February/March 2015 — Loyalty Programs

FEB/MAR 2015

Loyalty Programs Find the right carrot for your store NAHFA DataLink Finally a solution for your website and more

Made In America It’s worth the label

PRSRT STD U.S. POSTAGE PAID PEWAUKEE, WI PERMIT #1289

ALL THE ACCESSORIES YOU WANT, ALL IN ONE PLACE The BEST SELECTION of home accessories, creative merchandising solutions and unsurpassed sales support—TOGETHER IN ONE SHOWROOM —to give you more ways to profit and inspire your success.

ACCESSORIES MADE EASY RUGS

PILLOWS

THROWS

WALL DECOR

ACCENT FURNITURE

SHOWROOMS: ATLANTA DALLAS HIGH POINT LAS VEGAS NEW DELHI TORONTO | INFO@SURYA.COM 877.275.7847

LIGHTING

BEDDING

SURYASOCIAL SURYA.COM

RUGS: GES-1003, GES-1015, MYK-5006 // PILLOWS: CV-004, CV-006, EL-005, GE-006, GE-018 // THROW: TNL-1000 // WALL DECOR: MRR-1004 // DECORATIVE ACCENTS: AHJ-901, BDH-100, SLU-970, TAV-830-M, TAV-832 // LIGHTING: LMP-1060

INSIDE February/March 2015

in each issue 04. NAHFA President’s Message 06. Editor's Message 10. Connections New NAHFA Members 12. Retailer2Retailer/Inspired Reading 26. Product Focus Made in America

14.

44. The Scoop 47. Industry Calendar 48. The NOW List

features

14. Customer-loyalty Programs 24. NGN Spotlight: Jacob Shevin

departments Sales & Marketing

24.

22. Retailer Voice Are you using the right sales tools?

33. Shattering the Margin Myth Technology

08. TechNOW Membership 20. NAHFA DataLink 40. How Does Your Store Stack Up? 41. Networking News Operations

30. The Xs and 0s to Team Selling 37. Good Customer Service

42. What Would Disney Do?

30.

26.

Loyalty programs aren’t just for restaurants and coffee shops. Starting on page 14, we’ll tell you how home furnishings stores are using rewards to keep customers coming back. Jacob Shevin of Standard Furniture learned a lot from his father. See how 24. he’s practicing it on page 24. Gat Creek is one of many manufacturers making furniture right here in the U.S.—and retailers and consumers appreciate it, page 26.

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

1

thePlayers What we are so passionate about. . .

To have the courage to pursue purposeful dialogues that challenge conventional thinking, to engage and entertain our readers by delivering content that creates a fervent following ready to change the landscape of our industry.

Published by the North American Home Furnishings Association 500 Giuseppe Court, Suite Six, Roseville, CA 95678 800.422.3778 • retailernowmag.com

RetailerNOW is the magazine for today’s home furnishings professional.

Developed for a specialized community, RetailerNOW brings a unique editorial focus on progressive and relevant issues concerning the home furnishings industry in the retailer’s voice, with a focus on issues impacting retailers NOW. Contact Information:

Mailing – Editorial and Advertising 500 Giuseppe Ct., Suite 6 Online: retailerNOWmag.com Phone: Editorial: (800) 422-3778 Advertising: (800) 422-3778

Facebook.com/retailerNOW

Twitter.com/retailerNOW

Pinterest.com/retailerNOW

Executive Staff

Lisa Casinger Editorial Director lisac@retailerNOWmag.com

Sharron Bradley CEO NAHFA sbradley@NAHFA.org

Robert Bell Editor robert@retailerNOWmag.com

Mary Frye EVP NAHFA mfrye@NAHFA.org

Lisa Tilley Creative Director lisa@retailerNOWmag.com

Membership Staff

Michelle Nygaard Sales Executive michelle@retailerNOWmag.com

Roseville CA 95678

RetailerNOW Staff

Sydnee Seites Webmaster sydnee@retailerNOWmag.com Retail Advisory Team Carol Bell Contents Interiors Tucson, AZ

Subscription: $70/year RetailerNOW, ISSN# 2166-5249, is published monthly (except March and December) by the North American Home Furnishings Association, 500 Giuseppe Court, Ste 6, Roseville, CA 95678.

Application to Mail at the Periodicals Postage Prices is Pending at Roseville, CA and additional mailing offices. POSTMASTER: Please address changes to: RetailerNOW, The North American Home Furnishings Association, 500 Giuseppe Court, Ste 6, Roseville CA 95678.

Kaprice Crawford Membership Team Leader kcrawford@NAHFA.org Jordan Boyst jboyst@NAHFA.org Sherry Hansen shansen@nahfa.org

POINT MARKET 45 HIGH Michael Hill OCTOBER18-22 , 2014 mhill@NAHFA.org

Jana Sutherland jsutherland@NAHFA.org

Travis Garrish Forma Furniture Fort Collins, CO

Dianne Therry dtherry@NAHFA.org

Rick Howard Sklar Furnishings Boca Raton, FL

Please call (800) 422-3778 for all membership inquires.

Mike Luna Pedigo’s Furniture Livingston, TX Andrew Tepperman Tepperman's Windsor, ON

If you would like to stop receiving RetailerNOW, please send an email to unsubscribe@retailerNOWmag.com.

If you would like to only receive an electronic version of RetailerNOW, please send an email to gogreen@retailerNOWmag.com. © 2015 North American Home Furnishings Association. Published by the North American Home Furnishings Association. Material herein may not be reproduced, copied or reprinted without prior written consent of the publisher. Acceptance of advertising or indication of sponsorship does not imply endorsement of publisher or the North American Home Furnishings Association. The views expressed in this publication may not reflect those of the publisher, editor or the North American Home Furnishings Association, and North American Retail Services Corp. Content herein is for general information only; readers are encouraged to consult their own attorney, accountant, tax expert and other professionals for specific advice before taking any action.

2

FEBRUARY/MAR CH | 2015

Contributors Kaprice Crawford, Jeff Giagnocavo, Marty Grosse, David McMahon, Sydnee Seites, Tom Shay

www.retailerNOWmag.com

WHERE FACE TO FACE NETWORKING GETS REAL...all in 3 days or less

theHFNC.com | May 17-19, 2015 HOME FURNISHINGS

INDUSTRY ICONS FEATURED ON THE MAIN STAGE

MONDAY, MAY 18

TUESDAY, MAY 19 What You Can Dream, You Can Achieve

The 2015 Residential Furniture Retail Analysis Report: A Conversation with Jerry Epperson

Lunch with Keith Koenig, President, City Furniture

Mann, Armistead & Epperson, LTD. Jerry Epperson

Keith Koenig

FULL AGENDA ONLINE at theHFNC.com or call for information (800) 422-3778 THE DETAILS

Our registration package includes access to all of NAHFA’s educational seminars, our exhibitor showcase, all scheduled meals including the Retailer of the Year Awards Evening and the Treasure Trove Celebration at the Living Seas Pavilion at Epcot!

NAHFA MEMBER BOGO* REGISTRATION Members First registrant Second registrant Each additional

$499 $ 0 $199

Vendor Partners** First registrant Second registrant Each additional

$499 $249 $199

**Qualified Vendor Partners are NAHFA *To qualify for the Buy-One-Get-One sponsors or preferred partners. discount you must be a member of the NAHFA.

General registration from $799

Partnering with:

FURNISHINGS COUNCIL

THE PLACE

Disney’s Coronado Springs Resort Special Group Rate: $164.00 plus tax Group rates available: May 15th through May 22, 2015 (pre and post options subject to availability.)

Call in reservations: Group code: Reserve online:

407.939.4686 G0649974 www.theHFNC.com

President's Message President’s

Problem Solved

I can’t tell you the number of obituaries I’ve read over the years for brick-and-mortar stores like yours and mine. Of course, those deaths are greatly exaggerated given how relevant we remain in this e-crazed economy. We know our customers want to research that sofa online, but we also know they want to feel the fabric and sink into its cushions. I’m no expert on technology, but I’m pretty sure there’s not an app for that. Yet. That’s why our stores are just as relevant now as ever.

But I also know many potential customers, using their laptops or smartphones, will buy a new sofa without ever leaving the old one she’s sitting on in her living room.

That’s why I’m excited about NAHFA DataLink, our association’s latest member service that allows retailers to easily receive standardized product data from manufacturers for use on all of their digital platforms. All of us know the challenges of populating our websites with the furniture and accessories we stock. It seems like every manufacturer has a different format for their data.

At times I feel like getting pictures and information from them is like pulling teeth. Now more than ever we need NAHFA DataLink. Our customers are shopping online before they choose where to shop in person. If our websites don’t give them everything they need to make a decision, they’ll click elsewhere.

Forbes recently reported that 90 percent of shoppers would rather buy from a brick-and-mortar store.

That’s not just Baby Boomers and senior citizens, but teens, Millenials and Generation X shoppers, too. That’s why it’s so important that they not only reach your website, but that you can show them everything you have to offer. With NAHFA DataLink, shoppers will find the same information at your website that they’ll find at bigger e-retail sites. The difference, of course, is they can drop by your store to look, feel, and, ultimately buy.

It’s not just your website that will benefit from this service. Standardized product data will make it easier to run all facets of your business—from your POS system and social media platforms to digital signage and more. We’ve needed a solution to level the playing field with giant ecommerce retailers and this new service will do that.

You’ll find more information about NAHFA DataLink in this issue beginning on page 20. I hope you see the benefits of standardized product data for your store. If you have any questions or want to subscribe to NAHFA DataLink, you can call our association at 800.422.3778.

I’m proud of the way our association is adapting to change. And I’m proud of you. We’re still standing—all of us—relevant as ever to our customers, and with NAHFA DataLink we are going to take our industry back from the huge online retailers. Thanks for your support.

Marty Cramer

4

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Editor’s Message

Keep Those Fickle Customers Loyal Of all the interesting conversations I had at Las Vegas Market, one in particular still resonates with me. Bob Bruns from Cozzia was trying to explain his company’s wildly successful robotic massage chairs.

“You have to give the customer a compelling reason to want your brand,” Bob said. “At the end of the day, it doesn’t matter what you’re selling. It’s a commodity. Your customer needs a reason, a story, for wanting what you’re selling.”

Bruns, of course, was speaking from a manufacturer’s perspective but aren’t his words universal? He could have easily been talking about your store, right? After all, today’s shoppers have so many options on where to shop. What’s the compelling reason for them to walk through your doors or click on to your website? That’s the $64,000 question retailers have struggled to answer for years.

Maybe the solution is in your wallet.

Restaurants, ice cream stores and coffee shops have spent years cultivating shoppers’ loyalty with rewards programs. You know what I’m talking about: Buy nine pretzels, get the tenth free. But for whatever reason, home furnishings stores have been slow to embrace the concept.

This month RetailerNOW looks at home furnishings stores that have implemented a loyalty program and tells you why a similar program might work for you and your customers. Loyalty programs are a great way to stay engaged with your customers while at the same time supplying you with important data about their shopping habits. Our story begins on page 14. Let us know what you think.

Also, the Home Furnishings Networking Conference takes place May 17-19 at Disney World, a place that knows a thing or two about customer loyalty. Lee Cockerell, Disney’s former executive vice president of operations, will be one of our guest speakers and will talk about how your store can provide great customer service. The best loyalty program can’t compensate for shoddy customer service. I hope you can attend the conference and hear Lee speak. Until then, get a sneak preview on page 42 of what Lee will be sharing. Hope to see you in Orlando!

Robert Bell robert@retailerNOWmag.com | (916) 757-1169

6

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Tech facebook.com/RetailerNOW

@RetailerNOW

pinterest.com/RetailerNOW

In the News

“Pay to Play”—the “new” social media marketing model?

Social media is free. Social media marketing is not.

There seems to be consensus among marketers that the early days of social media brought brands and businesses abundant organic reach (the ability to build communities of fans, and then continue to engage using content published to fans’ news feeds). There’s also a consensus among digital experts that this fundamental assumption about social media’s “golden days of free reach” is, and always was, a fantasy.

Whatever your opinion, the fact is, in 2015, you need to embrace paid advertising.

