July 2016 RetailerNOW by RetailerNOW

JULY 2016

INSPIRATION+EDUCATION

Honoring Their Roots HFA celebrates the Wo brothers and C.S. Wo & Sons

Mike Wo of C. S. Wo & Sons HFA 2016 Retailer of the Year

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TAKEAWAYS 1 2 3 4 5

Invest in rugs. 16 Target profitable customers. 20 Sweat the small stuff. 22 Plan for your business’ future. 24 Protect your image. 32

CONGRATS The Wo brothers —Bub (left), Mike, Scott, Wendell and Bennett — of C.S. Wo & Sons are one of the HFA’s 2016 Retailers of the Year.

10 WHAT’S INSIDE 2. 4. 16. 24. 26. 28. 32. 34.

HFA President’s Letter Editor’s Letter Product Focus: Area Rugs Family Matters: Succession Planning Next Generation: Kellen Harkness Take 2: Chapin Furniture Member Benefit: Image is Everything HFA Conference: Highlights from the HFA Networking Conference in Long Beach, CA 38. Government Action: Taking a Stand in Washington 42. HFA Community

DEPARTMENTS Cover Story 10. Celebrating C.S. Wo & Sons Sales & Marketing 20. Draw a Line in the Sand Operations 22. Are You Well-Suited for Retail? 30. Finding Your Purpose

CEO POWER Sharron Bradley, HFA, and Andy Counts, AHFA, bring the industry together in D.C. to meet with policy makers.

RetailerNOWmag.com

JULY | 2016

“

President Jeff Child RC Willey

Let no one be ashamed to say yes today if yesterday he said no. Or to say no today if yesterday he said yes. For that is life. Never to have changed—what a pitiable thing of which to boast! — Johann Wolfgang Von Goethe

President-Elect Steve Kidder Vermont Furniture Galleries

Our industry is changing—are you?

Vice President Jim Fee Stoney Creek Furniture Secretary/Treasurer Sherry Sheely Sheely’s Furniture Chairman Marty Cramer Cramer's Home Furnishings

Jeff Child

Executive Staff

HFA President

Sharron Bradley Chief Executive Officer sbradley@myhfa.org Mary Frye Executive Vice President mfrye@myhfa.org Membership Staff Jana Sutherland Membership Team Leader jsutherland@myhfa.org Jordan Boyst jboyst@myhfa.org Sherry Hansen shansen@myhfa.org Michael Hill mhill@myhfa.org Dianne Therry dtherry@myhfa.org Kaprice Crawford Director of Education kcrawford@myhfa.org Please call 800.422.3778 for membership inquires.

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he Home Furnishings Association just finished another successful conference in Long Beach. We should never stop learning in our personal lives and in our business lives. These conferences are a great way to re-energize, see old friends, meet new ones, and celebrate the success of others. As always I learned a lot, both from the presenters and also from the chance to network with others in the industry. Maybe because I’ve been thinking a lot about this lately, but the theme of the conference for me was "change." Everything we know is changing. How we live our lives, how we run our businesses, how we communicate with our customers, and how we ourselves learn. How we deal with three or even four different generations working at the same time. How we get our arms around that elusive thing called social media. How we contribute to our communities and help others around us. All these things along with many more were addressed at conference. There were breakout sessions to deal with mundane things such as operational best practices, cash flow, how to merchandize your store, credit issues, and everything else you can think of that relates to running a home furnishings business. Retailers, vendors and suppliers all joined together and shared insights and lessons learned on these topics. We’re fortunate that, as members of the HFA, we have access to so many experts who can help us grow our business. There was one thing that was disappointing to me and that was I wish we had more retailers in attendance. Don’t get me wrong; we had a good turnout, but I know there are many companies out there that would benefit had they attended. In our fragmented industry the information that was available at conference is hard to get. I know it’s sometimes hard justifying the time off, the cost of travel, and the conference itself, but I promise if you attend with a desire to learn and get involved, it will be well worth the cost. No matter what size or type of business you run, you’ll learn things that will make your company better. With all the change and challenges we face as an industry, it only makes sense that if we all pull together and learn from one another, the industry and our companies will be stronger. So here’s my pitch: I hope to see you at our next conference in San Antonio, June 4-6, 2017. Not only will we learn, but Tex-Mex food is pretty good, too. We’ll all be better by attending.

Jeff Child

jeff.child@rcwilley.com

JULY | 2016

”

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JULY | 2016

“ RETAILERNOW STAFF

Your market has a free choice, and only by supplying what the market wants, and not by your efforts to impose your merchandise, will you get your maximum share of the market’s potential.

Dan McCann Publisher dmcann@myhfa.org

— Walter H. Lowy

Lisa Casinger Editorial Director lcasinger@myhfa.org

”

Keep sending your stories! (Here’s one more for you)

Robert Bell Editor rbell@myhfa.org Tim Timmons Art Director ttimmons@myhfa.org Lynn Orr Business Development Lorr@myhfa.org

Robert Bell

Cassie Wardlow Digital Marketing Coordinator cwardlow@myhfa.org

Editor, RetailerNOW

RETAIL ADVISORY TEAM Carol Bell Contents Interiors Tucson, Ariz. Travis Garrish Forma Furniture Fort Collins, Colo. Rick Howard Sklar Furnishings Boca Raton, Fla. Mike Luna Pedigo’s Furniture Livingston, Texas Andrew Tepperman Tepperman’s Windsor, Ontario This Month’s Contributors

Jeff Giagnocavo, Marty Grosse, Sue MasaracchiaRoberts, Gerry Morris, Wayne Rivers, and Martin Roberts. Contact Us RetailerNOW 3910 Tinsley Dr., Suite 101 High Point, NC 27265

’m going to let you in on a little secret: I’ve got the greatest job in the world. OK, until Florida State calls and offers me the head football coaching position or I sell my house and move the family to Islamorada to start my own charter fishing business, I’ve got the third-best job in the world. But third best ain’t bad. One of the reasons I love my job is getting to talk to retailers like you every day. No, really. I love hearing your stories, your challenges and your celebrations. I love hearing how you got involved in the home furnishings business in the first place—and why you never want to leave it. I heard a lot of these stories at our annual Home Furnishings Association Networking Conference in Long Beach, Calif., in May, but I hear them every day when we’re putting this magazine out. Did you know that HFA member Steve Rotman got his start in retail selling hotdogs as a teenager? Or that fellow member Bernie Moray turned down a job in New York so he wouldn’t have to uproot his family from Michigan? Instead, he bought a furniture store. Like an old vaudeville comedian might say, I’ve got a million of ‘em—stories, that is. And I love collecting them. This month’s issue includes another. The Wo family—Bub, Wendell, Mike, Bennett and Scott—are third-generation family members running C.S. Wo & Sons in Hawaii. They also happen to be HFA’s Retailer of the Year for stores with sales of $10 million or more. Like last month’s issue profiling David and Joey Gunn, I hope you find the Wo’s story just as compelling. Both the Wo’s and Gunn’s passion for our industry is infectious. It makes all of us at RetailerNOW just as passionate about helping them grow their business. Thanks for sharing your stories with me, and if you haven’t, drop me a line.

RetailerNOWmag.com 800.422.3778

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. POSTMASTER: Address changes to: RetailerNOW, NAHFA, 500 Giuseppe Court, Ste. 6, Roseville CA 95678. If you would like to stop receiving RetailerNOW, please send an email to RNOWunsubscribe@myhfa.org.

Robert Bell

rbell@myhfa.org

© 2016 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.

JULY | 2016

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RETAILER2.0 Perfecting Personalization

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When engaging customers, how much is too much? For retailers, it’s no longer a question of whether to personalize customer engagements. Nearly half (48 percent) of customers say it’s important for retailers to provide ondemand personalized promotions when online, and 45 percent want the same options in-store, according to a recent IBM report, Shoppers Disrupted: Retailing Through the Noise. The question now is how much personalization—and what kinds—are most effective? A survey of 100 C-level retail executives by personalization provider TimeTrade revealed that 69 percent of retail decision makers believe their businesses already provide a consistent personalized experience for every customer. However, a subsequent survey by TimeTrade (State of Retail 2016) shows only 26 percent of customers feel they receive a personalized retail experience across channels. There’s a disconnect between many retailers and consumers in what constitutes a personalized experience. It’s time to bridge that gap, and we’re here to help you take your personalization efforts to a new level with the following tips:

Implement Internal Data Sharing

Don’t cross the line separating “helpful” from “creepy.” Personalization loses its potency if relevant customer data isn’t shared throughout your organization.

•

Ensure all touch points are continuously updated with the most current data about shoppers and their activities.

Practice Transparency

Today’s shoppers know retailers use personalization techniques. Even so, they want to be made aware. Be transparent about your personalization programs and their benefits, and always provide easy ways for consumers to opt out.

•

Pay Attention to Context

The same customer can welcome a personal approach in one situation (using her first name during a phone call) and dislike it in another (greeting her by name in the store). Think through each type of interaction, and train your employees how to correctly “read” the customer’s desired level of intimacy for each one.

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Ensure Data Security

It should go without saying, but all customer data needs to be protected from malicious actors. With each new layer of customer information retailers gather, there needs to be a corresponding layer of security to ensure it doesn’t fall into the wrong hands.

