RetailerNOW June 2016 by RetailerNOW

JUNE 2016 Vol. 5 Issue 5 Retailers of the Year: Knight Furniture JUNE Issue

INSPIRATION+EDUCATION

Taking a Stand in Texas HFA celebrates the Gunn family and Knight Furniture

Knight Furniture’s Joey, Gina and David Gunn — 2016 Retailers of the Year

JUNE 2016

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TAKEAWAYS 1 2 3 4 5

Increase your sales in lighting. 18 Measure employee performance. 30 Plan your family business’ future. 32 What’s hot? Not? 34 Leverage members’ expertise 36

(L to R) Gina, David, and Joey Gunn of Knight Furniture

10 WHAT’S INSIDE 2. 4. 18. 21. 32. 34.

HFA President’s Letter Editor’s Letter Product Focus: Lighting Next Generation: Lance Zeto Family Matters: Succession Planning Market Trends: High Point Market Trend Spotters 36. Member Benefit: Associating 38. Government Action: Slow & Steady Wins the Race 40. HFA Community

DEPARTMENTS Cover Story 10. Celebrating Knight Furniture Sales & Marketing 22. 23. 24. 26.

Retaining Designers Marketing to Millennials Beware the Green Monster What Mattress Shoppers are Saying

Operations 16. Getting Customers to Come Back 30. Performance Management Software RetailerNOWmag.com

JUNE | 2016

“

Assertion is not argument. Contradicting the statement of an opponent is no proof you are correct. President Jeff Child RC Willey

— Samuel Johnson

”

President-Elect Steve Kidder Vermont Furniture Galleries Vice President Jim Fee Stoney Creek Furniture

To market! To market!

Secretary/Treasurer Sherry Sheely Sheely’s Furniture Chairman Marty Cramer Cramer's Home Furnishings

Jeff Child

Executive Staff Sharron Bradley Chief Executive Officer sbradley@myhfa.org

HFA President

Mary Frye Executive Vice President mfrye@myhfa.org Dan McCann Director of Marketing & Communications dmcann@myhfa.org

ike many of you, our company is in the post-market rush of getting pictures of items we liked, receiving product sheets and working on assortments for each category. It’s a busy time, but it’s also an exciting time. Attending markets is one of the most important things I believe we do as a company. Seeing new product that may end up on our showroom floors, visiting with old friends and networking with other retailers keeps me excited about this industry. I attended my 59th High Point market in April. I still get excited by the energy those markets bring. I know some of you wonder whether the cost, hassle of getting around, and time away from the floor is worth going. Some retailers hope their sales reps will bring them pictures of what’s trending so they can make decisions without going to market. That’s an option, but let me tell you what I get out of market beyond just looking for new product. 1.

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.

Market gives me a good feel of the trends, colors, fabrics and styles our customers will be seeing. Without seeing those trends it’s hard not to just keep buying what’s worked in the past. Occasionally we may have found ourselves ahead of our customers in these new items, but once consumers start seeing these trends they realize our company can be a style leader. It’s amazing how much I learn just running into old friends— retailers and wholesalers alike. A few simple questions—How’s business? What’s selling?—help me judge how we’re doing and if there are merchandising or advertising areas we’re missing. Educational seminars covering everything from finance, design, and management are right at our fingertips at market. Almost all of them are free and give us new ideas. Markets are a good chance to get involved in our industry through things like the City of Hope, Hall of Fame, and outdoor concerts. Don’t forget the parties. They’re as much a part of growing your business as they are entertaining.

If you’ve never been to a market or it’s been a few years, it’s time to go. Whether it’s High Point, Las Vegas, Dallas or Atlanta, if you go not only to look at what’s going to end up on your floor, but also to learn more about the industry, you’ll be money ahead.

Jeff Child

jeff.child@rcwilley.com Twitter.com/retailerNOW Facebook.com/retailerNOW Pinterest.com/retailerNOW

JUNE | 2016

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MAY | 2016

“

RETAILERNOW STAFF

One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you. —Jeff Bezos

Lisa Casinger Editorial Director lcasinger@myhfa.org

Stop looking for passion, let passion find you

Robert Bell Editor rbell@myhfa.org Tim Timmons Art Director ttimmons@myhfa.org

Lynn Orr Business Development Lorr@myhfa.org Cassie Wardlow Digital Marketing Coordinator cwardlow@myhfa.org

Robert Bell

RETAIL ADVISORY TEAM

Editor, RetailerNOW

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

Ginny Gaylor, Jeff Giagnocavo, Kevin Hsu, Gerry Morris, Lloyd J. Princeton, Wayne Rivers, Tom Shay, and Charles Wiedenhoft. Contact Us RetailerNOW 3910 Tinsley Dr., Suite 101 High Point, NC 27265 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.

”

ou’re going to hear a lot about passion this month. From high school auditoriums to college football fields, folks are going to invoke the grandest of emotions to anyone who will listen. “Find your passion,” new graduates will be told, as they sally forth into the job market. “Figure out where your passion lies,” guest speakers will profess with great assurance. “If you do what you’re passionate about, it won’t feel like work,” others will say. Passion is thrown about so frequently in career corners you’d think they were asking for advice on how find a soul mate (sorry, that’s another magazine). Then there’s Eric Easter’s view of passion. Easter is the CEO of Kittle’s Furniture in Indianapolis. Eric spoke to a group of Next Generation Now members in High Point in April at one of the HFA’s Lunch with Leaders programs about anything and everything in the home furnishings industry. Eventually the discussion got around to passion. “We ask the same thing every day from everyone at Kittle’s and that is to start the day by putting your CAP on,” says Eric. “C is for culture and creating an atmosphere where everyone thrives. A is for accountability, doing what is expected of you and then some.” You can probably guess what P is. I’ve thought a lot about passion in recent weeks as we kick off the first of back-to-back issues profiling our 2016 HFA Retailers of the Year winners. Ten minutes in the same room with David and Joey Gunn, whose profile begins on page 10, and you can sense their passion for Knight Furniture. One of the NGN members started to ask Eric how to inject passion into a company and employees in desperate need of some as though there were some magic passionate pixie dust out there. Eric shook his head and interrupted. “You can’t teach it,” he said. “Passion comes to all of us the same way—from within. Look, in some ways, fate or luck or something led me to this industry. There was nothing special about the path I chose. What mattered was what I did after I made my choice to make this a career.” In other words, passion is not something you pursue. It’s something that will follow you as you put in the hard work to become valuable to your coworkers, your company, your world. Those are words to live by not just for June, but the rest of our lives.

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.

JUNE | 2016

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A need for efficiency is behind the proliferation of on-demand trucking services, the founders of Convoy, Cargomatic and TugForce all say. Combined with reduced capacity within the trucking industry, a desire for transparency into the shipment process as well as the need to communicate with carriers in a more efficient manner may mean that many companies will seek to outsource transportation functions to these upstart, on-demand third party shipping and logistics companies. In addition to trucking, on-demand delivery services such as Shyp, Shipster, Dolly, Fleet and Dropoff and a handful of others have also become established startup contenders in the shipping and logistics space. Shipster, for example, partnered with all of the major carriers, including FedEx, UPS, and DHL, and employed a fleet of about 100 contractor agents—walkers, bikers, cars, vans and trucks—to accommodate every type of pickup. Dolly has a partner program—available to a variety of businesses, including full-price retailers, consignment stores, and interior decorators—which facilitates same-day, local delivery, pick-up, moving or haul-away for “bulky items.” Dan Lewis, co-founder and chief executive of Convoy acknowledges that making the jump to a new, unproven service will be challenging. “But not everybody has to shift over, and if the new way is better than the old way, then people using the Uber-for-trucking model will do better than those who don’t,” Lewis says. Bob Costello, chief economist at the American Trucking Associations said the organization is watching the upstart trucking services to see what it brings to the trucking industry.

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

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HFACHAT

Q:What makes a good salesperson? Kati Purkett

Northern Home Essentials Havre, Montana “A good salesperson needs to be customer-service oriented and friendly, but not too friendly. We’ve all run into that sales associate who comes up to you right from the get-go and instead of asking, ‘How are you today?’ they ask, ‘What can I help you with?’ They almost seem attacking. Sometimes they keep on talking and talking, and don’t give customers an opportunity to walk around and shop. They have to give people some space. They also need to follow up with customers and make sure that they are satisfied with their purchase.”

Dale Dodd

Dodd Home Furnishings Guin, Alabama “A good salesperson is one who is knowledgeable about products they sell and someone with good communication skills. Someone who will talk about things other than what they are selling to make consumers feel more comfortable and at ease. I also feel a good salesperson is someone who greets customers and lets them know they are there to assist and does not make every step with the customer. Pushy salespeople will drive me out the door very quickly.”

Rae Walzer

The ETC Shop Pedricktown, New Jersey “A good salesperson would be one who listens to what the customer is looking for and then directs them to the proper pieces to look at and gives them guidance on how to finish it. And they have to be courteous to people, of course. Some people come in and they are overwhelmed by what they really want, so you make it positive and make it a happy day. And know the product that you are selling. You are the resource for them.”

TOPSHELF Remove Clutter, Improve Production (The Secret to Peak Productivity, AMACOM, 224 pages) Your desk can tell a lot about you. Or rather the surface of your desk. Can you see the surface? Are papers stacked neatly and filed in the right place? What about your email? In The Secret to Peak Productivity, Tamara Myles presents a set of tools for eliminating physical, electronic, and mental clutter through organization and effective time management. Her “Peak Productivity Pyramid” model provides a simple way to assess and then improve skills for coping with the constant inflow of information and demands on time. Myles claims there are five levels: Physical organization, electronic organization, time management, activity-goal alignment, and possibility. The tools Myles offers create an individualized and effective means of boosting productivity. Reaching the top of the pyramid reveals new business and life goals, creating the space to live a meaningful life with purpose. Myles makes a living out of bringing organization and order to other people’s chaotic lives. Myles and others like her do more than eliminate clutter; they empower clients with the tools to organize their lives so clutter will not return. In her years as a CPO (Certified Professional Organizer), Myles has come to understand physical clutter as a symptom rather than a cause of people feeling disorganized and overwhelmed. Cleaning up physical clutter—the piles of paper, the forest of sticky notes—therefore must come first. Once a client’s office space is put right, she turns to electronic organization, followed by time management, activity-goal alignment, and finally, possibility. With time freed up by increased productivity, people will have the luxury of considering all the potential uses for their newly minted free time. This hierarchy of organizational needs forms a pyramid, the “Peak Productivity Pyramid.” The concept draws on Abraham Maslow’s well-known hierarchy of human needs from the field of developmental psychology. Maslow’s pyramid begins with the most basic needs for survival, such as food and water. At the top is “self-actualization,” a realm of creativity, morality, and compassion. By the same token, productivity begins with basic organization and rises to the level of possibility. Not everyone will require the same amount of work on each level of the productivity pyramid—someone with a well-organized email inbox may still have a problem with office clutter. But assessment should begin at the bottom and each level should be cleared before moving up. No one can reach the top of the pyramid—possibility—without first mastering all the previous levels. People who want to become more organized can do a brief self-assessment, analyzing each level of the author’s Peak Productivity Pyramid. Each level of the assessment features five to ten statements, such as, “I sort and file my papers.” Responses range from “1: Rarely if ever,” to “3: Frequently and on a regular basis.” The beauty of Myles’ book is that it can help anyone— from the hopelessly cluttered editor of a home furnishings trade magazine to you. Book review: bizsum.com

JUNE | 2016

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APRIL | 2016

Taking a Stand in Texas David and Joey Gunn prefer to lead rather than follow the pack. It’s a philosophy that’s proven successful for Knight Furniture these past 104 years. It’s also a reason father and son are the Home Furnishings Association’s Retailers of the Year. By Robert Bell

JUNE | 2016

RetailerNOWmag.com

STAYING STRONG In a sea of big-box competition, family-owned Knight Furniture in Sherman, Texas, continues to thrive thanks to David and Joey Gunn, the Home Furnishings Associationâ&#x20AC;&#x2122;s 2016 Retailers of the Year for stores with sales of less than $10 million.

