JUNE 2015
INSPIRATION+EDUCATION
What Makes Millennials Tick?
ACCESSORIES MADE EASY
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2015
JUNE2015
TAKE 5! Five takeaways you can implement this month:
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WHAT’S INSIDE 2. 4. 20. 23. 26. 30. 36. 38. 42. 44.
NAHFA President’s Letter Editor's Note Retail Voice Member Portrait: Melissa Haberstroh Product Focus: Accessories Next Gen—6 Answers with Mike Fiacco Fresh Perspectives NAHFA Member Benefit Of Note NAHFA at Work—Formaldehyde
Who are social shoppers? 14 How and why to measure GMROI 22 Accessories make great add-on sales 26 Print ads still work 34 You need a safety program 38
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DEPARTMENTS Cover Story 10. What Makes Millennials Tick? Sales & Marketing 16. Connecting with Social Shoppers 34. Breaking Through with Advertising
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Operations 22. Most Important Retail Metric: GMROI 32. Mattress Retailers Have Something to Shout About
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President Marty Cramer Cramer’s Home Furnishings President-Elect Jeff Child RC Willey Vice President Steve Kidder Vermont Furniture Galleries
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Personal relationships are always the key to good business. You can buy networking; you can’t buy friendships. — Lindsay Fox
Baseball, Golf and Members... Oh My!
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Secretary/Treasurer Jim Fee Stoney Creek Furniture Chairman Rick Howard Sklar Furnishings Executive Staff Sharron Bradley Chief Executive Officer sbradley@NAHFA.org Mary Frye Executive Vice President mfrye@NAHFA.org Membership Staff Kaprice Crawford Membership Team Leader kcrawford@NAHFA.org Jordan Boyst jboyst@NAHFA.org Sherry Hansen shansen@NAHFA.org Michael Hill mhill@NAHFA.org Jana Sutherland jsutherland@NAHFA.org Dianne Therry dtherry@NAHFA.org Please call 800.422.3778 for membership inquires. Contact Us RetailerNOW 3910 Tinsley Dr. Suite 101 High Point, NC 27265
Marty Cramer NAHFA President
ne of the missions of your Board of Directors is to establish ways to connect with members. In 2013, funds and staff were appropriated to create a series of annual regional events. This year we have more than 15 regional events planned throughout the country—from golf tournaments to educational lunchand-learn events. Admittedly, it’s been a struggle. Our intent is to bring our members together and hope the networking opportunities proved valuable. Many of the events we put on last year had poor to moderate attendance. We knew it would take time for the word to get out and to build participation. I am thrilled to inform you that the word is out! Last year we rented a suite at a Colorado Rockies game and invited all of our Denver-area members to join us for a night of baseball. The attendance was dismal to be honest. Board member Travis Garish, who headed up the event for us, would not give up on the idea. He and Cindi Williams, our staff liaison, went back to the drawing board and I am happy to report this year’s night at the ball game in Denver was a SELLOUT! In fact we had to upgrade to a larger suite to accommodate more than 60 retailers. Unfortunately the game was rained out, but we’re trying to reschedule for July 7. Please check with our wonderful membership services staff for more updates. Our golf tournament and education event in Spokane, Wash., last year had average attendance. Again we solicited feedback, made some changes and although this event isn’t until August we already have people asking when and where it will be. I am certain we will have a sell out. The buzz on regional events is growing. More and more members are asking what’s going on in their area. I hope you will visit Nahfa.org and find an event near you. If there isn’t something in your area and you want to help put something together, shoot me an email. I’ll be happy to help you create an event.
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“
The next generation of businessmen will be articulate, knowing what they believe and entering joyously into the battle of ideas, or there will be no business as we have known it before. — Clarence B. Randall
RETAILERNOW STAFF Lisa Casinger Editorial Director lisac@retailernowmag.com
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Trying to Understand a Misunderstood Generation
Robert Bell Editor robert@retailernowmag.com Lisa Tilley Creative Director lisa@retailernowmag.com
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Tim Timmons Creative Designer ttimmons@nahfa.org Michelle Nygaard Sales Executive michelle@retailernowmag.com Sydnee Seites Webmaster sseites@retailermag.com
Robert Bell Editor, RetailerNOW
RETAIL ADVISORY TEAM Carol Bell Contents Interiors Tucson, Ariz. Travis Garrish Forma Furniture Fort Collins, Colo. Rick Howard Sklar Furnishings Boca Raton, Fla. Mike Luna Pedigo’s Furniture Livingston, Texas Andrew Tepperman Tepperman's Windsor, Ontario Contributors
Brooke Feldman, Jeff Giagnocavo, Karen Hornfeck, David Love, Gary Morris and Marisa Peacock
rowing up, I remember listening to a lot of conversations between my parents. They talked about war, politics, the economy, the neighbor across the street who came home well after midnight—I’m guessing the same stuff we talk about today. Of course I remember listening to their conversations. I didn’t say I understood them. It’s not like they were speaking in code to one another. I was just coming to the table with a different perspective from theirs. I could no more understand their conversations than they could understand my allegiance to Springsteen or that Steve Martin album I couldn’t live without. And yes, it has come full circle watching in equal parts amazement and disbelief as my 14-year-old son shoots zombie after zombie on his iPhone (Quick aside: When the Zombie Apocalypse comes, you’re going to want Riley on your rooftop). I suspect this disconnect is how Millennials feel about me and you. We can sit in the same room, but still not understand where the other is coming from. If you’re a retailer, you need to understand the world the Millennial is coming from. They have a buying power of $170 billion and, no matter how different they seem from the rest of us, they still need a sofa to sit on, a mattress to lay their head on every night. This month we take a look at what makes Millennials tick and, just as important, how retailers can connect with the younger generation. RetailerNOW also takes a look at an oft-overlooked aspect of the industry: accessories. Besides the potential for add-on sales that comes from carrying accessories, there’s the bonus of leveraging their display to entice customers back to your store again and again. I hope you find the article as interesting as it is informative.
Subscription: $70/year RetailerNOW, ISSN# 2166-5249, is published monthly (except March and December) by the North American Home Furnishings Association, 500 Giuseppe Court, Ste. 6, Roseville, CA 95678. Application to Mail at the Periodicals Postage Prices is Pending at Roseville, CA, and additional mailing offices. POSTMASTER: Address changes to: RetailerNOW, North American Home Furnishings Association, 500 Giuseppe Court, Ste 6, Roseville CA 95678. If you would like to stop receiving RetailerNOW, please send an email to unsubscribe@retailerNOWmag.com.
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Robert Bell
Robert@retailerNOWmag.com
© 2015 North American Home Furnishings Association. Published by the North American Home Furnishings Association. Material herein may not be reproduced, copied or reprinted without prior written consent of the publisher. Acceptance of advertising or indication of sponsorship does not imply endorsement of publisher or the North American Home Furnishings Association. The views expressed in this publication may not reflect those of the publisher, editor or the North American Home Furnishings Association, and North American Retail Services Corp. Content herein is for general information only; readers are encouraged to consult their own attorney, accountant, tax expert and other professionals for specific advice before taking any action.
JUNE | 2015
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RETAILER2.0
@RetailerNOW
facebook.com/RetailerNOW
pinterest.com/RetailerNOW
GOOD TO KNOW Bring Your Own Device: The Good, the Bad and the Scary
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Bring Your Own Device strategies are among the latest trends in the omni-channel era, empowering customer service and creating a more efficient workplace. BYOD, as the name suggests, allows your employees to use personal devices (smartphones, tablets) at work to access information in real time and use them to enhance the customer experience. It can be a great way to leverage limited resources and empower your salespeople, but the security risks that come along with BYOD shouldn't be ignored. We’ve outlined some of the pros and cons for you to consider.
Potentially Big Benefits
Sales reps can use tablets and smartphones to furnish customers with real time information about inventory, shipping, product releases and promotions, and financing. By integrating operations such as scheduling and day-to-day communication, BYOD can boost management productivity and workplace efficiency. Companies save money by avoiding purchasing dedicated devices. Employees often prefer to use familiar devices. Customer experience enhancements are endless with each employees’ ability to tap into all of your store’s channels.
Serious Security Concerns
Opening your store’s network to external devices like employee-owned tablets exposes your network to malware and viruses. BYOD devices can be lost, stolen or even hacked. An employee could leave the company with access to proprietary information. Mitigating these risks requires time and resources to develop and implement formal security measures that protect your sensitive data.
COOL APPS Mint Bills (formerly Check https:// check.me)
Options Away (https://optionsaway.com)
A free app that stays on top of your bills and money.
Founded in 2012, Options Away uses optionstrading technology to change the way people buy plane tickets. For a small fee, you can lock in a low fare for 3, 7, 14 or 21 days while you decide whether to book. Perfect if you’re not sure how many employees you’ll be sending to market, or whether you’ll be able to make that conference. Sound too good to be true? In March 2015 the company announced it has raised $3.5 million from a solid group of investors.
Hold your flight for days or weeks while you finalize your travel plans.
Mint Bills (formerly Check prior to Intuit acquisition) is an award-winning app that stays on top of your bills and money for you, so you never miss a bill or get hit with overdraft and late fees again. Just set it up once and the app goes to work—proactively staying on top of your bills and monitoring your bank accounts and credit cards, all in one place. When bills are due or funds are low, the app will let you know so you’re never caught off guard. Mint Bills is from the creators of TurboTax, Quicken, QuickBooks and Mint. Free; iOS, Android. Paying bills using your bank account is free; paying with your credit or debit card includes a transaction fee.
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Web-based; hold fees range from $4 for a few days to $50 for up to three weeks.
Want to share cool apps? Drop us a line at Robert@RetailerNOWmag.com
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866.325.0015
info@profitsystems.com www.profitsystems.com
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CONVERSATIONS
Q.
How much do you rely on MSRP?
Sherry Lambert Storeroom on Market Oneida, Tenn.
“I use it as a guide, but that’s all it is—a guide. I rarely follow it. I usually feel the MSRP is too high. Markup is usually 2.5 times what you pay, but to be competitive with other stores I need to make it less than MSRP.”
Brandy Lynch Home Works LaValle, Md.
"I often go above suggested retail depending on the freight in my area. If I don’t have a good seller flying out the door I might follow (MSRP), but I’m usually paying 20 percent on freight. I want to make that up if I can."
Josh Norman
AFA Stores East Brunswick, N.J. "When all is said and done, it’s just a number. We put a lot into coming up with our price, freight, and what our competition is doing are two big factors. After we’ve done our own homework it just happens that we’re pretty close to (MSRP), but we are not married to it. And if we have to go below it to get a sale, we’re going to go below." going to take care of everything.”
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TOPSHELF Adapting Your Store to the New Employee When Millennials Take Over
Everyone it seems—from politicians and Madison Avenue suits to home furnishing retailers—is trying to understand the Millennials. And with good reason. According to the Pew Research Center, Millennials will overtake Boomers later this year as the largest living generation. Millennials are coming of age and moving into leadership roles along with Gen Xers as Boomers retire. If you’re thinking about bring Millennials’ much-needed skills into your workplace, you need to know the traditional ways of organizational structure of hierarchy and silos fail miserably with many of this generation. Millennials grew up in open, collaborative environments where the team approach was ingrained from an early age. They are digital natives and use technology to communicate and network effortlessly. They are used to having access to information. Change comes naturally to them. If something isn’t working they move on quickly to find a better solution. If it sounds like the characteristics of Millennials are often at odds with the traditional management structure, you’re right. A culture shock takes place in the workplace. How can businesses adapt to this generation, which is very different from previous ones? In their book, When Millennials Take Over, authors Maddie Grant and Jamie Notter tackle this new reality for businesses. Combine the decline of modern management, the social media shift of power toward individuals and the ascent of the Millennial genera-
tion into leadership roles and you’ll find organizations of all shapes and sizes—maybe even yours?—are facing a future they are ill-equipped to handle. As a result of this perfect storm of trends, Notter and Grant found through their research that too many businesses struggle to stay relevant to customers, capitalize on opportunities in the marketplace, and attract top talent. Successful companies regardless of size and industry, on the other hand, are shifting to embrace this new reality and so can you. There are four key capacities, according to Grant, that will drive the future of business: digital, clear, fluid and fast. Grant says the future isn’t about the Millennials taking over, but about how all of the generations can learn and work together. The future will involve embracing Millennials' strengths in using technology to relevantly use their network and connect with other types of people. She shares three suggestions retailers can use: Share information internally with staff and allow them to see both big and small pictures. Give more voice to those on the frontlines. Millennials want the opportunity to share directly what is happening instead of having the manager report up. Create an environment where experimentation is championed and remove the fear of failure. Success depends on every generation working together and building on each other’s strengths. When Millennials Take Over is a much-needed guidebook for laying the foundation for that success.
