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!