RetailerNOWmag.com

JUNE | 2016

hen word first leaked out, David Gunn had two reactions. The first involved taking a long, deep breath and exhaling. As the owner of Knight Furniture in Sherman, Texas, Gunn has seen his share of competitors try to chip away at his market share, but this one was different. This one was Nebraska Furniture Mart. The Warren Buffett-owned company was planning to build the nation’s largest home furnishings store less than an hour’s drive away. “Wow, this is serious,” Gunn recalls thinking. “When these guys decide to show up in your market, you can’t just assume it’s business as usual.”

That led to Gunn’s second reaction: He immediately called in his management staff—everyone from sales to operations to human resources—for an emergency weekend meeting. But here’s where it gets interesting. At no time was there a sense of panic from Gunn or other store leaders. Not during the meeting or in the months after when Nebraska Furniture Mart hired away two of Gunn’s high-level managers. “We never talked about what we would do different or how we would try to do things like they do things,” says Gunn. “We took a good long look at what made us so successful for so many years and whether we were still providing those things to our community. Yes, these guys are as big as it comes, but we’ve faced competition for years, over a century really. I remember that day we left the meeting committed to refocusing, reloading and becoming even more determined to succeed. Not just survive, but succeed.” Two years later, Nebraska Furniture Mart in north Texas has a 560,000-square-foot showroom and a 1.3 million-squarefoot-warehouse packed with inventory. The store’s digital price tags, which change daily due to buyer demands, can be found on 125 accent chairs, 165 recliners, 110 bedroom sets and 100,000 other pieces of furniture and accessories. Every week, the store does more than $9 million in sales. And tiny Knight Furniture in downtown Sherman across the street from the Grayson County Courthouse? Sales are up over the past year, says Gunn, who, along with his son Joey, are the Home Furnishings Association’s 2016 Retailers of the Year for merchants with less than $10 million in sales. “We don’t have the selection they have, but in my heart I know they don’t touch our service and commitment to helping our customers,” says Gunn. “I guess our customers think the same way.” By any measure, Knight Furniture has come a long way since founder J.S. Knight opened the store in Sherman in 1912. It’s come a long way since David Gunn joined the company in 1988, too. Gunn originally worked in the banking business with no interest in joining his wife Gina’s family store ON EDGE David Gunn says the arrival of Nebraska Furniture

Mart in north Texas in 2014 made him a little nervous. “But nervous is a good thing sometimes,” he says. “In some ways the past two years have been fun. We see how we’re evolving and making ourselves a better company.”

David Gunn on Leadership

The first step of leadership is having the vision of what your organization can and should be—what’s the focus? What sets you apart?—and then communicating and empowering your team to make it happen. Good leaders create a desirable and productive place to work by setting the example for compassion, respect, excellence and fun within the team. Demonstrate a commitment to excellence and your team will rise to the challenge.

JUNE | 2016

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until his father-in-law, Sam Knight, approached him one day. Even then, Gunn was hesitant. At the time, 16 people held a stake in Knight Furniture. Most were children of the original Knight family and were not active in the store’s day-to-day operations, but still wanted a say in how the store should be run. Gunn learned quickly that trying to please everyone, pleased no one. “You had 16 people giving you different input every day on how to run the store. Every week it was, “Do it this way or do it that way. Eventually I learned to listen, smile and nod, then go do what I thought was best for the business.” That Gunn was the son-in-law marrying into the family business didn’t help. “Coming into a family business is challenging,” he says. “Coming into one where so many other people are involved is even more challenging, but we worked through it.” By 1999, Gunn and his wife Gina bought out most of the family members. Today they control 95 percent of the company and have turned Knight into a business that Sherman residents can turn to—rather than that major chain down the highway— for their home furnishings needs. In fact, that’s all Gunn wanted from the start: A store that wasn’t a large chain. He loves walking into the store—be it the original one in Sherman or the second branch in nearby Gainesville—every morning and greeting his staff. There will be customers soon enough, but Gunn says the staff are fun to be around. “When you surround yourself with good people, good, smart people, who work hard and are just as passionate about the business as you are, it’s hard not to have fun at work and enjoy each other’s company,” he says. Joey Gunn got his start in the family business at the tender age of 14 working in the warehouse. It was never a given he would join the firm, but Joey knew that’s where he wanted to be. “And not because I knew it would be an easy job,” he says. “Just the opposite, I guess. My dad always told me that because I was family, I always had a higher standard to live up to—and

not for him, but for the people who work for us, the betterment of the Knight name.” David Gunn takes pride in not being the same old furniture chain. “It’s about personality when you walk in here,” he says. “It’s about offering a high-class shopping experience. I have a lot of pride and respect in our roots and where this store came from, but at the same time we’re not your grandfather’s or grandmother’s store anymore. We’re a modern store that gives our customers the service they’re just not going to find at a major chain. I’m proud of how far we’ve come and where we are these days.”

HIGHER STANDARD Joey Gunn knew what he was getting into when he joined the family business. “My dad always told me that, because I was family, I always had a higher standard to live up to—and not for him, but for the people who work for us, the betterment of the Knight name,” he says. Joey is now the company’s VP.

David Gunn on Customer Experience

If your store is going to have longevity it first needs personality, something that sets the customer experience apart from other shopping options. Once you know what that is you have to make it part of every employee’s DNA. You want customers and employees to be proud to be associated with your brand and to enjoy the time they spend with you. And don’t forget the experience when something goes wrong. A problem is an opportunity to differentiate, not negotiate. Let the other stores have satisfied customers, I want loyal customers. RetailerNOWmag.com

JUNE | 2016

David Gunn is the first to admit getting here wasn’t easy. Looking back, Nebraska Furniture Mart’s arrival might have been the best thing to happen to Knight. “It made us a little nervous, but nervous is a good thing sometimes,” he says. “In some ways the past two years have been fun. We see how we’re evolving and making ourselves a better company.” Joey Gunn, Knight’s vice president, agrees. He says the emergency meeting his father called was illuminating. “We looked over everything. Vignettes, delivery policies, easy credit, the knowledge our sales people had, display uniqueness—everything got a second look,” Joey Gunn recalls. “We changed a few things and others we left alone. We were reminded of why we are important to so many people and what we could do to make ourselves even more relevant.” David Gunn says he was determined to improve on what Knight was already offering its customers: Fast turnaround on special orders, impeccable customer care and deep knowledge of the products offered. And even though he and several members of his management team walked the showroom floors of other Nebraska Furniture Marts to see what they were up against, he was determined not to copy what he saw. “Duplicating what they do is a losing game,” David Gunn says. “We’ve got to do our own thing. We’re 104 years old for a reason. We’re so ingrained in our community with our brand, that our competitors will never be able to touch that. I like to think of us as the hometown brand. That means we can compete with anyone who comes into our market.” Indeed, Knight has more than 100 lines for shoppers to choose from, as well as an in-store La-Z-Boy Comfort Studio, where clients can choose from a full wall of fabric for their custom orders. One of Knight’s most well-received lines has come from Mayo Manufacturing, which can turn around a customer order in two weeks. “It’s been very good for us,” Joey Gunn says. “We’re all about standing out from the crowd and Mayo helps us do just that.” The Gunns extend that philosophy of standing out to every part of their business. Sherman is near Lake Texoma. The lake community is a nice chunk of Knight’s business. “Those houses need to be furnished and we want to be the ones who furnish them,” Joey Gunn says. “If people have disposable income they could easily spend that money on something besides furniture if we’re not constantly making a presence so

HAPPY FAMILY The Gunns are proud of their staﬀ. Back row, (L to R)—vice president Joey Gunn, owner David Gunn, and operations manager Jason Oglesby. Front row, (L to R)—CFO Linda Walker, merchandise manager Lou Anne Quick, owner Gina Gunn, oﬃce manager and merchandising assistant Amy Williams, and general manager Karla Colwell. we’re constantly trying to make furniture a sexy experience so they’ll spend more time in the store. We don’t ever want to be out of sight, out of mind.” The Gunns are just as conspicuous in lending their time and talents to charities and civic associations around Sherman, although the motive is less business and more altruistic. Sherman is where he raised his family. “This community is our home and has supported us through the years,” David Gunn says. “I think it’s important to me and my family that we give. Why wouldn’t anyone want to do that?” David Gunn knows there’s a time when he’ll be turning over the keys to his son, but not anytime soon. For starters, he’s only 55. But also, he’s having too much fun going up against some of the fiercest competition in the nation in north Dallas. “Every day’s an adventure, something new,” David Gunn says. “I’ve got a good management staff around me that makes it fun every day. It’s kind of like a roller coaster here. We have our ups and downs, but they’re mostly ups. I’m not ready to get off yet.”

David Gunn on the Association

The members of the Home Furnishings Association are among the most innovative, creative and successful people in our industry. The inspiration I’ve received from them has contributed significantly to the vision for our company, and ultimately our bottom line. The savings on essential supplies and services are great, but nothing compares to the impact of the educational webinars and one-onone time with other outstanding retailers. The HFA is one of the best things we’ve ever done.

JUNE | 2016

RetailerNOWmag.com

Congratulations!

Winner in the category of under 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

Getting a Customer is Easy

(Getting them to come back is hard) By Jeﬀ Giagnocavo

’m always looking for examples from my everyday life, good or bad, that I can turn into a column topic. Obviously I’d prefer to take a positive experience and put it to work in my businesses and here, but, just like losing the big game, there’s a lesson to learn from negative experiences too. Such is the case in this story. Recently I learned that WallyPark, an offsite parking lot I frequent near the Philadelphia airport, offers a membership program. I’ve always appreciated WallyPark’s service and speed when delivering me to and from my gate. How I learned about the membership program is where this lesson begins. Upon arriving at the lot recently, which I’ve been using faithfully for the last 13 years of air travel, I was turned away at the gate. Apparently the lot was full and they were only accepting cars with a reservation.

I was disappointed to say the least, in part because I’ve paid zero attention over the years to other parking lot alternatives and didn’t know where to turn next, but also because I wasn’t even aware they took reservations. In all the years I’ve done business with them, not once was I offered a membership card, let alone a free membership card. Beyond that, not once did any of WallyPark’s staff ever explain the membership program and benefits that would prevent me from being turned away at the gate in the future. I asked the attendant where to find another parking lot, and if I could please have a membership card for the next time. “Oh you have to get that next time, if I give you a card now, I have to let you in now,” he replied Wow! Once I dialed my blood pressure back from the edge of stroke to a level at which I could effectively communicate I said, “You can’t be serious. I don’t have to come in, I can simply turn around and leave, but it would be a huge favor to me if I could sign up now.” The attendant wouldn’t budge. “Nope, I can’t let you do that,” he said. I wasn’t backing down either. “You realize I park here about eight to 10 times a year, never use a coupon and I consistently refer others here.” That wasn’t an understatement. Both sets of in-laws and five of my friends now use WallyPark because of my recommendation.