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(foko.co) A photo messaging app for retail teams Foko is a private photo sharing app built for retail teams for faster merchandising validation, easy best practice sharing, and internal communications. Using a familiar, Instagram-esque interface and features, team members can add photos, albums, documents, links, give real-time feedback with likes and comments, and categorize your content with #hashtags. Foko can also integrate with third-party services including inventory, POS, social media and scheduling tools. This can simplify training processes, allowing managers to share documents, videos, links and other information to achieve those critical “See what I mean?” moments when onboarding sales associates.

(skype.com) The whole world can talk for free Skype is the video conference app to beat, and has remained one the most effective and popular small business communications tools available. Whether you’re speaking with telecommuting associates or remote business partners, Skype is a great tool to help everyone stay connected to your business. Share your computer screen as well as photos and files of any size, with the person you’re speaking with or an entire group, call a group of up to 25 people and send text messages to friends. You can integrate your account with Microsoft Office and use Skype to hold online video meetings, messaging and calls with up to 250 people.

Want to share a cool app? Drop us a line at rbell@myhfa.org 6

JULY | 2016

RetailerNOWmag.com

HFACHAT

it easy for you to take a Q: Issummer vacation?

Joseph Ewald

Ewald Furniture Company Tiffin, Ohio ”I would love to take a vacation and relax, but the truth is I’m usually not able to get away much and when I do, the business is not very far from my mind. I suspect I’m like a lot of other retailers on this one. I’ve been in this business my whole life and you learn early on that the business comes before vacation or getting away. Besides, if I love what I’m doing that’s like a vacation, right?“

Chad Bergman Farnham’s Furniture Gallery Casper, Wyo.

”I don’t get a lot of time off so when I do I want to make the most of it. I’m going to Jackson, Wyoming this summer for some white water and four-wheeling. That doesn’t mean I’m not thinking about work, though. It’s always on my mind, but less so when I’m on vacation. I like to get a lot of things done before I leave so when I get back I’m not overwhelmed.“

Karen Craig

Texasfurniturerep.com Houston, Tx. ”To make a comfortable living, requires me to plan each week and day to be productive. When a retailer locks the doors at the end of a day, the reps are checking into hotels, finishing up orders and checking stock to see if the order can ship soon so a vacation is not in the plan! I hope all representatives will add the HFA’s Networking Conference in San Antonio next year to their vacation list.“

TOPSHELF Great ideas for great service (What Great Service Leaders Know & Do, Berrett-Koehler Publishers, 288 pages) First disclosure: Authors James L. Heskett, W. Earl Sasser and Leonard A. Schlesinger have never worked a day in their lives at a home furnishings store. Second disclosure: It doesn’t matter. In, What Great Service Leaders Know & Do, the authors still manage to present sound, anecdotal evidence in support of eight things that great service leaders know and do. And let’s face it: Good service is not limited to the airline industry, or the restaurant industry—and certainly not to the home furnishings industry. What works at your local diner can work in your furniture store. The authors cover every aspect of optimal service leadership: The best hiring, training, and workplace organization practices; the creation of operating strategies around areas such as facility design, capacity planning, queue management, and more; the use and misuse of technology in delivering top-level service; and practices that can transform loyal customers into owners. Using examples of dozens of companies in a variety of industries, such as Starbucks, Amazon, Disney, Progressive Insurance, the Dallas Mavericks, Whole Foods, IKEA, and others, the authors present a narrative of remarkable successes, unnecessary failures, and future promise. Great service leaders know that leading a breakthrough service is different, and they take steps to ensure repeated memorable service encounters. They also go to great pains to show that customers buy results and excellent experiences, not services or products, so leaders focus on the few things that produce results and experiences for the right customers. The authors give countless examples of how: • Great service starts with the frontline employee, and as a result leaders hire for attitude and train for skills. • Effective operating strategies have to create value for employees, customers and investors, so leaders ensure the achievement of the leverage and edge that produce win, win, win results—the “service trifecta.” • The best uses of technology so leaders use technology to elevate the most important and eliminate the worst service jobs. • Satisfying customers is not enough, so leaders take steps to develop a core of customers who are “owners.” • Great service leaders build agile service organizations that learn, innovate, and adapt. What Great Service Leaders Know & Do goes beyond the tried and true of today’s retail industry and explores the ideas needed to achieve breakthrough service in the future. Book review: bizsum.com

JULY | 2016

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i i a w a H 5-Wo

JULY | 2016

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FAMILY The “sons” of C.S. Wo & Sons, (left to right) Bennett, Bub, Wendell, Mike and Scott are one of the HFA’s 2016 Retailers of the Year.

The latest generation of family members leading C. S. Wo & Sons are five brothers who learned business and personal skills from their parents. Sometimes it was difficult telling the two lessons apart. By Robert Bell

RetailerNOWmag.com

JULY | 2016

HE HOUSE HASN’T CHANGED MUCH OVER the past 40 years. Maybe a fresh coat of paint and some landscaping—certainly some new furniture, too. The memories haven’t changed much either. Mike Wo still remembers the excitement of his parents picking him and his four brothers up Friday afternoons at school and heading straight to the family’s beach house on Kaneohe Bay in Hawaii. There the Wo family—along with aunts, uncles and cousins— would spend the weekend fishing, crabbing and water-skiing the Windex-blue waters behind the house. Just as vivid to Mike are the relationships forged over those weekends. “I remember how we all got along so well and respected each other while we were there. If there was a difference in opinion on what to do we’d talk it out and once a decision was made everyone went along with it. I’m sure there must have been some fighting or difference of opinions at some point, but I just don’t remember

it because we worked things out. It’s a wonderful house with wonderful memories.” And here Mike is quick to add: “That house and those weekends—they taught my brothers and me some wonderful lessons.” If five brothers under one roof is a recipe for conflict, what happens when those same five brothers take over the family business? In the case of the Wo brothers – Bub, Wendell, Mike, Bennett and Scott—the answer is pretty boring: not much. In fact, anyone looking for a juicy story about backstabbing, jealousy and squabbling will have to tune in to reality television. C.S. Wo & Sons, the Home Furnishings Association’s 2016 Retailer of the Year, is too busy selling home furnishings and growing their grandfather’s general merchandise store into one of the nation’s largest home furnishings empires. C.S. Wo & Sons sold nearly $80 million in furniture and accessories last year through its five stores in Hawaii and California.

CELEBRATE Bub Wo, left and his brother Mike celebrate C.S. Wo & Sons being named one of the Home Furnishings Association’s Retailers of the Year at the HFA’s annual conference in Long Beach in May.

Mike Wo on Leadership

Leadership is the key ingredient to a successful organization. It is critical in leading an organization and its people toward its mission by establishing a clear purpose, vision, principles, and expectations that are understood by all. A vibrant culture embedded with company values that encourage leadership development is essential for a healthy and growing business. Leadership is required at all levels within the organization to achieve the goals and results desired and drive the organization forward. Systems make it possible. People make it happen. Leadership makes it work.

JULY | 2016

RetailerNOWmag.com

STANDING TALL The Wo brothers are the third generation running C.S. Wo & Sons. What started as a small general merchandise store more than 100 years ago is now Hawaii’s largest home furnishings company.

And they did it by building consensus and respect into the daily decision-making process—not just among the brothers, but the company’s employees, too. “Nobody has all the answers,” says Bub, the oldest of the Wo brothers. “When there’s a decision to make, we’ll talk about it. If we can’t come to agreement the reality is the one or two people in the minority will often go with the majority. It’s just not worth the arguing or stress that comes with it.” That’s not a philosophy the brothers gleaned in business school, but rather at home. The Wo parents, Robert and Betty, established the business and family culture for the boys when they were growing up. Not just on the weekends at the beach house, but Monday through Friday at home. “Dad was the business person,” says Bub. “He was always stressing efficiency, finding improvements and pushing for innovation. Mom was the people person who brought the five of us up. She showed us how relationships work, to work as a team and respect each other.” “The result,” he says, “is we have a great business focus through Dad and a great sense of community and respect through Mom.” Mike agrees, “You really need the business and relationship

skills to succeed.” C.S. Wo & Sons traces its roots back to the entrepreneurial spirit of the early 1900s. Ching Sing Wo, the Wo brothers’ grandfather, grew up on the sugar plantation fields of Kauai, but dreamed of one day opening his own business. After saving up enough money, he moved to Honolulu and opened a general merchandise store named C.S. Wo & Brother. The store was small so he packed it with everything a family might need: hammers, saws, baby cribs, gardening tools—you name it. As Hawaii prospered, so did Wo’s business. In 1942, Ching Sing Wo transformed his general merchandise store into a furniture store. Mike likes to say his grandfather had an epiphany after selling his first large piece of furniture. After years of realizing a profit of 25 cents selling large bags of rice, Wo cleared several dollars on his first sofa sale. “We need to sell more furniture,” he said. Ching Sing Wo retired in 1948 and turned the business over to his sons Robert, Jim and Bill. A new sign went up: C.S. Wo & Sons and the store sold nothing but furniture. Robert was always looking for an advantage over his competitors. Within a year he found one. A dock strike in 1949 shut down the shipping of furniture and other products to Hawaii for six months.