You needn’t look further than your favorite social media marketer newsletter to realize the marked shift to the ‘payto-play’ model. Since the 2013 publication of Forrester’s report that said “facebook is failing marketers,” Facebook has been the poster child for the death of organic reach.

Brands are being crowded out of the platform as content from publishers and people’s friends is given priority in the news feed. By Facebook’s own admission it will continue to be increasingly difficult for brands to gain significant organic exposure on the platform.

Twitter continues building and improving its promoted tweets, the paid ad platform it debuted in 2010. Late last year, news broke that Twitter is looking to introduce its own version of a Facebook-style filtered feed in 2015, meaning tweets would be organized by relevance rather than merely presented in the order they were posted.

8

FEBRUARY/MAR CH | 2015

Pinterest is on the brink of launching Promoted Pins, its paid advertising platform, which has produced promising early results for companies that have been beta testing the service since May. There is currently a waiting list for this function (on ads.pinterest.com), which looks to be the start of restricting what branded content users see.

Even Instagram, widely believed by many to be a social platform where free reach still exists, started introducing ads in November of 2013 and continues to beef up its ad platform.

(Facebook acquired Instagram in April 2012).

Good to Know

Apple Maps Connect for Small Business Add or claim your business in Apple Maps Connect by visiting mapsconnect.apple.com

Ever wondered how to add or correct business info on Apple Maps? So did we…until now.

Apple Maps Connect is a web-based tool for businesses to either add or edit their listings to the Apple Maps database (much like you can claim your business on Yelp – biz.yelp.com).

You will need an Apple ID, but once you sign in you’ll get a

www.retailerNOWmag.com

Tech

dialogue asking if you own a small business and encouraging you to add or correct your business information to help your customers find you in Apple Maps. The site also has a tool for setting up indoor positioning in certain areas, which will be used to bolster Apple’s indoor mapping data for future iOS Maps features.

 Cool Apps Easily Do

(easilydo.com) Productivity App. Less work, less worry, and more time for you.

EasilyDo is an award-winning assistant that organizes your work and personal life. The premise is to save you time by reducing the number of steps it takes to get things done.

Simply connect your email and social media accounts.

The app will remind you about important events (like your Facebook friends’ birthdays), alert you when it’s time to head to that meeting, track your deliveries and packages, give you directions, clean up your emails and lots more. It will even read your emails and predict which ones might require your attention. Free; 30 day free premium trial. iOS, Android.

30/30 (http://3030.binaryhammer.com/) You set up a list of tasks, and a length of time for each of them. When you start the timer, 30/30 will tell you when to move on to the next task.

If you find yourself (or your employees) struggling to self-start or needing help budgeting time for multiple tasks, do we have an app for you. Binary Hammer is a glorified timer: the idea is that you work on something for 30 minutes and when the timer pings, you know to move on to your next task (or take a 30-minute break.) Then, rinse and repeat.

Of course you can set the times you feel are appropriate in order to boost productivity.

The display is minimal but attractive and it still shows you everything you need to know: • What am I supposed to be doing right now?

• How much time do I have left to do it?

Users swear by it (that is, when they’re not getting things done in a timely fashion). Free; In-App Purchases. iOS.

“STORIS’ Inventory Control is top-notch, robust & easy to use. The system has lots of checks and balances and has eliminated our need to look back at paperwork. STORIS exceeds our expectations and fully understands the business side of furniture retail.”

Lyndon Johns, CEO & President

Connections

MEET YOUR NEW ASSOCIATION MEMBERS

WESTERN MEMBERS Scott Johnson, Johnson’s Fine Furnishings, Newberg, Ore. Helder Costa, Sofas 4 Less, Concord, Calif.

Karen Desantis, Vioski Modern Furniture, Los Angeles, Calif.

Ron Sellers, ecUtopia, San Diego, Calif.

Jennifer Brown, Artesanos Design Collection, Durango, Col. Donny Dean, Image Audio and Home Furnishings, Wasilla, Ark. Darlene Skoda, Billmyer Furniture, Cresco, Iowa

SOUTHWEST MEMBERS Nora Amoedo, Dallas Dinettes Furniture Center, Farmers Branch, Texas Tom & Mary Baker, Aladdin Home Store, Marble Falls, Texas Teena Caldwell, Twenty Two Fifty Interiors, Sugar Land, Texas Cindy Claborn, Bassett Home Furnishings, Tulsa, Okla.

Jim McIngvale, Gallery Furniture, Houston, Texas Robin Taylor, The Refuge Lifestyle, Bixby, Okla.

YOUR MEMBERSHIP TEAM Kaprice Crawford

kcrawford@nahfa.org Roseville, CA Membership Team Leader 10

FEBRUARY/MAR CH | 2015

Mike Hill

mhill@nahfa.org Roseville, CA Western Team www.retailerNOWmag.com

Sherry Hansen shansen@nahfa.org Roseville, CA Western Team

(800) 422-3778

EASTERN MEMBERS Jessica Dauray, Elements of Style, Greensboro, N.C. Andrew Gonzalez, Marcal Design, Doral, Fla. Natalie Harrison, French Furniture of Orlando, Boca Raton, Fla. Mandy Jeffries, Colfax Furniture, Greensboro, N.C. Asaad Malak, Jewelry and Art Kingdom Co., Charlotte, N.C. Tim Marshall, Innovative Design Solutions, Sarasota, Fla. Thomas Adam, Room Concepts, Pittsburgh, Pa. Robert Betesh, Furniture Mart USA, Penndel, Pa. Joseph Bograd, La-Z-Boy Furniture Galleries, Riverdale, N.J. Armand Guerrini, LaSalle Home, Wickliffe, Ohio Ramin Samouhi, Ryan Furniture of the Bronx, Bronx, N.Y. Carl Vogel, Carl’s, New Hartford, N.Y. Steve Wampner, Miller Home Furnishings, Wabash, Ind. Joseph Ramia, Gallery 1 Furniture, Dartmouth, Nova Scotia

Jana Sutherland jsutherland@nahfa.org Dallas, TX Southwest Team

Jordan Boyst jboyst@nahfa.org High Point, NC Eastern Team www.retailerNOWmag.com

Dianne Therry dtherry@nahfa.org High Point, NC Eastern Team F E B R U A R Y / M A R C H | 2 0 1 5

11

Retailer2Retailer

Inspired Reading:

Lee Cockerell’s The Customer Rules: 39 Rules for Delivering Sensational Customer Service

T

wo stores, two stories: I was buying a pair of running shoes at an independent sporting goods store when I noticed one of the shoes was missing its shoelace.

I told the clerk, who walked over to a display and pulled out a brand-new pair of shoelaces.

“Will these work?” he asked.

“Perfect,” I said. “Thanks.”

That’s when you could have knocked me over with one of those shoelaces. “They’re only $2.95,” he said, proceeding to ring up the sale. I thought he was kidding until he asked for my credit card.

“Really?” I asked. “I have to pay for shoelaces because your shoe is missing one?”

The clerk shrugged his shoulders as if there was nothing he could do.

“What about taking a shoelace out of another pair?” I asked.

just need to figure out how to input it in the computer.”

She summoned a manager, who manually entered the coupon code. I got my discount and the store got a loyal customer.

I thought about both transactions while reading Lee Cockerell’s The Customer Rules: 39 Rules for Delivering Sensational Customer Service. Cockerell is executive vice president of operations for Walt Disney World® Resort, a company that knows a thing or two about providing impeccable customer service.

In his book, Cockerell offers 39 digestible chapters on how to create an environment that not only explains why the customer always rules, but also shows how you can serve customers so well that they’ll never want to do business with anyone but you.

There is, of course, a double entendre to the book’s title. The customer always rules and, since the customer is the sole source to your bottom line, there are rules for not only keeping them, but also turning them into loyal emissaries for your store.

This brought a chuckle from the clerk: “But then that shoe wouldn’t have a shoelace,” he said. I said nothing, hoping the clerk “Great service serves bottom-line business would realize the absurdity. Nope. Nothing. objectives,” writes Cockerell. “Sounds simple, but I constantly meet execuI left the store without the shoes or shoe- tives who don’t understand that. They laces. Haven’t been back since. say things like “I’m in the commodity business, and it’s all about the product.”

Fast forward to December when I bought I tell them that they better have a great a frame for a photo I was giving my wife product because the most extraordinary for Christmas. I handed the sales clerk a customer service in the world won’t com20-percent off coupon and she gave me a pensate for a bad one.” similar confused look.

Let’s face it. You’re not the only home “Is there a problem?” I asked. furnishings store your customers can shop. What will set you apart from your “No, not really,” she said. “It’s just that this competitors in the service and attention coupon doesn’t begin until Friday.” to detail you and your employees bring to work every morning. Cockerell’s wisdom, I started to apologize, but she cut me off. as simple as it is profound, will show you “It’s not a problem with you,” she said. “I the way.

12

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Retailer2Retailer Who maintains your website and how often do you update it?

“I do almost everything myself. We’ve got a small staff and we do most of our business on the Internet. We’re not near a lot of other dealers so I found a supplier that drop ships everything for us. I take care of the pictures, product listings, live chat—everything, really. But I’m on there every day updating it.”

Max Hazan Modern Furniture Montreal “We have a marketing company that takes care of that for us.

They’re constantly putting pictures up for us and setting up our pages. We’re just starting to merge our business online and we don’t have the time and expertise to make it look professional and not look like some guy was sitting at home and made it up in 20 minutes. “ Wendy Chandler Chandler Designs Jacksonville, Fla. “We have a company that manages our site for us, but I have access to change photos when I need to.

I’m probably in there once or twice a week playing with things. If I sell something of the floor I don’t want someone calling thinking we still have it.

I’ve only had one person call who was upset that we had a picture of something on our site but not in the store and I’m not so sure he wasn’t another retailer.”

Joe Meyer Meyers Furniture Rochelle, Ill.

Grant Laidlaw VP of Sales Eric Clarke President

Locations: Puyallup, WA Mira Loma, CA • Morganton, NC Fax: 828-764-4461 • Phone: 855-208-6377 Email: sales@NWFXpress.com Please contact Grant Laidlaw VP Sales at 778-549-3188 or glaidlaw@nwfxpress.com to review your transportation needs.

The Northwest Furniture Transportation Leader

www.NWFXpress.com

Cover Story

Customer-loyalty programs are rare in our industry, but those who have them in place are succeeding. Here’s how you can, too.

BY ROBERT BELL

STOP RIGHT THERE. Kristin Jones has heard all the arguments her home furnishings brethren have against loyalty programs. She knows what they’re going to say. Loyalty programs are nice carrots for customers buying foot-long subs or $5 lattes, but furniture is different because, let’s face it, a Michael Amini sectional ain’t exactly a cup of coffee. She’s heard storeowners lament that furniture isn’t an impulse purchase made during a lunch break.

Consumers, they say, often spend weeks doing their homework, ultimately choosing price over loyalty eight days a week. And yet…

14

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Cover Story

MAKING A

LOYALTY PROGRAM

WORK

“And yet we have customers who can’t wait to get their furniture delivered and their rewards points recorded so they can start shopping for whatever accessories they might need,” said Jones, general manager of Noel Furniture in Houston. “I can’t tell you how many times we’ve made a sale because the buyer was motivated to use their rewards points.”

Loyalty programs are all the rage. A 2014 study from research firm BIA/ Kelsey found that 34 percent of small businesses employ loyalty programs as

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

15

Cover Story

A HISTORY OF LOYALTY PROGRAMS

1929

1872

The Grand Union Tea Company provides customers with tickets they can exchange for company catalog merchandise in the store.

1793

An American storeowner starts giving out copper tokens to shoppers who later exchange them for items in his store.

Betty Crocker issues coupons on its boxtops; they can be redeemed for items like free flatware.

1891

Blue Stamp Trading System introduces the first trading stamps, which shoppers affix to booklets and redeem for store products.

Six years later the Sperry and Hutchison Company becomes the first third-party provider of trading stamps for companies such as gas stations and supermarkets.

a part of their marketing strategies to attract and retain customers. Another 21 percent said they are likely to adopt a loyalty program in the coming year.

habits and spending. Loyalty data, when managed correctly, can provide a gin-clear picture of what the customer is buying across all channels, online and in your store. Armed with this data, says Wise, a home furnishings retailer can effectively market that individual shopper.