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I tried to meet the attendant halfway. I told him I understood the policy, but that it would make my day to have a membership card now so this doesn’t happen the next time I travel. “I’ll just grab the card, and head to another lot for today,” I said. “Sorry, I’m not permitted to do this,” the attendant replied, “and the manager is all the way in the back of the lot right now.” This is where it gets interesting. I drove around the wooden lift gate, straight to the back of the lot where I found the manager. I asked him how long he had been the lot’s manager. “Fifteen years,” he said. “Perfect,” I said. “That only helps the point I’m about to make. If the service I just received at the gate is any indication of your company’s training program it’s certainly lacking. I personally have had no fewer than 200-plus interactions with your staff over the years, and not once has any one offered me a membership card let alone informed me that you even have a membership program. “So here I am today without a place to park. But this isn’t why I’m here to lecture you. I get that mistakes happen, but your staff member was extremely rude, and made no effort to make an unfortunate experience better. He not only aggravated me, he gave me step-by-step directions to your competitor. “You have to see that your staff not only isn’t engaging in retention efforts with your membership card, but they have zero skills in customer service. They sent me to the competitor’s lot. “Now,” I took a breath, “all that being said, as the manager, what do you have to say?” “Well, do you want a membership card or not?” he asked. Again. Wow. Rather than continue the rant, I said, “Sure I’ll take one.” Once he gave me a membership card I shook his hand and offered my thanks for his help, knowing full well in the back of my mind that once his membership card found my glove box it would never again see the light of day. The point of this whole story is to highlight this critical point: Are you covering all your bases, 100 percent of the time with your customers? What are you and your staff saying to your customers? Are you using scripted processes? Carefully chosen language? Is it plausible that I was offered a membership card at some point in the last 13 years? I suppose. Perhaps I turned down that 10-percent off membership card because it wasn’t worth the extra weight in my wallet which sits in my back pocket and causes me enough of a backache already. Or perhaps I got the membership card mixed up with all the other membership cards I long ago stopped paying attention to. However, this membership card could have provided me exclusive benefits, like not being turned away at the parking lot where I need to park my car before I miss my flight. That I will take, especially when the benefits are properly explained. The keyword here is, explained. Not only do your membership

benefits have to be worth my time and wallet space, but your staff has to effectively communicate how these membership perks would benefit me. Let’s take this example one step further and look at the added benefit to them. WallyPark could have offered each membership card by saying, “Simply give us a business card and we’ll enroll you in the program; then we’ll mail your membership card and you’ll have it in your mailbox by the time you return from this trip.” This is convenient for me and it gives WallyPark an invaluable asset. A customer list! A customer list they aren’t buying. A customer list they’re installing a steel cage around. See how a simple tweak in scripting, a small hinge if you will, moves mountains and in this case builds them a free customer list, and creates a happier customer. Naturally, they could do many other things with this list, cross sell; promote other offerings; sell the list to others. For instance, a list that includes many names just like mine, names of business people and frequent travelers, would be highly sought after by clothing stores that cater to business people. Now this zero-cost list makes them money. Small tweak, happier, engaged, and committed customers. Little hinges swing big doors. You might ask, how did someone like myself, who is very observant, miss all the other parking options over the years? I thought I had my guy, in this case, for 13 years WallyPark was my guy. Speed and proximity to the airport were the perks that kept me. Lock me out and all that goes away, as the story told here goes. For years I likely saw other advertisements, but I wasn’t even looking around. I had my guy. WallyPark was good enough and satisfied my needs; until they didn’t. Without my little lecture they never would have known I left, and sadly because I’m not a member, they have no way to contact me to try to get my business back. Ask yourself what’s happened in the past with interactions between you/your staff and your customers that could have possibly replicated the exact same scenario? Were you a customer’s guy and now you aren’t? Do you have customers who’d been visiting your store, maybe even for generations, but because of one big letdown they’re gone forever without your knowing? If you offer a membership or preferred customer program is your staff presenting it consistently and selling the benefits of it each and every day or are they glossing over it or worse not discussing it all? Getting a customer is rather easy; keeping a customer is harder but that’s where sustainability and long term success can be found. Work every day in your business to be the go-to person for your customers; make it so good they don’t even see or pay attention to another competitor, ever.

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Jeff Giagnocavo is an HFA member, mattress retailer, and CSO of Infotail Systems, and creator of Automatic Mattress Profits. Infotail has developed Automatic Mattress Profits to help mattress retailers increase sales and profits. Jeff can be reached at jeff@automaticmattressprofits.com.

JUNE MAY || 2016 2016

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Lighting Comes Out of the Dark More home furnishings stores are turning to lamps and other lighting accessories to boost sales. By Ginny Gaylor

LIGHTING IT UP HFA member Ellie Pelett who, along with her sister Emma and mother Pam, runs City Liquidators in Portland, Ore., invests heavily in lighting as an accessory at the family store.

JUNE | 2016

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DDS ARE IF YOU ARE A RETAILER, your salespeople are not promoting lamps and lighting when customers come in the door. Your focus probably is on the bigger sale. Maybe you know you’re missing out, but aren’t quite sure how to encourage staff to display lamps so customers notice them. You may not even have a strong understanding of what the trends are in lamps and lighting to know what your customer is looking for (and those same customers may not know what they are looking for either). The emphasis on lighting in a home furnishings store depends on the store. Kirsten Perkins, oﬃce manager for Magnolia Furniture in Magnolia, Del., handles all the store’s lighting product purchases. She admits that lamps and lighting sales are not a big part of their business despite encouragement from their reps to use the accessory category as an add-on to other purchases. “It’s something we try to do, but don’t always do a good job of following through on. We’re more worried about the bigger sale,” she says. On the other side of the country, Emma Pelett and her mother, Pamela, who run City Liquidators in Portland, Ore., saw an increase in interest in lighting about 18 months ago. The mother-daughter team decided to take a chance and invest in more products from new manufacturers to see if they could grow this aspect of their business even more. “Sorry about the pun, but it was like a light went off,” Emma says. As a result, sales have improved to the point that lighting is now one of the store’s biggest sellers in terms of accessories. “When you think about it, lighting is the perfect way to build a ticket because it’s the perfect way to build a room without a huge investment. Think about someone who’s trying to make a room very elegant and special. They’re going to have a hard time finding, say, an 8-by-10 rug that’s going to set the room off, but a nice floor lamp or a pair of table lamps will do just that for a lot less,” she says. But it hasn’t just been about adding new product; staff training also has been a crucial part of increasing their add-on lamp sales. “We’re always training the staff to help customers not just with the sofa or chair they came in for, but the complete room. We look at it like this: If the customer is so incentivized to come out and look, they must really not like what they have in their home. A sofa alone probably isn’t going to fix that, so we try to complete the package whether that’s with a rug, end tables or lighting,” Emma says. Claire Wei, director of media relations for Wildwood Lamps, says that even renters want the opportunity to include lighting in their homes, and not just table and floor lamps. That’s why she’s seen an increase in plug-in wall sconces. “Consumers who live in rentals still want to make that space uniquely theirs,” she says.

HEAVY METAL Currey & Co.’s newest collection, Industrial Chic, oﬀers a streamlined industrial look that puts a heavy focus on metals and woods.

Making customers want it When customers of Magnolia Furniture do request lighting, Perkins says their focus is on lighting that’s different. “Not the same old, same old—they want something that’s attractive, maybe even a conversation piece,” she says. She has found that customers who ask about lighting specifically, typically are looking for floor lamps, but that if they buy lighting as an add-on, their purchase is a table lamp. In terms of table options, size does matter. “Bigger lamps aren’t as popular. They’re wanting something small that doesn’t take up too much table space,” she shares. Pelett has found that in her part of the country the industrial loft look is big, as is a more “funky, mid-century modern” look. “Here in Portland people are looking to add something that’s unique and special to their homes that’s not expensive,” she says. But as Betsy Levin, marketing director at American Lighting Brands, explains, if customers don’t see the products displayed effectively, not only will they not know what they want, they definitely won’t be buying it. She suggests that retailers incorporate vignettes into their showrooms as often as possible to help the consumer imagine a product in their own space. “If they are not showing it, they are not selling it,” Levin says. Wei concurs. “Most retailers will merchandise their stores by product categories, which doesn’t resonate with customers. I think consumers come into stores looking for inspiration, which

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JUNE | 2016

What’s next in lighting trends

BLENDING IN Retailers who integrate lighting into

their furniture displays give shoppers an idea of how the accessory can be used in their homes.

explains why some retailers that offer personalized design services are very successful.” She recommends that instead of a lighting gallery, or at least in addition to it, retailers should include lighting with furniture in styled vignettes. “There should be more pendants, sconces and chandeliers incorporated since those draw the eye up and create a new layer of lighting,” she says. JoAnn Hollingsworth, owner of The Natural Light in Panama City, Fla., along with her husband Harvey, has worked with numerous retailers in her years as a manufacturer and says when it comes to displaying lamps and lighting some retailers are “absolute aces at what they do, and if they are focused on lighting that will be communicated to their staff as well. “One analogy I like is a men’s clothing store,” she says. “When a man goes in to buy a suit, the salesman will show him a suit in his size, but that salesman also will immediately start pulling shirts, ties, socks, too. When someone comes in for a sofa, a good retailer knows the customer’s need goes beyond that sofa.” Hollingsworth encourages retailers not to wait to ask the customer about throw pillows or lamps, etc. Instead, just as the sales person in her suit analogy would, they should simply start including those products in the conversation. “One of the buzz words we hear now when watching new real estate shows is ‘updating,’ which seems so obvious when looking at kitchens and baths,” she says. “But I don’t think most people take the time to realize that their lamps may be outdated, too. They still work, but they’re no longer in style.”

Hollingsworth feels that lighting manufacturing has changed when it comes to style trends. “I think probably to me one of the most important trends is lighting has become more sculptural, it’s more of a piece of art in the room,” she says. Regardless of the media used—metal, glass, etc.—she finds that lamps have taken on a whole new life. “It’s not just providing light or color, although that’s important, it’s providing a silhouette that seems more artistic.” Another trend Hollingsworth has seen is lighting used at different levels. “It’s always been important, but now it’s more important in the way the room is arranged, with light coming from different sources at different levels,” she says. This can mean recessed in the ceiling, in addition to table lighting or even lighting coming from the floor. “It’s not just along the perimeter of the room, the source of lighting has moved to center areas and to conversation areas,” Hollingsworth says. When it comes to finishes, Levin finds the trend is toward mixed metals, including copper and rose gold. Echoing the trend that the Peletts see in Portland, Levin also cites an uptick in interest in exposed and vintage-style bulbs, as well as cottage industrial styles and mid-century modern looks. Bethanne Matari, from Currey & Co., highlights their focus on industrial as evidenced by one of their new collections, Industrial Chic. Mixing reclaimed wood, linen and other textures, the group includes large lanterns and repurposed industrial elements but is more of a streamlined look than previous industrial incarnations. She explains that authenticity is important and that perfection is not the goal, rather it is often the unique differences that make each design more interesting. These so-called imperfections attract many consumers because they tell a story. Christine Gould and David Elliott, owners of Flow Décor, have seen a softening in both the materials and color scheme of lighting options over the last 5 to 10 years. Shiny is out and more muted options are in, for instance antique brass or gold or brushed nickels. Elliott says, “Another trend is a combination of materials, so instead of all metal lamps, we’re seeing a pairing of two, three or four materials—from marble and metal to blown glass, crystal, and wood.” Elliott also mentions more of a focus on shades, particularly in terms of the quality of the shade. Many less expensive lamp options feature simple shades with plastic liners. “We noticed about two years ago that when our lamps had cotton liners, which adds to the look of the lamp instead of shiny plastic, the light diffuses more nicely.” What’s more their customers noticed as well, even when the pair didn’t point out the difference. “Retailers said they can command a higher price point if the shade was nicer,” says Elliott, “so we started investing in nicer shades, and it has paid off.” Ginny Gaylor is an awarding-winning writer and editor based in Greensboro, N.C. She has more than 15 years of experience writing about the home furnishings industry. She can be reached at ginnygaylor@ gmail.com.