Mike Wo on Customer Experience

The customer experience is one of the most important facets in our business. With the globalization of the marketplace by the internet, the customer experience is especially significant and provides an opportunity where we can best differentiate ourselves from others. The value and joy we can add to a customer’s experience keeps us relevant and helps us build life-long relationships with customers. Every team member and department impacts the customer experience and we must execute as a team to provide ultimate customer experiences that will enhance our customers’ lives.

RetailerNOWmag.com

JULY | 2016

Instead of waiting it out, Robert bought up local timber and started manufacturing furniture locally. The Wos soon discovered a love for manufacturing, and their new perspective led to the company’s successful development of direct import programs and overseas expansion. In 1957, while Japan was still recovering from World War II, Robert took American designs to Asia and made the furniture to their specifications. This was the early stages of what would later become Universal Furniture, the first manufacturer to recognize Asia’s potential as a large-scale furniture producer. Universal was bought out in the late 1980s, and the Wos used those proceeds to grow the family business into the empire it is today. But an empire doesn’t have to be cold and intimidating. When Robert was ready to turn the business over to his sons, he made sure that the first day they were in the store was his last day. He and his brother Jim moved their offices a few blocks away. “Dad made it very clear to us that he would be there for us,” Bub recalls, “but he didn’t want us coming to him all the time with a question or a problem. He wanted us to work things out ourselves.” Which brings the story full circle back to the family beach house. “Everyone respected one another and if there was a problem, we talked and made sure everyone was heard,” Mike says. “It’s no different at work, too.” Indeed, that philosophy permeates all aspects of the company. Employee opinions are not just valued they’re expected. That kind of empowerment has produced incredible loyalty to the Wo family. In a business where employee turnover runs high, most of C.S. Wo & Sons’ staff are longtime employees. And more than 60 percent of those employees have perfect attendance at their jobs. “We’re blessed to have such loyal and dedicated employees and I think it’s because of what Mom and Dad instilled in us,” Mike says. Betty and Robert Wo did their best to expose their sons to the family business at an early age, whether it was working in the stockroom or pushing a broom in the warehouse. Bub recalls tagging along with his father to furniture markets in Dallas, Chicago and San Francisco. “Dad would take us around to meet all these people in the business and they were all families involved in their business just like us so we instantly had something that we could relate to.”

HOME SCHOOLED The Wo brothers (left to right) Wendell, Mike, Bub, Bennett and Scott, with their parents, Robert and Betty. Bub Wo says his father taught the children the business while his mother taught them the importance of respecting each other’s ideas and beliefs.

Neither recalls the family business being discussed much on weekends at the beach house. “Family and business were separate, Mike says. “That beach house was family.” That doesn’t mean the beach house is separate from the business. The Wo brothers still gather their families in the car and head down to the house for weekend stays, but they also open the house up to their extended family—their employees. The house is used for manager’s meetings where employees show up in shorts for team-building exercises on the water. Longtime loyal employees are also invited to spend the night. “It’s a nice way to show our employees that we think of them as more than employees,” Mike says. “They’re family and we like to think we treat them that way.” Says Bub: “If you treat your employees right, and by that I mean give them the respect they deserve and the power to make decisions and be heard, they’re going to treat the company like it’s their own.” Mike agrees. “We really want to be a family business, not just C.S. Wo & Sons. Dad has never said anything because we’ve never asked him, but I suspect he’s proud of how we do things. I know I am.”

Mike Wo on the Association

The HFA plays a significant and meaningful role in promoting, supporting and growing the furniture industry. Sharron [Bradley, HFA CEO] and her team have been effective at bringing together retailers and suppliers, providing valuable networking opportunities and a sharing of ideas and best practices, along with offering a variety of educational and learning sessions which help us all become better retailers. The HFA is a tremendous resource for all furniture retailers.

JULY | 2016

RetailerNOWmag.com

Congratulations!

C.S. Wo & Sons Winner in the category of over 10 million

“It is a great honor to be awarded the HFA’s Retailer of the Year award. To be recognized by your peers as the best says a lot about your company. Congratulations to our winner.” —Jeff Child, HFA President, RC Willey CEO

HOME FURNISHINGS Recognizing excellence and outstanding achievements

Cash in on Rugs Knowing the trends and display options is key By Sue Masaracchia-Roberts

Fashion and design in home dĂŠcor hold more emphasis than ever before, providing an edgier way for those in the home furnishings market to compete. Nowhere is this truer than with rugs, where colors, patterns, sizes and display techniques are among the greatest shifts in the current market.

JULY | 2016

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arger rug patterns, bolder prints and feathers, combined with hand-knotted rugs in colors not shown before lead the way with consumers this year. Modern styling, vintage antique looks, overdye rugs and distressed styles are also trending. Viscus, silky rugs are popular styles heading into fall, while shades of blue, greys and ivory are among the ‘hot’ colors being featured. Nourison president Alex Peykar says, “Casual and worn looks are on top of the chart, while another popular category is the modern traditional, combining revised and traditional designs with simplified soft tones that lend themselves to a modern setting.” Pat Howard, vice president of HFA member Sklar Furnishings, attended the Milan Furniture Fair where she noticed the return of fringe to rugs. She also said rugs are far more durable today without sacrificing style. “The raw materials used are far superior to ones in the past,” she says. “They take color better, are more stain resistant and allow for fabulous new designs. We love the carpets that are one color when you walk towards them and another when you walk away.” “These days,” says The Rug Market president Andrew Shabtai, “everyone has his own designers and professionals who stay in the know and are attentive to detail. They have to keep an eye out for what is going on [in the marketplace]. [As a result,] we definitely strive to produce the highest quality, [the most] ontrend, best designs possible.” He adds, “The more you learn [about LEARN AND EARN Andrew this category], the more it will Shabtai, president of The Rug become successful.” Market, believes the more “Hardwood floors lead to the retailers learn about the rug need for area rugs, especially if category, the more successful you want to preserve the floors they’ll become. or prevent scrapes,” says Jessica Bartels, of Rugs America. “Decoratively, they add dimension to a room. People also want something soft and warm to put their feet on.” The way consumers use rugs is also a trend to consider. Rugs don’t need to be limited to floor accessories either. “If you have a nice decorative wall, with the right amount of design and color pop, it will catch attention and makes a great setting work,” says Shabtai. In addition, manufacturers are constantly testing new materials to enhance their products and increase affordability. “Over the past 10 years, new fibers, loom advances and textures have come to the forefront,” says Brandon Culpepper, vice president of specialty sales for Mohawk/American Rug Craftsman. “Bamboo, undyed wool, microfiber and a sustainable ever-strand fabric made from recycled water bottles, along with smartstrand yarns made from biofuels—both Mohawk innovations—are very soft and durable. Soft sells.” “Machine-made rugs have really stepped up with quality and super soft durable fibers at compelling price points,” says Emily Vickers, category manager for HFA member Badcock Home Furniture & More. In addition to seeing a lot of new colors, Vickers adds, “I’ve been seeing a lot of transitional rugs with distressing and blown up traditional patterns without borders, mimicking old antique rugs.” Safavieh marketing manager Chris Sippel says so many high-styled, high-quality rugs now can be made at a price that reaches a wider audience. “They strike an emotion and are something [consumers] can see in their own homes,” he says. “With people being very busy in this hightech, information overload society, area rugs create a soothing oasis in their homes.”

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Another evolving trend seems to be rug sizes. According to Vickers the 6’ 6’’ x 9’ 6’’ rug “has proven a great value for our customers. This size enables us to offer a larger rug (without increasing their cost) to one at least double the retail price of a regular 5’ x 8’ rug. This size maximizes material at production, which, in turn, also reduces waste, making it a great value on a number of levels.” With wall-to-wall carpeting becoming passé, especially in warmer climates, Vickers says feel, quality, design, and price points are keys to making rugs more popular. She says, “Good value always excites customers.” In Florida, many newer homes have marble or ceramic floors and are sold furnished. Area rugs, therefore, are popular purchases. For existing homes, accessories [like rugs] may come before new furniture is purchased.

Showcasing the product To help determine what to show, Culpepper suggests using Pinterest for insight into the female customer’s thinking. “She’ll pick up on something she sees on social media and build a room around it. That is the digital world we live in today. Be aware of what moves her.” According to Howard, it’s important to Sklar Furnishings “to be able to do the whole project for a client. We are a hybrid—a furniture retail space and a design resource, able to offer the whole package, including rugs. This is a great service for our clients.” Not everyone is interested in using their own resources to sell rugs. Buying and displaying rugs “takes a level of expertise we don’t have,” said HFA member Eric Easter, CEO of Kittle’s Furniture. As a result, his store leases space to the International Rug Group (IRG). “We felt that, with the kind of investment it takes to do justice to the category, it would be better off leaving it to the experts.” With rug sales representing about 1 percent of Badcock’s sales, Vickers says, “We believe that showing the right rug with the right living room or bedroom will increase attachment. A lot of our customers appreciate some of the design work we do, showing the rugs in the context of living room and bedroom settings. To more effectively take advantage of the space available, aside from showing rugs in these vignettes and room ensembles, a large number of stores also have rug racks.” As “we do a big amount of design business, rugs are important to finishing off any job,” says Rick Howard, president of Sklar. “We display rugs with our furniture settings in a way a customer would use them in their homes.” Pat Howard said Sklar used to have the standard rug rack seen in most retail stores, but realized carpets look different when they are hung versus when they lie flat. “When we needed more space in the store, we moved the racks and now show carpets only in room settings so the customer can see what it will really look like,” she says. Sklar also adopted a trend discovered in Europe and began to add rugs under the feet of their beds. In addition, their designers also use catalogs and ‘blankets’—good sized rug samples. Smaller pieces mounted on boards, Pat Howard says, “make them easier to see and a couple of our vendors actually made us a display that will fit into [our] size constraints.” Aside from these display options, rugs are sometimes stacked in piles on the floor or rolled and packaged with display images, Added display area can sometimes be achieved by just removing or repositioning a rug rack.