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RHFF BOARD OF DIRECTORS From left to right, Pedro Capo, Howard Haimsohn, Doug Wolf, Jim Cerza, Jerry Baer, Dennis Novosel, Jeff Baker, Jim Fee and Sharron Bradley, center, of the North American Home Furnishings Association.
INVESTING IN OUR FUTURE A $50,000 gift from the Retail Home Furnishings Foundation will help young people learn and connect with others in the home furnishings industry. By Robert Bell erry Baer can look back on his life in furniture—36 years and counting—and remember fondly the people who helped him get to where he is today. Mentors like Bernie Moray and Hershel Albert along with his father and uncles. “When I look back on the people who helped me,” says Baer, owner of Baer’s Furniture, a Top 100 store in Pompano Beach, Fla., “Some of my most cherished times are hanging out with and learning from these people. They’re the ones who I can honestly say helped me get to where I am today.” Now Baer and the foundation he runs, the Retailers Home Furnishings Foundation, want to pay that goodwill forward. At the High Point Furniture Market in April, the foundation’s board of directors unanimously approved allocating $50,000 over the next three years to the North American Home Furnishings Association, which will use the money to provide much-needed scholarships to young people just starting out in the retail home furnishings industry. Baer said the scholarship recipients will receive the guidance and mentoring that he and others like him received years ago.“If
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you look at out industry it’s still one that’s dominated by family businesses,” says Baer. “Some are very big, but most are small operations that could use some help, some inspiration along the way. We’re going to provide them with that.” NAHFA’s Retail Education Team, a group of retailers that plans educational meetings for the association’s members, will award scholarships to young retailers to attend three of the industry’s biggest organizations and events: NAHFA’s Home Furnishings Networking Conference and the association’s on-site mentoring programs, and Furniture Today’s Future Leadership Conference. Baer says all three events are places where young home furnishings employees can learn and grow and hear from mentors in the industry. “Everyone needs a little help along the way, a little purpose or passion put into them,” he says. “We want that—we need that—for these people if they’re going to be the ones who move us forward.” Scholarship recipients must be between the ages of 18 to 25 and must be attending one of the three programs for the first time. Sharron Bradley, CEO of NAHFA, believes the scholarships are a strong example of the home furnishings retail industry RetailerNOWmag.com
looking toward the future. “I’m very excited that (RHFF) is investing in the next generation of retailers,” says Bradley. “It’s a great project that will benefit not just individuals, but the industry as a whole.” The Retailers Home Furnishings Foundation was created more than 25 years ago and funded in large part by donations of life insurance policies from other retailers. The foundation has helped fund numerous programs with the Interior Design Society as well as training programs and research projects for the retail industry. And yet few people in the industry are aware of the foundation’s existence. “Unfortunately we’re a well-kept secret within the industry, but that’s about to change,” says Doug Wolf, treasurer of the RHFF and president of Wolf Furniture in Pennsylvania, Maryland and Virginia. “For whatever reason, we really haven’t done a good job of enticing young people to our industry,” he says. “That has certainly reflected on our industry’s health and we want to change that.” Bradley says NAHFA’s board of directors needs to discuss how the scholarship money will be appropriated and will be releasing more information on the scholarships later this year. JUNE | 2015
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What Ma Mille T By Robert Bell
Millennials. What with their smartphones and their Candy Crush and their selfies—Look! Me at Disney! Me at the Grand Canyon! Me at the laundry mat!—and their job-hopping, and their 30-hour work weeks, and their disdain for brand loyalty while embracing all things Kardashian and their, well, you get the picture. The point is, who needs Millennials?
The answer, of course, is you. For years, Baby Boomers were the gravy to the home furnishings retailer’s train. Like clockwork, they’d waltz through your front door every seven years or so—sooner if that big promotion came through or they finally bought that lake house—looking for a sofa or bedroom group. Only now that gravy train is slowing down. Baby Boomers are downsizing. Those 3,500-square-foot homes are now (gasp!)1,800-square-foot townhomes. Even worse, Boomers have grown accustomed to that 16-year-old recliner so there’s no sense in changing things now. Millennials—consumers born between 1980 and 2000—are the demographic every home furnishings store is chasing and with good reason: With almost 80 million of them, they’re the nation’s largest population segment. That $170 billion in annual purchasing power they wield isn’t too shabby either. And they’re only getting bigger. One Accenture study believes Millennials will come into their own by 2020 when their spending in the United States will grow to $1.4 trillion—that’s trillion with a T—annually and represent almost a third of total retail sales.
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One more thing: Millennials want furniture. They spent more than $27 billion on it last year, according to Furniture Today’s Consumer Buying Trends, compared to $11 billion in 2012. They account for 37 percent of all furniture and bedding purchases. The back-of-napkin math doesn’t lie: That’s a 142-percent increase over two years. Those same two years saw Baby Boomers’ furniture spending drop 17 percent. Marisa Peacock knows the importance of retailers hooking up with Millennials and has spent the past several years playing matchmaker. “All these Millennials represent a huge opportunity for home furnishings retailers because they’re starting families and beginning to settle into homes just like their boomer parents,” says Peacock, whose company, The Strategic Peacock, helps small businesses target Millennials and their disposable income. Her job is not as easy as it may sound. That’s because Millennials don’t walk, talk and buy like Generation Xers or their Boomer parents. They’ve grown up in a world where newspapers, magazines and print advertising are heading the way of Morse Code. They get much of their enter-
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Makes lennials Tick? tainment and news from a laptop or tablet. They’ve seen what the Great Recession did to their parents’ retirement plans and are wondering if they’ll ever pay off those monstrous college loans. In other words, the tried-and-true ways of connecting with Boomers the past 40 years won’t work with Millennials. “You have to understand Millennials before you can even begin to connect with them,” says Peacock. “Once you know where they’re coming from, the world they’ve grown up in, you can better engage with them.” Home furnishings retailers willing to put in the effort to figure out the habits of the elusive Millennial are starting to reap the rewards. In Texas, Sam’s Furniture concentrated heavily on Internet advertising, hoping to capture Millennials who are
glued to their tablets and smartphones. The company went to great lengths and dollars to maximize its search engine optimization. It even hired another employee to answer chat questions from its website. The result? Within a three-year period Sam’s Furniture nearly doubled its revenue. In Ohio, Coconis Furniture took a second look at the way it was spending money on its advertising. For years the store stuck to the traditional mediums of print, radio, television and direct mail. Last year the company dedicated about 15 percent of its budget to digital advertising and email marketing campaigns. Traffic to the store’s website has exploded. Bo Coconis, a buyer and merchandiser who pushed hard for the campaign, is so pleased with the results he’s pushing his father to buy tablets for store employees to expedite checkouts and
MILLENNIAL MYTH: We Don't Buy Furniture One of the most accepted truisms about we Millennials—easily the most overexamined generation in history—is that we don’t want our parents lives of a house and furniture. That we value our free time and don’t want to be burdened with possessions. Except that furniture sales to Millennials has more than doubled—from $11 billion in 2012 to $22 billion last year according to a recent Furniture Today Buying Trends report. We may not like mom and dad’s 12-piece dinning room group, but we have our own tastes and desires for home furnishings. And we're willing to pay for it. RetailerNOWmag.com
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60%
90%
conduct shopping research online
send and receive text messages
JUST HOW CONNECTED ARE MILLENNIALS?
52% read blogs
43% play online games
56%
67%
download music
receive their news online
is thinking of hiring a full-time employee to manage the company’s social media and answer questions at the store’s online chat. “It’s all about finding out where Millennials are in their lives and meeting them there,” says Coconis, who, at 30 years old, knows a thing or two about his generation. “You can connect with them once you know what makes them tick.” And therein lies the $64,000 question, or in the case of the Millennials’ projected furniture buying power this year, the $35 billion, question: What makes Millennials tick? For starters, no offense Boomers, but they don’t really care for your advice. Older Americans tend to trust the counsel of friends and family members when mak$
ing a big purchase such as furniture. Most Millennials, on the other hand, don’t want their parents’ or peers’ help. Think back to the Great Recession, soaring unemployment and seemingly daily bailouts. Can you blame them? According to a Harvard Business Review Study, 51 percent of Millennials say they not only trust but also prefer product reviews from people they don’t know. Buying Local On a recent Saturday in Charlotte, N.C.,
41.8 MM
$
34.7
$
31.8 MM
$
27.0 MM
22.3 MM
$
Wendy Davis decided the wobby legs on the kitchen dinette set she inherited from her grandmother outweighed the sentimental memories of the piece. She sold it on Craigs List the night before and had a list of four stores and one bigbox (Costco) she was going to shop—stores all coming from reviews she found online at Yelp, a website where people can review and recommend restaurants, shops, nightlife and more. “I never even thought about asking friends,” said Davis, a 31-year-old paralegal, who lives in Rock Hill, S.C. “It just seemed easier to go online and look on my own.” Davis ended up buying a new table and four chairs at City Supply Co. because they had MM in Charlotte exactly what she was looking for and because of the glowing reviews she read online from complete strangers.
17.7 MM
$
11.1 MM
$
3.0 MM
$
2012
2014
Millenials (18-34)
2012
2014
Generation X (35-50)
2012
2014
Baby Boomers (51-69)
2012
2014
Seniors (70+) Source: Furniture Today
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MILLENNIAL MYTH: We Want to Live in Cities, Not Suburbs We prefer the bright lights of the big city, where they can walk or take the bus, subway, or Uber virtually anywhere they need to go. True. Sort of. The number of us living in midsize cities was 5 percent higher compared with 30 years prior. But not so fast. U.S. Census data from 2014, the latest available, shows that people in their 20s moving out of cities and into suburbs far outnumber those coming the other way. In the long run, the suburbs seem the overwhelming choice for us to settle down. It’s true that a smaller percentage of 20-somethings are moving to the suburbs compared with generations ago, but much of the reason why this is so is because we're getting married and having children later in life.
Stop right there. We know what you’re thinking: A Millennial actually put down her laptop and smartphone long enough to enter a brickand-mortar store? While Millennials have earned a reputation for viewing and engaging the world through a digital lens, they still venture outdoors. In fact, members of the digital generation prefer visiting stores to shopping online. “I need to see the chairs, the grain of the table,” says Davis. “You can’t tell something’s quality from a photo on the Internet.” For years Bill Napier, a strategic consultant to several companies in the home furnishings industry has preached that retailers need to see the Internet as their partner rather than their enemy. “Eighty percent of consumers including Millennials want to buy local,” he says. “Sure they’re going to do their homework online, but if you’re competitive on price and can offer a good return policy, Millennials are as smart as any other generation. They’re going to want to do business in your store.“ Davis said she did just that in shopping for her kitchen table and chairs, spending about four hours researching online over two weeks before heading out. That dependency on online reviews by Millennialls is one reason Napier and others push retailers to come up with a system in which customers leave feedback online be it at Yelp or your store’s FaceBook page or Twitter. Napier suggest a follow-up email a week or two after the purchase reminding the customer that if they were pleased with the purchase they could go online and leave a
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positive review. Of course, don’t forget to include a link to the review sites you want to show up in. “It’s not enough to provide a good product and service and leave it at that,” he says. “Retailers need to be more proactive and prod the customer into getting their name and serice out to others.” It’s also not enough for retailers to have a website and expect Millennials to show up at their store, printouts in hand. Peacock and others say Millennials are looking for a smooth transition from a website to a smartphone to your brick-and-mortar store without any hiccups or surprises. It’s not that Millennials are spoiled or possess a sense of entitlement, says Peacock, it’s the world they grew up in. Peacock likes to use a music analogy to compare Millennials to their parents. (Warning: the following paragraph might make you feel old. Very old).