JUNE | 2016

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NEXTGENPROFILE

MINUTES with Lance Zeto

ver since I was kid, I’ve always pushed myself to get better with everything I do, and challenged myself to reach the next level. Playing soccer for 17 years, I’d always look for that next trick shot. When snowboarding and skateboarding I’d look for that next big move; and when surfing, I’d look for that next big wave. These actions pushed me to always look towards finding a challenging and fast-paced career choice; who knew that would land me in the home furnishings industry providing EDI solutions to manufacturers and retailers. This brings a whole new degree of objectives that I look forward to. Finding the answers to problems that manufacturers and retailers face moving data electronically to each other and taking cost and time out of their supply chains are what keep me on my toes every day. Yes, I’m faced with challenges that aren’t easy to overcome; but going up against those challenges are what leads to the celebratory moments I get to enjoy with my team!

What makes a good leader? A leader is only as good as the team that follows. Being a leader doesn’t mean you stand above your peers to take action, but rather join them on the level needed to make everyone successful. Encouragement and keeping a positive energy with you and your team are what make a leader someone everyone can follow the footsteps of. Good leadership is keeping motivation at its highest peak.

Lance Zeto

Electronic Data Interchange Specialist Ecutopia, Inc.

Words to Live By “I ask not for a lighter load, but for stronger shoulders” � St. Augustine

HOME FURNISHINGS

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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. JUNE JUNE || 2016 2016

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ENGAGEMENT KEY TO RETAINING

DESIGNERS By Lloyd J. Princeton

aving designers on staff in your home furnishings store is good for business. Today’s consumers can easily be overwhelmed with all the furniture, upholstery, rugs, lighting and accessories on the market. They may have an idea of what they like, but usually have little knowledge about a particular product and how it compares to others in quality, price and features. That’s where a good designer comes into play. Designers have extensive product knowledge. They can advise customers on what products will work well in the space they have or with the look they want to achieve in their home. Often these customers would like a designer’s advice but aren’t willing to pay designer’s fees. Having a designer on staff provides a valuable service that helps distinguish your store from your competitors. That’s the good news. The bad news is keeping designers on staff can be a challenge. By nature, designers are creative, and retail positions provide limited opportunities for them to put their passion into practice. Some new designers take jobs in retail to learn the sales and customer service side of the business, as well as acquire knowledge about product lines, while they search for a position with a design firm. Others find it a way to practice their profession without the hassles of running their own business. Eventually, though, they may lose interest or not be comfortable with all the duties required of them. Or, when demand for designers increases, they find they can earn more money doing design on their own. According to the U.S. Bureau of Labor Statistics, home furnishings stores employed nearly 1,400 interior designers in 2012, but that number fell to 1,300 last year as industry activity picked up. The annual mean wage for a designer in a home furnishings store in 2014 was $47,010, reports the BLS, compared to $54,620 for a designer employed in an interior design firm. Turnover can be a problem for retailers. On average, a designer will stay two, maybe three years at most, often less, says Doug Hartsell, vice president of corporate showrooms for Duralee Fabrics in Washington. “We plan on that,” says Hartsell. “For us, if a designer stays for two to three years, we consider that a good return on our investment in hiring and training them.” Hartsell worked as a designer for 10 years before taking a position with Duralee. He knows the business from both sides and understands why designers, especially those new to the profession, move on. “There’s a lot of grunt work involved, and many designers don’t like selling,” he says. “What they really want to be doing is designing. When they have an opportunity to join a firm or to earn more elsewhere, they leave.” For some designers, though, working in home furnishings is an attractive alternative to being a sole practitioner or running

JUNE | 2016

a small business. What attracted Hartsell was having a more stable lifestyle. He has hired a number of experienced designers over the years who, like him, got burned or burned out doing design and wanted regular hours, a reliable paycheck and benefits. Often, more experienced employees who have given up their design careers will stay on the job longer. They like the customer interaction and the aesthetic environment. They get to design and advise customers without having to manage a project or assume a lot of risk. Connie LeFevre, a Houston interior designer who also owns and manages two showrooms all under the name of her firm, Design House, says she prefers to hire more experienced designers. They know product, how to design, and how to order, whereas many new designers still have a lot to learn about how designers work and the various product lines she carries. While she struggles with turnover issues—“It’s the biggest problem we have in our business today,” she says—LeFevre has managed to maintain a loyal core of employees. One former designer has been with her now for 10 years. For starters, she pays them a competitive salary instead of commission and rewards them with raises when they perform well. To feed their passion for design, she has them create vignettes in the store and provides regular updates on the latest products and trends. She lays out a career path for them so they can envision a future with the business. If they show an interest, she mentors them in other areas of the business such as planning and management. In addition to raises, she rewards and incentivizes them in other ways, such as accommodating an employee so she could work part-time for a while after returning from maternity leave or taking an employee along to an industry trade show. Most important, says LeFevre, is to keep them engaged. “We work as a team,” she says. “I invite their feedback and listen to their insights and opinions on what products we should sell. It requires constant vigilance to keep the chemistry right.” The way to keep good designers in your home furnishings store, as these experienced pros have learned, is to hire the right people, treat them well, pay them well, and respect their knowledge. Make the workplace challenging and welcoming. Give them the opportunity to learn and to contribute, and, like your best customers, they’ll keep coming back.

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Lloyd Princeton is a retained search expert as well as management consultant to the design and architecture trade. He finds the best talent for firms and provides strategic advice to management to achieve operational and design excellence. He can be reached at lloyd@idtalentsearch.com.

ONCE UPON A TIME When Marketing to Millennials, it’s all about the story By Charles Wiedenhoft

here’s a lot of buzz in almost every circle about the Millennial generation, those born between 1978 and 1995, and for good reason. They’re spending money in a big way and, if you market to them right, on home furnishings. The numbers don’t lie. Millennials are poised to become the largest percentage of home buyers this year. These new homeowners will be looking to replace older furnishings or fill empty rooms. The impact is already happening. Millennials spent 142 percent more on furniture and bedding from 2012 to 2014. Working with a company that’s predominantly made up of Millennials, I can attest to the amount of money they spend on a new place. Marketing to Millennials is quite different from other generations. One-directional communications through a singular communication platform won’t cut it with this crowd. They rely on multiple platforms. While television is still important, it’s relied upon less heavily by this age group than others. Moreover, this new demographic requires more personal connections with home furnishing brands. This will come in the form of leveraging social media, mobile, and email marketing more than ever before. However, it’s not just using different forms of communications that’s important, but also what you convey to Millennials that will change. Home furnishings stores can’t simply blast their products and services over the airwaves touting the best selection at the lowest prices and get Millennials to respond favorably. They look for home furnishing stores and manufacturers to demonstrate how a comfortable home that looks great is key to facilitating the best in regular activities like cooking and entertaining friends. Millennials are eager to find “everyday celebrations” as a means to connect and share experiences together. One of the other things that makes this generation unique is how much more driven they are than GenX or Baby Boomers to their social, photo-driven culture. The notion of “looking better” is a natural motivator for Millennials. This includes both

their physical appearance as well as their material objects and possessions. Furniture retailers and home furnishing manufacturers will have to educate this consumer demographic base on how their products help them complete the picture. And herein lies the rub. The social value of home furnishings to Millennials is more dependent on the backstory of how they were created than the price for which the products are offered. Unlike previous generations, these consumers want to understand the designer’s inspiration, source of materials, and complimentary objects. This gives Millennials something to share and talk about with their friends. In turn, home furnishing manufacturers and retailers must respond with a concept called “storyselling,” the idea that every product has something important to add to the conversation and experience of the customer. This is especially valuable to Millennials living in smaller spaces in downtown cities or walkable urban neighborhoods. Furniture retailers will need to demonstrate how to make a home, no matter how large or small, the very best it can be. Because Millennials value creativity, they will appreciate educational tools and resources for putting a look together themselves; especially on tablets and mobile. For many in this industry, this strategic marketing shift may require some retooling of tactics and techniques, both on the promotion and evaluation side. The number of ways home furnishing manufacturers and retailers can measure the success of these initiatives is plentiful. The trick will be to look at the right information and take effective action to acquire, engage, convert and retain customers. Make no mistake, though. Millennials are not only a fast growing segment of the home furnishings market, but will be the dominant one in the not-too-distant future. There’s good money to be had by those who act to engage this consumer group effectively.

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Charles Wiedenhoft is director of strategy and planning for Red Door Interactive, a data-driven marketing agency with broad experience in the home furnishing industry. He can be reached at cwiedenhoft@reddoor.biz.

JUNE | 2016

Beware The Green Monster (In baseball and in business)

By Tom Shay

hen Fenway Park was built in 1912, Boston’s baseball stadium immediately stood out for its leftfield wall. The Green Monster, as it became known, was built to prevent people who hadn’t bought a ticket from being able to watch the game for free. The tradition continues with a similar Green Monster in leftfield at the team’s spring training field in Fort Myers, Fla. Attending a game there recently, I saw a connection between The Green Monster and your business. When retailers get together and discuss business, it seems the first measure of comparison is sales. “How have sales been for your store in the last year?” goes the question. And with that, retailers offer results and explanations from their businesses. There appears to be an unwritten rule that the winner is the business owner with the largest and longest ongoing sales increase. Over the years sales increase has proven to be an accepted measure of winning, but there’s the potential for a sizable downside for the winner. Unfortunately, many of us think that a sales increase automatically means an increase in margins due to buying in larger quantities, but that’s not always the case. There are other things to consider such as an increase in operating expenses (salespeople, delivery and installation, etc.) The theory is correct, and in most cases when the owner is paying attention to their operating expenses, the bottom line of the income statement is going to look better. However, there is a green monster looming out there. Just as Fenway’s Green Monster was designed to keep people from seeing what’s on the other side, this improved income statement is

JUNE | 2016

hiding a green monster from the owner. Unlike baseball’s version, when you understand the seriousness of the green monster in your business, you’ll definitely want to pay (it will cost a bit of your time; not money) to see what’s on the other side. The green monster of the retail business has another name; cash flow. Having a profit is great, but the question is whether you’ll have the cash on hand to pay the bills as they come due. This is cash flow, and when it comes to your business, you either have it or you don’t. If you don’t have good cash flow, there’s good news: Poor cash flow can be fixed. The cash flow problem occurs because the sales increase requires that the business spend money before the income arrives. The business isn’t going to suddenly increase sales with the same inventory. A sales increase is going to occur because of an increase in inventory; an increase in advertising; or a decrease in margin. All three of these change how much cash comes into your checking account. Unless you’re going to persuade your vendors and employees to allow you to pay your bills on a delayed schedule, somehow your business is going to have to come up with cash to sustain its growth. You might consider going to the bank and borrowing money. Just remember whatever interest rate the bank charges you to rent their money is going to reduce the net profit on your income statement by a like amount. Does this mean that a sales increase is bad for your business? Absolutely not! You’re only going to make more money by one of these three: Increasing sales, decreasing expenses, improving

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your margins, or a combination of the three. As all experienced retailers know, you can only control expenses so far as well as increase your margins so far. The rest of the profit you’re wanting to increase will have to come from increased sales. The “home run” for your business occurs when you’re able to plan the sales increase. This also means you have to be able to calculate the increase in operating expenses and what your margin will be; with that information you create a budget for your store. The suggestion here is to create a budget that projects 12 months in advance. Once you’ve created the budget, consider how much cash you have on hand at the beginning of the first month and then look at what’s going to affect the amount of cash on hand. While you add the profit to that amount, you also have to consider how much inventory you’re paying for during the month. You also have to consider the principle payment on any loan as that amount is not appearing on the income statement. The same is true for any depreciation as it is a non-cash item. While stated in a very simple example, the resulting number is an anticipated amount of cash on hand at the end of the month. Perform this exercise for the 12 consecutive months and you have a 12-month projection of cash flow.