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FLOORED More retailers are showing rugs in room settings rather than from a display. Safavieh’s Anthracite shows the subtle difference in color rugs show under direct light as opposed to hanging from a display (inset). STYLE Modern traditional with

“Display is definitely important in optimizing sales potential,” says Bartels, “and lighting is vital. Rugs absorb more light than furniture. You need to view rugs as you would art in a gallery, head on, not on an angle” even though display racks “take up a very large footprint in retail space.” To provide a solution to this footprint problem, Rugs America unveiled a new display system at the High Point market that is on a sliding rail system, with rugs housed within a rack. This creates a viewing space for rugs to slide out of their housing to allow for a flat view. The display cases come in three sizes that complement the most commonly purchased sizes to maximize the space allocated. “This sliding rail system takes up only a set square footage,” explains Bartels “where one walks into the space.” Sippel says his retail stores average 20 percent of their floor space dedicated to rugs, not necessarily including where rugs are displayed with furniture vignettes. “You sell what you show, so you need to devote space to the category. Light it properly and show the biggest rug you can. Also, make sure all colors, sizes and prices are on the display hang tag. It is much easier to order a smaller one from a larger sample. Because fluorescent lighting makes colors look different, use halogen lights, as close to natural light as you can get.” He adds, “Profit per foot is generated by a rug department. It’s never a bad investment to give floor space to rug displays.” Bartels also suggests the use of drop down LED track lighting to showcase rugs. She advises retailers not to overlook websites and catalogs as additional tools to let customers know what is available beyond the showroom. “You must offer something tangible as a back up method to let the consumer know there is more available than what is in the store.” “Furniture stores have an inherent advantage over rug dealers and other retailers,” says Culpepper, “as they offer a whole home in one space.” However, “you must make it easy for [customers] to ‘get it.’ This is accomplished by how things are lit, how the product is presented and [by detailing] what it costs and how delivery works. Anything complicated should be eliminated.”

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Overcoming challenges

Keeping the floor fresh can become an issue. Sklar donates some floor samples to Habitat for Humanity. “Even though we hold warehouse sales,” adds Howard, “rugs don’t seem to move like our other products do.” “We have been enjoying great growth in our rug business over the past three years and have done really well at getting rid of a lot of discontinued rugs,” says Vickers, “and, by changing the ordering process to once a week, we were able to reduce a lot of distribution center inventory.” However, Badcock’s greatest challenge is “stepping out of our ‘sweet spot,’ the price point and jumping our customer up to higher end goods,” says Vickers. Showcase what you want to sell. “Just like when you sell a bedroom set and tell a client you also have mattresses,” Pat Howard advises, “make sure your customer knows you sell rugs.” Bartels says, “If retailers want to see a boost in rug sales, they definitely should consider acknowledging this as a category rather than as an accessory.” Shabtai echoed this sentiment, saying “You need to invest in the category full strength, using all your efforts.”

NEW DISPLAY Rugs America offers retailers a new way to display rugs on a sliding rail display system. The display cases, unveiled at High Point Market in April, help maximize showroom space.

Sue Masaracchia-Roberts is a freelance writer and public relations consultant with more than 25 years of experience in writing and public relations. She can be reached at suemas@comcast.net

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JULY | 2016

Draw Your Own Line Determine your most profitable customers. Then go after them. By Jeff Giagnocavo

he title may seem confrontational but it shouldn’t. Manipulate, by definition (and by which this article has been influenced), means to “handle or control (a tool, mechanism, etc.), typically in a skillful manner.” Very recently in our store, Gardner’s Mattress & More, we drew a line in the sand. After much thought we stopped displaying certain price points—those below $1,000 in queen—in our main store. Before we drew the line in the sand, our showroom floor consisted of more than 15 mattress models under a $999 price point. The issue was these models represented less than 8 percent of our business, yet claimed 20 percent of our showroom floor, making that real estate even more expensive given the poor sell through of these models. You should think of your whole store (whether you own it or rent it) as a “landlord” and your merchandise as its “tenants.” Continually evaluate which “tenants” are adding to your bottom line and which are digging into your profits. My business partner and I resisted this change in spite of the numbers because of the “what ifs?” What if a customer came in looking for these products—would we turn them away without a solution to offer? How would we feel about this? How would they feel about this? What permitted us to pull the trigger and draw the line in the sand was a renewed commitment to helping our customers wake up happy and pain free. Further, we recently authored a mattress buying blueprint. We now communicate precisely how a mattress should be purchased and control the influence by now displaying the sub $1,000 price points in a very small

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footprint with an efficient, easy-to-use hydraulic racking system that in itself is a unique experience we believe only our store can provide. We’ve never been a price-oriented mattress store. It’s actually one of the many reasons for our success and why we attract a higher-end clientele. But still we struggled with actually drawing this line in the sand. So why draw a line anyway? First, it makes life much easier to create marketing messages when you don’t have to placate any one audience or group of people. Our advertising is very laser focused now, even more so than before. Second, it’s very freeing to have finally put this plan into action. We’ve had many customers come to us simply because they see the word mattress in our advertising or outdoor signage. They think, and by no fault of their own, that all mattress stores are the same when in fact they aren’t, at least in our case. When they’re looking for inexpensive, price-driven solutions and they accidentally find us, the conversations are—how do I say this?—awkward. How do you draw your own line in the sand? How do you manipulate the marketing message to best benefit you and the customers you seek to serve? First you need to be clear about what you want to do and what you want to offer and consider how these goals line up with your personal and business goals. Only you can answer these questions as the business owner. If you let your customers decide you will be lead around by the nose over the years by your customers and employees. Also your marketing messages will never match up with the desired goal of increasing sales and presenting quality

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merchandise at better and even premium price points. There’s nothing wrong with choosing how your business is run, how you promote it, and who you choose to do business with. And of course I’m in no way saying to discriminate or act unfairly. What I am telling each and every one of you is to dedicate your efforts to the customer you would like to do business with 100 percent of the time. In our example the costs of fulfillment (short of actual inventory) are all the same. Whether I sell a $500 mattress set or a $5,000 mattress set my costs to deliver it remain static. The same operations person orders it. The same warehouse crew unloads it. It costs the same rent per square foot to store it in our warehouse until delivery day, even the same dollars per hour to deliver it. It’s likely the same cost of fulfillment structure exists in your business. Whether you have a mattress store, full line furniture store, or design house. Only the costs of inventory, marketing to acquire the customer, and post-sale marketing change. If you spend 10 percent on marketing, it’s far easier now to justify better quality media and publications to advertise in when a large percentage of your sales are above $1000 as opposed to below $1000. In my business, master bedroom mattress tickets average $2,700, giving me the ability to invest $270 per customer to acquire the sale. Compare this to the average mattress ticket

of $950 in our industry. Most everyone else is only investing $95 to get a customer. Because of the new line we have drawn in the sand, we can spend three times as much as our competition to acquire a customer. And he who spends the most to get a customer will always win. It’s up to you to decide where your line in the sand exists. I suggest finding it by the math examples I’ve discussed here. Be warned that emotions, desires, and wishes can often be misleading when you start to figure out where you want to draw your own line. First be clear on what you want and then look at the math. Look at your customer list. Who are the 20 percent that give you 80 percent of your revenue? Yes, the 80/20 rule exists here too. Find them, seek to replicate them. Then take that 20 percent and find the next level of 20 percent that give you 80 percent of those revenues. These are your real money makers and they should dictate where you draw your line in the sand. Admittedly, this method isn’t for everyone; it’s a sobering task and one that makes some uneasy. But, if you seek change, want to take control of your business, and manipulate your own skyrocketing success, this is a must do exercise. Jeff Giagnocavo is an HFA member, mattress retailer, and CSO of Infotail Systems, an Infusionsoft Certified Partner and creator of Automatic Mattress Profits. Jeff can be reached at jeff@automaticmattressprofits.com.

“

Because of our new line in the sand, we can spend three times as much as our competition to acquire a customer.