MILLENNIAL MYTH: We Don’t Want to Own Homes
Yeah, right. And we all love Justin Beiber. Countless surveys show that the vast majority of us do, in fact, want to own homes. It’s just that, at least up until recently, those monster student loans, a bad job market, the memory of our parents’ home being underwater, and our delayed entry into the world of marriage and parenthood have made homeownership less attractive or impossible. Bloomberg News reported that we Millennials made up 32 percent of home buyers in 2014, up from 28 percent from 2012, making them the largest demographic in the market. Surveys show that 5.2 million renters expect to a buy a home this year, up from 4.2 million in 2014. Guess what we plan on filling up those houses with?
RetailerNOWmag.com
“Baby Boomers grew up listening to their music on record players or eight-track tapes and then cassette tapes, and then they switched to CDs and later to iPods,” says Peacock. “Millennials don’t know anything but digital music. So when they walk into a store after viewing something they liike on a website they don’t understand why the retailer is handing them a printed piece of paper with the sofa on it. They want to see it on a screen just like they did back at home or in the coffee shop. They leave wondering, ‘Why doesn’t the store have what the website has?’ ” Evan Faller, business development officer for Furniture Wizard, believes one the biggest mistakes retailers can make with Millennials is not ensuring a seamless transition from your website to your store. “If you put your website together and brand it as your store with 50,000 products available and then your store doesn’t match that experience, right off the bat you’ve got a huge disconnect with the Millennial,” he says. “And let’s be honest here, that statement probably goes for any consumer,
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MILLENNIAL MYTH: We Prefer
“There’s nothing traditional about Millennials”
Uber Over Owning a Car
Cars are just not cool. They’re bad for the environment. They’re too expensive. And we Millennials live in a world where socializing online is just as meaningful as socializing in person. Sorry, not buying it. Neither is the car industry, which claims correctly that the economy rather than interest is why fewer Millennials are buying cars. The numbers show that more than three-quarters of us plan on buying or leasing a car over the next five years, and 64 percent of us say we absolutely “love” our cars.
but it applies even more to the Millennial consumer who’s used to having things a certain, consistent way.” Just as home furnishings retailers spent years catering to Baby Boomers through their mediums of choice—print, television, radio and direct mail—it’s time to cater to Millennials, says Napier. “They grew up with video games, the Internet and now smartphones,” he says. “They’re focused on technology and have perfected using it to find everything; Restaurants, clothes, furniture decorating ideas and more. And they take the use of technology further; they read reviews and are highly influenced by them on social media and consumer websites.” No other retailer knows this better than NAHFA member Seth Weisblatt whose store, Sam’s Furniture in Fort Worth, Texas, has been connecting with Millennials and Generation X consumers for years through a committed online presence. How committed? Half of Weisblatt’s advertising budget is invested in search optimizing on the Internet, live chats on his store’s
—Marisa Peacock The Strategic Peacock
website and targeted email campaigns. Weisblatt says traditional advertising is lost on Millennials. “They’re living lives that are completely different to Boomers and even (Generation X),” he says. “You still need to advertise on all your traditional channels, but if you’re not advertising online, you’re not relevant to them because they’re not going to know anything about you. To them you don’t even exist until you’re online.” Coconis agrees. “I don’t watch TV, I don’t get a newspaper and I rarely listen to the radio,” he says. “The best way to get hold of me is through email. Again, it all comes down to reaching them where they are in their life.” Peacock takes that theory one step further, arguing that instead of waiting for Millennials to fall into traditional consumption patterns (“There’s nothing traditional about Millennials,” she says), home furnishings retailers should take the time to understand the complex factors that compel Millennials to spend.
Marketing strategies, she says, should be geared to where Millennials values lie, instead of where the status quo (read: Boomers) expects them to be. A good example is the popular (and true) narrative that Millennials are more empathetic to our environment than Boomers or Gen Xers. “That needs to be part of your marketing strategy,” says Peacock. “Millennials who are looking to buy a coffee table might be reluctant if their afraid that it will be obsolete or thrown out when they decide to upgrade if they get married or have a family. It’s (the retailer’s) job to show that that product can be recycled or already was recycled in some fashion. Retailers need to ask themselves if they’re pursuing the wants and needs, sure. But at the same time are they prusuing the Millennial’s values?” Weisblatt offers one more piece of advice about pursuing Millennials: A year or two from now, prepare to throw everything you’ve just read out the window. “Technology is such that everything changes so fast and Millennials are quick to adapt. What you implement today might be obsolete a year from now so be ready to change.” But when it comes to Millennials, they’re worth the pursuit.
MILLENNIAL MYTH: We Have a Different View of Work As Millennials entered the workforce and became a more common presence in offices around the world, the assumption has been that young people supposedly care more about wearing jeans and having flexible work hours more so than did Gen X and Boomers. Young people also want to be more collaborative, demand more feedback, and are less motivated by money than older generations. An IBM study begs to differ. “We discovered that Millennials want many of the same things their older colleagues do,” researchers state. There may be different preferences on smaller issues—like, say, the importance of being able to dress casually on the job—but when it comes to overarching work goals achieved in the long run, Millennials are nearly identical to their more experienced colleagues: They want financial security and seniority just as much as Gen X and Baby Boomers, and all three generations want to work with a diverse group of people.”
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CONNECTING WITH
SOCIAL SHOPPERS
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By Marisa Peacock
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hink about the last time you made a purchase. Whether it was a couch or a pair of pants, chances are you took time to research until you found what you wanted to buy. Maybe you browsed user reviews on the company’s website. Maybe you asked for feedback on Twitter or Facebook. Maybe you created a pin board of potential candidates on Pinterest. Congratulations! You’re a social shopper. Shopping combines relationships, connections and conversations with purchasing. Sometimes it’s more about the relationships— when we take our best friend to go the outlets; other times it’s about the purchase—when we want to get the best deal. Every time a consumer consults others in an effort to make a more informed purchasing decision, it can affect your company. Think about the power behind this statement: What people are saying about you and your products can influence what people buy. There is much to gain by leveraging the loyalty and sustained satisfaction that social media can bring. Successful social media campaigns start with understanding the behaviors associated with your audience. Here are some best practices designed to get the most out of social media as you launch campaigns to connect with customers.
What is Social Shopping? Social shopping refers to consumers who use social networking services and sites to share their latest purchases, deals, coupons, product reviews, wish lists and other shopping finds. It usually refers to e-commerce, like online shopping, but it can also be applied to in-store purchases as well.
Who are Social Shoppers? According to research by NetBase, social shoppers are social media users who strongly agree with the statement: “The brands and products my friends use influence my own purchase decisions.” If we look at friends from the context of a social network, it’s a pretty big network of influencers, as the average number of Facebook friends of U.S. users in 2014, for 18-24 year olds is 649, while those ages 25-43 have 360. That’s a lot of influencers! To better understand the behaviors of social shoppers, here are four categories social shoppers may fall into. The Efficiecny-Sprint Shopper is someone who uses social media to help narrow in rapidly on consumer-generated information to make sensible purchases. More often than not the EfficiencySprint Shopper: • looks at top rated reviews for best results • relies on group think to make decisions • uses sites like Yelp or reviews on Amazon The Peer Shopper relies heavily on recommendations and tips from friends. This type of shopper is someone who: • trusts their friends more than other sources • uses Facebook as their primary network for gathering insight The In-the-Know Shopper cultivates a following based on their
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insider status. This is the person you hope loves your store because, chances are, he or she will be one of your biggest social media fans. The In-the-Know Shopper frequently: • mentions or tags brands/companies in Tweets or posts • craves connections with brands/companies • uses Twitter and check-ins to broadcast The Impulse-Buying Shopperear suffers from FOMO — Fear Of Missing Out on great deals. To combat that phobia, the Impulse-Buying Shopper: • uses daily deal sites, searches for coupon codes before buying • shares deals with friends to receive incentives • participates in online giveaways, contests and other social promotions
Best Practices for Influencing Social Shoppers How can your store engage and connect with shoppers in your community? Here are a few ways to leverage social shopping to drive traffic, sales, and loyalty and become the ultimate influencer. Show social proof: People like to feel part of something bigger. Convince visitors to take an action by showing the support of hundreds or thousands of “likes” or testimonies from people they may know. When shoppers see how many of their friends have bought or reviewed an item, they may feel more comfortable in browsing your storie or website. That means they might be more likely to commit to purchase. Make sharing easy: Nobody likes to work for something when they can take the easy way. Make it easy for customers to share their shopping experiences with others. Encourage customers to share what’s in their cart after checkout. Offer promotional codes to those who share their purchases with friends and family. Ask or reward customers for posting on Instagram or tweeting their wares after purchase. Analyze sharing behaviors of customers: What are customers saying when they share information about your store or furniture? Is it positive or negative? What products are they sharing the most? What networks are they sharing to and what networks are driving traffic to your site? When customers ask questions about your products are you responding in a timely matter? Are your customers responding? What do you know about them? Could you be rewarding them for their assistance? The more you understand about what they’re talking about, the better you can respond to meet their needs. Create a new vocabulary: You can see what products people are pinning from your website and how they are categorizing them on their boards (simply use www.pinterest.com/source/WEBSITE). What words are they using to describe them? What can you learn? If they’re adding them to boards called ‘wishlist’— perhaps you can offer promotions? Randomly reward customers? Maybe they’re using products in unique ways. Take that knowledge of what you’ve learned and apply it in your store by adding the keywords into your messaging or incorporate the keywords into your social advertising campaigns. Integrate online and in-store experiences: Does the online experience complement the in-store experience they receive? Is it easy for them to connect to Wi-Fi in your store? Have you leveraged location-based technology to offer promotions when customers are nearby? Can mobile coupons be redeemed easily at checkout? When online, offer to let customers pay online and pick up in store. This can make customers become more familiar with the in-store experience. And of course you and your employees
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need to make sure they feel welcomed when they arrive. An online customer should be just as treasured as someone walking through your front door. No matter how you choose to leverage the power of social shoppers, it’s important to first understand the behaviors of your audience to learn where they are online and what they’re doing there. Then, you can learn how their social behaviors can help drive traffic, cultivate relationships and build loyalty.
THE NUMBERS BEHIND SOCIAL SHOPPING
Marisa Peacock is owner of the Strategic Peacock, a social media consultancy that helps organizations create and implement online strategies that appropriately target the right audience with the right information using the right media. Contact her at marisa@strategicpeacock.com.
Social shoppers are more likely to have Facebook profiles over all other social networks. Before making a purchase in at least one product category,
64%
of social shoppers consult message boards or blogs for inspiration.
75%
of social shoppers have Twitter profiles.
On Instagram,
45%
of social shoppers are influenced to purchase a product in at least one product category.
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75%
of social shoppers prefer consumer reviews rather than expert reviews, before making their purchases.
52%
of social shoppers indicated that they look to Pinterest for product inspiration.
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Grant Laidlaw VP of Sales Eric Clarke President
Locations: Puyallup, WA Mira Loma, CA • Morganton, NC Fax: 828-764-4461 • Phone: 855-208-6377 Email: sales@NWFXpress.com Please contact Grant Laidlaw VP Sales at 778-549-3188 or glaidlaw@nwfxpress.com to review your transportation needs.