“The research indicates that these programs are becoming an integral part of retail strategy for a growing number of small businesses,” said Steve Marshall, director of research for BIA/ Wise says home furnishings stores that run rewards plans are Kelsey. “The data indicates solid interest and intentions in loy- better connected with their customers. “(Loyalty programs) alty programs, which are becoming an increasingly important tend to make consumers more willing to give accurate data about themselves—such as with emails, phone numbers and tool for customer retention.” addresses—and they’re more engaged with the retailer because Small- and medium-sized home furnishings stores typically now the consumer has a vested interest in opening your email,” earn business on customer service and high quality, but lack Wise says. “Besides seeing your message, that email has value the economies of scale to compete on price with bigger home to them in that it tracks their rewards points.” furnishings stores. Wise says a loyalty program can bridge that gap by helping smaller stores add more value to their brands And therein lies the real value to loyalty programs. You don’t have to offer weekly promotions or give away heavily discounted without having to lower prices. recliners to win over customers.

Despite the mounting evidence of loyalty programs’ success, home furnishings stores have been slow to embrace them, says “You just need to stay connected to them so that you’re the store Troy Wise, co-founder of Bungee Loyalty, a Wisconsin-based they think about when it comes time to buy that sofa or dining firm that provides loyalty software programs to small businesses. room table,” says Anduena Zhubi, vice president of marketing “Furniture stores are scared because loyalty programs are per- for SpotOn, a California company that provides loyalty programs ceived to work well with frequent purchases and furniture has for small businesses. a longer buying cycle. The truth is that a loyalty program fits well with any retailer-customer relation goal whether it’s used Let restaurants keep handing out those punch cards that allow customers to earn a free Rueben after paying for the first nine. every other day or every other year.”

Smart retailers know the gold is in engaging with the consumer.

Besides, says Wise, a loyalty program is more than enticing Home furnishings retailers offering a loyalty program through customers to spend more or provide perks for repeat business. a smartphone rather than a crumpled punch card can make all It’s about compiling sophisticated databases that track shoppers’ the difference—there’s nothing like having real-time access to

16

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Cover Story

1983

2012

Holiday Inn launches its overly generous rewards program. After 75 stays, members can choose two airline tickets to Europe, one week’s hotel stay in Paris or a week’s free car rental. The hotel drops its program in 1986 and rolls out a lessgenerous program a few months later.

Ikea's new kiosk-based loyalty program IKEA FAMILY enrolls more than 1.6 million members in its first three months.

2008

1981

American Airlines introduces AAdvantage, perhaps the most famous loyalty program ever. The goal is simple: Retain American’s most frequent customers by rewarding them for their loyalty with free tickets and upgrades.

Starbucks customers earn free drinks or food and get deals and early access to new products with My Starbucks Rewards.

your consumers through a device in their pockets that they check umpteen times a day.

That helps keep Noel in the consumers’ mind, but Gruen says the rewards program also keeps customers from drifting to other stores when it comes time to make a purchase.

Zhubi says the importance of retailers keeping in touch with their customers was underscored in a recent SpotOn study. Small “I don’t think we’re any different than Best Buy as far as our businesses that send loyalty members two to three emails per loyalty program,” says Gruen, who is enrolled in the electronweek enjoy three times more customer ics store’s loyalty program. “When I see visits than those that do not send any I have put together a certain amount of communications. rewards money with Best Buy, I’m usually over there trying to use it.” Gruen Zhubi cautions that the study’s data says. “It’s the same way here with our customers. When they see they have comes heavily from restaurants—which reward points just sitting there, they rely on dramatically shorter buying cycles than furniture stores—but she believes want to use them—who doesn’t?” the results hold true for home furnishings retailers, too. “With a good loyalty Noel keeps its loyalty program simple: program retailers have a communication Rewards are accrued based on a per[medium] in place that can be engaging centage of the purchase, typically 1 in content and offer deals,” she says. “It’s percent unless the store is offering the same technology that the big boxes double or triple points during promohave had for years only on a more persontions. Points, or rewards dollars, are al scale for smaller businesses’ customers.” redeemable on any purchase up to 50 percent of the new purchase amount.

That’s exactly what Noel Furniture provides its customers, So a consumer spending $2,600 on a sofa can redeem $1,300 says Guerin Gruen, the store’s marketing manager. The store, rewards dollars. which sells high-end lines such as Bespoke, Lillian August and Henredon, does not have a set schedule for emailing its The store tracks its customers’ purchases and updates its customers. But when it does reach out with its email blasts, electronic records quarterly before notifying customers the content is original and exclusive which keeps customers by email of their current level. Loyalty cards are mailed to engaged, Gruen says. every client who has amassed $25 or more in rewards. Jones

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

17

Cover Story

Noel Furniture general manager Kristin Jones believes customers have embraced the store’s loyalty program: “They’ll call us wanting to know where they stand.” Photo by Cody Duty

says it’s a nice advertisement every time a customer opens her wallet, even though everyone’s records are maintained at the store. Sometimes Noel isn’t fast enough getting the word out.

“We have customers who know when the updates are coming, but can’t wait,” Jones says. “They’ll call us wanting to know where they stand.”

Creating a loyalty program might seem overwhelming for many home furnishings stores given everything that’s already on the owner’s plate. The good news is that for retailers who do not have the time or talent to manage a program, there are plenty of companies that offer loyalty platforms to choose from.

Miller Brothers Furniture’s reward system offers shoppers 3 percent over $395 in rewards points to be used on future purchases.

Zhubi and Wise say it’s important for loyalty programs to be another layer of your marketing package and not the driving factor, something Barrett agrees with.

Wise agrees, but cautions home furnishings retailers to have patience when starting a loyalty program. “Given the longer buy cycle, it could take years before you see the needle move in some appreciable fashion,” says Wise. “Retailers are like the rest of us in that they want to see quick results. If you’re patient and you run a smart (loyalty) program you’re going to see the results.”

“We use our rewards program as part of our total package,” said Barrett. “We have a lot to offer consumers with our 30-day guarantee and same-day delivery in our region. I wouldn’t say our (loyalty) program is a big part of our marketing. You should never rely on one promotion—but I know it’s something our customers factor when making a decision.”

Jones says Noel’s loyalty program has been a nice return on investment for the store, but she’s constantly reminding staff that a plastic card in and of itself does not engender loyalty. “We still have to go above and beyond our competition,” she says. “We still need to offer good products and great customer service. If we’re loyal to our customers, they’re going to be loyal to Noel.”

SpotOn and Bungee provide loyalty programs and advice to small Miller Brothers Furniture, a two-store chain in Pennsylvania, has businesses—be they corner cafes or large home furnishings stores. used a loyalty program for six years. Customers are asked to sign “Most companies offering loyalty marketing expertise understand up when they make a purchase. Sandy Fink Barrett, a sales as- the transition to digital can be daunting for a lot of furniture stores,” sociate the past six years, said she’s never had a customer opt out said Zhubi. “The thing is (starting a program) doesn’t have to be of the program. “I’ve had maybe one person tell me they didn’t overwhelming or intimidating. Our job is to show retailers that want to sign up and then when we explained it to them they said, this is really easy to get going and once they get it up an running how much smarter their marketing can be.”

‘Oh, sure!’”

18

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

866.325.0015

PSIinfo@accellos.com www.profitsystems.com

The #1 in-demand retail management software Built on 5 SMART Steps™ that maximize your profitabilty Elite Customer Support Largest Customer Base Integration Partners

Cloud Solutions Professional Services Hands-on Training

“Since implementing PROFITsystems, we have grown our volume, increased GMROI, and doubled our profit.”

– Michael Alan Furniture

Membership

New service will deliver standardized product data for retailers to use online and in-stores BY ROBERT BELL

according to John Wells, president of Wells Home Furnishings, a two-store chain in West Virginia, is shoppers can drop by a local retailer’s store to look, feel and ultiNAHFA MEMBER RICK HOWARD “This is a game changer for home furnish- mately buy. knows all too well the love-hate relation- ings retailers,” Bradley said, of the program, ship between the home furnishings retailer which was introduced to manufacturers “I’m excited,” said Wells. “It’s becoming very and his website. Howard loves the added at the winter Las Vegas Market. “NAHFA clear to me and a lot of other retailers that sales and visibility that come with a store’s DataLink is going to help level the playing to stay in business 10 years from now, we’ll online presence. He hates the amount field between brick-and-mortar retailers and need a store and web presence. NAHFA of work that goes into populating the web- e-commerce giants.”

DataLink will help us build to that future.” site given that each manufacturer offers Retailers have forever been frustrated try- Wells uses a third party to populate his its product data in a different format. ing to access manufacturers’ data—photos, website, but he still doesn’t have the entire “ I t ’s a l w a y s b e e n a h a s s l e ,” s a i d pricing, measurements and styles—in a product data from his 100-plus vendors.

Howard, owner of Sklar Furnishings in standardized format. Indeed, web-service Boca Raton, Fla. “Everyone just thought all providers often hire many workers whose Bradley and other this time and effort was a necessary evil of full-time job is to download and format NAHFA officials the different types of product data from are meeting with doing business on the Internet.” manufacturers. manufacturers. She Not anymore. said most are eager The labor is expensive, but much needed. to participate, and The North American Home Furnishings Without that data, online shoppers who that NAHFA hopes Association has created an innovative ser- can’t find what they’re looking for locally to have more than vice that promises to deliver standardized turn to e-commerce giants to do their re- 3 0 0 m a n u f a c t u r product data from manufacturers to home search and shopping instead. ers’ catalogs availfurnishings retailers who can then use the able to retailers by information on their websites, point-of- And make no mistake: Consumers are buy- the April High Point sale systems, e-catalogs, digital signage and ing home furnishings online. Overstock’s Market with more highest-performing product category from coming. more.

Nov. 27 to Dec. 1—traditionally retailers’ NAHFA DataLink will reduce the amount biggest selling period of the year —was P r i c i n g w i l l b e of time and labor retailers currently invest furniture sales. Yet even as online shopping determined by the in building their web presence and product grows, 90 percent of shoppers would rath- number of SKUs a libraries, said Sharron Bradley, the associa- er buy from a brick-and-mortar store rather retailer has. The service will be available than online, according to Forbes. tion’s CEO. to all retailers, but NAHFA members will receive a steep discount.

With NAHFA DataLink, local retailers can make Howard said the program is needed among that happen by offering small and large retailers alike. “(NAHFA shoppers the same pho- DataLink) isn’t about an end to a retailer’s tos and information as brick and mortar. Nobody’s ready to give Overstock, Amazon, One that up yet,” he said. “But technology is such Kings Lane and other on- that the business is changing for all retailers. line giants. The difference, Why not get ahead of the game now?”

20

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Retail Voice

ARE YOU USING THE RIGHT SALES TOOLS?

No single strategy will attract customers to your store, but combining several can make all the difference.

I WANT TO SHARE A SECRET. Your store revolves around only three business components: tools, systems and automation.

BY JEFF GIAGNOCAVO

Jeff Giagnocavo is co-owner of Gardner’s Mattress & More in Lancaster, Pa. He is also co-owner of Mega Mattress Margins and regularly speaks at industry events on successful retail strategies.

22

Tools are things you use in your business. Tools can be a business card, a lost-customer postcard, a Facebook ad, thank-you cards, client assessments, proposals, referral cards, newsletters, logo pens, yellow page ads, Google Adwords, email marketing—really, anything you do or use to communicate or reach customers.

Most think that tools are marketing, that a business card or a Google Adwords ad is marketing. They are not. They are tools of marketing. Know that for the best results and use of your tools you should combine them.

So let’s say we want to reactivate lost customers. In our store we use the Lost Customer System. The tools we use are email marketing, postcards, online-lead generation, offline-lead generation and telemarketing.

Here are our system’s goals: • Re-engage customers who haven’t visited our store in a predetermined time.

• See if our emails are being opened and digested.

• Mail to only those most interested, thereby reducing mailing costs.