Are you seeing numbers at the bottom of this projection that are too low or a negative number? That’s a warning sign of an oncoming cash-flow problem. Now you’re in a position to decide if you want to control the sales increase or borrow money to cover the deficit. At the ball game, it feels good being on the right side of the green monster; you get to enjoy food and the game because you paid for your seat. Nobody likes being on the other side of the green monster where all you hear is the roar of the crowd as something exciting happens. The same is true for the green monster of your business. You want to be on the right side so can see what’s going to happen. It’s kind of scary being on the other side. I know I don’t want to be there. Subscribe to Tom Shay’s e-ret@iler, a free monthly newsletter packed with tips for improving the profitability of your store, at profitsplus.org.

THE ULTIMATE DESTINATION FOR

ALL THINGS OUTDOOR SEPTEMBER 20 SEPTEMBER 23 2016

CasualMarket.com #casualmarket

Casual Market Chicago is the world’s largest marketplace for the best in outdoor furnishings. Discover new products, hundreds of exhibitors and the largest selection of permanent showrooms anywhere.

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Poly-Wood

Merchandise Mart, Chicago

JUNE | 2016

WHAT MATTRESS

SHOPPERS ARE SAYING (And what you can learn from them) By Gerry Morris

JUNE | 2016

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The new mattress in my bedroom felt nothing like the sample in the showroom.” Uh oh. It can be troubling to hear what mattress shoppers have to say. Thankfully, it’s not all negative. Whether good, bad or ugly, there is no better information for mattress retailers to keep a “finger on the pulse” than actual up-to-date comments from real mattress shoppers and buyers. This month I want to encourage retailers to consider their products and practices from the shopper’s perspective and to make adjustments accordingly. So where does one go to find that kind of information? Goodbed.com is a great place to start. It reaches about two million shoppers per year, has more than 25,000 stores listed on its site and has collected more than 50,000 mattress ratings. One of the most helpful features is the consumer input found through forums, questions to experts and for this article, actual customer reviews and ratings, of brands, products, stores, and shopping experiences. Here are some GoodBed quotes along with my comments and suggestions. I deleted store and brand names because they are irrelevant. (Translation: I don’t want anyone mad at me.)

Pricing “Some retailers like to lie to their customers by making up the starting price of $3,500. 75% off then less $500 and another 20% off. Really what they mean is $300 is the regular price that they try for every day.” It’s no secret that consumers think mattress retailers inflate prices so they can come back and discount. That’s because many do. It’s a circular process, consumers expect discounts, retailers offer them, consumers expect them. But it’s vital that retailers protect their credibility, reputations and, of course, margins. The problem is when “difficult” shoppers get huge discounts and “nice” ones don’t. Make sure pricing is realistic, competitive and fair. Consider creating and adopting a pricing policy with parameters on discounting. Many shoppers do not like to negotiate, but often feel it’s an expected part of the process. The good news is that people who know the rules up front are usually fine with them. I’ve also worked with successful retailers who don’t negotiate at all. “Expectations were met…they provided the expertise regarding latex mattresses…provided a good price, but still expensive. No regrets though.” Price will always be an important factor for shoppers, but retailers don’t have to have the lowest price. Many people willingly pay more for the same product if they like and trust the salesperson and the company they buy from. Price is important, quality goods, service and most of all trust are essential.

Remember what the great mattress retailer Ben Franklin once said: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.” OK, he wasn’t a retailer, but he would have been a good one.

Return polices “The store sells you on a 60-day comfort guarantee but there’s a catch they won’t tell you about until you try to exchange the bed they sold you. This is where they get you; they charged me a $350 restocking fee.” What a shame, for customers and retailers to have an Us vs. Them dynamic. Experiences like this make shoppers suspicious of all retailers. So-called comfort guarantees are meant to be a safety net and should be mentioned only after the sales associate and shopper have gone through the complete process of selecting a model that is most satisfactory. Just as with pricing, if people know the rules ahead of time, they are typically OK with them. Spring it on them after there’s a problem…well, you get the disgruntled customer above. Make sure salespeople go over all pertinent policies and procedures at the time of purchase. “The problem is they pushed their “Worry No More” warranty that turned out to be completely useless. They also said mattress manufacturers will deny warranty if we use a competitor’s box spring (this turned out to be completely false).” Most states have their own laws governing such things, but as a general rule, manufacturers can’t deny a warranty if the customer puts the mattress on a box spring they already own or on another brand’s foundation. They can, however void a warranty if the foundation is inadequate, broken down, and/or contributes to the breakdown of the mattress. Either way, this can all be avoided by knowing and giving proper information and more importantly using a proactive approach. Sales associates should recommend buying the foundation that goes with the mattress for the benefit of the customer to get the proper support and the maximum usage from the set.

Delivery “I ran outside to the delivery guys before they left and showed them that they delivered the wrong bed. We spent hours on the phone with customer service and no one seems to care enough to actually change the delivery or get us the correct mattress, much less offer any consolation for our troubles.” But wait. Here’s another: “The delivery crew unloaded them (the set) by dropping them off the truck to the ground. The wood in the box springs does not like that. Management did not seem to care or look into their delivery process or people who did this.” Even worse than these two incidents themselves, is the uncaring attitude of the management. Most people understand that things happen and when management responds quickly to rectify situations. Customers feel validated by their complaints being heard and addressed and often have a better opinion of the retailer than they otherwise would.

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JUNE | 2016

“Bought the mattress, got it the next day. No delivery fees, no problems. Couldn’t be happier.” Not much to say here. It’s pretty simple and obvious what makes customers happy. The only issue is that nothing is free. Each retailer has to decide which best serves their customers though. Many have delivery fees so as not to penalize people picking them up. Retailers need to provide an excellent experience to all their shoppers from the moment they enter the store until after they take delivery on their goods.

Body impressions and sagging “It started sagging where we slept. The store would not take it back and allow us to exchange for something more firm.” And… “It’s so soft, just not for me. I need extra firm.” These are just two of thousands of quotes based upon body impressions. Almost all of these issues can be avoided by sales associates addressing experience and expectations. Your sales staff should be asking what type of mattress the shopper is accustomed to sleeping on. They should also be asking what they expect from their new set.

People willingly pay more for the same product if they

like and trust the sales associate and the company they buy from. Price is important, but so are quality goods, service

and trust.

CONNECT NOW

Sales associates

“Jason helped me find the perfect mattress for my toddler. Most importantly, he helped me measure the exact height the bed would be and gave me all kinds of different height options so that my toddler could easily climb in and out of the bed and transition from her crib seamlessly.” Professional sales associates like Jason take the time to discover and address needs, large and small, while bringing up issues shoppers may not have considered “I was impressed by our sales associate Kim. She knew her product and wasn’t pushy like some of the other stores. We ended up buying a whole house full of furniture there.” Too often, mattress sales associates get a bad rap. There are far more caring, competent and conscientious ones like Jason and Kim serving customers well on a daily basis. “Assuming they work on commission. I was surprised that no one approached us. One lady even asked us if we ‘were having fun.’ I thought that was a bit condescending.” This speaks for itself. We’re all familiar with stories like this. Hence the stereotypical used-car salesman references.

Expectations “I liked how the mattress in the showroom felt but the one they delivered felt nothing like it.” Retailers should check the condition of their floor models daily. A great way to keep them fresh and feeling more like the inventory models is to put on the law tag, the date they are put on the sales floor and replace them on a regular interval. Also it can make for a great promotion: “Our floor models are on sale, we replace them while they still feel like the models in inventory.”

JUNE | 2016

Brands and trust

“There really wasn’t any reason to shop anywhere else. They have most of the major brands and they really specialize in adjustable bases. Their prices were the best we had seen, even when we compared them to internet prices.” Good selection at competitive prices—what a concept! But the real lesson in this comment is the exponential growth in sales that retailers are experiencing from displaying adjustable bases. They have gone from being associated with hip surgery to just being hip. Better jump on the bandwagon, but be careful! “This bed is amazing, but I had no idea about this brand. We were a little concerned but the salesman explained it had the thickest springs for the most support and that it was made in Southern CA. We love it!” No doubt, brand is important to most shoppers because there is familiarity and an implied credibility. But studies show that many shoppers willingly switch to brands they may have never heard of if they like and trust the retailer and the sales associate.

See for yourself

Mattress retailers can go to GoodBed.com, “claim” their business profile for free, enabling direct control over the information listed about their store, such as product selection and services. Here is the best part, it also allows for easy monitoring of your online reputation and the ability to respond to consumer reviews. What are consumers saying about your store? 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 furnituretrainingcopany.com

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2015 RN

MOVE NOW

Our industry moves at a rapid pace. You need to move with it. RetailerNOW is the only association magazine dedicated to helping retailers like you move and stay ahead of the curve. Each month we bring you expert analysis, industry insight and interesting stories to move your business forward. Subscribe now. Visit Retailernowmag.com.

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INSPIRATION+EDUCATION

6/18/2015 1:36:34 PM

Choose the Right Performance Management Software

Measuring your employees’ performance requires the right software By Kevin Hsu

skilled and talented workforce is the main lifeline of home furnishings professionals for carrying out their business activities. But if companies don’t invest the time to continuously develop their talent force—their most important and valued resource—then all their efforts and money spent recruiting is wasted.

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Medium- and large-sized home furnishings stores must look for the right set of tools to measure and manage the performance of their employees, and at the same time, the technology they use to do so. Corporate performance management software helps the managers outline accurate job profiles and expectations, create relevant objectives in accordance with the company’s mission and

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goals, document performance of the employees, and write appraisals. The corporate performance management software also enhances employee engagement via recognitions, valuable feedback, and transparency. Each employee—no matter on the sales floor or in the warehouse—can see how they’re contributing to the company’s mission and how professional development programs are closely linked with business goals.

Conducting a Comparison Performance management systems help line up your store's workforce to the company’s objectives, measure and evaluate the performance of each employee, and measure the organizational results from time to time. The software also automatically tracks down all the activities which ensures the objectives are consistently being met in an effective and efficient manner. Conventionally, organizations conduct performance reviews once a year. However, it’s essential for employees to receive feedback to understand how they are contributing to the organizational goals, as well as how their careers will benefit in the long run. This means continuous alignment and assessment of performance is needed along with feedback from not only their immediate manager, but also from the team members, peers, and even the indirect managers. A corporate performance management software offers the following functions, which can be used to gain a better insight into an individual’s overall potential and strengths: • Performance review management • Performance appraisals • Coaching management • Development planning • Multi-rater functionality • Feedback management • Performance pay • Mobile capabilities • Talent profiles • Analytics and reporting • Alignment, goal-setting, and management • Skill assessment and competency management • Performance and productivity analysis

Common Applications When choosing corporate performance management software, there is no one-size-fits-all solution. Different stores will require a different type of management system with tailored features. So, it is vital to consider your store's needs and the goals you’re looking to achieve. Having said that, the market can be categorized in the following manner:

Size of the Organization • Large home furnishings stores: It’s necessary for large stores to have management software which integrates well with their existing HR or ERP systems. They must consider an integrated suite from one vendor or make sure that the new software will blend seamlessly with their existing systems. • Small– to medium–sized stores: Thanks to the introduction of Software as a Service (SaaS), small- and medium-sized stores can benefit largely from a robust performance management system. For upcoming and growing stores, scalability is evidently one of the major factors to be considered. Nobody wants to outgrow their system in a matter of few months. As you grow, you’ll need to continuously evaluate your company’s goals and growth projections in order to make sure that whoever you ultimately choose as a vendor remains a good match with your store’s growth. In case you find that your system lacks the functionality your store needs for your organizational work and growth, it’s best to change your vendor as soon as possible.