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The Northwest Furniture Transportation Leader
www.NWFXpress.com
5/13/2015 5:27:06 PM
The casual approach doesn’t cut it in our industry. Every part of your business needs to be run with a purpose. By Jeff Giagnocavo
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asualness can kill. Kill sales, kill customer relationships, kill your store’s upward trajectory and ultimately the store itself. It’s best to live by the old Boy Scout motto: Always Be Prepared. Recently, I was at a user conference for the software we use in my mattress stores. There were about 250 high-level users and partners invited to this special session complete with food and drink. This year the host is making, as they say, a big push to grow their partner community. During our special session they unveiled the agenda and keynote speaker for an upcoming event, which are major financial investments for them. They urged all partners to attend for numerous reasons. It will be a good event and I am going in spite of their casualness. Hey, after all I won’t cut off my nose to spite my face, but I don’t have to like it. As I said, at this session the host had some of their best users, customers and partners in one room. A room they paid for. They spent even more money on food and drink just to announce and highlight their upcoming conference to their partners.
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The point of casualness? The insidious sales killing deed? They didn’t ask for the sale. They had 250 partners in a room, there was no order form presented. No website to go purchase a ticket. They even have all of their partners' credit card information on file, but no, there was not even a mention of actually purchasing a ticket to this event. They had all 250 of us captive. Held hostage by the law of reciprocity with great food and drink, but since they didn’t ask, they didn’t get. Unforgiveable. In your store this is akin to mailing 50,000 homes touting your Grand Opening Sale and not including your address, website or special incentive or offer. It’s not enough to rely on the ad arriving in the person’s hand. You must always offer a reason to do business with you right here, right now. Casualness exists everywhere. It exists in big brand awareness campaigns. I was recently witness to a large rebranding effort for a company whose product we sell. The whole ad campaign is based on two photos. These were very simple photos, with just a smattering of the actual product, and zero sales copy. If you were to take the name of the company off the bottom of the ad you would be hard pressed to see if this ad is for women’s dresses, women’s hats, draperies, carpets, lamps, luxury home sales, boats, luxury travel, hotel sales…the list could go on and on. As I watched the presentation, the question running through my mind was, what happens when this campaign becomes a copy cat victim by a larger company with a bigger ad budget? There is no ask, and there certainly will be no get. Far too casual, so casual you have to wonder what it is you, as a consumer, are buying when looking at this ad. So how casual are you in your store? Do you drive tons of traffic to your website without telling your potential customers who you serve and what you stand for in your community? What greeting is your sales staff using? Is it the same greeting each and every time with each and every customer? What do your employees present first and why? Is there a script for each product that covers the main bullets that must be presented each and every time? I was told the other day that, in a word, I am intentional. Yes I am extremely intentional. I have very specific goals both professionally and personally. The only way to achieve those goals is to be intentional. I intend to be in a position to move my family anywhere our needs require, anywhere in the world, within the next 24 months. I intend to go on an elaborate Disney vacation in November, complete with
12 hours of private Imagineer Tour Guide access that costs $2,400. I can’t afford to be casual. Take a look at all that web traffic you are paying for so leads will visit your website. Are you happy to take your provider's click, like, and links reports at face value? Or can you do something about it? You can. You can offer valuable information like a buyer guide, membership club, or discount offering in exchange for the lead’s name and email once they arrive at your website. You ask, you get. You begin to create real communications with real people who you can sell something to. This is intentional, not casual. Take a look at your staff. How are they dressed? Is it intentional or casual? Do they all greet in the same fashion or are there variations? Consider the word-of-mouth business and referrals that come your way. How do you think a casual approach to how you and your staff work with customers helps convert that referred business? If a sales presentation isn’t as good as it was to close the customer who initially referred, don’t be surprised when their friend reports back with a less than stellar impression. That means don’t expect another referral. Why should your customer stick their neck out for you, when you were too casual to treat their friend the same way you treated them? Simple things can be done to improve this casualness. Develop scripts for greeting customers. Scripts for every product and service you sell. And if your staff tries to tell you that scripts “cramp their style” or “make them sound like a robot” or “impede the actual sale itself” ask them this one question: What is your favorite movie or TV show? Regardless of their answer you can tell them that the actors in that movie or TV show are all paid very handsomely to deliver one thing and one thing only, a script! If my software provider had adopted scripts to their presentation and remembered to ask for the order they would have filled their event to 40 percent capacity 10 months ahead of schedule, with just one touch point! Remember casualness can creep in anywhere. It’s your job to cut it out and replace it with intention.
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Jeff Giagnocavo is co-owner of Gardner’s Mattress & More in Lancaster, Penn. He is also the co-owner of Infotail, a sales and marketing automation agency, and he regularly speaks at industry events on successful retail strategies. He can be reached at jeff@infotail.com.
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The Most Important Retail Metric: GMROI
Sales, profitability and cash flow are tied to your ability to manage inventory productively. By David McMahon
I
n my previous article on performance indicators, I wrote about how the correct combination of inventory and income to sales can increase cash flow. Now, I’m going to focus on Gross Margin Return on Inventory (GMROI), the most important metric in retail. GMROI connects the profits made on all sales transactions to the amount of product investment needed to support those transactions. Here’s the equation for GMROI: Sales – Cost of Sales (on annual) = Gross Margin Dollars / Average Inventory Carried = GMROI
GMROI as an Operational Indicator Let’s take two scenarios: Company X and Company Z. Both produce $5 million annually. However, Company X has 2 percent lower cost of goods and thus 2 percent higher gross margin than Company Z. On the top line, Company X is $100,000 more profitable than Company Z annually. Using this information, which business would have a higher return on investment on the sale of its product? We don’t have enough information to answer this question yet. To get a return on investment we need to know what the investment is. After knowing this, we can figure how many times the investment turns. Now, by adding the average investment in inventory to the mix for both companies we can see the return. Company X carries $1 million to support its sales volume. Company Z carries $750,000. As a result, Company X produces $2.25 in gross margin dollars for each dollar it invests. Company Z makes $3.13. Back-of-napkin math shows that Company X makes 88 cents less that Company Z. Another way to look at this is as a percentage. Company X has a 225 percent return on inventory. Company Z has a 313 percent return. I have seen similar results to both these cases many times in the field. With this example, I cannot really say that Company Z is doing a better job with its business than Company X. Their business situations are probably not identical. In fact, it may be that Z has the biggest opportunity to improve in gross margin. The important thing for any company to realize is that GMROI is an important performance indicator, and that consistently tracking it and developing strategies around improving it will help your store grow.
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GMROI as an Operational Tool GMROI should be used as a tool to improve operations. First, it should be monitored in all these areas to capitalize strengths and weaknesses: • Overall organization • Each store • All merchandising categories • All merchandise vendors • Individual items or groups of items Then, strategies and actions should be executed to improve. Here is a basic list of merchandise areas in which you can use GMROI as a business advancing tool: Best-seller merchandise—Focus in on top-tier inventory. This produces high-level GMROIs. Love it. Dog merchandise—Focus in on bottom-tier inventory. This produces low-level GMROIs. Leave it. Border-line merchandise—Focus in on questionable inventory. This produces average-level GMROIs. Decide what to do with it. Bottom line: I have seen the most successful operations use GMROI as a guiding force in their day-to-day operations. They use it to direct their entire business strategy. David McMahon is an industry business consultant and certified management accountant. He is director of consulting and performance groups for PROFITsystems, a HighJump Product. He can be reached for questions or comments at david.mcmahon@accellos.com.
HOW DOES YOUR STORE STACK UP? Would you like to know how your store compares to others in the industry? This year, with your help, the NAHFA is surveying retailers across the country. Once the data is gathered, we will compile the results and release a metrics-performance report so you can see where you are in the many key performance indicators that matter. Best of all, the service and your store’s results are free! For more information visit: http://www.nahfa.org/rpr.
RetailerNOWmag.com
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In Texas, a Store’s Reputation Grows (Owner’s too)
Lone Star shoppers flock to Burlap Horse to see—and buy—Melissa Haberstroh’s inspirations.
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By Robert Bell
elissa Haberstroh still remembers Fisher Grade School’s career week and the aptitude test she took in seventh grade. So many questions, so many bubbles to fill. A few weeks later, a computer spit out the results: based on her answers, a career in interior design seemed a good fit. Melissa took one look at the results and gave them the same look many seventh graders give their parents: She rolled her eyes. Eventually she went off to college where she studied psychology, but she couldn’t resist the innate tug of design coursing through her DNA. She was always helping friends decorate their dorm rooms and apartments. Instead of immersing herself in biochemistry, she absorbed shelter books and design magazines. “Photography and decorating—I kept up way more with those than with calculus or organic chemistry,” Melissa says. “Even as a
child I remember playing with Barbies and building these elaborate houses and decorating them with record albums for walls and fabric covering them. With me it was always the house that came first and Barbie second.” Today, of course, that seventh-grade aptitude test seems prophetic. Melissa is the owner of Burlap Horse, a tiny home furnishings store with a big reputation in Boerne, Texas, the heart of the state’s Hill Country. Burlap Horse’s clients come from all across the state—and country—to browse her intimate store on South Main Street looking for Melissa’s hand-picked classic furnishings, artisanal accessories and antiques that define the modern Hill Country lifestyle. “I can’t imagine myself anywhere else doing anything other than what I’m doing now,” says Melissa, a longtime NAHFA member. “I know there aren’t a lot of people who can say that about themselves so I count myself as one of the fortunate.” It wasn’t always this way. After spending time in Belgium and Af-
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“
rica as part of the International 4-H Youth Exchange Program, Melissa embarked on a career I love the idea in applied psychology. As a that you can research assistant in Texas, she influence buying worked at facilities that housed chimpanzees and baboons. decisions with She started pursuing a PhD psychology. in comparative psychology — Melissa Haberstroh when she broke her leg in a skiing accident. She was on crutches for 16 weeks. A lot of things can happen in four months. For Melissa, the idea of a home furnishings store first began to percolate. One day in 2000, Melissa was heading to a doctor’s appointment when she saw a FOR SALE sign in the window of a historic bank building. The day she was free of crutches was also the day she opened Burlap Horse. When it comes to buying merchandise for the store, Melissa breaks rule No. 1 of retailing: Don’t buy what you like, buy what the customer will like. She says the furnishings and accessories in her store could easily be found in her home. “The store is very much a reflection of what I have in my home—or would like to have,” she says. “My mantra is if it’s something I’d put in my home, it’s good enough for my store.” Melissa’s mantra is paying off as Burlap Horse and its reputation continue to grow. Customers come from nearby Houston and as far away as the East Coast to check out the store’s unique hair-hide and carved upholstery pieces as well as one-of-a-kind accessories.