• Create buyers not just shoppers.

This Lost Customer System starts with a milestone being met. For us the milestone is flagging someone who has not purchased an item from us in the past year. (You should have a POS or system to access this type of data.)

You may argue that Facebook ads are a type of marketing. This is true only when there are multiple tools used in conjunction with the Facebook ads as the medium. For example, an ad that points nowhere or Rather than send everyone on your list that expensive simply back to your Facebook page is a tool, and a “Private Client” mailing once a year highlighting evweak one at that. You can turn that tool into a system erything you sell, try something more personal and if that Facebook ad directs someone to a low-cost engaging. Why not send customers a piece highlightoffer, or to an opt-in for a special report that col- ing the other rooms they have NOT bought from you. lects a customer’s information (name and email) for Include an insert showcasing items that complement subsequent email marketing. what they bought previously and why they simply must have them in their home.

Systems are a combination of tools strategically put together to execute a task for best results. Think If you think this won’t work simply look at your about a plumber for example. He has a ton of tools Amazon account, have you ever seen “because you available. For a clogged drain he loads his tool belt bought X you might like Y”? with the tools and applies the actions, or system, to fix the drain.

This may seem difficult to coordinate, but working with a printer who handles your direct mailing material In our world as furniture and mattress retailers, if we will help immensely. want new customers using any advertising media we need to combine our tools and assemble them into a Here’s how our system works: Once the milestone is system to manage the increase in leads that will come reached, an email is immediately sent, alerting our our way. In this example the media is just a tool, it’s customers to check their mailboxes in the next week not marketing. because something special is arriving just for them;

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Retail Voice

this is the insert showcasing items that complement their last purchase.

If the email isn’t opened and the “for their eyes only” link clicked (because link clicks, not opens, are the true measure of engagement) then they don’t get the personalized mailing piece. You need to give a compelling reason for the reader to click the link and once they do they should get a thank-you message and instructions to check their mailbox for a special offer.

Each week you can send your printer the corresponding customer lists so they can then manage your mailings accordingly.

Those who don’t click the link receive a postcard that directs them to call to claim their offer or go online and claim a free gift. Now we have a list of those who responded and who didn’t.

Those who do nothing with the email or those that bounce back, get a phone call

from the sales associate who sold to them last year, telling them of the offer you’ve been trying to make them aware of.

The reason to do this is because you aren’t mailing those that have no immediate interest in your bigger more expensive mailing piece. Also, you are still mailing the entire list about the special, but simply spending less money by dividing your mailing list and costs by only mailing the expensive items to those who engage.

You might ask, how would I know who has opened, clicked, responded or set an appointment? That is where automation takes over.

Remember that milestone of a lost customer after a year? Automation will solve that too. When you have an automation platform at work you will be able to market to the important milestones in your business and life cycle of every client on a more personal level.

Likewise having an automation platform at work will allow you to see via a “command central” window who is opening, clicking and claiming your email and online offers. A proper automation platform also allows you to let the platform know when an offline action, like a successful phone call by a sales associate telling the customer about their special offer just for them, has been set. From this action communications to keep the customer engaged until they are sold can be sent automatically.

When you look at your business through the lens of these three components, you will begin to realize that tools aren’t marketing. Systems only happen with the right combination of tools for the specific task.

Over the coming months I’ll be discussing tools, systems and automation, and how to set each one up to work with the other for maximum success.

NEW DATES NEW NAME NEW LOGO NEW SHOW

THE CANADIAN FURNITURE SHOW IS PROUD TO SHOW ITS TRUE COLOURS. THURSDAY JUNE 4 - SUNDAY JUNE 7, 2015.

For all the info, go to canadianfurnitureshow.com.

The Canadian Furniture Show. Growing forward.

15-1091 Magazine US_PrintAD_7,375x4,75.indd 1

www.retailerNOWmag.com

14-12-02 F E B R U A R Y / M A R C H | 2 0 1 5

9:28 AM

23

Next Gen NOW Spotlight

GETTING TO KNOW JACOB SHEVIN President Standard Furniture Birmingham, Alabama

Jacob Shevin isn’t giving up on his dream of becoming a professional golfer. Until then, however, he’s doing fine running Standard Furniture in Birmingham, Ala.

24

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Next Gen NOW Spotlight

: You’re a fourthgeneration furniture store owner. Was this your destiny?

Jacob: I wouldn’t say it was a given I’d be part of the family business. I was always interested in business. Other than the perpetual dream of being a professional golfer I’ve been interested in business. It just so happens I went into the family business.

RN: Tell me about your first job at Standard.

Jacob: I started out in one of our retail

team’s office for collections. It was my job to call and remind people if they were late with their payments. We had a collections van that rotated from store to store and when it came to my store, of course it was my job to go out and collect. Collection isn’t like it is on television. There’s no hiding in the bushes and it’s nothing like Airplane Repo. You knock on doors and just talk to people.

RN: What did that job teach you?

Jacob: It woke me up a little bit. It was

tough seeing people who had unfortunate events come up in their lives. A lot of times it was a medical reason they couldn’t or didn’t pay their bill. I understand that and I can sympathize with them. But it didn’t take me long to realize that without that income our business doesn’t run and we have employees who have families to support.

RN: What’s the biggest lesson you learned from your father, Stuart Shevin?

Jacob: Dad was a good teacher. I’ve

heard so many terrible family businesses stories, but my father always kept family and business separate. He showed me that running a business is not rocket science. It’s really easy if you do what you say you will do and treat people well.

RN: Were you ready to take over the business when he died?

Jacob: You’re never ready to take over

a business no matter how much preparation you’ve had. It doesn’t matter if you’re taking over as the store manager or president of the company, it’s hard. It was hard for me, but I had a great team of employees around me who made the transition easier than it could have been.

RN: You live in a football-crazy state torn between two schools.

How do you please Alabama and Auburn customers alike?

Jacob: I went to Alabama, but I tell

people my favorite color is green so we work it out. Our policy is to have fun with the customers if they look like they can have fun with it. We’re not going to say, “Roll, Tide” to an Auburn fan if it makes them mad. We’re not going to lose a sale over football.

RN: Look into the future and tell me where the home furnishings industry is going.

Jacob: I don’t think e-commerce is

going to be the way everyone buys if the Marketplace Fairness Act forces online retailers to collect sales tax like the rest of us. When you have a major

purchase like furniture the sales tax becomes a big angle. But if everyone has to collect taxes now the playing field is level and I think people still want to see an item in person at a store.

RN: Where can the industry improve?

Jacob: We need to do a better job

emphasizing the value of our products and not just think of what we sell as a commodity. When you look at the price points in our industry, they’ve always stayed the same or gone down. Why are we so scared to increase prices? Look at the automotive industry. You never see new models come out with lower prices. We need to be working with our sales staffs to add value—our whole industry could improve on this. I’ve only been doing this for nine years but I remember how much better trained the reps were compared to today. Buyers are having to do that job now as opposed to manufacturers. We need to change that.

RN: What do you get out of Next Gen? Jacob: I’m concerned about young people making their way into the industry.

I don’t see a lot of younger reps coming through my doors or young people applying for jobs with us. I think (Next Gen) is helping solve that. Before Next Gen I knew one person in the industry my age. I had a hard time getting excited about change. This group has shown me we’re not alone out there. There’s a lot of young talent in the industry and we’ve got some good ideas.

Next Gen NOW (NGN) is a community of young, passionate, engaged industry professionals whose mission is to give a voice to the needs and goals of the up-and-coming future generations. NGN strives to educate the industry on how and why it should attract and keep young talent. The NAHFA supports NGN by facilitating meetings and educational opportunities and introducing the industry to its members through RetailerNow. Connect with NGN members at NextGenerationNow.net or on Twitter @ngnow.

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

25

Product Focus

Berkeley Springs, W.Va., is home to Gat Creek, where owner Gat Caperton and his more than 200 employees craft 100 percent American-made furniture.

BY LISA CASINGER

SEEING A MADE IN AMERICA LABEL ON THE DINING “The 55+ age group has money and they are willing to pay for table you just bought may elicit warm fuzzy feelings for many of you, nicer goods,” he said. “They don’t want to overpay, but if you but does it mean that much to today’s consumer? Does it matter to can show them some of the reasons the goods are worth the your bottom line? Some in the industry say yes and yes. money, the older generation will pay for it. One of the nice things about the American-made goods is that you can special Brian Garrison, owner of Garrison’s Home Furnishings in Medford, order it. The customization side of American-made goods is Ore., consciously shops for American-made product. In fact, nearly where we have seen lots of success. I have always believed 85 percent of his inventory is domestic. When Garrison transi- that American manufacturing would come back when the tioned to mid- and high-end product a few years ago, his customers consumer was willing to pay for what they want. Importing predominately wanted American-made, better built goods. special order is near impossible for me.”

“All around our store you’ll see Made in America tags,” he said. “We occasionally run events and offer discounts only on the American made products. It’s absolutely a selling point for us. Our salespeople are more proud and excited to sell American made product and that enthusiasm often transfers to the customer.”

Tim Koerner owns Koerner Furniture in Coeur d’ Alene, Idaho, along with his brother Mark. While he doesn’t specifically shop for domestic product, he looks for the best value for his customers; sometimes that’s domestic and sometimes it’s imported. Koerner highlights domestic product by putting American flags throughout the showroom. One observation he’s gleaned from his customers?

Men care more about where something is made and women tend to care more about the “best bang for the buck.”

He says country of origin isn’t always a selling point, nor is it necessarily an indicator of quality—price point is. It’s harder to find domestic product at lower price points, but Koerner’s discovered there are consumers who will pay for quality.

26

FEBRUARY/MAR CH | 2015

Garrison thinks his customers do care where their product is sourced from, especially when it comes to better goods. “This is true up to a point though,” he added. “As much as a customer thinks they care, if the price is significantly more for an American-made product than an imported one (without a huge quality difference) most customers will still side with saving money. However if salespeople can sell the “story” of the product and/or the company making the product, that story will build value in the product, and people will spend more.”

Both retailers say they’ve seen an increase in demand for American product in recent years, though maybe not for reasons you’d think.

“When customers say they want American-made, they usually mean not made in China,” Garrison said. “Customers tend to be more accepting of imported product if it’s from anywhere but China. That being said, we are starting to see another shift towards American made.”

www.retailerNOWmag.com

Product Focus

Photograph by Robert Peak

Koerner says he’s not sure if the increased demand is because of a push from consumers seeking the product or more retailers advertising the product—either way he’s seen a resurgence.

“I do believe in American-made goods, but not to the point I will put American on the floor just because it is American made,” Koerner said. “The American-made goods have to be worth the price.”

Jody Oettel, vice president of sales for Interiors in Lancaster, Pa., says her store supports buying locally to help the region’s economy and businesses, and she sees that in the same vein as consciously buying products made in America.

“There are customers who do ask about items that are are made in America and we are happy to show them many upholstery lines that are manufactured in the USA,” Oettel said. “Case goods are a bit more difficult, but there are choices available. We are proud to tell them the Stickley story about American-made wood pieces.”

Oettel says many consumers have no idea where furniture is made and are surprised to learn it’s imported. They’re even more surprised when they find out how that affects the product’s price. “They often want made in America, but with pricing that is not found on that type of product,” she said.

Lancaster is known for its Amish communities and Amish handmade furniture. “I believe our area is more aware of furniture made locally and in the USA by craftsmen because of that,” she said.

Furniture manufacturing moved off shore because it made more economic sense at one time. But as labor costs are rising around the world manufacturing in Asia isn’t automatically the most cost-effective option for U.S. furniture manufacturers. According to a manufacturing survey by The Boston Consulting Group, U.S. manufacturers (not just of furniture) are reconsidering domestic

Top: Brian Garrison, owner of Garrison’s Home Furnishings, Medford, Ore., says about 85 percent of his inventory is domestic.

Bottom: Tim Koerner, co-owner of Koerner Furniture, Coeur d’Alene, Idaho, carries about 20 percent domestic product.

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

27

production because of labor costs, proximity to customers and product quality along with access to skilled labor, transportation costs, supply-chain lead time and ease of business. The study says furniture manufacturers could be overestimating their savings from off-shoring by up to 30 percent.