”

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21 17

Well-Suited

For Retail? By Marty Grosse

ecently my wife and I vacationed in Asia thinking it would do us good to get away from the world of furniture. Besides, we wanted to experience Japan’s cherry blossoms, walk the Great Wall, and see the majestic skyline of Hong Kong. Unfortunately, one of my self-diagnosed ailments flared up while traveling. “Retail Sensitivity Syndrome” is a malady where you have acute retail sensitivity and everything you see or experience is viewed from a retailer’s perspective. It’s not exactly tennis elbow or plantar fasciitis but serious none the less. OK, no boring travel pictures or stories but we did make these travel observations with applicable lessons for a retail store. The little things can and do make a difference. Fortunate to travel first class, my first cup of coffee on American Airlines was served luke warm in a room temperature cup. However, on the Hawaiian Airlines segment, our flight attendant pre-warmed the cup, filled it with a delightfully fragrant steaming Hawaiian Kona blend elixir and made sure it was replenished as needed. How many of you rushed to put coffee stations in your store on the heels of the Starbucks craze but simply don’t maintain that process in your store? Here’s the point: If you decide to do something in your store to make the in-store experience special, then make it unique and memorable or don’t do it at all. A retail friend of mine says it only costs a little more to go first class. If you have set first-class expectations, then make certain you provide first-class service. By the way, don’t you prefer real cream versus those little pre-packaged creamer substitutes? I bet your customers do, too. Do you have customers who speak a language other than English? Lost in translation took on a completely new meaning on this trip. What impressed us were those hotels, restaurants and attractions that instantly recognized we only spoke English. Out of the retail shadows the best equipped English-speaking

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employee would appear, apologize for a lack of proper English and proceed to help us. How do you handle language issues in your store? Do you have someone who can help with Spanish or other languages? There may be other types of language barriers in your store that would benefit from a specialist. I happen to be fluent in the language of finance and my wife has mastered design and decorating speaking. Here’s the point: Identify those in your store who can help with an actual language difference or a department or process that requires communication expertise. You’ll make more sales and gain loyal customers when you bridge language barriers. Are your employees well-suited for retail? Do you have the right people in the right positions? We aren’t naïve people, but had to wonder, how do the Japanese do it? How do they seemingly get the right employee in the right position? How did they get them to smile and thank us for our business? Do they have a taxi driver school where grooming and keeping your vehicle ridiculously clean is taught? (Uber is going to have a rough go of it in Japan). Here’s the point: Make certain your employees are suited for retail. Do they have pleasant personalities, enjoy customers and have a servant’s attitude? Retail home furnishings is not for everyone, and having the right people in place has tremendous impact on your business and ultimately your customers’ experiences. We are pretty sure the Japanese train their people extremely well and expect quality customer service. By the way, our Hawaiian airline flight attendants were Japanese.

Do your delivery trucks and service vehicles run on schedule? Granted, riding a subway or a bullet train isn’t as complex as delivering furniture but the concept of running on time is relevant. All our subway and train rides were on time and well communicated. Plus, everything was as clean as a whistle. As the folks in all three countries count on dependable, predictable and on

time transportation my mind and malady instantly went to furniture delivery and service calls. Today’s customers expect deliveries run on time and smoothly. Face it, you’ve spent a ton of dollars on advertising, merchandise and systems all designed to have customers make a decision to buy in your store. The last and often lasting impression of your store will be the delivery or service call to a customer’s home. By the way, all train and subway personnel were uniformed, clean and well groomed. How’s the appearance of your delivery/service teams looking these days?

Not every experience was positive during our trip, and I will not tell you about our taxi driver getting lost in Beijing as we searched for the perfect Peking duck dinner. Finally, my malady settled down as we finished our final day at Tokyo Disneyland. The legendary Disney customer service standards were clearly on steroids. As we cleared U.S. Immigration to “welcome back to the United States” my eyes welled with tears. We live in the greatest country on earth with boundless opportunity and it’s always good to be home. By the way, if you ever get the chance, visit the Great Wall. I’m thinking about a reality show called “The Amazing Retail Race.” Let me know if you want to try out.

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Marty Grosse has held executive positions at six furniture retailers. His website, Furniche.com provides furniture shoppers with relevant, timely advice . Email martygrosse@furniche.com to learn more.

JULY | 2016

FAMILYMATTERS

Stayin’ Alive Here’s how to keep the family business going

(White polyester suit not required) By Wayne Rivers

ast month we kicked off a series of three articles addressing why family businesses fail to do succession planning. You can check out last month’s RetailerNOW, but here’s a quick recap: The first reason succession planning is ignored is it rarely seems urgent for the family members involved. Of course, it never seems urgent until it is. By that time, it’s too late. The second reason is many family business plans tend to focus on tax avoidance and “drop dead” scenarios. Both of those create a false sense of security. Finally, the obvious: For myriad reasons, family members and/or employees push back against the plans that are being considered. This month, we’ll address three additional rationales for failing to plan. Do any of them strike a nerve with you and your store?

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WHO SHOULD I SELL TO? (YOUR FAMILY OR A COMPETITOR?)

1. It’s always safer not to change Dr. Mike Lyons, the Family Business Institute’s resident psychologist, likes to say, “It’s always, always, always, always easier to not change.” Think about it; deciding not to change— whether you’re talking about a business or family strategy—is, in the short run, easier. Just look at all the reasons why store owners embrace the status quo. It certainly doesn’t cost anything in terms of time or money to leave things the way they are. If everyone’s fine with how things are going now, then no one will have their feelings hurt by leaving well enough alone. There’s no push back from your employees. The senior generation doesn’t have to sweat over issues relating to their aging or eventual demise. There’s no potential discord over this plan or that because there is no plan. The family doesn’t have to hire any new advisers or employees, and the status quo can continue to be the status quo. In the short run, Dr. Lyons is right; it’s always easier and emotionally safer to leave things the way they are. However, what works in the short run to preserve the status quo can be a death sentence in the long run for families in business together.

2. Family businesses don’t know how to undertake succession planning I’ve had lots of calls over the years from people who were “kicking tires” about doing some family-business succession planning. I can’t tell you how many times the conversations end with something like “Well, until I know my own goals and those of my family, there’s really no point in getting started.” That’s always been a frustration to us; if a family business owner doesn’t know her own mind and her own goals by now, what makes her think that by putting succession planning off for another month or year she’ll have any new insights? The fact is that inter-generational transition only comes along—you guessed it—once a generation. Therefore, most family businesses don’t have a track record to fall back on in terms of how to get started, what to do, what problems might arise, how to resolve thorny issues, family business best practices, etc. If it was simply an operations issue, most experienced family business leaders could provide an answer and knock the issue out of the park in no time flat. But since succession issues come along so infrequently, and what worked for dad or granddad’s generation may no longer be relevant today, they don’t know where to start in terms of planning, so they just don’t start at all. That proves to be a big mistake.

3. Lack of courage among the next generation family business leaders It is difficult to describe how many calls we get at The Family Business Institute from successor generation family business members who say, “My mom and dad are 80 years old, and they still come in every day and make all the decisions. I’m 54 years old, and I have no idea what their plans are, nor do I seem to be able to advance myself and increase my responsibility. I know I can take this business to a new level, but….” The lack of courage among 40- and 50-year-old next generation family business members is appalling. For this generation to be unable or unwilling to have a blunt, open discussion with their parents about the need to do succession planning and to professionalize the family business is outrageous. The love and reverence they have for their parents causes them to behave not as family business peers but as adolescent

I’m selling my store for health reasons. I want to sell it to a family member who has worked with us for more than 30 years. He’s ready to take over and would do a good job. I’m worried the store doesn’t have the cash flow required to support his (modest) lifestyle and still make payments to my wife and I. Recently, I’ve been thinking about selling to a third party, a competitor in the area who would keep my family member on. How do I present this to my family member without it seeming like he’s bidding on my business?

First and foremost, you should talk extensively to your competitor to have the outline of a deal in place. Make sure you’re on sound footing there before you preemptively blow off Plan B! Your concern for your family member employee is commendable, but you need to put first things first. Especially in a situation where your health is in decline, you must think about to whom you owe your greatest stewardship debt. Is it to you, your wife, and your kids as you contemplate retirement? Or is your first stewardship debt to your employee family member? Once you have your arrangement in place and secure with your competitor, meet with your employee and lay out the reasons for your decision in a businesslike and logical manner. He’ll either understand or he won’t, and you cannot control either response. Be prepared for either eventuality, and be firm, keeping in mind your retirement necessities. It would be terrific for your family member to stay on and work happily for the new owner; that would represent a win-win. However, if he flies off the handle and storms off in a blind rage upon the delivery of your news, that’s his choice and utterly beyond your control.

children. At some point, it no longer makes sense to allow love, respect, or reverence to stand in the way of undertaking planning that would benefit everyone in the business as well as employees, customers, vendors, and others. Successor family business members need to grab themselves up by their bootstraps and, if necessary, force the issue. If they’re not willing to do that, if they’re not willing to reason with their parents as adults, maybe they deserve the frustrations they’re experiencing. Next month, we will conclude this series by examining three additional reasons family businesses fail to plan their futures: family fairness, seeing transition as an event and not a process, and cost.

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Wayne Rivers is president of The Family Business Institute. He has appeared on The Today Show, CNN, CNBC and is an expert panelist for The Wall Street Journal. Email your questions to Wayne at wayne. rivers@familybusiness.institute.com.

JULY | 2016

NEXTGENPROFILE

MINUTES with Kellen Harkness

t’s funny, but I’ve never really considered myself as someone who has “grown up” in the family business. I was very active in sports at an early age and the competitive schedules did not allow for me to work steadily in our store. It wasn’t until I graduated from Ohio State University that I finally made the decision to pursue a career in our family furniture store…and I’ve never looked back! Thankfully I’ve been able to learn from one of the best mentors in the industry, my dad, Dave Harkness. His hard work and dedication to our operation has inspired me to be the best I can be, not only for myself, but for the team members that will one day rely on me to lead them as a successful fourth-generation business owner.