”
Psychology of selling In the fall of 2003, Melissa and her husband Jeff relocated the store to a nearby, undeveloped property. Keeping with Melissa’s philosophy of offering the customer a unique shopping experience, the building is unlike any on Main Street: a 2,450-square-foot structure that shares classical and modern elements and appears to be a centuries-old farmhouse that has always been part of Boerne. Inside, she goes to great pains to merchandise the house as though a family lives in the store after hours. Picture frames throughout the furnishings and dinner party invitations on the farm table bring, “a story to life about someone or family living here,” Melissa says. “People seem to connect with that.” She even draws on her psychology background to help with the art of selling and placing vignettes around the store. A welldesigned store can unknowingly guide customers throughout each vignette, allowing them to pause and see the story Melissa is trying to convey. “I love the idea that you can influence buying decisions with psychology,” she says. “I’m not trying to trick my customers, but I am trying to connect with them.” Melissa is always looking for ways to connect. As a small, independent home furnishings retailer, she doesn’t have the luxury of a marketing or staging team. She often relies on national retailers who she believes are her competitors, such as Pottery Barn and Anthopologie, to get a feel for what’s trending, price points—anything that might help pull in a shopper off the street. “I’m no different from any other independent trying to find their way these days,” she says. “We’re all having to do so much with so little that we
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need every resource available to us. I like the idea of my competition actually helping me measure what’s going on with clients like mine.” Burlap Horse is constantly looking for ways to engage with shoppers. The store runs several loyalty programs such as exclusive sales for its best customers, beer tasting, wine tasting, breast cancer awareness events—whatever it takes to connect and keep their customers coming back. “We try to have events where (our customers) view us more as a retail family than a store,” she says. “We want to connect with them on an emotional level.” Melissa is quick to say that all customers are valued, but some are valued more than others. “We live by the 80-20 rule,” she says. “We have about 6,000 names on our mailing list and about 20 percent of those people make up 80 percent of our volume so we’re going to market to them and do whatever it takes to make them feel special.” Melissa’s biggest marketing tool used to be the exclusivity she had on several lines of furniture and accessories, but that’s a tool that’s getting harder to leverage as vendors, looking for more revenue, are more reluctant to grant exclusiveness to just one retailer in an area. “It’s getting harder to be unique,” she says. “I’d like to see vendors have qualified buyers. Something where they tell the retailer, ‘For your area you need to do x volume for a year and if you’re not meeting your exclusivity agreement we’ll put you on probation. That way both sides can get something out of the arrangement. It’s more of a partnership.”
Stretched too thin There was a time when Burlap Horse’s popularity grew so fast and furious that Melissa opened a similar store down the road and then another. Big mistake. She slowly came to realize her creativity was being sapped and she was unable to give all three stores the attention they deserved. “I’m something of a perfectionist,” she recalls. “It didn’t take me long to realize I was stretching myself too thin.” Melissa closed the other two stores and focused her attention on Burlap Horse. Hoping she’s learned from her mistakes, she’s embarking on a new venture, partnering with a custom homebuilder in
BREAKING THE RULES Haberstroh believes if it's good enough to put in her home, it's good enough for her store. So far, it's a strategy that has paid off.
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About That Name Melissa Haberstroh likes to have Burlap Horse’s vignettes tell a story as though the store is a home to a family. Turns out the name of the store has a story behind it, too. Melissa and her husband, Jeff, frequented antique auctions when they first married. It was love at first sight when they found an antique pull toy—a horse filled with wood wool and wrapped in burlap—at an auction house one Saturday night. They stayed until 2 a.m. waiting for the horse to go on the block. When it finally came up for auction, the couple was the lone bidder, taking the horse home for $10. Two weeks later, Melissa was attending the famous Round Top Antiques Fair when she spotted a similar horse for more than $350. “When I saw that woman hand over her check with that horse tucked under her arm I was so excited,” Melissa said. A story—and store—were born. the Hill Country to focus on a seamless cradle to grave operation. “After the house is designed and built, we come in and decorate it,” Melissa says. “It was an answer to the question, how can we get to the customer earlier in their buying process?” She’s excited about the experiment. “It’s something I haven’t tried before and this time I can control things a little better. I won’t let my creativity be stretched again.” Melissa’s excited about the future, but grounded in the present. “This store is always going to come first with me,” she says. “It always has.”
PRIORITY ONE After opening two more stores, Haberstroh quickly shut them down, realizing she was stretching herself too thin. .
Furniture Software Development Expertise
“Karvonen’s shares the value of continuous improvement with STORIS, which has been important to our relationship. Beyond that, the simplicity of our daily processes using STORIS’ Cloud Platform makes our employees happy and keeps our business running smoothly.” Aaron Karvonen, Vice President
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Accessories Drive Traffic, Profits
Stores that offer more than just furniture position themselves as a one-stop convenience over big box companies. By Karen Hornfeck
LIGHT BRIGHT Company C’s throw pillows are being displayed this year in lighter shades, which add pops of color.
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TRENDING NOW Global Views' room scenes show layers of accessories and an on-trend blue and orange color story.
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t’s a good time to be a furniture retailer. Blueport.com reports furniture and bedding sales last year were $87.5 billion in the United States—a 3 percent increase from 2013. The U.S. Census Bureau recently announced that a key sub group of Millennials are now the largest demographic in the country. Jonathan Smoke, chief economist of realtor.com says this generation will drive two-thirds of household formations in the next five years (see What Makes Millennials Tick, page 10). And it’s clear that for the rest of the country, economic recovery is in full swing. Plenty of disposable income, increasing home sales, and new homeowners equal a great time to be furniture retailer, right? Maybe. The battle rages as big box and online retailers compete with independent furniture stores more than ever before. “There are 50 percent fewer customers coming in the door from five years ago because of online sales,” says Martin Roberts, owner of Martin Roberts Design, LLC. “You have to make every sale better than it was five years ago.” What can retailers do to engage customers and increase sales?
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“In today’s market, it’s really about lifestyle merchandising,” says Shelbi Owens, public relations director at Global Views, a Dallasbased accessories wholesaler. The company’s showroom at April’s High Point Furniture Market featured lifestyle vignettes filled with furniture, coordinating rugs, lighting options, and complementary decorative accessories. From a retail perspective, each space offered an aspirational lifestyle tailored to myriad potential customers. Transitioning to a lifestyle merchandising focus means moving from being product-focused to customer-focused. A productfocused retailer would likely line sofas in one area of the showroom and accent chairs in another, and mattresses in a far corner. A retailer who is emphasizing lifestyle merchandising would likely create vignettes that reflect potential customers’ interests and attitudes, and what products they need to live a certain lifestyle. “Customers really respond to an overall look,” says Owens. When designing a vignette, accessories should be chosen carefully for each room to create a coordinated, well-decorated area that flows well. Owens recommends organizing rooms by color story. By defining a room that way, retailers can create a cohesive look.
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Accessories with Thought
“Layering is very important,” says Owens. She recommends that displays include an item of each element—glass, wood, ceramic, metal, textile and leather. A mix of elements creates visual interest, variety and increases cross-selling opportunities. Anchoring a room with a rug also helps customers see the display as a true room. Repetition is also a useful display tool. Multiples of small items can make a big statement. “Customers take repetition directly from the store to the home” which also increases sales, adds Owens. Owens reminds retailers not to ignore lighting fixtures when thinking about how to set up vignettes. “Lighting categories have really grown,” she says. “Customers want to outfit an entire room and lighting fixtures are an important part of that.” Lighting fixtures are another way for customers to personalize a room and make stylistic statements. This category offers retailers an opportunity to outshine big box stores. Often, retail chains carry very limited lighting choices. Independent retailers can offer lighting fixtures of better quality, as well as a wider selection. In lighting, Owens notes that metals such as nickel, brass and gold are on trend heading into summer and fall. The right lighting fixture can make an important statement to a room—whether that room is in a home or a furniture showroom. When lights are placed in a room on the showroom floor, make sure they are on to illustrate the impact of the chosen fixture. Other small touches can help customers see displays as realistic. Candles should be placed in candleholders. Add a wine bottle to an ice bucket and fill vases with flowers. Owens even recommends putting stationery and business cards on desks. Make sure displays are
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highlighted using a mix of spotlights and floodlights as well. And don’t forget to dust. Regularly cleaning accessory displays is crucial so all of the merchandise looks fresh. “The advantage for independent retailers is that their customers see that they can get everything in one place,” explains Owens. A customer might come in with a need to buy a sofa, but when they see how a mock room is set up on a store’s floor, it often encourages them to buy additional furniture, lighting and decorative accessories. There is also another plus for retailers. “The profit margins on accessories are more than furniture,” says Chris Chapin, owner of Company C, a New Hampsire manufacturer of handcrafted bedding and accessories. “Item to item, the profit margin is really nice.” Chapin also points out that customers purchase accessories more than they do large furniture pieces, so stocking well-chosen accessories can keep customers frequenting your store more often. When updated regularly, accessories can also help a sales floor look fresh, which keeps customers returning. Something relatively inexpensive like adding decorative pillows can easily update a piece of upholstery and make it pop in a new way. “Pillows are like jewelry,” Chapin says. “You can change them out easily to have fun with color trends.” Chapin recommends swapping pillows out seasonally to create interest and to draw customers in to the store. Company C’s pillow line features hand-printed linen and cotton textiles and organic fibers to offer customers a unique and premium accessory option.
Lighter, Pale Colors are In
Bold prints remain popular, but Owens says consumers are starting to warm to lighter colors, too. “Buyers are surprised and excited to see colors like pale green and pale blue,” she says. The colors are being used in variety of ways, including decorative ceramics and art glass pieces to add accents to rooms. Bringing nature indoors is also trending. “We are seeing a lot of natural materials as well as repurposed and recycled materials,” says Owens. A stone cantilevered table made of malachite was one such item attracting attention in Global View’s High Point showroom. Consumers, especially Millennials, are also concerned about sustainability and health more than ever and as a result, organic fabrics are trending well. “We offer all organic bedding,” says Chapin. “Anything that is good for the environment is important.” A year ago, Company C began ensuring that all of its fabrics are Global Organic Textile Standard (GOTS) certified. The company makes it known that its upholstered pieces are made in the United States with certification from Sustainable by Design. Since 2005, Company C has also been a member of GoodWeave, an
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organization that partners with rug manufacturers to ensure carpets are made without the use of child labor, and that companies have improved working conditions and provided fair wages for their employees. Each year, Company C donates a portion of its rug sales to this effort, which has helped improve the lives of children in India through education. Moving to a lifestyle merchandising approach begs an important question: Exactly who are your customers? Think carefully about who they are and what lifestyle they want to create. With that in mind, quality furniture, carefully-chosen accessories and sales staff can be utilized to craft a well thought-out ambience in a store. The reality is that there is nothing like touching and seeing furniture and accessories in person so that a customer can be confident that what they are purchasing will help them create a home environment that is comfortable, personal and functional. And in that sense, independent furniture retailers truly have an important advantage. Karen L. Hornfeck is a freelance writer and marketing consultant based in Greensboro, N.C. She has more than 20 years of experience in marketing, public relations and journalism.
Add-on Sales in Bedding Bedding—as in mattresses and box springs—offers retailers another area in which to shift to a lifestyle merchandising focus. “The buzz in purchasing behaviors right now is centered on wellness,” explains Sam Malouf, CEO of Malouf Bedding. “There is a big focus on food, fitness and rest, and we see a substantial emphasis on how higher quality bedding can help consumers get a better night’s sleep.” Malouf says retailers often see themselves as providing customers with customized mattresses only, but they are missing out on critical sales opportunities. He asserts that retailers should shift their focus to offering their customers a total bedding experience by offering bedding accessories like customized mattress toppers, high quality sheets, top of bedding and pillows. “I think it’s important to emphasize that whatever accessories you carry will enhance and increase the customer’s enjoyment of the mattress,” Malouf explains. Martin Roberts, of Martin Roberts Design, LLC recommends that retailers talk with customers initially to see what their sleep style is and match a well-made pillow to that style. “Most customers think it is nonsense at first,” Roberts says. “But when they lay on a premium pillow while trying out mattresses, they feel the difference.” Martin recommends placing pillow displays near the register to encourage sales. “At that point, customers may decide to spend 10 to 20 percent more on pillows and that can be a significant part of the sale,” he explains. Roberts, an award-winning retail store designer, notes that he often puts two shelving sets in bedding stores. One shelf is functional and displays mattress protectors, sheets, and pillows. The other shelving unit indicates an industry shift to lifestyle marketing and carries candles and aromatherapy products designed to help make the total bedroom experience more restful. “One is functional,” says Roberts, “and one is more about emotional buying.” Both will help retailers increase their profit margins.
TOP IT OFF Bedding accessories, such as Company C’s Lucy Quilt, are easily overlooked but can’t be ignored in completing a sale.
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NEXTGENPROFILE Six Answers with Mike Fiacco
Mike Fiacco President Bennington Furniture Bennington, Vt.