There are still some furniture manufacturers left who make their product domestically, but Koerner brings up some interesting points about made in America.

There are some manufacturers who make parts of their product in the U.S. or import components and manufacture them here.

The federal regulation regarding Made-in-American labeling is administered by the Federal Trade Commission. It states that for a company to label its product “Made in America” the product must be “all or virtually all” made in the U.S., which includes the 50 states, the District of Columbia and the U.S. territories and possessions. “All or virtually all” means all significant parts and processing must be of U.S. origin. The product’s final assembly or processing must take place in the United States.

California’s requirements are more stringent. California prohibits the use of “Made in USA” labels or claims “when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.”

Some furniture manufacturers who label their product “Made in America” have gone so far as to make specifications such as “using domestic and globally sourced components” or listing the specific components that are made in the U.S.

W.Va. Owner Gat Caperton says made in America has become its own category. Gat Creek products are 100 percent American made and it sources more than 95 percent of its raw materials from within a 350-mile radius of its factory.

Caperton began designing furniture in 1996 after buying a small manufacturing company that had built antique reproductions for more than 40 years. Gat Creek’s employees hand craft each piece of furniture from Appalachian cherry and each piece is signed by the person who builds it. Caperton said, “Made in America is a critical part of our story and marketing. It’s also a good selling point.”

He does see demand increasing, but only slightly, while the attitude toward the category has changed dramatically. “Five to 10 years ago, people looked at me with pity when I told them I manufactured domestically,” he said. “It looks cool today.”

Last year the company was recognized by the U.S. Department of Commerce for its export growth over the past year. The company exports to 28 countries.

Caperton sees many benefits to domestic production. “It allows me and our employees to live in the U.S.” he said. “Our folks really are a cornerstone to this community.

Our workforce includes volunteer fire fighters, EMTs, and Sunday school teachers. We pay the taxes that fund local schools and our far-flung military. On the consumer side, all these things are nice and I like to call it sustainability. Buying U.S. sustains. It sustains our forests (more trees and tree mass in the Appalachian forests today than 30, 60 and 100 years ago), our environment (lower energy use = less carbon and other pollutants in our atmosphere), our communities and the American way of life.”

“That’s why it is getting hard to be 100 percent made in the USA,” Koerner said. He points out that companies such as La-Z-Boy, for example, employ lots of people in the U.S. but they can’t (and don’t) claim to be made here. “On the case goods side, there is a The downside is the “unfair” competition from Asia—government lot of lumber imported from Canada, the environmentalists have subsidized dumping of products into our markets. made it to where we can’t cut our trees, we have to cut Canada’s trees,” Koerner said. “The world is truly turning into a world For Caperton, the biggest reason Gat Creek is American made is the community. NAFTA is part of the success of made in America. I sense of responsibility he feels to the people who build the furniture, am trying not to import as much furniture, but I have no control some of whom have been doing so for more than 40 years. “We over where manufactures source their materials. Part of me is not have a great factory, truly world class in almost any measure, and concerned with where the materials come from, as long as the talented people who care. I never wanted to become a marketing USA continues to create new goods; there will be manufactur- company like Thomasville and many of the other old-timers in the ing of goods here in the USA, we just might be importing the industry. I’ve always wanted to be a manufacturer.” raw materials.”

Randy Gleckman, national sales manager for Omnia Leather tells Koerner said about 20 percent of his product mix is made in the U.S. a similar story from the west coast. Chino, Calif.-based Omnia is a second-generation, family-owned business founded in 1989.

One manufacturer that can make the unequivocal claim that their product is made in America is Gat Creek, based in Berkeley Springs, “Omnia has always been made in southern California,” he said.

28

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

“Everything is designed and manufactured right here. There are a lot of companies that make leather in the U.S. and have a subdivision outside the U.S. for lower price points, but we don’t.”

Gleckman says many middle to better quality retailers do seek out American made product, when it’s not a price sensitive situation; and in fact when you say import “there’s a stigma of being inferior.”

Being domestically made is part of Omnia’s marketing story and it’s a selling point. Gleckman says though there are many advantages to being American made, one of the biggest is Omnia’s ability to offer the number of SKUs it does. “We sell a wide assortment of options, leathers, colors; we’re versatile,” he said. “When you go to imports it’s different. With us you can have it any way you want; with imports you can have it any way you want as long as that’s how it’s coming out of the container. We have a very loyal following that understands and appreciates what we do.”

Omnia also prides itself in its service and being able to react quickly, something the company couldn’t do if it was in the import business. “We’re more flexible,” Gleckman said. “We aren’t jamming retailers up with having to buy containers. We’re geared toward special orders. Whatever configuration, whatever color, we can do it.”

Omnia Leather owner Peter Zolferino, left, inspects new leathers with daily operations manager Shane Haley at their Chino, Calif., plant. Designing and making its own leathers makes Omnia more attractive to retailers and customers, according to national sales manager Randy Gleckman.

That flexibility does have a flip side though because it means having to carry more inventory so the customer doesn’t have to. Omnia “A lot of first-time buyers go for lower price point, the disposable manages to do this with about 200 employees and two buildings. furniture; but when they have to replace that they realize they should get something that lasts three times as long,” Gleckman said.

He agrees with Caperton and others that the appreciation for “You get what you pay for. There is a pendulum swing coming back to U.S.-made products. People take pride in buying it now.”

American-made product is growing.

What does Made in America actually mean?

According to the Federal Trade Commission, Made in the USA means that “all significant parts, processing and labor that go into the product must be of U.S. origin.”

Not all component parts, however, need to be made in the United States. If imported component parts make up a “negligible” portion of the product, it may still be labeled “Made in the USA.” Not so in California. There, the labeling law prohibits the “Made in the USA” label if “the merchandise or any article, unit or part thereof has been entirely or substantially made, manufactured or produced outside of the United States.” Defining

what constitutes “substantially made” and what constitutes a “part thereof ” is up to the California courts.

Furnishings Alliance. “With a little calculus, you can determine that this equates to more than $10,000 per employee. This burden impacts both domestic producers and Manufacturers can’t make a false claim importers, but, obviously, the regulations about being made in the USA, but that’s related to the environment and worker probably the least of their worries. health and safety weigh more heavily on our domestic producers. These are mostly Regulations are a big part of U.S. manu- protective measures that none of us would facturing and contribute to the costs as- want to be without, but it requires vigilance sociated with production. on the part of associations like AHFA and NAHFA to keep crippling measures with “The Small Business Administration esti- no real benefit out of the mix.” mates regulations now cost businesses in the United States $1.75 trillion—that’s It’s estimated that regulation on the retail trillion, with a “t”—each year,” said Andy trade has grown nearly 58 percent since 1997 Counts, the CEO for the American Home and just over 50 percent on manufacturing. www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

29

Operations

What do NBA titles and working together on the sales floor have in common?

Both take a lot of training.

BY MARTY GROSSE

THE SAN ANTONIO SPURS ARE LAUDED FOR THEIR unselfish play, a system designed to build on the strengths of individuals, and a focus on team success versus individual achievements. There must be something to that system given the Spurs’ success—five NBA championships in 16 years.

Teamwork is not confined to the basketball court. You can achieve customer centric teamwork within your sales teams while unleashing individual productivity by creating a deliberate and defined training approach.

Think about your own experiences. At a restaurant, car dealership or during an oil change, you sense when a group of people are working as a team and are focused on making your experience positive. We like doing business with these organizations. Whether you have one store or 100 you can create the same experience for your customers.

The hiring process is an important place to begin. Over the years, I’ve mistakenly hired salespeople by placing the priority on teamwork versus the individual’s selling ability. Face it, when you hire pleasant people who can’t sell you end up with a group of nice people. Your first priority is to recruit people you believe can sell then focus on their ability to work in an unselfish, team-selling environment. You should look for someone who fits in with your store’s culture and has the ability to manage change and respond to problems.

You can learn a lot about an applicant through situational interviewing techniques. A question such as, “Tell me about a time when you experienced a lack of teamwork in a previous job” will provide insight and clues to attitudes and approaches to working in a team environment. Listen to how they respond. Do they answer in terms of “I” or do they respond with words like “we” and “us.” Listen for clues that might tip you off about an applicant’s ability to be part of a team.

The initial training period is the time to instill and reinforce an atmosphere of working together in a productive selling environment.

30

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Operations

Group training is the best. When training a group of salespeople, you establish the tone by dividing into teams and using training materials that focus the teams on working and presenting together.

Teamwork and focus on the customer experience should be an overriding principle in your training program. One example would be asking a team to develop a list of questions to probe for more information from a customer. The trainer observes the teams as they work together and looks for traits of good teamwork or possible individual problems. If an individual is exhibiting poor teamwork tendencies you should address them before they hit the sales floor.

Ongoing training in the form of sales meetings is a venue for teamwork and focus on unselfish selling. Creating teams within a sales meeting to present information on new products or new programs will reinforce the culture of working together. For example, establish teams, task them with creating a list of features and benefits of a new product on your floor and ask them to present the findings.

Whether you develop the teams with deliberate forethought or allow selected leaders to pick their own players, the dynamics of working as teams in the sales meeting may reveal positive or undesirable tendencies. Those revealing positive teamwork attitudes during a sales meeting are worthy of public praise while negative behaviors warrant private individual counseling. Teamwork and unselfish selling are functions of communication and trust between individuals.

Teaching teams to work together and understand each individual’s strengths ultimately spills over to the selling process.

in unselfish team selling while appealing to an individual’s pride and personal strengths. Do you have selling experts on your floor?

Identify those people with strengths and specialty skills that others may turn to for help in selling situations. For example, do you have a bedding expert or bedroom expert? This process allows you to appeal to the ego of a higher performing salesperson while creating a source of help for newer or less-skilled salespeople. This approach ultimately adds to the concept of unselfish team selling.

As in sports, there are rules that have to be followed. Make sure that the selling rules are clearly defined in your store. How are be-backs handled? Do you use an “up system”? Do you have a “turn over” process? Defining selling rules and keeping them enforced provides a framework for working together and quickly resolving disputes. Of course this requires ongoing vigilance by a sales manager. Unfortunately the adage of “set it and forget it” is not applicable to managing a team of high performance sales people.

Team-building exercises train, build and maintain trust and communication. Including non-selling personnel will make it fun for everyone and allows that sense of “shared experience” that binds people together. One of my favorite exercises is “Take What You Need,” which involves handing a roll of toilet paper around and telling the employees to take only what they think they need. The number of sheets taken requires the individual to provide as many Achieving a system of qualities or unknown facts about themselves. people working together unselfishly to serve cusCreate specialized teams within the store around specific issues tomers while encouragneeding focus or improvement. For example, fabric/leather protec- ing individual achievement and growth is not an easy task. It takes tion sales may need additional training for improved production. time and commitment from management to develop and sustain.

Carefully choose teams of better producers combined with lower Not every player fits into the San Antonio Spurs’ system and you’ll producers to create a training environment where ideas and tech- find some players won’t fit in yours. That could mean replacing them. niques may be exchanged. This team concept continually reinforces No one enjoys that aspect of managing sales teams but the benefits working and communicating while finding solutions to real issues. of unselfish team selling outweigh the alternative. It has been said Don’t just focus on the negative. Create teams to learn and confirm that teams that play together stay together or there is this trite but why something is doing well. true definition of TEAM—Together Everyone Achieves More. When you achieve a sales team that trusts and works unselfishly with one Is it possible to have only one person on a team? Use the idiosyn- another, your customers will sense it and want to buy from your cratic management style and meet with individuals to ask for “help” store. And isn’t that what you want?

Furniche.com founder Marty Grosse has 35 years of experience including senior positions across six top-tier retailers. Furniche provides visitors real, relevant and timely shopping advice with access to research, local furniture stores and manufacturer information.Contact him at martygrosse@furniche.com

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

31

Sales & Marketing

32

Sales & Marketing

BY DAVID MCMAHON

Gross margins are in your head. Choose

How can two retailers who carry similar product lines with the same sales volume, the same operating costs and the same inventory levels produce completely different results?

The answer is gross margin.