What do you get out of participating in Next Generation Now? I really enjoy the camaraderie and learning opportunities that come with my involvement in Next Generation Now. I’m able to eat lunch with industry leaders, tour top-notch facilities and socialize with my furniture friends at networking events. Next Generation Now provides me with a wonderful platform that allows me to learn innovative ideas not only from industry leaders, but also from my peers.

Kellen Harkness

Purchasing Manager, Harkness Furniture

Words to Live By

“I can do all things through Christ who strengthens me.” �Philippians 4:13

HOME FURNISHINGS

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The Harkness family on a recent trip to Cancun. From left, Kellen Harkness’ dad Dave, mom Cyndi, sister Kimberly Wynn, niece Isabel Wynn, brother-in-law Mike Wynn, Kellen and partner Danny Herbst. 5 Minutes is a monthly profile of a Next Generation Now member. Next Gen NOW is an HFA-hosted community of young industry professionals whose mission is to give voice to the needs and goals of the industry’s next wave of leaders. Connect with members at nextgenerationnow.net or Twitter @ngnow.

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TAKE2

Martin Roberts took advantage of the store’s name by turning the ‘h’ in Chapin into a chair. The chair is easily recognizable from the interstate nearby.

Chapin Furniture comes back (bigger and better) By Martin Roberts

n early 2015, Joe Grimaud, a retired Air Force fighter pilot and now an HFA member, contacted me to help with the design of his new Chapin Furniture store in Chapin, S.C. Our goal was to put an attractive building on a relatively small tract near Interstate 26. Because the new property was less than half the size of the former location, I decided to incorporate some of the aspects of the old building, which had a 35-foot high rise warehouse adjacent to it. To accommodate the height and combine the warehouse with the store, I came up with a two-story sales floor area with a 35-foot high warehouse attached. Shelving for the warehouse was already available from the old facility, as well as a fork lift to reach all of the shelving. So, in reality, the warehouse was designed to accommodate the quite expensive shelving from the former warehouse. Joe and I were concerned about getting customers to go up to the second floor of the sales area. Because of the expense of escalators, I incorporated a one-way escalator leading to the second floor. While this would make it easy for customers to get upstairs, a large atrium over the center

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a ated in w was loc e n e r o e h t t s t old drab e impac Chapin’s and lacked th ll es. strip ma ne store provid lo stand-a

sales counter would provide glimpses of the upstairs environment to make it more inviting. Rest rooms were also located on the upper level, with a combination of stairs and an elevator to allow returning to the lower level. We decided to incorporate large floorto-roof windows in the facility on three sides. For effect, the escalator was placed adjacent to one of the windows with space

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between the windows and the escalator to allow for displays or advertising panels to be visible to passersby. Movable walls were incorporated in the design with numerous electrical outlets in the flooring for connection to the electrical outlets in the movable walls. Prior to settling on the design Joe visited Mathis Brothers Furniture in Oklahoma, where I had already imple-

mented many of the design features I was proposing for Chapin Furniture. While a long stretch of inclement weather made delays in getting the slab poured, the new Chapin facility was ready for its grand opening on Memorial Day weekend. Joe is certainly pleased. In the first three days under the new roof, Chapin Furniture achieved one day of sales exceeding anything he had previously done in the former location. It’s an extremely short history, but the store is getting rave reviews from residents for its exterior and interior.

The w a st alk up r that ain and to the se le has thre ss intim cond fl o e la nding idating or of fu with r s. a ge niture is ntle le stair ss of cas e

f the side o apin e h t h n e is o shopper, C tranc n e e h t t helm . tmen depar ot to overw attresses g in d d m n e The b ding. So as election of uil b ed s w e n n edit a s r offe Joe is even looking into the possibility of using solar power to lessen the utility bills. All of the interior lighting is of the LED variety with lights on timers and with motion detectors in the warehouse and restrooms for automatic turnoff after a period of no motion. A large solar array has been placed on the roof. Although the solar array is not an insignificant investment there are now both federal and state incentives to make it more attractive, with an estimated four-and-a-half-year payback. As Joe says, “We have a big red chair, but we are a green facility.”

en e the wide-op , Roberts mad ls al w ls al le w ab e rt r vignettes. Th By installing po ore intimate fo m r oo fl om ro show icity. ets for electr also have outl From the beginning, Chapin Furniture emphasized the “h” in Chapin, making it look like a chair. I suggested incorporating that “h” as a logo on two sides of the building and making it extend from the ground to five feet above the roof in bright red. Exterior flood lights make the ‘h’ stand out at night. Martin Roberts, a retail and design veteran, has more than 40 years of design projects to his credit around the world. His company, Martin Roberts Design, includes an award-winning team of retail consultants, architects and graphic designers. Roberts can be reached at martin@mrobertsdesign.com.

With no ceiling and an open door to the second floor, warehouse employees don’t need an expensive freight eleva tor to move furniture to Chapin’s second floor�just a forklift.

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JULY | 2016

FIND YOUR PURPOSE Stores that enjoy enduring success have a purpose that remains fixed while their strategies and practices endlessly adapt to a changing world. By Gerry Morris

hat’s your core business? What’s the purpose of your business? The answer to the first question is pretty straight forward. The second, not so much as we shall see in this article. Many retailers don’t have much time to consider and answer big-picture questions like these. The daily grind of doing business is demanding and can be all-consuming. There are just too many trees to stand back and view the forest. Just considering the various elements of retail is exhausting. Merchandising, advertising, inventory, accounting, delivery, customer service, management, sales, marketing, financing, the list goes on and on. When you add in the forces of competition and consumer empowerment fueled by social media, well, just keeping afloat is challenging enough. But it’s exactly those reasons that retailers desiring sustained growth would do well to consider, identify and address the issues of core business and purpose.

What are we doing? How we can do it better? Most every retailer has the same core business. It is the standard definition of the term “retail” itself: The selling of goods directly to customers in stores. In our case, the words “home furnishings” or “mattresses” can be inserted in front of “goods.” Some definitions of retail include phrases such as “to make money or to make a profit.” But, retail sales blogger Eric Deniger (Denigear.com) says “Making money, or not for that matter, is a result of the practice of retail not the purpose” Deniger goes on to say: “The purpose of a retail business is to create new customers while maintaining existing customers” I like that, but I also think that’s arguable. Many retailers’ purpose is to make money, and creating new customers while maintaining existing ones is the “how.” Now what they want the money for is a diﬀerent matter. Some want to build their business for future generations and to contribute to society. Others may want to make enough money to cash out, and go live on a fishing boat. (That would be me.) Unfortunately too many retailers simply go through the motions of the process without ever considering their core business

JULY | 2016

or defining their purpose. Core business is a practice, an action that can and needs to be managed. Purpose is a concept or a philosophy that must be conceived and imagined. These are overseen by two distinct roles, leadership and management. Leaders create a vision, management executes it. Larger companies have leaders and managers. But let’s face it: There are many more home furnishings retailers’ who perform both roles wearing the management hat most of the time. When that’s the case, what’s one to do?

Identify and focus on your core business. As stated above, a retailer’s core business is selling goods to customers. But you can actually peel back the layers to reveal the absolute essence of retail, the “core of the core,” if you will. The essence of retail is the transfer of ownership of goods from the supply side to the demand side of the equation; it’s the mechanism and the fountainhead that provides every dollar and all the benefits to everyone in the industry top to bottom. It all hinges on the outcome of the conversation between two people, the sales associate and shopper. So focusing on core business requires putting the many elements of retail into a hierarchy with sales at the top of the food chain. It’s easy to lose perspective and consider sales as just one of many important elements of business and the sales staﬀ as one of many departments. Seeing sales as the engine that pulls the train and the salespeople as the engineers, relegates all the other aspects of retail into a supporting role to facilitate that all-important moment in time, where the shopper either takes ownership of the goods from your store or another. Here are suggestions for focus on your core business: • Identify and separate management from leadership duties. m Make a list of your daily tasks and how much time you spend on each one. m Look at each task through the prism of does this facilitate our salespeople making the sale or not? m Delegate or outsource the tasks that may be urgent but not important. • Spend time on the sales floor watching and interacting with shoppers, customers and staﬀ. • Empower and equip salespeople using an ongoing systematic training process based on proven learning principles. • Create an environment conducive to making the sale. That involves not only the merchandising and physical appear-

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ance, but also the tone of conversation and the selling process itself. Focusing on core business is an action that will result in more productivity, efficiency, sales, and profits, to a degree. But the fuel for dramatic, long-term sustained growth comes from a clearly defined purpose. TM