Out of college I wanted to work on Wall Street. I went to work for AIG selling bonds and that was going well. But I was making a lot of money for others and not me. I started to think about working for myself; of controlling my own destiny.
When my mother contacted me about taking over the business, I wasn’t sure I would like it, so I took a job selling furniture on weekends. Selling furniture in New York—on Central Avenue—in Scarsdale and Yonkers is the hardest place to sell. There are so many stores, so much competition. You walk in to a store and there are 10 or 15 sales people waiting for you, but I thrived on that competition. It reminded me of playing sports in high school. The competition was unbelievable. It was like boot camp for sales. If you want to earn your sales training boots go to New York.
We’ve grown a lot since I’ve been here. We’ve opened three stores in the last five years, but I can’t take the credit for our success. Mom did the heavy lifting. She started the business in a 3,000-square-foot building and just kept building on her success year after year. (Bennington Furniture has locations in Vt. and N.Y.)
There’s a lot that goes into opening a new store. I spent a year driving around and shopping in Queensbury, N.Y. looking for the right location. Opening a furniture business is very much like the real estate business. You need the right location and that takes doing your homework. I’ll spend a year looking for new subdivisions, traffic and who my competition might be and where they’re getting their customers. The hardest part of opening a store is actually making the decision and going for it. You can do all the homework in the world, but you still have to be willing to pull the trigger and go for it. If you’ve done your homework and you make the decision to commit, you’re halfway there.
I don’t have many hobbies outside work although I just started flipping houses. I’ve got so many really good designers on staff that I told my wife, “We really need to try this because we have the access to all these designers who can stage things and make them look really nice." We bought our first house in January. It was a total gut job—bathrooms, kitchen, carpet, molding—pretty much everything. We probably put $50,000 into it, but we sold it pretty fast. We made about a 24-percent return on our investment in eight weeks. I told my wife this was pretty easy, but we’re keeping it a hobby for now.
I’m very pace driven and I expect that from the people we hire. When I want something done, I want it done now. I want the floor samples on the floor the day they are received. When someone makes a special order, I want it placed that day. No other retailers work the pace we do. That’s the edge I think we have over our competition. Six Answers is a monthly profile of a Next Generation Now member. Next Gen Now is an NAHFA-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. 30
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”If you want to earn your sales training boots go to New York.”
2015
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THE ULTIMATE DESTINATION FOR ALL THINGS OUTDOOR Wednesday, September 16 – Saturday, September 19, 2015
The Casual Market 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. The Merchandise Mart, Chicago CasualMarket.com #casualmarket
Gloster Furniture
CONNECT NOW
You’ve got product, we’ve got buyers. Let us help you connect. RetailerNOW is the only association print and digital media dedicated entirely to your target retail audience. Our readers are the CEOs, owners and decision makers you want to reach. Ready to connect? Advertise now. Call Michelle Nygaard at 916.757.1160.
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MATTRESS RETAILERS
HAVE SOMETHING TO SHOUT ABOUT! Take advantage of the powerful force that’s transforming our industry
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By Gerry Morris
I'm so excited, and I just can’t hide it. I’m about to lose control and I think I like it!” I’m not really about to lose control, like the Pointer Sisters, but, I don’t think we’re worked up about the same thing. I found no mention of “retail mattress sales” in their lyrics. So, what’s stirring up my innards? (Sorry, that's the Texas in me) If you haven’t noticed, there’s been a change taking place in retail mattress sales in the last few years and I believe we’re on the cutting edge of tremendous growth. And if you haven’t noticed, it’s time to get with it, because there is tangible evidence to support my optimism.
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What’s behind this evolution? Well, there’s an intangible force that’s the catalyst driving the change and it may surprise you. We’ll get to that in a moment. First, lets see what’s new. These times they are a changin'. Bob Dylan was right. Not too many years ago, the standard was for mattress departments to be laid out like army barracks, with 50 shades of beige upholstered rectangles. Remove the brand labels, and people would be hard pressed to differentiate one from another. We languished in safety mode for more than a decade. An industry reporter wrote a column asking, “Why are all mattresses white?” It was because we feared that color and strong patterns could possibly evoke a negative response, “I like the mattress OK, but I don’t care for this color or that.” Also, women were concerned about them showing through the sheets. Mattress protectors have gone a long way to rectify that. But “It’s a new day, a new dawn” and in an effort to differentiate, brave manufacturers have found how to do it with beautiful and exciting border treatments, fabric colors, patterns and textures. That, along with bold end of bed and pillow adornments, has helped brands claim distinctive identities and entice shoppers to indulge. Previously, in many stores, when a customer left a beautifully decorated case good or living room vignette and entered the mattress department it was like walking out of a lush forest into the dessert, save for a matching silk plants and end tables by each model. (Obviously I’m painting with a broad brush. No need to call me out.) Now, in more forward-thinking stores things have changed. Gone are the prohibitive Lucite signage that would stop shoppers in their tracks from attempting to lie down. “No, read me first!” It seemed like a good idea at the time, to try to get the pricing out of the way first, demonstrate value with triple marked up suggested retails, detailed specifications and a few features and benefits. But the net result was more time spent in conversation about the product than actually experiencing it. Now pricing and spec information is being discreetly displayed on end of bed feet protectors. Once prevalent mini spring units and layer samples are not demanding attention, but are kept available if needed. Appropriately so, the focus is now on the product, not the tools to sell it. What a concept. Cutaway schematic type posters have been replaced by lifestyle images. After-thought accessories are now featured in clever kiosk displays. Soft soothing lighting, cool serene color schemes, creative layouts and vignette style designs that offer accessibility and privacy are luring shoppers into what formerly has been a destination-only department. But the best trend of all is the evolution of the cumbersome geriatric hospital bed to the sleek new adjustable base. This may
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be the biggest boost to volume and profits retailers have ever experienced. Anyone interested in four figure average ticket price gain? WOW! I visited a store recently that had more than half its floor models on adjustable bases. The majority of its sales are to people who were not even shopping for them. What's going on? Now back to my assertion that there’s an intangible force driving these tangible changes. What is it? Emotion. The power of emotion has and will continue to propel retail mattress sales into a whole new realm. Smart bedding retailers are using these tools to lure shoppers into their mattress departments and entice them to test drive top quality models they previously wouldn’t considered. There’s no doubt that price and value will always be considerations for mattress shoppers, but there’s also no doubt that when emotion enters the equation, many are inspired to invest in quality for comfort, health, happiness and wellbeing. Consider the power of emotion in car shopping. Cars being a similar category to mattresses in that they are utilitarian and provide a specific and necessary life function. If your consumers approached shopping for a car the way they traditionally shop for a mattress, their main determinant would be a safe, dependable means of getting from point A to point B. That’s hardly the case. When someone test drives a car, they get a glimpse of what life could be. It was just my imagination, running away with me! No kidding, running away to the tune of $30,000 or more. I don't need to tell you that if someone wants something badly enough, they’ll find a way to get it. The best news of all? It doesn’t matter which age group you’re dealing with because feeling good, happiness and comfort have universal appeal. Emotional attraction, curiosity and the accompanying motivation will transcend age, gender ethnicity and any other category you can think of. At the end of the day, we all want a sense of wellbeing and arguably, no other consumer product can offer that as well as a mattress can. Engage shoppers’ emotions using these illustrations and you can literally change their motivation from need to want. “I second that emotion.” The action is the same, the motivation is what’s changed. Want is simply a need with an added emotional component; it’s as simple as that. Harness the power of emotion and boost your mattress sales to new heights. “You can’t always get what you want, you can’t always...” actually Mick, when it comes to mattresses, you can and should get what you want!
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Gerry Morris has more than 20 years experience in the mattress industry. In partnership with the Furniture Training Co., Morris offers a premium online training course, “Sell More Mattresses with Gerry Morris.” To view the course, visit furnituretrainingcompany.com
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BREAKING THROUGH WITH ADVERTISING Print ads still work, but you need the right copy and the right message to be heard over your competition. By David Love
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G B H
efore you craft your next advertising campaign, consider this: If you never ran another ad, or sent a postcard or inserted a flyer, the world would get along just fine. The sun would continue to rise in the East and set in the West. Men, women and children would continue to go about their busy lives. Your prospect may work. She may be married or a single mom. She may have to pick up the kids from school, take them to soccer practice, rush home to fix dinner. She may have to help with homework and so on. Your prospect is not waiting breathlessly for your ad to appear in the paper or for your postcard to drop into her mailbox. If you stopped running ads, she is not going to call and ask when you’re running another one. How do you break through all of the clutter in her life to get your message across? How do you separate your store from others? You run ads with compelling content. Content grounded on facts, not opinions. Content that appeals to her wants and needs. Content that explains why what you have to offer will benefit her. Believe it or not, 50 percent off and 72 months free financing is not compelling content. Shouting 50 percent off in your ads is really not that much different than one of your sales associates shouting 50 percent off when someone enters your store. But they don’t do that, do they? They make your guest welcome. They ask qualifying questions to determine her wants and needs. They discover her situation, her problem and they provide solutions. Years ago when I was a rep for Sealy Mattress, they conducted a survey to determine why people bought. The choices included things like store location, selection, sales associate and so on. It also included price and value. Guess what? Value came in number two and price was number seven. Similar surveys today will show that price has risen in importance, but it is still not the primary reason people buy. They want good value, and are often willing to pay more if shown the benefits of doing so. If she doesn’t see value, the price really doesn’t matter much. Here are five advertising breakthroughs you
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can apply to any print campaign: Understand that people buy for one reason and one reason only—to enjoy the benefits of what they buy. We’ve all heard the old expression, “You buy the hole, not the drill.” You all know this. You all practice this in your stores. So why not in your ads? She may say she wants a new sofa to replace her old one, but what she really wants is a more comfortable home; a more inviting room; a room she can be proud of. She may say she needs a new mattress, but what she really needs is to wake up pain free; to stop tossing and turning; to fall asleep faster; to live a healthier life. I once had a friend who owned a rental center. A place where you rent tools and such. Someone might come in and ask to rent a ditch digger. Employees were trained to always ask, “What’s your project?” “What are you trying to accomplish?” “What is your situation?” This started a dialog which many times resulted in a higher ticket and a more satisfied customer. Accept the response-tested, research-proven FACT that people will read copy—if it is interestingly written and it serves her needs. Yes, I said FACT. Contrary to most retailers’ opinions, prospects for what you have to sell are hungry for information and will read your copy. If it addresses and serves her needs. Every ad needs to sell three things—the sale, your products and your store. Copy is essential to accomplish this as I’ll explain. 1. Sell the sale. Tell her why your sale is important. Why you’re running it now. How it differs from the other sales in town. You can’t do this without copy. 2. Sell your products. If you’re running a $399 recliner, why should she choose yours versus all the other $399 (or less) recliners in town? It takes words to do this and not just any words. But the right words and in the right sequence and with the right emphasis to do their job, which is to sell. Here’s where you pile on the benefits. 3. Sell your store as the place to buy. Tell her how your store is different. Here’s where you can really separate yourself. It has to be more than guaranteed lowest price and such. Every store says that.