Types of Application • Integrated suites: For organizations that wish to improve their entire talent-management process, they need to create an effective and efficient system from the start, or upgrade from the spreadsheets, and subsequently an integrated suite with multiple modules and add-on features, which will prove the best option. • Best-of-breed: With a comprehensive HR solution already in place, it is best to opt for a standalone system that offers more advanced functionality than the traditional systems, especially if you are satisfied with the majority of your human resource information system. Do ensure that the new software integrates well with your existing platform.

Choosing the Best Analysis of the performance management market, its eminent features, and current market trends are some of the key points that organizations must keep in mind while making their software purchasing decision. If you’re planning to buy CPM software and don’t know which one will suit your requirements; it’s advisable to take the assistance of a professional. There are many software companies out there that offer integrated solutions with software demos at the most reasonable prices. Browse through the web, find a good service provider, get a hang on which performance management system will best match your organizational requirements and then make a purchase.

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Kevin Hsu, is cofounder of Kepion Solution, which drives innovations in areas of business intelligence and analysis for companies. He also writes for GrowBiz Media, a consulting company specializing in small businesses and entrepreneurship. Sign up for free small-business stories and tips at smallbiz.com

JUNE | 2016

FAMILYMATTERS

Succession Planning

It’s not a four-letter word, but retailers sure treat it like one. Starting this month, nine reasons why you need to face the future. By Wayne Rivers

t’s gotten so the big financial services companies produce a report about family businesses two or three times a year. They almost always tell the same story: Family businesses are woefully unprepared for management succession. They’re somewhat under-prepared for ownership succession. Few have adopted formal business and family governance practices. To make matters worse, the senior generation has no plan to retire, which creates a fair bit of uncertainty for subsequent generations in the business. Sound familiar? So why don’t family businesses, given the fact that the do-or-die test of their long-term success is at issue, undertake more rigorous, thoughtful, and productive business succession planning? There are a host of reasons, but there are nine which continually rise to the top of the heap. We’ll tackle three of the reasons each of the next three months in this space. By the end of summer (if not sooner), you’ll have no reason not to have your affairs in order!

1. It’s not urgent For a healthy, relatively energetic 65-year-old with employee children ages 40, 38, and 36, there are many, many pressing events demanding his attention every day. Succession planning is high on his list of importance, but let’s be honest here, succession planning rarely makes it to the top of his urgent to-do list. It was a goal to undertake succession planning in 2013, but for some reason we can’t quite recall, it didn’t happen. So the goal was pushed back to 2014. Same goal, same story—no movement whatsoever. Last year things were just too crazy what with furniture market and having to hire two new sales associates. And then there was that accident on the job site, and an unexpected lawsuit came up which required plenty of time and money. The patriarch says, “We absolute, positively have to take care

JUNE | 2016

of succession planning—and we will next year.” And so on, and so on. The fact is the big picture, multi-year process of succession planning actually does lend itself to being pushed back a week, a month, a year. Business succession planning is rarely urgent—except when it is, and then, or course, it’s too late. A corollary to the never-urgent issue is the fact that there’s never any time. I don’t need to tell you the life of a home furnishings store owner—especially in the years following The Great Recession—is a hectic, fast-paced existence where she moves from one task to the next, one meeting to the next, one phone call to the next, and one fire to put out to the next. The lack of downtime—time to simply put one’s feet up and relax—precludes deep, introspective business thinking and planning about succession. To gain traction, family business leaders and next-generation family members must make succession planning a priority and schedule sufficient time, money, and energy as they would towards completing any other high impact project. Look at this another way in the long run, what project is more important to your business than planning for the future success of your business and family? Another way to look at it: Every day you’re looking at the short-term future of your business’s success. Why not invest just as much energy into your business’s long-term success?

2. The focus on tax avoidance and “Drop Dead Plans” creates a false sense of security When we started helping family businesses plan for a better future 27 years ago, the state of estate planning among them was— how shall I put this politely? —woeful. Today, due to a concerted education effort on the parts of the legal and financial services communities, estate plans are much better thought out and more robust than ever before. And that, in and of itself, presents a problem. Almost all estate

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plans are crafted as ownership succession plans only, and the primary strategy behind the plans is tax avoidance. Now, let me stop here for a minute and say I get it. No one wants to pay a nickel more in tax than necessary, but to allow the tax tail to wag the dog when it comes to family business succession planning is setting yourself and your store up for a painful mistake. Ownership succession is not management succession, and management succession is the 800-pound gorilla in the room that must be acknowledged and addressed if a family business hopes to prosper several years down the road. Who cares who owns the business if your store is destined to go broke within five years of mom and dad’s retirement? The fact that family businesses have spent hours and hours and thousands upon thousands of dollars to perfect their tax avoidance and Drop Dead Plans is a barrier to good family and management succession planning because it creates a false sense of security that everything is well in hand. Deep down you know that’s not true, and estate planning, while an important component of business succession planning, is only a small, albeit significant, piece of the larger puzzle.

3. Family member or employee push back Families sometimes undertake ownership or management succession planning, think long and hard about pros and cons of potential outcomes, and then enter into discussion with family members or key non-family employees about the plan only to find that the employees give it a lukewarm or negative response and family members don’t think the plans are all they’re cracked up to be. That push back, while honest, is often enough to crush the enthusiasm and newfound planning momentum and cause senior generation family business leaders to say, “Why bother?” Perhaps the plans weren’t perfect (few are), and maybe they were even pretty flawed, but whoever—senior generation or next-generation family members—starts the succession dialogue ought to be encouraged and given the respect they deserve. No great book was ever in final form at the first draft, and your family business succession plans will likely require many versions before they’re “perfect.” Patience and a positive attitude go a long way—not just in business, but in planning for the future. Next month, we’ll take a look at three more rationales family businesses love to fall back on when it comes to putting off the planning so desperately needed: Fear of family upset, the lack of “how to” knowledge, and the stunning lack of courage displayed by successor generations. 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@ familybusinessinstitute.com.

ADDING A FAMILY MEMBER TO THE BUSINESS

My daughter is a blessing to our store. She works hard, has a great eye for what sells and has turned the operations side of the business around. So what’s the problem? Her husband wants to join the family business. He’s worked for years in the financial industry and wants a change. The problem is my son-in-law, while a great husband and father, doesn’t have the ambition and passion I think is required. He’s used to working 40-hour weeks and thinks my daughter should, too. How do I have this conversation without hurting both of them?

So your son-in-law wants to make a change? How nice! What qualifies him to succeed in the retail business? You don’t need employees; you need great employees. At what is he great, and would he be a genuine asset to your family-owned business? Is there a position open for him? If not, the conversation is over; creating a job out of thin air for the benefit of a family member is a mistake. If there is a position open, is he clearly more qualified than other applicants? Unless he’s unmistakably more qualified than other people interested in the job, he shouldn’t get it. You should be running your business based on merit, not nepotism. Is your son-in-law’s compensation expectation in line with yours? Is he in the budget? If he’s not in the budget, he represents a dead cost—something no retailer needs. If his compensation expectation exceeds what the market would typically bear, that too represents a dead cost. As you already know, the expectation of consistent 40hour work weeks in a family business is unrealistic. If your daughter is going to lead from the front, some weeks she’s going to be there for extremely long hours. Your son-inlaw’s expectation of predictable, consistent 40-hour work weeks is unrealistic and portends a future of unmet expectations—and therefore, dissatisfaction—on both sides of the equation. Finally, and most importantly, what kind of pressure will working together place on your daughter’s marriage? At the moment, he’s a great husband and father, but it is the rare couple that can happily coexist when they’re spending 24 hours a day together. I recommend a blunt discussion covering these questions and a healthy application of tough love in a formal business setting. You’re much better off setting clear expectations than allowing your son-in-law to join the family business only to have to make a dramatic change if things don’t work out. As the old Fram oil filter commercial said, “Pay me now, or pay me later.” Go ahead and have an uncomfortable conversation among family members now, or risk having a much more difficult conversation later.

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JUNE | 2016

MARKETTRENDS

High Fashion in High Point Couldn’t make it to all the showrooms at High Point Market this spring? Who can? Relax. That’s where we come in—or rather High Point Market’s ever-vigilant Style Spotters. Colors run from soft to bold. Shapes range from geometric to whimsical. And skins and hides have never been more popular. Here’s an inside look at some of the leading trends coming out of April’s market from some of the design industry’s leading experts. With a unique perspective based on their own design style and preferences, each Style Spotter has selected their top trends from market.

Malene Barnett Maleneb.com @malenebcarpets

@malenebcarpets

A cultural enthusiast and passionate entrepreneur, Malene collaborates with international artisans to create handcrafted custom carpets, inspired wallcoverings, and artisan tiles for her company, Malene B. Her luxe creations have enlivened premier hotels, iconic office buildings, and sophisticated private spaces. Jo Liza’s Lacey lounger

Marie Flanigan marieflanigan.com @MarieFlanigan

@marieflaniganinteriors

One of Traditional Home’s 10 New Trad designers for 2015, Marie is an awardwinning interior designer whose passion and achievements have positioned her as one of the nation’s best. Drawing from her roots and education in commercial architecture, she excels in the integration of interior and structure, and makes her mark with a personal touch of refined elegance and innovative simplicity.

Revel in Reinvention

Island Living The idea of relaxing in a Caribbean villa was prevalent in many collections. Jute, a natural fiber found in many parts of the world, was one of the material highlights of Market. Traditionally known for its use in furniture, the fiber is now given new life as it is woven into interesting geometric patterns reminiscent of macramé and string art, and used in lamps, chandeliers, accent tables, artwork and mirrors.

Geometric Patterns Geometric patterns were everywhere, and their prominence indicated that companies are not afraid to express a love of pattern. Techniques, ranging from hand-carved and patchwork to laser cut, each expressed a different aesthetic, but all in a modern style.

I believe the saying goes, “If you don’t learn from the past, you’re destined to repeat it,” and Market revealed that we’ve learned, loved, and elected to repeat. Showrooms were teeming with revivals and it was remarkable to see century-old styles being subtly transformed through the use of contemporary textiles and finishes. I was particularly drawn to the streamlined mid-century modern pieces, European antique reproductions, and vintage Oushak rugs that were cleverly re-purposed to serve as upholstery. These hybrid pieces add a remarkable touch to any design, creating modern spaces that share a stylish and richly-layered story. Arteriors’ Wade lamp

Jaipur’s New Traditions jute rug

JUNE | 2016

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Brynn Olson brynnolson.com

Anne Sage annesage.com

Inspired by the idea that “How you shape your space will shape your day,” Brynn believes that the power of a well-designed interior goes beyond an aesthetic transformation to deliver an incredible impact on individuals who live, work or interact with the space.

