter than they will spend the whole year on furniture.
Events that make it more likely, for millennials, are sales and special promotions! Next in their preference were delivery and carrying affordable products. All other fluff like celebrity appearances, design workshops, and open houses are only listed in 10th percentile. Interestingly in store sales, by millennials, for both men and women are 2/3 in store to 1/3 online. The survey indicates that only about a half of the younger buyers use store apps or websites.
The last bit of trivia from the survey is that overwhelmingly most young couples host dinner parties or cocktails as op-posed to brunch, lunch, or parties. I’m not sure how that sells furniture!
I only bore you with this survey to show that young buyers are POTENTIAL customers, but maybe your effort needs to be up the line where there is more disposable income, life changes, and multiple housing opportunities. What do I know! There isn’t even a category old enough to cover me!