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Personalize your ads. People like to buy from people they know and like. Especially if you’re a small store in a rural area. But you can also do this even if you’re not small. In fact, if you’re not small, I suggest you act like you are. In your ad, include your picture with a caption inviting your readers to come see you. Show the family, the delivery guys and the office staff. This is especially important if you are up against one or more of the big boxes. You can’t possibly beat them at their own game—massive ad budgets with frequent flyers and TV spots—but you can beat them at your game. Create clean, uncluttered ads. Too many stores make the mistake of trying to cram everything they sell into an ad. It’s more productive to do a better job of selling fewer items than a not so good job of selling many items. I can’t show you a sample layout in this article, but if you’ll shoot me an email (david@lovefurnitureprofits.com) with Layout in the subject line, I’ll send you one. Even if you load up your ad with items, you still can’t possibly show everything you have. To appeal to the prospect who has no interest in what’s in your ad, include a reverse box in black or red with a line something like this: “This ad shows only a small sample of the values that await you. Come see them all.” Include a call to action. Tell them what you want them to do—this is lacking from just about every ad I see. The best way I can describe selling in your ads is to do it just as you do in your store. Greeting, qualifying, finding solutions and closing. The call to action in your ad could be as simple as, “Sale ends Sunday” or “We’re almost sold out, come choose now.” That sort of thing. Employ one or more of these advertising breakthroughs and you’re bound to enjoy increased traffic, more sales with higher tickets and more satisfied and repeat customers. David Love helps retailers slash advertising waste and make more money. For a complimentary copy of his special report, “Exposed: 5 Advertising Mistakes..." visit Lovefurnitureprofits. com. Contact David at 803-764-3977 or david@lovefurnitureprofits.com.
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FRESHPERSPECTIVES
Finding Your Path Advice on navigating the winding road that is your career.
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ello, readers! I’m back and it has been quite an experience the last six months being out of the industry. Why did I step away? The best way to describe my experience is comparing it to the shotgun approach—making quick decisions rather than creating a plan of attack. I’ll make it simple, at the time I thought taking on a new opportunity outside of my skill set and passions was the right choice as a resume builder. Was I ever wrong. The biggest realization I had is that changing career paths is a not an uncommon move to make in the Millennial generation. A lot of us want instant gratification or satisfaction. I spoke to different members of my family about these anxious, unsettling feelings about where my career was. A majority of the advice had a similar theme: patience, patience and even more patience. Maybe you’re feeling some of those same frustrations; maybe you’re in the same place I was. Here are a few things I learned that helped get me through that unsettling time in my career and helped me focus on what I want to achieve: Be Patient: I wasn’t the happiest camper for a few months. I was frustrated with my decision to change jobs and aggravated that I couldn’t fix this change overnight. Remember when you were a kid and your favorite toy broke and a lollipop was all it took to make things better? The sugar high might ease the inner anger, but it doesn’t change the fact that this is where you are right now and you made this decision because you thought it
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was the best thing to do at the time. Learn to accept this is where your career is and eventually it will either get better, or you can make a change. Going into a job with a miserable attitude is not going to move you forward. Your Parents Might Be Right: Believe me, I don’t want to admit it at times, especially being the youngest in the family. You want to be able to solve the problems and questions you come across by yourself, but sometimes the perspective of someone who has been there before helps. It was a relief to hear about my father’s experience moving from job to job and how he learned to hone in on what he wanted to focus on in his law career. My father was a huge help to me understanding the business side of business such as understanding the difference
between a good offer and a bad one. Make a List: A professor in grad school once gave my class an assignment: Go home, and make two lists—what you want to achieve in the next six months and what you want to achieve in the next five years. It’s actually difficult to think that far in advance because a lot can happen in that timeframe, but the task helps identify your desires and needs. A need could be a raise or a promotion; a desire could be to run your own business. Making a list helped me come up with realistic goals and create a plan of attack. It’s never too late to change the path. Brooke Feldman is the markting manager for MEGA Group USA. She can be reached at brooke.e.feldman@gmail.com.
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2015 RNO
FOCUS NOW
Quality beats quantity every time. RetailerNOW is the only association print and digital media focused entirely on your target audience—retailers. Focus your ad dollars on reaching the CEOs, owners, buyers and decision makers rather than just blindly reaching. Advertise now. Call Michelle Nygaard at 916.757.1160.
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BENEFITFOCUS
Implementing a Workplace Safety Program It's good for your store and your store's bottom line By Kaprice Crawford
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here are many benefits to having a workplace safety program in place. Not only does it protect your employees’ wellbeing, it helps reduce the amount of money you pay out in health insurance benefits, workers’ compensation benefits and possible wages for temporary help. Plus, it reduces the cost of service or sales that may suffer due to fewer employees and stress on those employees who are picking up the absent worker’s share. The NAHFA has experts on hand to help guide you in putting together a workplace safety program, but you can do one yourself. What’s required to implement a truly effective safety program? An effective accident prevention program requires proper job performance from everyone in the workplace. Therefore, before implementation of your program takes place, your employees and managers must be properly trained. How can you ensure that your employees are properly trained regarding your safety program? As a business owner, you must ensure that all employees know about the materials and equipment they work with, what known hazards are in the operation, and how you are controlling the hazards. Each employee needs to know the following: No employee is expected to undertake a job until they have been properly trained and authorized to perform that job. No employee should undertake a job that appears unsafe. Consider combining safety and health training with other training you do, depending upon the potential and existing hazards you have. Your training goal is for all employees to know how to keep themselves and their fellow workers safe and healthy. When you’re implementing your plan, consider these things: You’ll need an insurance plan. Beyond the liability protection you will receive, don’t expect much more from insurers. Their goals are different from yours hence, they may not have the in-depth expertise to provide many of the services you may need concerning training. Don’t dwell on your program’s structure and reporting relationships. It really does not matter to whom one reports within your business. Promote a safe workplace. The best claim is the one that never
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PLAY IT SAFE As an employer it's your responsibility to make sure your employees are properly trained and know about the materials and equipment they work with.
happened. The primary goal of each employer should be to avoid accidents in the first place. How can you accomplish this seemingly impossible task? Avoiding accidents can be as simple as ensuring that employees use safety equipment or as difficult as restructuring job tasks and duties in a more ergonomically efficient way. Match an employee’s physical capabilities to the physical demands of the job. Avoid placing employees in situations they are physically incapable of handling. Job titles and descriptions should be incorporated into your policy handbook or operating procedures.
Documenting Your Workplace Safety Program Documenting your safety program is important. You should document the activities in all elements of your workplace program. Essential records, including those legally required for workers’ compensation, insurance audits, and government inspections, must be maintained as long as the actual need exists. Keeping records of your activities, such as policy statements, training sessions for management and employee safety and health meetings held, and medical arrangements made, is also a smart idea. As an added incentive, maintaining essential records will also aid in the demonstration of sound business management, for showing “good faith” in reducing any proposed penalties from OSHA inspections, for insurance audits, etc. In any safety program, accountability is the key. Some states allow for a reduction in a workers’ compensation award when an employee fails to follow a safety rule or fails to use safety equipment. Safety programs should not just be written; each employee should be given a copy of the safety program and should sign to show that a copy was received. Also, you should know that your association can provide quotes on health insurance and worker's compensation. Just ask! Kaprice Crawford is NAHFA’s membership director and can help NAHFA members with many of their questions or problems they encounter on the job. Contact Kaprice at 800-422-3778 or kcrawford@nahfa.org
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h Unlimited telephone/email access to human h Guidance to problems with: resource lawyers and consultants - state & federal wage and hour compliance h Access to an entire data and labor law library, and wage and hour laws - OSHA compliance h Wage, salary and benefits data h Personnel forms and many other resources
h Workers’ Comp & unemployment insurance
“The program with American Consulting Group(ACG) is the single most important benefits we have with NAHFA. I have used this service a multitude of times and just the peace of mind that we are handling issues correctly is worth our membership.” — George Nader, Nader’s La Popular, Gardena, CA
Call (800) 422-3778
for more information on this money saving member program!
or visit nahfa.org
The North American Home Furnishings Association is committed to helping you Sell More, Make More and Keep More
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RetailerNOWmag.com
5/13/2015 5:45:19 PM 7/8/2014 2:29:52
SponsorT
Our Association gratefully recognizes all of our sponsors whose dedication and commitment have strengthened our industry. Signature Sponsor
Premier Sponsor
Coaster Company of America Furniture Today North American Retail Service Corp Titanium Sponsors Ashley Furniture Industries Emerald Home Furnishings FurnitureDealer.net Furniture Wizard MicroD, Inc. Myriad Software Nourison STORIS Synchrony Financial
Platinum Sponsors ACA Advertising Concepts of America • Best Buy for Business • DataMentors • Diakon Logistics Furniture of America • High Point Market Authority • Leggett & Platt • Mail America Northwest Furniture Express • Profitability Consulting Group • PROFITsystems, Inc. R & A Marketing • Simmons USA
Gold/Silver Sponsors Jaipur • Phoenix A.M.D. • Horich Hector Lebow Advertising • Restonic Mattress Corp Steve Silver Co. • Why Not Lease It
Bronze Sponsors BrandSource AVB • Ekornes • Moso Graphics • Wahlquist Management
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To become an industry sponsor contact:
2:29:52 PM
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North American Home Furnishings Association 800.422.3778 or email: cwilliams@nahfa.org RetailerNOWmag.com
JUNE | 2015 *List as of May 6, 2015
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OFNOTE
G Joseph Cory, Founder of Furniture and Appliance Delivery Service, dies at 76 Joseph P. Cory, chairman of Cory First Choice Home Delivery, Secaucus, died April 28. He was 76. Cory presided as CEO from 1977 to 2013 when the transition to the third generation of the family began overseeing the company. His vision was a company built on relationships founded in dignity and respect and he would often tell family members and business acquaintances, “We are in a people business, not a trucking business.” Cory First Choice Home Delivery specializes in warehousing and in-home delivery of fine furnishings, appliances, electronics and more. The company makes more than 1.6 million annual home deliveries, handling $2 billion worth of
consumer products every year. Cory is survived by his wife, Nada; his sons Joe Jr. and Patrick and his wife Chunji and Marin Dragojevic; his daughters Virginia Grace, Jennifer and her husband Rocco Morrongiello, Jessica and her husband Tony Robles and Martina Dragojevic; and his sister Grace and her husband Jim Tsokanos; 14 grandchildren and four great-grandchildren. The family is asking for a donation to the City of Hope. In 2010, Cory was honored with this organization’s Spirit of Life award for his efforts to support the City of Hope’s research efforts to seek out treatments and cures for cancer and other illnesses.
Surya President Satya Tiwari Named Regional Entrepreneur of Year Finalist The president of rug and home accessories supplier Surya has been is a finalist in the Family Business Category for the EY Entrepreneur Of The Year 2015 Award for the Southeast region. Satya Tiwari’s nomination marks the second straight year he has been recognized with for the award. Finalists were evaluated and selected by an independent panel of judges based on their business vision, financial performance, demonstrated leadership in driving innovation and commitment to social responsibility. Under Tiwari’s direction, Surya has grown organically from $2.7 million in
NAHFA’s DataLink Program The North American Home Furnishings Association is working on bringing the industry’s first standardized data initiative to fruition. The Association is collecting manufacturers’ product information to universally streamline it, making it easier for retailers to use on their websites and point-of-sales systems. This member benefit is in development and members interested in beta-testing should contact Lisa Tilley at 800-422-3778 ext. 106 or LTilley@nahfa.org.
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sales in 2004 to nearly $100 million during the most recent fiscal year. The company has been named by Inc. Magazine as one of America’s fastest growing privately held companies for four years running. Surya will open a 1-million-square-foot, state-ofthe-art corporate headquarters and distribution center later this year that will bring an additional 200 jobs to the North Georgia region. Since assuming the role of company president in 2004, Tiwari has systematically extended the Surya line across multiple product categories, quickly bringing to market the latest and most relevant designs backed by substantial inventory.
NAHFA Members Celebrate Milestones • Slater's Furniture, with stores in Modesto and Merced, Calif. celebrates its 103rd anniversary this year. The retailer hosted a Stickley Roadshow in May to commemorate the milestone. • Lynchburg, Va.-based Schewel Furniture reached its 118th anniversary this year as well; the Top 100 Retailer has stores in Virginia, West Virginia and North Carolina.
• Wells Home Furnishings in Charleston, W.Va. opened its second location recently in Morgantown, W.Va. Owner and president John Wells started the company 21 years ago with his father in Charleston. Got an item for Of Note? Send your information and hi-res photos to Robert Bell, Robert@RetailerNowmag.com.
