HGO Merchandiser Summer 2017 by MediaEdge

Michael Knell’s

HGO merchandiser SUMMER 2017

THE BOXED BED:

selling mattresses online

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Volume Six, Issue 2

Our Canadian Furniture Show preview David Coletto introduces the millennials The mattress: a technological marvel Kimmberly Capone & embracing change

CONTENTS

favour of shipping mattresses directly to the customer’s door without her ever seeing – or lying down on – the real deal. The crazy thing is, it seems to be working. Ashley Newport authored our report.

PROFILE EMBRACING CHANGE

8 EDITOR’S LETTER GET YOURSELF TO MARKET

Change is coming. Learning about those changes, sharing ideas about the best coping methods while finding great product for the floor remain three of the best reasons to come to market. If you’re a Canadian furniture, mattress and major appliance retailer attending the upcoming Canadian Furniture Show really ought to be mandatory. That’s also true if you’re a vendor looking to do business with that same retailer.

MARKET PREVIEW CELEBRATING THE CANADIAN INDUSTRY

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The 2017 edition of the Canadian Furniture Show will be easy to navigate and be a little more compact. The organisers are promising this industry’s only national trade event will offer all the right things to the attending retail buyer, including great product, a great shopping environment with opportunities to learn and network. Michael J. Knell reports on the preparations.

INNOVATIONS THE BOXED BED: SELLING THE MATTRESS ONLINE

A massive shift in consumer behaviour has prompted some brave – and, in some cases, quite successful – entrepreneurs to forego the traditional showroom in

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Ashley Newport profiles Kimmberly Capone and looks at how one woman dramatically transformed her fledgling family’s business model by reinventing the wheel and taking risks – something that ultimately quadrupled her com pany’s sales. All she did was adopt a new way of selling.

IDEAS HAVE YOU MET THE MILLENNIALS?

David Coletto, this country’s acknow ledged expert on the millennials, introduces us to this group of people, born in the years beginning in 1980, who are going to determine the fates and futures of furniture, mattress and major appliance retailers for literally decades to come.

PRODUCT STRATEGIES THE MATTRESS: A TECHNOLOGICAL MARVEL

Technology is driving growth in the mattress and bedding business. The product itself is becoming more sophisticated. So is the means by which is marketed and sold to the consumer. Canadian manufacturers are adapting to this reality quite nicely. Our report was written by Michael J. Knell.

INDUSTRY CALENDAR & ADVERTISERS’ INDEX ON OUR COVER: Industry veteran Deanna Bartucci founded The Naked Mattress last summer along with partner Juan Sanchez. It’s one of a handful of Canadian ‘pure play’ e-commerce mattress retailers who are changing the way the consumer thinks about buying the device upon which they spend about a third of their lives.

THE ENDURING CRAFTSMANSHIP OF STEARNS & FOSTER® Stearns & Foster mattresses are built on the belief that there is no greater luxury than the finest bed. Each bed is meticulously handcrafted by master craftsmen, paying relentless attention to detail. We fuse innovative time-honoured traditions, for precisely engineered construction and lasting quality.

stearnsandfoster.ca

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EDITOR’S LETTER

HGO merchandiser SUMMER 2017 • VOLUME SIX, ISSUE 2

MICHAEL J. KNELL

GET YOURSELF TO MARKET

Change is coming. Learning about those changes, sharing ideas about the best coping methods while finding great product for the floor remain three of the best reasons to come to market.

ELL, HERE WE ARE. MARKET IS COMING. EVERYONE IN THE

industry knows my view. If you are a Canadian furniture, mattress and major appliance retailer, it’s in your best interest to get out of your store and get yourself to Mississauga for the Canadian Furniture Show, which opens at the International Centre on May 26. Conversely, if you are a Canadian furniture manufacturer, mattress maker, major appliance resource or other potential vendor partner to the aforementioned retailer, your obligation is to have a presence on the floor, ready to share your knowledge, insight and strengths – and maybe even your product. A year ago, in this same issue of the Merchandiser, I advocated furniture trade events really shouldn’t be about buying and selling. In my view, the purchase order should be seen as a bonus – as a ‘nice to have’ not as a ‘must have’. We need to come together as an industry and start talking to each other about what’s coming, because I don’t think the industry is really aware of potential dangers lurking on the horizon. They will impact all points of the purchase path to the consumer, from manufacturing and distribution to retail. Some of them we’re aware of: increasing household debt; stagnant wages; housing affordability; and, uneven job growth. Others are no so obvious. The new U.S. administration wants to renegotiate NAFTA. During the first goround, this industry was very nearly sacrificed in the government’s haste to sign the deal. Fortunately, that exercise seems to have worked out reasonably well. After all, the damage in recent years was caused by the dollar, which went on a crazed oil-driven growth spurt and drove it to highs no one anticipated. Now, our sitting federal government is talking about free trade with the People’s Republic China, which is a really bad idea. The PRC has done this industry a lot of damage over the past two decades and we’re going to have to fight this. And the best way to fight it is to get united. That’s why we need the Canadian Furniture Show. It’s a place for people from across the industry to meet and talk. We need to strengthen our manufacturing. We need to bolster Canadian furniture retailing. Our best place to meet is at our only truly national industry event. It’s not a panacea. It’s a start. I hope to see you there.