One business has greater merchandise costs as a percent of sales than the other. This happens even though their inventory value as dollar asset amounts are identical.

I’ve even seen businesses that thrive at lower sales levels and others struggle to pay their bills because of gross margin. It is clear to me that gross margin is one of the most important numbers to track in any business. Expressed as a ratio (%) gross margin is:

to be profitable.

Sales Dollars Merchandise Cost + Freight-In Gross margin is the percentage that you have left after you subtract your direct-landed cost of sold merchandise. Sales start at 100 percent and then cost of goods is removed from that to produce your gross margin percent. Gross margin is the percent of every dollar that comes into the business that you have left

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

33

Sales & Marketing

over to accomplish three main things: pay operating costs, make a profit and produce decent cash flow.

So, why would two similar businesses produce such different gross margins?

Because, that is what their respective owners have decided to do. One business had decent operating cost levels for its volume.

The owner decided that, to keep the business strong and to live comfortably, they needed a certain gross margin percentage. The other business owner with similar operating costs decided that they could only command a certain mark-up to be competitive so they priced accordingly.

Maximizing gross margin and your opportunity to prosper comes down to owner belief and decisiveness. You have all heard the saying, “If you believe you can, or if you believe you can’t—you are right.” Margins are in your head—decide to be profitable.

What is mark-up anyway? Mark-up is a traditional retail strategy of multiplying cost by a number (commonly defined as two times) to produce a price. For example, if something cost $500 landed, multiply by two, put $99 on the end, round up or down, and you get a retail price of $999. I have to tell you, if Restoration Hardware were using the old number mark-up method, they would have a much harder time affording their beautiful catalogues and merchandise presentations. I doubt they would have had the money to grow their business. Mark-up strategy should be used as a guide and should be adjusted depending on the product line and home design strategy.

So, what gross margin percentage is good overall? I have witnessed retail furniture category margins ranging from the high-end of 75 percent to the low-end of 10 percent. However the normal margin seems to be in the 40 to 55 percent range. Fifteen percentage points of sales is a huge gap.

Unless you have a very high-volume, low–operating cost business model like Costco, it is almost impossible to make a healthy profit at under 42 percent. Yes, there are some profitable low-margin cases, but they are few and far between. Forty-five percent is the low that I have seen in our performance groups of non-appliance and non-electronic home furnishing retailers. Our most decently profitable clients operate above 48 percent and many seek to crest the 50 percent gross margin threshold for any period of time.

Even though pricing at a number produces 50 percent margins, a business will never finish there at the end of the day. This is due to mark downs of stagnate inventory (everyone has a few dogs on their floor), customer and salesperson negotiating, credits and sale events. To get a 50 percent gross margin on your financial statements, you need to start at least five percent on average higher for new items and best sellers.

34

FEBRUARY/MAR CH | 2015

Any retailer has the opportunity to increase margins. If you know how to dissect your inventory and sales data into its parts and can implement ongoing improvement systems, you will get results.

Here are some hints: • Start with your proven best sellers. This is the low-

hanging fruit. They are your current producers. Price right. I won’t tell you not to discount, but I will tell you not to offer deep discounts.

• Look at how you sell special order product. There is a lot

of variety in customizing product. There is definitely more work and added employee time costs. Establish proper and non-standard price determination tactics.

• Private-label. Your brand is everything.

• Listen to vendor pricing advice. Then make your own

decision. It is an advantage for you both to maximize return on investment.

• Watch your mark-downs. Try to take action faster on

slow-moving merchandise at a smaller reduction.

Don’t wait for a seasonal slash-and-burn event—that slows both margin and inventory turnover. Instead, save your slash-and-burn sales for the total dogs.

• Build your selling culture around margins. Align the

self-interests of the business with the sales managers’ and sales people’s compensation.

• Maximize warranty and protection sales.

• Constantly tweak inventory, selling systems and procedures to produce improving results.

A member of a performance group that I lead, and one of the smartest guys I have encountered in retail, was asked by our other members: You have 56 percent gross margin now. You have lots of competition. Where is the top for your gross margin percentage?

He laughed out loud. “I have no idea,” he said. “But—we are going to keep on pushing it up until we find out!”

That is the attitude of success.

Decide on that attitude first, and higher gross margins and profits will follow.

www.retailerNOWmag.com

David McMahon is a management consultant and certified management accountant. He is director of consulting and performance groups for PROFITsystems, a HighJump product. You can reach him to discuss improving your situation at david.mcmahon@ acellos.com.

NAHFA FEATURED PRODUCT Protect your customer’s investment.

Delivery Products Available at Member Discounted Prices!

Doorjamb Protection Pads

Move furniture through entryways and stairways without damage Item# W220

Doorjamb Protection Pad

$19.95

Item# W250

Individual Packing Blanket

$9.99

Home Delivery Gloves Item# W4002 Men’s Reversible String Knit with Dots $6.85 (6 pairs/pack) Item# W4000 Lightweight Disposable Home Delivery Gloves $4.90 (12 pairs/pack)

Floor Protection Item# W3100

Lightweight Disposable Delivery Shoe Covers $18.00 (50 pairs/pack)

Item# W4050

30”x200’ Carpet Shield

$24.99

Look no further than your association to help you

Sell More, Make More and Keep More CALL TODAY TO PLACE YOUR ORDER!

Exclusive pricing for association members! Non-members add 25%.

Phone: (800) 422-3778 or (916) 784-7677 Fax: (916) 784-7697 Website: www.nahfa.org Email: orders@nahfa.org Address: 500 Giuseppe Ct, Ste 6, Roseville, CA 95678

RetailerNOW™ is the only association publication delivered to dedicated home furnishings retailers across the U.S. and Canada. We’re devoted to helping furniture retailers grow their businesses—just like you are.

Reach your potential customers: Breakthrough Online

CUSTOM FURNITURE CONF

Furniture Customizati

on Solution “Retailer of the Year” JUNE Issue

IGURATION AND VISUA LIZATION The new Design Your Own merchandising and eCommerce solution enables consumers, sales associates, and interio r designers to go beyon fabric and finish chang d es to customize and visualize various option s of their furniture selections.

Vol. 3 Issue 4

 More than 12,000 targeted subscribers—CEOs, presidents, owners, dealmakers

es powerful yet simpl e to use MicroD Accessorize design and merchandis ing tools that can enhan ce the user-experience .

“AFTER THE SALE” MAY Issue

 Immediately visua CONNECTING THE ENTIRE HOME FURNISHINGS INDUSTRY lize furniture style & fabric  Customize furnit Streamline communication, increase process visibility, & increase efficiency for retailers, ure with a click of a mouse  Get dynamic pricin manufacturers, & logistics providers. g updates at every step  Simulate floor, wall, trim colors Backed by the unparalleled industry expertise and innovation of MicroD, this advanced,

cloud-based solution manages over 100,000 EDI transactions each day and empowers more than 650 trading partners to:       

 Changes fabrics & finishes  Add a rug  Purchase online or in-store

DAVE & CYNDI HARKNESS

TOM OLINDE

MicroD has 20 years proven success as a technology partner for retailers and manufacturers in the home furnishings industry. We’re a fast moving, big thinking company that drives business outcomes, builds customer loyalty, and furthers revenue growth.

For more information email: Solutions@MicroDinc

.com or call: 800-964-3876

MicroD-6-2014-RetailerN

OW.indd 1

5/1/14 9:16 AM

3

7/8/14 3:14 PM

For more information email: Solutions@MicroDinc.com or call: 800-964-3876

MicroD-5-2014-RetailerNOW.indd 1

COVER_RN_JUNE.indd

3/25/14 2:54 PM

MAY 2014

 Insightful articles encourage retailers to take their www.MicroDinc.com businesses to the next level and give them the tools to do it Discover us.

Discover us.

www.MicroDinc.com

JUNE 2014

The integrated company for the home furnishings world.

HARKNESS FURNITURE

OLINDE’S FURNITURE

Identify new business and service opportunities Enhance partner collaboration and relationships Permanently remove time and cost from processes Ensure successful transactions and retail compliance Gain insight through advanced dashboards and analytics Increase accuracy, reduce errors and cycle time Achieve any-to-any connectivity with RMS, ERP, and more

 NAHFA members boast $12 billion in annual sales

OUR RETAILERS OF THE YEAR

MAY 2014

Grow your Business withInaaddition to rendering the precise look of custom products prior to purchase, Design MicroD EDI Value Chain.Own Your also includ

The Simple Way to Get Connected

JUNE 2014 Vol. 3 Issue 5

 95% of our readership are pre-qualified home furnishings retailers

Sophisticated Furni ture Customization Tool to Benefit Manufactu rers, Retailers, and Empower Online Shop pers.

COVER_RN_MAY.indd 3

7/8/14 3:13 PM

 A mobile ap that keeps NAHFA members, readers and the industry plugged in to RetailerNOW and the NAHFA

Go to RetailerNOWmag.com to get the app!

Operations

GO ABOVE AND BEYOND EXPECTATIONS AND WATCH THE WORD SPREAD.

BY TOM SHAY

When a customer has an enjoyable experience in your home furnishings store they are bound to tell others about it. People tend to remember the sales person who made the extra effort because, unfortunately, great customer service is a rarity. Whether it was to get and use your name, or demonstrate a general interest in taking care of you, great customer service becomes an experience we want to tell others about.

The person who tells others about their experience is often referred

www.retailerNOWmag.com

F E B R U A R Y / M A R C H | 2 0 1 5

37

Operations

to as a ‘sneezer’. While a person who is actually sneezing is spreading germs, the person who is sneezing about your business is indirectly telling friends and those they meet why they should do business with you. No matter how much you advertise, the saying is true that you cannot buy what this sneezer is doing for you.

Recently I had the opportunity to visit a home accessory store.

It was not an intentional visit, but an attractive window display caused us to make a detour. This is where I met Marriah.

Her youthfulness was not a hindrance as she gracefully asked about where the accessory was going to be displayed. Within a minute we found ourselves looking at additional items.

Somehow, during the interaction we learned her name, she learned ours and where we lived. Marriah was proud of the business she worked for, how long she had worked in the store, and she shared that there was another location that was even closer to our home.

Amazingly, and with a lot of enjoyment, the single purchase became multiple items. While we expected to walk in and would likely purchase the item we had initially seen in the window, what would have been a 10-minute shopping experience consumed most of an hour.

All the way home, the discussion was more about Marriah than about the new store we had found and the items we were now going to place about our home.

A week later as we were in the neighborhood of their other location, we made a point to stop in and shop. The second location had a different sales floor layout, but much of the merchandise was the same.

The big difference was Marriah; or the lack thereof. While the merchandise was well displayed and we saw a couple of items we had not seen in the original store, the experience was much like what we all experience in most other stores.

The staff welcomed us and politely completed purchases. We stayed a bit to give all of the staff an opportunity to impress us as we watched them interact with customers, but there was no one like Marriah. It was an easy decision for us that while we liked both of the stores, our next shopping excursion would find us taking a longer trip because we wanted to see Marriah and have her help us again.

Both shopping trips reinforced two important points about retail and customer service. The first is that great customer service, the kind of service that inspired this column, is not dead. A second confirmation is that while Marriah was a great hire by the owner of these stores, the owner has not found a way to hire more Marriahs.

I suspect this business does not have a plan for helping more of its employees become like Marriah. Because we, like most everyone else wanting great customer service, hope that the owner of the business recognizes the difference Marriah is making. We also hope there is an incentive program to reward Marriah for her efforts.

Doing so means that this business is going to benefit from more people who become sneezers. As it currently stands, this family of sneezers will continue to tell others they should travel a bit further so they can experience Marriah.

The reason to return to this shop started with the right item that was well displayed.

The shopping experience was wonderful because of the great customer service and became the reason we will go back.

Marriahs are a rare breed. You can’t easily find them, but you can create them. It is going to take some effort on your end.

You can’t teach personality like Marriah, but you can hire for personality and you can teach customer service.

Next issue, I’ll talk about ways you can implement a training program that can create the customer service your home furnishings business needs.

Subscribe to Tom Shay’s e-ret@iler, a free monthly newsletter packed with tips for improving the profitability of your store, at profitsplus.org.