What’s the point? Now that we’ve touched on the “what you do” and “how you do it,” let’s move on to the “why you do it!” A great place to start is to first consider how fortunate we are to be in this industry. Home furnishings may arguably be the best category of all consumer goods to not only sell, but also, for customers to buy. Consider that every person is a potential customer. Our products go into every home; they wear out and get replaced. Most people spend the majority of their time in their homes, so their quality of life is directly impacted by the goods they choose to buy. Creating or identifying and focusing on purpose, defining goals and creating a mission is not only the key to increased sales and profits, but will also enhance the quality of life of both employees and customers as well. Consider these suggestions. • Switch focus from selling to serving. m Make profit a by-product of doing the right thing for the right reason. m Retailers in the business of serving versus selling paradoxically sell more, make higher profits, grow their customer base and reap rewards that go beyond monetary. m People perceive motive and if your motive is to serve them rather than use them to make a profit, they’ll want to buy from you. • Create a mission statement and make it your daily mission. m “We’re in the business of improving the quality of life for as many people as possible by helping them make their homes a place of joy and comfort by choosing to buy quality home furnishings.” Serving by selling. m Print out your mission and post it for all to see. Read it at the start of every morning and meeting. • Create a unified team of employees that understands the customer is their source of income as well. Have more interaction between departments to help each understand how they fit into the bigger picture of serving customers and each other. Retailers who take this approach create a compelling culture. People want to step into their world; feel like they’re part of something special and that they themselves are special, take a piece of it home, come back for more and tell others about it. Sustained growth, higher volume and profits, and expanding loyal customer base all start by identifying and focusing on your core business and creating and conducting business with a higher purpose. Gerry Morris has more than 20 years of experience in the mattress industry. In partnership with The Furniture Training Co., he offers a premium online training course, “Sell More Mattresses with Gerry Morris.” To view the course, visit furnituretrainingcompany.com

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MEMBERBENEFIT

Is Your Hiring Process Costing You Customers? HFA has a program to help members with employee relationships By Mary Frye

ere’s an idea that caught my attention because I had never considered this before. Your interviewing and hiring practices—do you think they could hurt your reputation with potential

customers? As I read J.T. O’Donnell’s article about this in a recent Fast Company issue, I was pretty sure this only applied to less personal industries like telecommunications or travel. I misled myself by thinking that many home furnishings retailers don’t have much turnover in their companies, that the family businesses in this industry employ family members and employees who seem like family, and that surely we treat everyone sublimely. That perception is true about only a handful of companies. And, in this environment of social media impacting reputations, paying attention to interviewing and hiring processes is worth your time no matter how often you do it. I hope you have a plan for taking care of employees. Guy Kawasaki, author and marketing specialist, recommends developing deep, delightful, and long-lasting, enchanted relationships with your employees that lead to their taking on lofty goals that propel your business forward. Those enchanted employees are on the front line with your customers. Their efforts can lead to enchanted customers who love doing business with you. Creating this kind of relationship with customers starts before someone is even a member of your staff. It starts with a plan to care for those who apply for jobs with you and who are not selected so that they take away a good feeling about your company. They may become customers or influence others to become your customers. And being a thoughtful potential employer is the right thing to do. A plan can be as simple as thinking about how you would want to be treated 32

JULY | 2016

in a similar situation. If it’s been too long for you to identify with applying for a job, ask your employees or others within your circle of contacts how your company might rate with people who don’t know you, like prospective employees. Think about your current process. Is it respectful of the candidates’ time? Have you left anyone dangling without knowing where they are in your hiring process? Can you tell candidates about qualities your company values? Do you know what your current employees appreciate about working for you? Asking questions like these may be uncomfortable but not knowing what you need to know is a bad position in which to find yourself. There’s no need to make mistakes because you didn’t know better. Home Furnishings Association members have free access to telephone consulting on employee/employer relationships through our member program with The American Consulting Group. When you know better you can do better. Association members can also obtain industry specific job descriptions that can help define the work your staff does. These descriptions can provide you with a checklist of skills and abilities to identify the employees you need to recruit. Use the power of the HFA. Let us be one of your first steps when you’re working on business solutions. For more information about how the HFA’s partnership with The American Consulting Group can help you with your interviewing and hiring processes, email Jana Sutherland, the Home Furnishings Association’s membership team leader, at jsutherland@myhfa.org or call her at 916.757.1162.

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Mary Frye is the Home Furnishings Association’s executive vice president. She can be reached at mfrye@myhfa.org or 916.757.1162.

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HFA@CONFERENCE Living Large in Long Beach The 2016 Home Furnishings Association Networking Conference in Long Beach had a little bit of everything: Insightful speakers, smart seminars, helpful networking opportunities, and of course, sand and water. More than 400 retailers, vendors and manufacturers showed up for the three-day conference. If you couldnâ&#x20AC;&#x2122;t make it, we hope you can be there in San Antonio for the 2017 conference. Until then, hereâ&#x20AC;&#x2122;s a look back at our 2016 version. CELEBRITY SIGHTING

HFA members Elain and Michael Nermon rub elbows with Jack Nicholson and Johnny Depp (or at least their lookalikes) at the Oscar-themed Retailer of the Year celebration.

APP-PROPRIATE Attendees made use of

the HFA conference app to check the event schedule, rate speakers, play games and connect with other attendees and exhibitors.

PORT TOUR

Bo Coconis was one of about 130 attendees who took a boat tour around the Port of Long Beach learning, among other things, that the port moves 6.8 million 20-foot container units every year and furniture is its top import.

CLASS IN SESSION Josh Hudson, left,

and fellow HFA members Mike Wo, and Mike Shuel listen in on a conference seminar about business estate planning.

JULY | 2016

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HFA@ HFA@CONFERENCE FAMILY AFFAIR The Gunn family and employees of

Knight Furniture accepted one of the HFA’s Retailers of the Year Awards. From left to right, Gina Gunn, Joey Gunn, David Gunn, Linda Walker, Karla Colwell and Lou Anne Quick.

ALOHA C.S. WO & SONS was named one of the HFA’s Retailers of the Year. Accepting the award were Mark Kantor, left, Bub Wo, Mike Wo, Ross Watabayashi and Daphne Oliveros.

WINNER

HFA member

Mandy Jeffries took home a $300 gift card for winning the conference’s app game.

READY TO PARTY HFA members

Joni and Greg Greeson were excited to celebrate the HFA’s Retailers of the Year.

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JULY | 2016

HFA@CONFERENCE IMAGINE Speaker Mike Walsh implores attendees to rethink the way they do business in the 21st Century.

MASTERS OF CEREMONY Kizer &

Bender pushed attendees to always be looking for ways to improve their business.

CONNECTIONS John Wells, left, enjoys catching up and sharing ideas with fellow HFA members Dave and Kellen Harkness.

WORKING AT NETWORKING Like many HFA retailers, Marvin Kerby of Kerbyâ&#x20AC;&#x2122;s Furniture uses conference to meet and learn from fellow retailers. MUSIC MEN Shane Spiller, left, and Jake

Jabs entertain fellow HFA members while contemplating taking the act on tour.

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BEACH BUMS Sun, sand and musicâ&#x20AC;&#x201D;a perfect ending to the 2016 HFA conference.

RELAXATION STATION

Attendees found time to relax even at work thanks to Cozzia, one of the many vendors attending conference.

who supports you?

With unwavering commitment towards your success?

SEE YOU SOON The 2017 HFA conference is in San Antonio at the Hyatt Regency Hill Country Resort and Spa, June 4-6.

We do. Your Success is our Business.

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myhfa.org | 800.422.3778 JULY | 2016 37

GOVACTION

Taking a Stand in Washington By Lisa Casinger

ast month, Home Furnishings Association members attended the second annual Washington, D.C. fly-in where they met with members of Congress and key officials to discuss legislation and regulations that directly affect HFA members and their businesses. Based on last year’s success, the government relations action team (one of HFA’s collaborative teams) decided our fly-in this year needed to be two days. One day was devoted to meetings specific to retailers and their concerns and the second day was a joint meeting to represent the furniture industry with members of the American Home Furnishings Alliance (AHFA). HFA members and a representative from the International Home Furnishings Representatives Association (IHFRA) spent June 7 in meetings on the Hill conveying member views on some of their top concerns, specifically a national remote

sales tax, deferred interest terms, port and labor issues, along with regulations under the purview of the Environmental Protection Agency (EPA) and the Consumer Product Safety Commission (CPSC). They met with Sen. Capito (R-WV), Rep. Graves (RLA), Chairman Goodlatte’s (R-VA) counsel in the House Committee on the Judiciary, Dan Huff, along with other congressional staffers. Our group this year included members from Florida, Washington, Oregon, Texas, Colorado, Vermont, Louisiana, and West Virginia representing retail operations of all sizes. HFA members joined AHFA members in representing the furniture industry on June 8 as the group was addressed by Senators Johnson (R-WI), Burr (R-NC) and Tillis (R-NC), Rep. Kelly (RMS), the Honorable Elliot Kaye, chairman of the CPSC, and Sarah Brozena, senior director of the American Chemistry Council.

TWO FOR ONE Sens. Thom Tillis (R-NC), left, and Richard Burr (R-NC) told HFA and AHFA members that “government isn't here to assure success but rather the opportunity to succeed.”

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“This was my first visit to Washington

and I realized how important it really is to knock on doors and actually get in front of the members of Congress to discuss our industry’s issues.” — John Wells III, Wells Home Furnishings, Charleston, W.Va.

MOUNTAINEERS West Virginia was well-represented with Gat Caperton, Gat Creek, left, and HFA’s John Wells III of Wells Home Furnishings.