RetailerNOWmag.com
5/13/2015 5:49:08 PM
Get back in the game with a Lynch
“It was the best Sale we have ever had...”
Sale!
Jim & Linda Shubert Shubert Design Furniture March 4th, 2015
Contact us today or visit our website for a complete outline of our legendary Sale Plans and our no-nonsense, one-page contract. 161 Ottawa Avenue NW Suite 300F Grand Rapids, MI 49503 (800) 824-2238 www.LynchSales.com Copyright 2015 Lynch Brothers Licensing Corporation
Coto de Caza Golf & Racquet Club
T
he North American Home Furnishings Association offers opportunities throughout the year for members to connect, learn and grow their business. Take a look at some of our upcoming events.
City of Hope’s 24th Annual West Coast Golf & Tennis Tournament Coto de Caza Golf & Racquet Club Coto de Caza, Calif. June 8 Here’s your chance to help raise money and awareness for the City of Hope cancer center while gathering informally to socialize with industry colleagues.
New England Region 7th Annual Golf Tournament
11th Annual Pilgrim Furniture City Golf Tournament
Stow Acres Country Club Stow, Mass. June 24 Join fellow retailers for a day of golf—we’ll play Florida Scamble—followed by dinner and prizes. Here’s your opportunity to connect with fellow retailers way from the office.
Lake of Isles North Stonington, Conn. September 12 Join us for an afternoon of golf, food and prizes (but mostly golf ) and get to know industry reps and fellow retailers on a golf course rather than in an office.
Inland Empire Furniture Dealers’ Golf Tournament Circling Raven Golf Club Worley, Idaho August 19 A Northwest institution that gets better each year, the Inland Empire Furniture Dealers’ Golf Tournament is a great excuse to get out of the office and meet other retailers on the golf course. RetailerNOWmag.com
Of Note JUNE V2.indd 43
Retailers interested in attending any of these events can visit nahfa.org or call 800.422.3778 for more details or to register.
JUNE | 2015
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K
NAHFAATWORK
DON'T BE CAUGHT OFF GUARD By Lisa Casinger
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the benefits of this regulation for seven years. hen most of us hear the word formaldehyde Counts notes that AHFA’s involvement in the federal formalwe think about frogs suspended in a clear dehyde regulation has not been at all focused on emission limits, liquid in biology or cadavers. In our industry which have already been adopted and mirror the board’s standard. formaldehyde is important because it’s used Rather the AHFA is focused on proposed improvements that in the production of wood binding adhesives would ensure the accuracy and reliability of the test methods and resins used in composite wood panels. within the enforcement framework and would strengthen accountFormaldehyde is a naturally-occurring organic compound and it ability within the third-party certification system to ensure noncan be formed when other chemicals break down. Volatile organic compliant products do not make their way into the compounds, as they are known, become gasses at supply chain for furniture manufacturers. room temperature and this is why formaldehyde “The Times article missed its mark by about a was an issue. Formaldehyde in small concentradecade,” Counts says. “The potential health impacts tions is a normal part of our environment. It is of formaldehyde were debated 10 years ago. Where listed with the Environmental Protection Agency we are today is trying to figure out how to achieve as a “probable human carcinogen” and the InterBIG DEAL Formaldehyde isn't limited to biology. accountability and reliability throughout a complex national Agency for Research on Cancer lists is as If you sell furniture, it global supply chain.” “carcinogenic to humans.” affects you. AHFA and its member companies have opposed It is important to know that while the EPA only one aspect of the proposed EPA enforcement hasn’t banned formaldehyde, it has been workscheme—the testing of laminated wood products ing for years on a national standard of acceptable based on the fact that such testing will provide emissions and the testing requirements used to no benefit to human health or the environment. monitor those emissions. California designated Research shows that finished products have a formaldehyde as a toxic air contaminant with reduced emission profile from that of a composite no safe level of exposure in 1999 and eventually panel and that laminating composite wood panels approved measures to reduce formaldehyde emisreduces the level of formaldehyde emissions in the sions from composite wood products. finished furniture product by at least 80 percent, Our industry, specifically the American Home making additional testing at the finished product Furnishings Alliance, has been involved in nearly level unwarranted. CARB took this research into every step of the regulatory process. The Associaconsideration in its decision to exempt lamition has called for strengthening the requirenated products from the testing and certification ments and oversight in the regulation to ensure requirements. a certified and compliant supply chain. NAHFA has supported As a retailer you may read this and think it’s a manufacturer’s AHFA’s efforts and informed and educated its own members about problem, not yours. You’re wrong. If you sell or import furniture the issue. The Association updated California members throughout (even if you aren’t the importer of record), it affects you. the emissions standards implementation and continues to apprise Consider the situation Lumber Liquidators found itself in members on the EPA’s efforts. after a 60 Minutes segment claimed the company sold laminate AHFA recently updated its fact sheet on Home Furnishings & flooring that contained formaldehyde levels that surpassed the Formaldehyde for a New York Times article on the EPA’s efforts to CARB emission standards. The company’s stock plummeted, its finalize rules implementing the federal formaldehyde standard. CFO is stepping down this month and there are 103 pending Unfortunately, the facts never made it into the article. “For more than a decade, AHFA and its member companies have class action suits related to the flooring. Lumber Liquidators is up against a tidal wave of bad PR and by default the furniture been actively involved in the regulatory development of formaldehyde emission standards—as well as the enforcement framework for industry is being painted with this broad brush of being against regulations. those standards,” notes AHFA CEO Andy Counts. “We supported You need to be aware of the situation, regardless of which California’s adoption of the most stringent formaldehyde emission state your business is located. California retailers should already standard in the world, and we have worked closely with EPA ofbe keeping chain of custody records and responding to customficials to help achieve a strong and enforceable federal regulation.” The report also omitted the impact of the California Air Resource ers’ questions about the safety of their furniture but so should retailers everywhere. Board’s (CARB) formaldehyde regulation (the toughest production Public perception can make or break a business. Don’t be standard in the world for formaldehyde emissions from wood prodcaught off guard. ucts) and the fact that consumers nationwide have already realized 44
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Basic AD
Introducing NAHFA DataLink, the home furnishings industry’s first automatically updated product data feed. No cost to normalize data for manufacturers A strategic tool for service providers A retail solution touching every aspect of business
Show More—Sell More—Do More To find out more: http://www.nahfa.org/about/nahfa-datalink Contact us: 800.422.3778 x 106 Lisa Tilley| nahfa.org
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INDUSTRYCALENDAR City of Hope's 24th annual West Coast Golf Classic
Summer Las Vegas Market August 2-6 Las Vegas, Nev. Lasvegasmarket.com
June 8 Coto de Caza, Calif. Nahfa.org
Dallas Total Home & Gift Market
Inland Empire Furniture Dealers Golf Tournament
June 24-30 Dallas, Texas Dallasmarketcenter.com
August 19 Worley, Idaho Nahfa.org
New England Regional Golf Tournament
Tupelo Fall Furniture Market
June 24 Stow, Mass. Nahfa.org
Atlanta International Gift & Home Furnishings Market July 7-14 Atlanta, Ga. Americasmart.com
September 30 Hickory, N.C. Ahfa.us
AHFA Solution Partners Regulatory Summit
Midwest Furniture Show September 2-3 Arlington Heights, Ill. Midwestfurnitureshow.com
October 1 Hickory, N.C. Ahfa.us
Casual Market Chicago
NAHFA-hosted regional events are highlighted in red.
September 29 North Stonington, Conn. Nahfa.org
AHFA Solution Partners Education Golf Tournament
August 20-23 Tupelo, Miss. Tupelofurnituremarket.com
September 16-19 Chicago, Ill. Casualmarket.com
11th Annual Pilgrim City Golf Tournament
Fall High Point Market October 17-22 High Point, N.C. Highpointmarket.org
ADINDEX Furniture Wizard (619) 869-7200 furniturewizard.com furniturewizard @furniturewiz Page 5
Las Vegas Market (888) 962-7469 lasvegasmarket.com las vegas market @worldmarketctr Page 3
High Point Market (336) 869-1000 highpointmarket.org http://tinyurl.com/ HighPtMarket @hpmarketnews Page 15
Lynch Sales (616) 458-6662 lynchsales.com lynchsales @lynchsales Page 43
Casual Market Chicago casualmarket.com casualmarket @CasualMarket Page 31
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NAHFA Sponsors (800) 422-3778 retailerNOWmag.com retailernow @retailerNow Page 41
Northwest Furniture Xpress (828) 475-6377 nwfxpress.com Page 19 ProfitSystems (800) 888-5565 profitsystems.com PROFITsystems @PROFITsystems Page 7 STORIS (888) 4-STORIS storis.com STORIS.solutions @STORIS Page 25
Surya (877) 275-7847 surya.com SuryaSocial @SuryaSocial Inside Cover
For information on how to advertise in RetailerNow, contact Michelle Nygaard at (916) 757-1160.
RetailerNOWmag.com
5/13/2015 5:52:41 PM
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NOWLIST
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Fraud Protection
Old School Furniture design student Kirsten Camara’s Analog Memory Desk, made with maple, glass and 1,100 yards of paper, lets you record notes, doodles and sketches by putting pen to paper on your literal desktop.
92%
40 s
of finance professionals think credit cards with EMV-based chip-and-PIN security technology will effectively reduce point-of-sale fraud.
Sourc
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Sourc
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Thin
Not Your Granny’s Rocker Canadian woodworker Reed Hansuld creates sculptural furniture pieces in his Brooklyn, NY studio. With a steel skeleton and graceful walnut wooden curves, his modern Rocking Chair No. 1 breaks any stereotypes you had about the classic rocker. $9,600.
Saving for a Rainy Day?
37% 5% of millennials save
Fruity Goodness Super Sofa Jacobs Krönung holds the Guinness World Record for the largest inflatable furniture; it is 67’3” long, 26’9” wide and 26’5” high. It was made in Bremen, Germany in 2009 and consisted of four different parts.
or less of their paycheck and
18%
The National Watermelon Association is 101 years old; July is National Watermelon Month.
aren’t saving at all.
Sourc Sources: Kcamara.com, Bankrate.com, Reedfurnituredesign.com, Association for Financial Professionals, Watermelon.ag, Matildabeckman.com
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THE WAY WE WERE
I’ve known this photograph my entire life. It was taken in 1970, three years before I was born and shortly after my grandfather, Nathan Tepperman, drowned while on holiday with my grandmother Rose in Palm Beach, Fla. That’s my father, Bill, sitting alone in the store his father built. Only 36 years old, my dad had a young wife and an infant son. Looking at him sitting there I can feel the solitude, and yet there’s not the least hint of the fear he must have felt.
My grandfather built a business with a reputation for being an honest place to deal and a secure place to work. My dad shared that commitment. He knew that his only option was to keep going, so he chose to serve our community as his father had. Boy, did he ever! Forty-five years later, my brother Andrew and I now share their vision. Service to our customers, our staff and our communities is our responsibility and our passion.
Noah Tepperman, third-generation co-owner of Tepperman’s, Ontario, Canada
Share your old photograph and memory by contacting Robert Bell at 916.757.1169 or Robert@RetailerNOWmag.com
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5/13/2015 5:55:03 PM
KNOW NOW
Our industry is always changing. The minute you think you know it all, that’s when you’re in trouble. Fortunately there’s RetailerNOW to keep you informed and on track. We’re the only association magazine dedicated to educating and inspiring retailers just like you to stay in the know. Subscribe now. Visit Retailernowmag.com.
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Vol. 4 Issue 5 Millennials JUNE Issue
DISCOVER NOW
Looking for new buyers? Check us out.
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RetailerNOW is the only association print and digital media focused entirely on your target audience—retailers. Discover how reaching qualified decision makers—the CEOs, owners, buyers—versus just reaching, can grow your business. Advertise now. Call Michelle Nygaard at 916.757.1160.
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