38

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

MORE Programs – MORE Benefits – MORE Savings These exciting and robust programs are open to all NAHFA members and are not available to outside brokers.

BUSINESS INSURANCE PROGRAM

Together with Association Insurance Services (AIS) and their program with The Hartford, we bring you the only Home Furnishings Industry Business Insurance Program. We are building the largest volume to control YOUR pricing, giving you a greater voice. We offer pricing concessions, dividend programs and special forms of coverage.

There is a difference between an “offering of insurance” and a “program.”

• Most associations and buying groups offer a service through an endorsed agency.

• A program offers a special classification with the insurance carrier, creating buying volume.

Choose from competitively priced plans for:

Ask About Our HEALTH INSURANCE PROGRAM

Call (800) 422-3778 to take advantage of these programs

h h h h h h h

Property and casualty Commercial auto Workers’ compensation Employment practices liability General liability Umbrella And much more

“Thank you so much for putting me in touch with Jim Saris about our workman’s comp insurance. He and his team Tammy Post, who is a pleasure to work with over the phone and email, saved us $4200.

It is great to have a service thru our association that helps you with these kind of savings. Thanks again for all that the NAHFA does to make business easier and profitable.”

—Dianne Ray, Garden City Furniture, SC

The NEW North American Home Furnishings Association is committed to helping you Sell More, Make More and Keep More

Membership

How Does Your Store Stack Up?

NAHFA resurrects the Retail Performance Report for industry benchmarking.

BY KAPRICE CRAWFORD

For almost 40 years, the Retail Performance Report was

the standard for industry benchmarking, and it’s back by popular demand. This year the North American Home Furnishings Association is using cloud survey and reporting technology and top industry financial consultants to compile the survey and interpret the results, which will set the stage for improving your business.

The Retail Performance Report is an in-depth, retail-specific report generated exclusively for our industry. It is designed to help home furnishings retailers evaluate their performance relative to top performing and average firms in the industry. Best of all, the report is free for NAHFA members.

The study will include critical performance metrics. By showing your store’s strengths and weaknesses, the Retail Performance Report will help you plan, set goals and strategies and outline specific tactics.

The survey will include operational and financial data from retailers across North America and will be organized by key performance measures that impact your profitability and productivity.

Here are some of the highlights of the report: `` Sales Performance Indicators—average sale, close rate, traffic, revenue per guest, sales per square foot and sales per salesperson. `` Profit and Loss Comparison—gross margin and net income. `` Operating Expenses—administrative, occupancy, advertising by type, selling, warehouse, delivery and finance. `` Balance Sheet Strength—financial ratios, cash flow, deposits, receivables, payables and debt. `` Inventory Management—gross margin by category and warranty performance. `` Return on Investment—GMROI by category. `` Personnel productivity by department.

40

FEBRUARY/MAR CH | 2015

NAHFA members who take part in the 2015 NAHFA Retail Performance Report survey will receive the 2015 NAHFA Retail Performance report free (a $199 value). For $99 you will also receive personalized benchmarking (a $299 value), your performance metrics with results compared against average and high profit results. Want more? For $199 you will receive customized feedback with your personalized benchmarking data (a $399 value).

David McMahon and Wayne McMahon, certified management accountants and furniture industry management consultants, will provide advice and opinions on how to take actions of improvement specific to your store.

All NAHFA members can participate. When you receive the survey invitation forward it to the appropriate person on your staff to complete. All your information and data will be sent to and compiled by PROFITsystems Consulting, the firm we have selected to conduct this confidential study. You do not need to be a PROFITsystems client to participate and all information will be kept confidential and shared only with you.

The survey promises to be easy and self-explanatory, and should only take approximately 20 minutes to complete online. The results will be compiled over the next few months. The final report will be released to each participant.

Don’t wait to take the survey. The success of this study is important for the home furnishings industry. Your participation will strengthen both your company and the industry as a whole. You cannot get this complete industry-specific information anywhere else. If you have not received your emailed invitation and would like to participate in this industry survey, please contact Kaprice Crawford, NAHFA Membership Director at 800.422.3778, ext.

102 for details.

For more information about this or any of NAHFA’s membership programs, call our membership team leader, Kaprice Crawford, at 800-422-3778.

www.retailerNOWmag.com

Learn

Get Your Spring On!

Achieve

Network

Summer Golf Events

March 3, 2015

Industry Open House, Paradise Valley, AZ 6:00 – 8:00 p.m.

5926 E. McDonald Drive Paradise Valley, AZ 85253 Hosted by Claudia LeClair, Fiesta Furnishings Food, fun, music, raffle prizes and more!

March 26, 2015

Dallas Region Lunch & Learn, Dallas, TX The Inside Story: A Tale of Innovation Alissa Ahlman, General Merchandise Manager, At Home 11:30 a.m. – 1:30 p.m.

Dallas Market Center, Seasons Gallery

May 5, 2015

Furniture Fiesta @ the Rockies Game, Denver, CO

June 8, 2015

City of Hope’s 24th Annual West Coast Golf & Tennis Tournament Coto de Caza, CA Coto de Caza Golf & Racquet Club

June 9, 2015

May 17-19, 2015

Pilgrim Furniture City Annual Golf Tournament, Southington, CT

May

Northwest Furniture Dealers Golf Classic Circling Raven Gold Resort, Coere d’ Alene, ID

Home Furnishings Networking Conference, Walt Disney World, FL Mall of America Scavenger Hunt

August 19, 2015

Check out all that we have to offer at www.nahfa.org

Retailers interested in attending any of these high-impact events can visit www.NAHFA.org for event details and registration, or call us at (800) 422-3778.

Operations

WHAT WOULD DISNEY DO?

Disney’s Lee Cockerell argues there’s no magic behind good customer service— only hard work. And it starts at the top.

BY ROBERT BELL

W

hen it comes to customer “Is the customer always right?” Cockerell service, are you practicing asks. “Of course the answer is no. But on the sales floor what you does that customer have a credit card? The preach in the employee answer is yes, and if you want to keep that lounge? Lee Cockerell, the former ex- customer and their credit card coming back ecutive vice president of operations for to your store you need to find alternatives the Walt Disney World® Resort, says the to making them happy—even if it’s going knee-jerk reply of many business leaders to take the next three weeks.” is “Absolutely!”

Cockerell says 70 to 75 percent of Disney’s Yet Cockerell knows better. customers are repeat customers. “That might be unthinkable right now in your “If you follow the leader around for a day furniture store, but it’s not impossible,” in their office or furniture store you find Cockerell says. Hiring the right employees that what they say and what they do are is important, but so is having the right sometimes two very different things,” says managers to lead them, he says.

Cockerell. “They might tell their employees that it is absolutely forbidden to send or “Think of you and the leaders in your busireceive texts while out on the sales floor. ness as parents,” says Cockerell. “Some That’s a good policy to have because you parents want to be their children’s best want your staff’s attention focused on the friend, but it can’t always be that way. Your customer. But I can’t tell you how many company’s leaders need to show the rest times those same leaders pull out their of your employees what’s right and wrong phones on the floor and start texting. Oh, through their own actions.” sure, they’ll tell you it’s different for them because they’re big, important people, but At the HFNC, Cockerell will spend an what kind of message do you think they are evening talking about what good customer sending their employees?” service looks and feels like. He’ll also talk about the importance of training your emCockerell knows a few things about the ployees how to achieve that level of service messages we send—or don’t send—to on a daily basis. “It’s not enough to hire customers, having spent the past 40-plus nice people anymore,” he says. “Nice people years working with Marriott hotels and, who aren’t trained are a disaster waiting to most recently, Disney’s resorts. More happen because niceness only goes so far.” often than not, an employee learns customer service skills not from a book, Good customer service is as much an investbut from their leader or supervisor who ment as lighting, technology and advertising. models how service should be carried And like those elements of your business, out. Cockerell will share his insights Cockerell says you need to educate up front. on blending leadership and customer “You can’t perform your customer-service service at NAHFA’s Home Furnishings training on your customers,” says Cockerell.

Networking Conference (HFNC) in “Would you want a surgeon training for a Orlando on May 19. procedure on you?”

42

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Former Disney executive Lee Cockerell is one of many business and industry experts sharing their thoughts and talents at NAHFA’s Home Furnishings Networking Conference, May 17-19 at Walt Disney World’s Coronado Springs Resort in Florida.

Conference attendees will enjoy exclusive access to Disney Institute Main Stage sessions, behind-the-scenes tours and park tickets (for attendees staying at the Coronado.) For more information and registration visit thehfnc. com or call 800-422-3778.

HOME FURNISHINGS

Our Association gratefully recognizes all of our sponsors whose dedication and commitment have strengthened our industry.

Signature Sponsor

Serta Mattress Company

Premier Sponsor Furniture Today Surya Rugs

Titanium Sponsors

aspenhome Coaster Company of America Cory 1st Choice Home Delivery Emerald Home Furnishings Furniture Wizard Synchrony Financial International Market Centers Jaipur Rugs Inc. Leggett & Platt MicroD, Inc. Myriad Software Nourison STORIS

Platinum Sponsors

ACA Advertising Concepts of America • American Leather Ashley Furniture Industries • Best Buy for Business Furniture of America • FurnitureDealer.net • High Point Market Authority Netsertive • Northwest Furniture Express • PROFITsystems, Inc. • R & A Marketing Simmons USA • Steve Silver Co.

Gold/Silver/Bronze Sponsors Aramark • BrandSource AVB • Color Ad • DSI Companies • Horich Hector Lebow Advertising Mail America • ShockWatch • Therapedic Idaho • TruckSkin, LLC.

To become an industry sponsor contact: North American Home Furnishings Association 800.422.3778 or email: cwilliams@nahfa.org

*List as of November 24, 2014

Left to right: Jerome Baer, vice president of merchandising and marketing, Beverly Fiskaali, vice president, Ira Baer, CFO, Darrin Sutton, floor coordinator, and store manager Jaculin Heck helped open Baer’s new Casselberry store in January.

vvAt Garden City, Bedding Sales Double After Mattress Department Undergoes Redesign vvBaer’s Furniture Opens New Florida Store that Anchors Casselberry Shopping Center NAHFA retailer Baer’s Furniture opened a new store in Central Florida at a newly acquired shopping center in Casselberry.

According to the Orlando Sentinel, Baer’s will anchor the 154,000-square-foot Greater Marketplace shopping center, already home to more than a dozen other businesses, including Bank of America, Verizon Wireless and Planet Fitness.

The 50,000-square-feet Casselberry showroom opened Jan. 24.

Baer’s recently closed a showroom in Altamonte Springs — about four miles west from the upcoming store — because its lease expired, said Baer’s chairman Bobby Baer. Employees who worked in Altamonte Springs move to the Casselberry location, Baer said.

The Casselberry shop will start off with about 30 employees, Baer said. The showroom will feature pieces from brands such Tommy Bahama Home, Century and Bernhardt.

Baer said the company plans to eventually remodel and update the Greater Marketplace shopping center, which benefits from high traffic visibility and is accessible to customers traveling from central and northeastern Orlando.

44

FEBRUARY/MAR CH | 2015

A year after Garden City Furniture unveiled its redesigned mattress department, NAHFA member Dianne Ray says customer perception of the furniture store has changed and bedding sales have doubled.

Ray hired retail strategist Connie Post, chief executive of Affordable Design Solutions, to help renovate the store, a fixture for shoppers in and around Myrtle Beach, S.C. since the 1950s.

Post revamped the 3,800-square-foot mattress department featuring 40 beds, with brands including Sealy, Stearns & Foster, Serta iComfort, Tempur-Pedic and ParkPlace. The resulting spa-like space is centered by a test area where new products are set off by white, mother-of-pearl vinyl and faux wood floors, sleek, contemporary lighting and Ralph Lauren metallic paint. Walls are covered in a silver metal grass cloth, and sheer, white draperies separate the mattresses to provide a sense of privacy while shoppers explore the latest technologies.