“Our government has so many

regulatory agencies now, and they have a perceived mandate to create new regulations. With the best of intentions, they will miss the mark miserably sometimes. Meeting with the agencies or governing senators and congressmen keeps furniture on the top of their mind, and I truly believe they listen. Their intent is good, and they use the guidance we offer to better understand what impact they have on businesses.” — David Beckmann, Emerald Home Furnishings

OPEN DOOR CPSC Chairman Elliot Kaye said he wants to “continue the dialogue with the industry” on all issues.

“It is easy to keep up with the news and

issues and assume you understand what it means to lobby and govern, but this was a special opportunity to listen in person and actually see the interest or lack of interest in issues affecting our industry. Walking in the halls that create laws that govern our country was a powerful experience. Much thanks to the HFA and AHFA teams for giving me this opportunity.” — David A. Davis, US Mexico Consulting, Austin, Texas THANK YOU Tom Olinde, left, an HFA member and president of Olinde's Furniture, appreciated hearing from Rep. Trent Kelly (R-MS). RetailerNOWmag.com

JULY | 2016

POWERHOUSES Richard Magnussen, Magnussen Home Furnishings, left, and HFA member Jake Jabs, American Furniture Warehouse, were among the more than 40 heads of business that participated in the 2016 fly-in.

“The HFA does what no other organization

serving furniture retailers will do—exert influence in Washington, DC to level playing fields, reduce unnecessary regulation, and help our legislators better understand the hardships placed on small business by our government. Visiting personally with Senators, Representatives and the CPSC was empowering, fun, occasionally frustrating, and one of the most important and memorable experiences of my life.”

HFA AT WORK Our lobbyist, Chris Andresen, left, Tom and Sheryl Olinde, and HFA CEO Sharron Bradley heading to an appointment with Rep. Graves (R-LA).

— David Gunn, Knight Furniture, Sherman, Texas

HE’S DONE David Gunn,HFA member and president of Knight Furniture, got stopped at security for having a fork in his coat pocket.

OVERFLOW Our delegation was so big we had to meet with Rep. Peter Welch’s (D-VT) staffer in the hall. L to R Frank Lorenzo, IHFRA, Chris Andresen, and HFA’s Steve Kidder, Vermont Furniture Galleries.

JULY | 2016

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HFACOMMUNITY Ashley HomeStore, Jacksonville Jaguars make a special delivery to family of 5 brothers in need of mattresses

Jacksonville Jaguars coach Gus Bradley, above, and defensive lineman Malik Jackson help with a surprise delivery of Ashley HomeStore beds for a family of five brothers. Inset: Ashley HomeStore of Jacksonville CEO Howard Fineman takes part in the delivery.

HFA member Ashley HomeStore in Jacksonville, Fla., teamed up with the Jacksonville Jaguars to make Ashley HomeStore’s Hope to Dream bed donation even more impactful for five young brothers in need of a healthy place to sleep. Ashley HomeStore recently provided all five brothers, ranging in ages from 5 to 12, with a complete sleep set of their own so they no longer needed to share one bed, and Jaguars head coach Gus Bradley and defensive lineman Malik Jackson joined in on the surprise delivery. “We truly believe that great sleep changes lives,” said Whitney Thomas, Hope to Dream market champion for Ashley HomeStore, “and this was a total community effort to change the lives of these wonderful boys.” A teacher from some of the boys’ school nominated them with support from the principal. When Ashley HomeStore received the nomination, they 42

JULY | 2016

immediately recognized the opportunity to engage their partners at the Jacksonville Jaguars and provide an even more memorable experience for the family.

“It’s unbelievable; you talk about a touching moment when you can come in and impact a home like this,” said Bradley, standing alongside Jackson. “We value the opportunity to give back and know that this makes us stronger as individuals and as a team.” In the five-year partnership with Ashley HomeStore, Bradley, along with his wife, Michaela, and their children, have participated in multiple Hope to Dream deliveries, as well as the annual Stadium Sleepover at EverBank Field. Jaguars players are also regulars on Hope to Dream deliveries. “We’re here to do the most good we can and serve our community at the highest level possible,” said Ashley HomeStoreJacksonville CEO Howard Fineman. “These five boys, and the other more than 30,000 children around the country that are sleeping in beds gifted to them through Ashley HomeStore’s Hope to Dream program, are the reason we push ourselves every day to be servant leaders and the absolute best company and community partner we can be.” Locally, Ashley HomeStores have been involved in improving the lives of more than 20,000 First Coast kids in need as a result of their various charitable efforts. “This is home. Our Ashley HomeStore team is proud to give back here at home, and is very appreciative of the support from our customers and partners here in Northeast Florida and Southeast Georgia,” said Fineman.

Since opening the first Ashley HomeStore in Jacksonville, Fla., CEO Howard Fineman, left, has created several outreach programs including Hope to Dream.

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HFACOMMUNITY Jordan’s Furniture kicks oﬀ its annual charitable summer clothing and shoe drive for local children HFA member Jordan’s Furniture recently kicked off its clothing and shoe drive for needy children in New England as part of the home furnishings store’s Cradles to Crayons Ready for School program. This year marks the 10th Anniversary of Cradles to Crayons school preparedness program, which provides local Massachusetts homeless and low-income children with the essential back-to-school supplies and clothing needed to start the

year prepared and excited to learn. “I remember my first days of school and To kick-off the collection, Jordan’s Fur- all of the memories of each one," Tatelniture in Reading Mass., hosted a Stuffman said. "It is so important for every A-Truck event on June 18. The Cradles to child to feel worthy. By working with the Crayons/Jordan’s Furniture partnership, team at Cradles to Crayons, we hope to now in its fifth year, has supported 8,677 do our part in helping area children get children to date. ready for school and be prepared to learn. “We are so proud to continue our part- Through the generosity of our wonderful nership with Cradles to Crayons and to customers, we know that our donation Networking support their Ready for School program,”HFA drives have made an impact during the said Eliot Tatelman, Jordan’s president last four years. We hope for the same sucand CEO. cess this year.”

Do you have something for the HFA Community? Send your information and hi-res photos to Robert Bell, rbell@myhfa.org.

HFA Networking

HFA Web-Ed

The Home Furnishings Association provides networking and education events across the country throughout the year.

Webinars are free to HFA members, and cover topics ranging from technology, sales, marketing and operations to consumer studies, e-commerce and more to help your business thrive.

HFA’s Denver Social Baseball Game

The Pros and Cons of Diﬀerent Sales Compensation Plans Wednesday, July 20 (Sales/Sales Management)

Thursday, July 7, 6:40 – 10 pm Coors Field, Denver

Today’s Store for Tomorrow’s Customer Thursday, August 18 (Store Design/Merchandising)

Next Generation NOW Lunch with Leaders

HFA Web-Ed

Monday, August 1, 11:30 am – 1 pm Las Vegas Market

Exit Strategies: What are Your Options? Wednesday, September 21 (Transition Planning)

Inland Empire Dealers Golf Classic Wednesday, August 17 Circling Raven Golf Club, Worley, Idaho

Omni-Channel Revenue: Go and Get It Wednesday, October 19 (Technology/Marketing)

Inland Empire Dealers Education Day

Company Culture—What is it and How Can You Change it?

Thursday, August 18

Mirabeau Park Hotel, Spokane, Wash.

Tuesday, November 8 (Management)

Visit myhfa.org/events for more information and registration. RetailerNOWmag.com

JULY | 2016

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NOWLIST A Little Mood Lighting

Like a Rock Finnish designer Janne Kyttanen uses an explosion welding technique he created to meld volcanic stone and 3D-printed copper into objects— including furniture like the Metsidian table.

Source: Jannekyttanen.com

Real Gold Bricks A couple in Poland creates accessories from LEGO® bricks— 24k gold-plated bricks. This $320 clutch is lined with satin and can be made in a variety of colors.

Source: nazzarenoruspolinidesign.com/?page_id=89

This tiny 3D-printed lamp, designed by Nazzareno Ruspolini out of white polymide, turns iPhone’s ﬂashlight into ambient light.

In Control

30% of U.S. businesses are owned by women.

Source: agabag.com

Reused Apples

Klaus Geiger takes recycling to the next level with his Benchmarc project; he turns Apple power Mac G5s into furniture. Source: projektgalerie.wordpress.com

JULY | 2016

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Source: Balboa Capital

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To advertise in RetailerNow,contact Lynn Orr at (916) 757-1160.

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THE WAY WE WERE

n 1932, W.D. Wilkins was the patriarch of a future fourth-generation, locally-owned, family furniture business that got its start in the loft of this cinderblock building. W.D. bought and sold cottonseed and manufactured steel knives in the blacksmith-machine shop on the first floor. The furniture, which he hauled in a trailer from the wholesaler’s warehouse 350 miles away in downtown Dallas, was carried up the steep stairs and placed in the second-floor loft. And then the race was on! The challenge was to sell the furniture as quickly as possible before the soot from the shop below rose and soiled the merchandise. Eighty-four years later, we continue this tradition of timely turnover by ‘stackin' it deep and sellin’ it cheap!’ Ashley Warren W.D. Wilkins Furniture, Lubbock, Texas

 Share your old photograph and memory by contacting Robert Bell at 916.757.1169 or rbell@myhfa.org

JULY | 2016

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