From her home base in Los Angeles, Anne brings her signature smart yet stylish approach to fashion, interiors, entertaining and more. Anne began her career working as a consumer strategist in Manhattan, and has developed into a full-time content creator. In 2010 she cofounded the online lifestyle Rue Magazine, and she now contributes regularly to a range of media outlets.

@BrynnOlson

@brynnolsondesigngroup

Animal Instincts Shagreen, vellum, and hair on hide were a huge hit in designs that wowed by wrapping the entire piece. Bernhardt’s Parkin Drawer Chest stunned in gray hair on hide with polished nickel details. Mr. Brown’s Belmondo Table, enveloped in striking shagreen, went ultimate luxe with brass branding and rivet details. Metal and mirror dazzled in the jewel-toned Custom Brooklyn table from Julian Chichester. Interlude couldn’t stick to just one skin, offering their Sinslet Spool Table in shagreen or natural vellum. Our animal instincts tell us this trend is likely to stay awhile.

@citysage

Dupuis Design Collective’s Cabo sofa

Green is the New Black A distinctive shade of deep, inky green played the role of a neutral in all furniture and decor applications this Market. Neither decidedly warm nor cool, this versatile hue can easily take the place of black or navy, and it easily veers traditional, glam, industrial, or beyond. From applications in leather furniture to ceramic decor, vinyl wall coverings to wool rugs, this green forms a solid foundation for any palette—all while imparting an earthy note of mystery everywhere it goes.

Bernhardt’s Parkin Drawer Chest

Laura Umansky laurauinteriordesign.com @LauraUInc

@laurauinteriordesign

Based in Houston, Laura is best known for her luxurious, livable interiors. Her signature Classically Current style has gained global recognition for bridging the gap between high design and practical living. She combines clean lines with an unexpected infusion of color to create a comfortable, yet bold, aesthetic.

Mid Century: Deco & Chinoiserie I loved the new vintage looks at Market! Chinoiserie—traditional and subtly contemporary—was on point, making appearances everywhere from entire walls, to furnishings, to detailed accessories. Lucite and brightly colored lacquer brought a new look to 18th-century inspired designs. Another classic look—the oh-so glamorous art deco—is also currently en vogue. I saw a lot of fabulously updated channel tufted upholstered pieces and cane furniture, inspired by French styles of the 20s, 30s, and 40s. Accent pieces like bar cabinets and materials such as burl wood added character to new collections.

John Richards’ Toledo armoire

This curated collection is just the start. The complete Style Report can be found on the Style Spotters page of highpointmarket.org. RetailerNOWmag.com

JUNE | 2016

MEMBERBENEFIT

One of the strengths of your association is, well, associating Take advantage of your fellow members’ knowledge and expertise By Jana Sutherland

SHARING KNOWLEDGE HFA members Chris and Aaron Cooley take part in the 2015 Networking Conference in Orlando. The conference is one of several HFA-sponsored opportunities to connect and share ideas with other retailers.

ssociating and connecting with other members, the Home Furnishings Association staff, and friends of the industry leads to answers to questions and situations that may have your business stymied. The resulting “collective intelligence” means none of us has to spend time reinventing the wheel. We can benefit from our collective experiences and lessons learned. Because your Association is committed to improving your business lives, we are always working on ways to make it easier to “associate” and learn from one another. One of the most obvious are the Retailer Resource Centers at the High Point

JUNE | 2016

and Las Vegas Markets. They’re great places to gather and learn—not just from fellow retailers, but marketers, designers and so many others. The annual HFA Networking Conference, such as the one held last month in Long Beach, Calif., is another associating place. But as we know, associating can happen online, too. So, do you need your Association for online connections? Connections can be made without the HFA, but connections that lead to better business come about faster and can be more effective because we help. Earlier this year, an association member had a question about salary structure and commissions. She was curious how other

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home furnishings retailers handled pay so she picked up the phone and called us. By the next day, we connected her with other retailers big and small who were willing to share their knowledge. Why spend time away from work trying to track this down when your Association can qualify and match your question with someone who has the answers? While you’re busy providing solutions for your customer’s furnishings needs, we’re focused on becoming indispensable to your own needs. We talk to other retailers, service providers, business consultants, and so many other thought leaders in our industry, and we collect ideas. We’re intent on identifying and collecting solutions that make a difference. Our member mentoring program pairs retailers who share ideas and strategies. Our leadership immersion program for Next Generation Now members lets them spend several days learning from successful retailers like RC Willey and El Dorado Furniture. Associating, connecting, and stepping back to think in new ways about your business are things that we are committed to doing with you. Take advantage of the many services your Home Furnishings Association has to connect you with other retailers who can help grow your business. Jana Sutherland is HFA’s membership director and can help HFA members with any questions or problems they encounter in operating their businesses. Contact Jana at 800-422-3778 or jsutherland@myhfa.org.

HFA Members Get a Private Shopping Portal. Through Best Buy For Businessâ&#x201E;˘ HFA offers members a private shopping site with discounts on thousands of products from leading manufacturers, plus quarterly featured solutions designed to help you take your business to the next level.

We make it easy with the right advice, products, services & support.

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To learn more about this HFA member program visit nahfa.org or call:

800-422-3778

Always providing members discounted pricing through our national programs.

GOVACTION

Slow and steady wins the race… I hope By Lisa Casinger

ne thing I’ve learned as a government relations liaison is you don’t step into anything connected to government and expect immediate results. That whole ‘patience is a virtue’ thing is an understatement. And those who know me will attest to the fact that I’m not a very patient person. Since the Home Furnishings Association made advocacy a priority three years ago, we’ve been led by our volunteer member team, the Government Relations Action Team, to monitor and affect change when possible on a host of issues including federal online sales tax, employment and labor, transportation and hours of service, state and federal regulation of formaldehyde emissions in furniture, state and federal regulation of flammability in furniture, and tax and healthcare reform. Along the way we’ve added other concerns to our watch list based on member questions or problems: Online review sites; patent reform; deferred interest scrutiny; furniture tip-over standards; mattress recycling; EVM chip card migration; and ADA website compliance. One of the big issues HFA members are working toward is online sales tax parity, also known as Marketplace Fairness legislation. Millions of dollars in taxes from online or remote sellers go uncollected every year because states aren’t authorized to collect taxes from these entities unless they have a nexus in the state. This hurts brick-and-mortar retailers who do have to collect and remit the tax, and it’s hurting states strapped for cash. The Senate passed the Marketplace Fairness Act in 2013 and sent it to the House—where it’s languished. HFA has led the industry effort in pushing this issue forward. Earlier this year when Senate Majority Leader Mitch McConnell promised to vote on MFA legislation in the Senate in 2016, I got excited. I thought, finally, we’ll have a bill, we’ll

JUNE | 2016

win. The only thing that had to happen to move this forward was for the House to bring up a bill to vote on. They have a couple of versions floating around—they just need to hammer it out, compromise, and bring it to a vote. So, several weeks ago when I heard that wasn’t going to happen this year I was deflated. Sure, I could look at all of the good things we’ve done over the last three years—the webinars we’ve hosted to educate members on EVM chip cards, ADA website compliance, MFA, and furniture-tip over standards; the tip-over ad campaign we launched this year; the education we’ve provided through our member updates and articles in RetailerNOW—but I really wanted that MFA win NOW. Then I stopped and thought about something one of our team members, Wogie Badcock, related to me when I first complained about how slowly things happen in government. Wogie has been advocating for retailers for decades and he’s passionate about it. He’s involved in local and state as well as federal issues; and if he’s not, someone on his staff is. He’s been recognized by the National Retail Federation (among other groups) as an outstanding retail advocate. He knows what he’s talking about. He told me about the struggle to reform bankruptcy laws and how that impacted the industry, specifically retailers who provide their own in-store financing. Retailers who carry their own paper (and the companies that buy that paper) are secured creditors, versus credit card issuers who are unsecured; this means they had a lot more on the line when customers filed for bankruptcy. “So, if someone was out there cheating the system, and believe me there were way too many people doing this [in the 1990s],” Wogie said, “we had little recourse. They’d come into the store,

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apply for credit, buy a new washer and dryer or bedroom suites, whatever, and then file for bankruptcy two weeks later. In bankruptcy court, their attorneys would try to convince the judge that the $1,800 worth of product their client just bought was only worth $800. We’d have to hire an attorney to represent us to prove the cost of the product, the judge would split the difference and we’d still not recoup the total cost, plus we’d be out the attorney fees.” Eventually, due to the efforts of advocates like Wogie in our industry and others, reform came in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act which made it more difficult for consumers to file for bankruptcy and put more requirements on them to return the merchandise or reaffirm the amount owed. Retailers won. And I think we can do it again. Why? Because it’s coming. Online sales tax parity is coming, whether it’s via federal legislation (which would be the best option) or by state legislation. States are ready to fight for their right to collect sales taxes from out-of-state internet retailers. Some are moving to impose those taxes themselves, daring merchants to challenge them and have their actions legally questioned so they can ask the Supreme Court to overturn the 1992 rule that prevents taxation of internet sales by retailers that don’t have a nexus in a state. So far 28 sales tax bills have been introduced in 13 states.

Early this year the American Booksellers Association and Civic Economics released a study titled Amazon and Empty Storefronts. The study shows the impact of uncollected sales taxes on states just based on Amazon sales. Here’s what these 10 states would have collected from Amazon in online sales taxes (in millions) had there been a federal law: Missouri $60.2; Colorado, $57.8; Louisiana, $54.4; Alabama, $50,2; Oklahoma, $45; South Carolina, $39.7; Illinois, $36.1; Arkansas, $32; Iowa, $28.9 and Mississippi, $22.7. Again, those numbers are based on Amazon sales only! According to the report, in 2014, Amazon sold $44.1 billion worth of retail goods nationwide, and avoided $625 million in state and local sales taxes. That’s the equivalent of 30,000 retail storefronts, 107 million square feet of commercial space, which might have paid $420 million in property taxes. A total of more than $1 billion in revenue lost to state and local governments, $8.48 for every household in America. So I go back to, slow and steady wins the race. I only hope we don’t have to wait decades to win this one. Lisa Casinger is the editorial director for RetailerNOW and the government relations liaison for HFA. Contact her at lcasinger@myhfa.org.

Tip-over prevention is everyone’s business! Every two weeks, a child dies in the U.S. when furniture, an appliance, or a TV tips over on them, according to the U.S. Consumer Product Safety Commission. By working together, we can help reduce the risk and prevent tragedies involving our industry’s products.

Together, we can reduce the risk. Whether you are a manufacturer, retailer, sales rep, or interior designer, you can find more information at the following websites: www.ahfa.us/furniture-tip-over www.anchorit.gov/get-involved www.myhfa.org/government-relations/the-issues/anchor-it-prevent-tip-over

RetailerNOWmag.com

APRIL | 2016

HFACOMMUNITY “79 years of hard work up in smoke” Photo by Chris Nelson, breakingskagit.com

An early-morning blaze destroys HFA member Don Gerrior’s store.

Fire destroyed Hansen’s Furniture in Mount Vernon, Wash., last month. HFA members Don and Cindy Gerrior, below, are deciding whether to re-open or not.