Ray says the new look makes it easier for customers to shop. “The design has made the shopping experience better for the customer, in that the presentation makes it easy to go not only from vendor to vendor, but from comfort level to comfort level as they choose their mattress.,” she said. “The atmosphere is relaxed and customers are encouraged to take their time.”

www.retailerNOWmag.com

“Let me tell you why Lynch is

your best choice

just as it has been for many of this country’s more successful furniture retailers.

vvNAHFA Member Ivan Smith Jr., is Named Shreveport Business Leader of the Year NAHFA member Ivan Smith Jr., is this year’s Business Leader of the Year as selected by by the Shreveport (La.) Chamber of Commerce.

Smith’s father, Ivan Smith Sr., started the family business in 1961, but it was Ivan Smith Jr., who grew the business into what it is today. Ivan Smith Furniture has 48 stores – 53 counting the stores operated under Ashley Furniture. The company has stores in three states with more than 700 employees.

The secret to Smith’s success is no secret, really. All you need to do to be a successful leader is be willing to take risks and “be brave,” Smith told the Shreveport Times. Smith said he looks for those strong character, as well as confidence and honesty, in his employees.

“You have to find the right personality; one who wants to make a commitment, make it work,” he said of the store managers for Ivan Smith Furniture. “You can teach a lot of things, but personality is not one of them.”

Judson Lynch, Co-CEO For over 100 years, the family-owned Lynch Sales Company has delivered on our promise to help our retail clients succeed through Lynch promotional sales, or close with dignity with our complete closeout sales. I am particularly proud that many of those storeowners reward us with their repeat business, time and again. Let them tell you why they prefer the integrity of our business model and our one-page contract over that of our competition.

To hear more from successful retailers, visit www.lynchsales.com/ testimonials

Smith said he offers guidelines for his managers, but is careful not to layer those guidelines with too many rules. “Too much structure gets in the way,” he said.

It’s not only Smith’s business success, but his community involvement that helped Smith win the leadership award, said Dick Bremer, chamber president. His positive outlook and enthusiasm has been spread among assorted nonprofit groups and boards through the years.

“He has done that over the years very successfully,” Bremer said. “Believe me, Ivan Smith is in good company.”

Serving the U.S., Canada and the U.K. Call (800) 824 - 2238 or www.LynchSales.com Copyright 2014 Lynch Brothers Licensing Corporation

The Scoop

vvNew CEO Hawley Pledges to Continue Building The HPMA put the 2015 team together by using a combination of self-identified and well-known candidates, with an impartial Weir’s Furniture Brand, Customer Experience NAHFA Member Weir’s Furniture has announced Jamie Hawley as the family-owned company’s first chief executive officer. Hawley assumed responsibilities in January. Craig Kilgore, a long-time Weir’s employee, has been named chief operating officer.

Hawley, 54, brings more than 25 years of strong retail industry experience across multiple sectors for Fortune 500, public and private corporations to his new role. He is the Dallas-based store’s first CEO who is not a member of the Weir family.

An employee with Weir’s since 1989, Kilgore most recently served as interim CEO. Also formerly the manager of the retailer’s flagship store on Knox Street, he brings great depth to his new role as COO, having held several different positions during his 25 years with the company.

vetting and selection committee, and sought a diverse and geographically balanced group. Here are the trendsetters and how you can follow them: • Michelle Jennings Wiebe, ASID (FL), Style Spotter “Emeritus”, Studio M, @StudioM_ • Arianne Bellizaire (LA), Inspired to Style, @InspiredArianne • Kati Curtis (NY), Kati Curtis Design, @DesignerKati • Beth Dotolo (WA), Pulp Design Studios, @PULPdesigns • Lori Gilder (CA), Interior Makeovers Inc., @LoriGilder • Patti Johnson, IDS, DSID (OH), Patti Johnson Interiors, @PJohnsonInt • Courtney Lake (CA), Monogram Décor, @CourtneyOutLoud • Jonathan Legate (Nova Scotia), Jonathan Legate Interior Consultation, @JonathanLegate • Leslie Hendrix Wood (TX), Hadley Court, @Hadley_Court

Hawley’s first priority will be to continue to build the Weir’s brand and its well-known customer service experience while maintaining its competitive prices in the marketplace. Hawley is an innovative strategist with a career history of managing operations exceeding $6 billion in sales and more than 1,000 employees. Known to produce v vRotmans Furniture CEO Launches Ecosubstantial profitability with customer-focused brand strategies, he Friendly Materials Distribution Firm also has diverse leadership experience and a highly respected reputa- Steve Rotman, president and CEO of Rotman’s Furniture, has tion that fits well into the Weir’s family leadership team. launched Nature’s Home Solutions, a distribution company devoted to identifying and bringing to market innovative, sustain“We are extremely pleased to add a proven visionary to lead the ably sourced, eco-friendly materials and components for use in Weir’s Furniture team,” said Todd Moore, Weir’s Furniture chair- the home furnishings, apparel, and other markets. man of the board and third-generation family member. “Jamie is an excellent fit with Weir’s Furniture and his background makes “As a retailer, we recognize our customers increasingly want natural, him the right person to lead our company to the next level of its sustainable, allergy-friendly furnishings for their homes that are growth and development, while continuing to embrace and up- healthy, environmentally responsible, and safe,” said Rotman, an hold our core values of providing quality at exceptional value and NAHFA member. “Often products that meet those criteria don’t service to our customers.” exist or are hard to find, so we created Nature’s Home Solutions with the mission to seek out eco- and allergy-friendly, certified Prior to joining Weir’s Furniture, Hawley was a corporate consul- sustainable, high quality, durable materials and materials technolotant and interim executive for companies in the food and bever- gies and bring them to market.” age, telecommunications and restaurant industries along with a nonprofit ministry organization.

Tomas Eisenberg will oversee business and operations for Nature’s Home Solutions. Tom is the founder of Global Bedding Connections, a bedding consulting firm, and previously was the vice president of strategic marketing for Latex International, the vvHigh Point Market Authority Announces world’s largest talalay manufacturer of latex mattresses and pillows.

2015 Style Spotters

NHS aims to improve the environment across all industries. Its first The High Point Market Authority has announced its 2015 step will be in the home furnishings industry. NHS has signed its Style Spotters Team, the home fashion trendsetters who will first distribution agreement with Vystar Corp, the manufacturer of showcase their favorite products and trends from both markets Vytex Natural Rubber Latex. Vytex is a multi-patented, all-natural on Pinterest. raw material that contains significantly reduced levels of non-rubber particles and proteins found in natural rubber latex.

46

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

Calendar & Ad Index

MARK YOUR CALENDAR FOR THESE INDUSTRY EVENTS Tupelo Spring Furniture Market

Showtime

Summer Las Vegas Market

February 5-8

May 31-June 3

August 2-6

Tupelo, Mississippi tupelofurnituremarket.com

High Point, North Carolina showtime-market.com

Las Vegas lasvegasmarket.com

High Point Market

Canadian Furniture Show

April 18-23

Tupelo Fall Furniture Market

June 4-7

High Point, North Carolina highpointmarket.org

August 20-23

Toronto, Ontario canadianfurnitureshow.com

Tupelo, Mississippi tupelofurnituremarket.com

International Contemporary Furniture Fair

Dallas Total Home & Gift Market

May 16-19 New York, New York icff.com Home Furnishings Networking Conference May 17-19 Orlando, Florida theHFNC.com

June 24-30

International Casual Furniture & Accessories Market

Dallas, Texas dallasmarketcenter.com

September 16-19 Chicago, Illinois casualmarket.com

Atlanta International Gift & Home Furnishings Market July 7-14

High Point Market

Atlanta, Georgia americasmart.com

October 17-22 High Point, North Carolina highpointmarket.org

Contact Our Advertisers Canadian Furniture Show

(866) 468-4436 canadianfurnitureshow.com CanadianFurnitureShow @CdnFurnShow Page 23

Connie Post

(304) 736-7283 conniepost.com Page 21

Furniture Wizard

For information on advertising in RetailerNOW contact Michelle Nygaard (916) 757-1160

(619) 869-7200 furniturewizard.com furniturewizard @furniturewiz Page 7

High Point Market

(336) 869-1000 highpointmarket.org http://tinyurl.com/ HighPtMarket @hpmarketnews Page 5

www.retailerNOWmag.com

Jaipur Rugs

(404) 351-2360 jaipurrugs.com jaipurlifestyle @jaipurlifestyle Inside Back Cover

Northwest Furniture Xpress (828) 475-6377 nwfxpress.com Page 13

ProfitSystems

Lynch Sales

(800) 888-5565 profitsystems.com PROFITsystems @PROFITsystems Page 19

MicroD

(888) 4-STORIS storis.com STORIS.solutions @STORIS Page 9

NAHFA Sponsors

(877) 275-7847 surya.com SuryaSocial @SuryaSocial Inside Cover

(616) 458-6662 lynchsales.com lynchsales @lynchsales Page 45 (800) 964-3876 microdinc.com microdinc @microdinc Back Cover (800) 422-3778 retailerNOWmag.com retailernow @retailerNow Page 43

STORIS

Surya

F E B R U A R Y / M A R C H | 2 0 1 5

47

The Now List A quick dose of fun facts, random trivia, and useful (or useless) bits of info

The Now List That’s Nuts!

Metal Beauty

Frank Tjepkema’s Bronze Age collection was on display last month at Meet My Project in Paris; it ran parallel to Maison & Objet. Each piece is hand-crafted in bronze.

Body Art

18% of the U.S. population has 6 or more tattoos.

Good for Tourism

Berlin, MD was voted the coolest small town in America for 2014 in Budget Travel’s contest. Rounding out the top 10: 2. Cazenovia, NY; 3. Buckhannon, WV; 4. Travelers Rest, SC; 5. Mathews, VA; 6. Nevada City, CA; 7. Rockport, TX; 8. Estes Park, CO; 9. Galena, IL and 10. Elkin, NC

“It Isn’t Safe to Walk the City Streets Alone”

Nearly one-quarter of the world’s hazelnuts (100,000 tons a year) are used to make Nutella.

Luxe Markets

New York, Chicago, Las Vegas, Miami and San Francisco are the top locations for luxury retailers to build stores, followed by Dallas, Houston and Orlando.

Making the Grade

Designer Eli Chissick’s Gradient coffee table is made from 10 veneers celebrating the natural beauty of wood, including MDF, oak, wenge, maple, walnut and emboya.

The table is available in North America via Switzer cult creative.

Glass Half Full

The end of 2014 saw U.S. small business optimism the highest it’s been since early 2008. Owners’ plans to create jobs are the most positive since 2007.

Picture Perfect

A picture’s worth a thousand words, or in this case 140 characters: Instagram is now bigger than Twitter with 300 million monthly users compared to Twitter’s 284 million.

Eddie Money may be right—at least 37% of American adults agree with him and say there are areas within a mile of their homes where they don’t feel safe walking alone at night.

Tweet Tweet

98% of the world’s top brands have a Twitter account and 94% tweet at least once a day.

Cricket Anyone?

236,000 people are on a waiting list to join the Melbourne Cricket Club—the largest sporting club in Australia. Just added to the list? Your wait is 40 years.

A Matter of Perspective Vivian Chiu’s Inception Chair is actually chairs

within chairs that are progressively smaller. Hand cut grooves, notches and pegs make up the mechanism that allows the chairs to slide into place and be taken apart and put back together easily. The chairs are made from ash.

Sources: Budget Travel, Tjep.com, Gallup, Simply Measured, Melbourne Cricket Club, Elichissick.com, VivianChiudesigns.com, NPR, Pew Research, Wells Fargo/Gallup Small Business Index, JLL’s The New World of Retail report, Adweek

48

FEBRUARY/MAR CH | 2015

www.retailerNOWmag.com

GET UNTAMED

See us in High Point 4/18 - 4/23

Š 2015 National Geographic Society. NATIONAL GEOGRAPHIC and Yellow Border Design are trademarks of the National Geographic Society, used under license. All rights reserved.

JaipurRugs.com

OmniVue

by

new designs that communicate your unique branding.

large product images. clean lines. dynamic navigation.

mobile-friendly. responsive designs. social media integration.

OmniVue is a merchandising and eCommerce website solution that improves the shopping experience and supports the common goals of manufacturers and retailers. Find out more: solutions@microdinc.com