HFA member Don Gerrior was in the hospital recovering from surgery last month when his wife Cindy showed up with the news: The main store to Hansen’s Furniture, a fixture in Mount Vernon, Wash., for 79 years, was destroyed by an early-morning fire. “Disbelief,” says Gerrior, when asked to describe the loss of his store. “I just sat there in that hospital bed wondering what

I was going to do next. That fire took more than just a store. Seventy-nine years of hard work up in smoke.” Gerrior is still not sure what he’ll do— rebuild or run his business out of the company’s second store down the block. Either way, the Home Furnishings Association moved quickly to help. Less than a week after the blaze, the Association sent Gerrior a care package to help the company get back on its feet: Hand-truck dollies, stretch wrap, tags, gloves, furniture polish, and a touch-up kit. Suddenly the basics many home furnishings retailers take for granted were rare commodities for Hansen’s Furniture. “Every bit helped,” said Gerrior. “When

you lose everything in one night, we were very grateful for the association’s help.” Fire officials say the blaze started around 3 a.m. on May 1 behind a store on the same block. The fire quickly spread to Hansen’s. More than 60 firefighters from nine area departments responded to the blaze. Nobody was injured, but damage to both stores was estimated at $1.5 million. Gerrior owns a second store across the street from his now-destroyed flagship store. That store, as well as his warehouse, were not damaged in the blaze. Hansen’s has been an institution in the Skagit Valley. Residents have furnished their homes through the store since 1937. Gerrior was an employee of the company until he bought the store 20 years ago. “It’s not just my life that’s affected,” Gerrior says. “I have employees and people who’ve been coming to this store and counting on us for years. They’ve been very appreciative of us and we have of them, too.” Gerrior met with an insurance claims adjustor after the fire and is waiting to hear back before deciding how to proceed. He’s 56 years old and has done the math. When you factor in the rebuilding process and the red tape to get all the building permits, “I’ll be 58 or 59 before we’re back up and running. Part of me says to just walk away, but a bigger part of me says this is our home and people are counting on us to come back.”

MicroD upgrades its OmniVue Platform to comply with anticipated changes to federal disabilities act MicroD, which offers integrated webbased merchandising and e-commerce technology for the home furnishings industry, has upgraded its OmniVue platform to comply with anticipated requirements under the Americans with Disabilities Act. In making the announcement, the North Carolina company said it expects the federal government to pass legislation that will require public websites to comply with ADA. While there currently 40

JUNE | 2016

are no mandated ADA requirements for private business websites, experts expect the government eventually will require them to follow related Web Consortium Accessibility Guidelines (WCAG), the company said. The latest OmniVue platform has been enhanced to follow the WCAG guidelines, said Ron Gordon, MicroD senior vice president of technology. “With these improvements, the website can be easily read by a screen reader, RetailerNOWmag.com

images carry additional text descriptions, and color contrast is improved to assist those who are visually impaired,” Gordon said in a release. “The site can be navigated with only the keyboard or through voice commands so those with limited fine motor skills can use the site.” Customers have the option to upgrade to this platform and also update their website designs to meet the accessibility guidelines, MicroD said.

HFACOMMUNITY At Jerome’s, search is on for a new CEO; Goodman promises a smooth transition HFA member Jerome’s Furniture is not rushing in to replacing the store’s outgoing CEO Lee Goodman. “The Navarras and I are committed to finding the right person to lead this incredible team into its next chapter,” Goodman said in a message to employees signed by Goodman with family members Adrienne, Jimmy, and Mark Navarra. Goodman, who announced plans to leave a few days before High Point market, has said he will continue as the 12-store company’s CEO for the next six months. There have been no changes to Jerome’s management since Goodman’s announcement. “Day-to-day operations remain the same,” he said.

Goodman’s decision to step down was something of a surprise to the industry. At the time of the announcement, Jerome’s Chairman Jerry Navarra stopped short of saying the company would seek a CEO. Since that decision things have been a “whirlwind,” Goodman said in the internal message to Jerome’s employees. “We’ve had countless meetings to determine the right game plan for moving forward and we’ve made some decisions.” The CEO search has already started, but the company is reluctant to say how long the search will take. Both Goodman and Jerome’s have said Goodman could stay on into the fall if needed to ensure a smooth transition.

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

RetailerNOWmag.com

JUNE | 2016

HFACOMMUNITY

Welcome New HFA Members

The HFA recognizes and welcomes the following new members to the Association:

Amy Zumberger

John Matter

Ask Amy Staging, Botkins, Ohio

Blake Poltz

Crown Furniture, Wenatchee, Wash.

Brad Schweig

Sunnyland Furniture, Dallas, Texas

Brenda Vidovic

Rod Olsen

Matter Brothers Furniture, Sarasota, Fla.

Olsen Furniture, Shelton, Kansas

Mario Amado

Mattress Direct, Ankeny, Iowa

Mark Cantley

Wyatt-Ogg Furniture Co. Inc., Westpoint, Va.

Roger Pries

Silver Comfort, Winter Garden, Fla. Furnitureland USA, Kissimmee, Fla.

Mark Managhan

Fortegra, Novi, Mich.

Managhan’s Furniture, Libby, Mont.

Brent Erickson

Mary Sorenson

Erik’s Furniture, Rancho Mirage, Calif.

Dan Steele

TC Home Furnishings, Columbus, Neb.

Mitra Mahmoudi

Elegant Furniture, Dallas, Texas

David Schwartz

Randy Maddix

J&D Furniture, Vineland, N.J.

Don Heinsch

Tim Orman

Orman’s Furniture, Overland Park, Kansas

Victoria Schutter

REM Sleep Solutions, Inc., Placentia, Calif.

Haven Home Furnishings, Chamblee, Fla.

Rich Donohue

Traditions of Hilton Head, Hilton Head, S.C.

Susan Daniger

Daniger Furniture, Lodi, Calif.

Tim Deets

Cedar Hill Design Center, Cedar Hill, Texas

Steele’s Furniture/TV & Appliance, Butte, Mont.

Steven Ogg

Central Hardware & Furniture, Ironton, Ohio

ASSOCIATE MEMBERS Andrea Ashley

Genesis Financial Solutions, Beaverton, Ore.

Brad Parker

doorcounts.com, Tualatin, Ore.

Leslie Linersky

catalogs.com, Weston, Fla.

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Cheryl Marchek

Monterey Mills Denali Home Collection, Janesville, Wisc.

Kerry Lawless

Guardsman, Grand Rapids, Mich.

Richard Kirishian

Richard Kirishian Rugs & Home, Spokane, Wash.

RetailerNOWmag.com

HFACOMMUNITY

The Home Furnishings Association provides networking and education events across the country throughout the year. Visit MyHFA.org/events for more information.

HFA’s Denver Social-Baseball Game Thursday, July 7 6:40 - 10:00 p.m. Coors Field, Denver, CO

NGN-Lunch with Leaders

Monday, August 1 11:30 a.m. - 1:00 p.m. Las Vegas, NV

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

Inland Empire Dealers Education Day Thursday, August 18 Mirabeau Park Hotel, Spokane, WA

HFA Webinars

Webinars are free to members, and cover topics ranging from technology, sales and marketing and operations to consumer studies, ecommerce and more. Visit myhfa.org/events for more information and registration.

How Four Industry Technologies Can Save Your Brick-and-Mortar Store Wednesday, June 22 (Technology/Sales)

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

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

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

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

RetailerNOWmag.com

JUNE | 2016

INDUSTRYCALENDAR Atlanta International Gift & Home Furnishings Market

2016 Showtime

July 12-19 Atlanta, Georgia Americasmart.com

June 5-6 High Point, North Carolina Showtime-market.com

Atlanta International Area Rug Market

NeoCon

June 13-15 Chicago, Illinois Neocon.com

July 13-16 Atlanta, Georgia Americasmart.com

WithIt Conference

Summer Las Vegas Market

Dallas International Lighting Market

Tupelo Fall Furniture Market

July 31-August 4 Las Vegas, Nevada Lasvegasmarket.com

June 19-21 Charleston, South Carolina Withit.org

June 22-25 Dallas, Texas Dallasmarketcenter.com

Dallas Total Home & Gift Market

With unwavering commitment towards your success?

June 22-28 Dallas, Texas Dallasmarketcenter.com

Your Success is our Business.

myhfa.org | 800.422.3778 44

JUNE | 2016

Casual Market Chicago September 20-23 Chicago, Illinois Casualmarket.com

ADINDEX Casual Market (312) 527-7915 casualmarket.com CasualMarket @CasualMarket Page 25

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August 18-21 Tupelo, Mississippi Tupelofurnituremarket.com

Myriad (800) 676-4243 myriadsoftware.com Myriad Inside Back Cover

Connie Post (304) 736-7283 conniepost.com Page 43

Northwest Furniture Xpress (828) 475-6377 nwfxpress.com Back Cover

High Point Market (336) 869-1000 highpointmarket.org HighPtMarket @hpmarketnews Page 9

Nourison (201) 368-6900 nourison.com Nourison @nourison Page 41

Las Vegas Market (888) 962-7469 lasvegasmarket.com wmclv @worldmarketctr Page 3

ProfitSystems (800) 888-5565 profitsystems.com PROFITsystems @PROFITsystems Page 7

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STORIS (888) 4-STORIS storis.com STORIS.solutions @STORIS Page 5 Surya (877) 275-7847 surya.com SuryaSocial @SuryaSocial Inside Cover

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

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JUNE | 2016

12/16/15 1:21 PM

NOWLIST Rock for Peace The angular elements of this rocking chair actually make it ergonomic. Designer Päivi Mikola (a professor of architecture) redesigned the rocking chair—Rock for Peace—which is manufactured in Finland and sells for about $1,350. What’s your home’s IQ? The number of smart homes with internet connected devices and appliances is projected to reach 339 million this year (nearly double).

Source: Rockforpeace.me

Source: MediaPost Communications

Tickets, please! Purchase airline tickets 57 days in advance to get the best deal on a North American ﬂight—and do it on the weekend. Source: Expedia

Two drink minimum? Millennials drank 42% of all wine in the U.S. last year; they averaged two cases per person. Source: Wine Spectator

Intelligent seating Italian architect Carlo Ratti created the Lift-Bit furniture system, possibly the ﬁrst internet-of-things sofa. It’s made of upholstered hexagonal seats that can be used alone or in groups to create diﬀerent seating arrangements. The seats can be adjusted with an app or manually, and if the system gets ‘bored’ it shapeshifts on its own to engage users. Source: Dezeen.com

JUNE | 2016

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JUNE | 2016

THE WAY WE WERE M

y grandfather, Clyde Sparks, sold appliances and small household gadgets in the beginning. My dad Ron and his brother Val took over in 1975. Two years later the fire took everything. I was 5, but I have a faint memory of standing across the street and watching the family business burn to the ground. That afternoon my dad and I were walking through the ashes looking for anything to salvage, but there was nothing. Just a lot of smoke and rubble. The next day my dad opened up shop in a building across the street. He brought whatever he had in our warehouse a few blocks away and started selling it. Sofas, Lane recliners—you name it. My dad didn’t have a plan, but he was a salesman so he started selling. We went on a fly fishing trip a few weeks back in Utah and dad was reminiscing about the fire. What he remembers most was the people in the community helping us get back on our feet. So many folks came up to us and said, ‘Well, I don’t need a refrigerator right now, but you never know when one will break down so I’ll take one if you’ve got one.’ A bank in town went out on a limb to help us; and a family that had a building company, the Talley family, built us a new store. They started building before there were any plans. Something like that would take a year now with all the permits, financing and paper work. We had our building and were back in business in four months. That was something that’s still very close to my dad’s heart. Some people hear our story and call it luck. I like to think we were blessed. Alan Sparks Owner, Sparks HomeStore, Thatcher, Arizona



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

JUNE | 2016

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VISIT US AT

High Point Market | April 15-20, 2016 Plaza Suites, 1st Floor NAHFA Retailer Resource Center

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Vol. 5 Issue 5 Retailers of the Year: Knight Furniture JUNE Issue

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JUNE 2016

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