Michael J. Knell Publisher & Editor mknell@homegoodsonline.ca

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ISSN 2291-4765

www.HomeGoodsOnline.ca PUBLISHER & EDITOR Michael J. Knell mknell@homegoodsonline.ca MARKETING DIRECTOR Corrie-Ann Knell marketing@homegoodsonline.ca CONTRIBUTORS David Coletto Donald Cooper CONTRIBUTING EDITOR Ashley Newport ashley@homegoodsonline.ca ART DIRECTOR Samantha Edwards Sam I Am Creative samiamcreative@gmail.com IT DIRECTOR Jayme Cousins In House Logic websmith@inhouselogic.com PUBLISHED BY Windsor Bay Communications Inc. P.O. Box 3023, 120 Ontario Street Brighton, Ontario K0K 1H0 T: 613.475.4704 F: 613.475.0829 Michael J. Knell, Managing Partner PUBLISHERS OF

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© 2017 Windsor Bay Communications Inc. All rights reserved. Windsor Bay Communications does not accept any responsibility or liability for any mistakes or misprints herein, regardless of whether such errors are the result of negligence, accident or any other cause whatsoever. Reproduction, in whole or in part, of this magazine is strictly forbidden without the prior written permission of the publisher.

AFFILIATE MEMBER

Business. Network. Inspiration. Over

7,000 Participants

230

Exhibitors

Great Show Specials!

Lunch & Learn Speaker Series

including Highly Acclaimed Designer Sarah Richardson

May 26-28, 2017 The International Centre — Toronto, Ontario canadianfurnitureshow.com Facebook “f ” Logo

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MARKET PREVIEW

The Alliance dining table from Zuo Modern Canada offers a regal profile using an elegant ‘X’ style wood base supporting a plank style table top with a distressed natural finish that adds intrigue and dimension to the room.

CELEBRATING THE CANADIAN INDUSTRY This year’s Canadian Furniture Show will be more compact but the organisers are promising it will offer all the right things to the attending retail buyer, including great product, a great shopping environment with opportunities to learn and network. BY MICHAEL J. KNELL

HIS YEAR’S CANADIAN FURNITURE SHOW

will be easy to navigate and even though it will occupy a more compact space, president and chief executive officer Pierre Richard is promising attending retail buyers there will be plenty for them to see, shop and study as they walk the halls of the International Centre beginning on the morning of May 26. There will be several noticeable differences from last year’s show. The schedule is the most immediate. In 2017, the show opens on Friday (May 26) and closes on Sunday (May 28). The exhibits will open at 9am and close at 6pm. This is a shift from the Saturday to Monday timeframe used last year and the Saturday to Tuesday used for decades prior to 2014. According to Richard, the schedule was changed in response to feedback received from retail buyers and other attendees when they were surveyed after last year’s event. “A lot of buyers said they didn’t want to spend a weekend at the show,” he said, adding, “People told us they prefer Friday to Sunday.”

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The Perth queen Platform bed from Zuo Modern Canada offers a simple yet bold silhouette as its rich chestnut finish with elegant distressing gives a distinguished detailed look to the plank style headboard. Its sturdy metal base adds a retro mid-century modern look in iron finish.

For the past 46 years, the Canadian Furniture Show has been – and remains – the industry’s only truly national event. Indeed, the only furniture and mattress industry trade events held outside of CFS are the member-only conventions and buying fairs held by Cantrex Nationwide and Mega Group and the Toronto Winter Furniture Show – an ad-hoc event for a group of companies with permanent showrooms in and around the International Centre. It’s organised by the Canadian Home Furnishings Alliance. Richard acknowledges when the doors open on the morning of May 26, the show will be slightly smaller in terms of its floor plate, but will show the wares of about the same number of exhibitors.

New to Magniflex is the Grandioso, which features the Italian mattress maker’s dual-core technology with a double-sided cover. The winter side features cashmere and merino wool, whereas the summer side features quilted silk and linen.

This harvest table is the latest addition to the Springwater Woodcraft assortment. It features chunky four-inch square legs and a 1.5-inch thick, hand-planed top that resembles barn board.colour scheme.

Elegant and impressive, the model 9707 is the latest addition to Superstyle’s ‘Inspiration Home Collection’. Its attractive fabric combinations give a slightly formal attitude to the suite’s carriage coil support system and ‘Super-Cel’ premium seating.

CFS will occupy Halls 1 to 4 of the International Centre this year having closed Hall 5 and the bridge connecting it to the rest of the building on Mississauga’s Airport Road. “The floor plan is more concentrated, more efficient,” Richard said, adding the show team has spent a lot of time configuring the traffic flow for 2017 and believes attending buyers and other visitors will find the show easier to walk and still find everything they want.

THE EXHIBITORS

The permanent showrooms of the International Centre’s SOFA (Source of Furniture & Accessories) annex will, as always, be open throughout the show. Since the close of CFS 2016, SOFA has added at least two tenants of interest to furniture buyers: Canadian solid wood case goods manufacturer Ruff Sawn; and, Zuo Canada, the Montrealheadquartered branch of Zuo Modern, the California-based modern furniture resource. Both of these firms could be found on the main show floor last year. As has been the case for the past few years, a least four furniture suppliers with permanent showrooms outside of the International Centre will be ‘official’ participants in CFS 2017. They include three leading Canadian upholstery producers: Brentwood Classics, Décor Rest, and Superstyle Furniture – along with its sister companies, Trend-Line Furniture and Simmons Upholstery Canada. The fourth is Korson Furniture Design, the full-line resource that also represents Coast-to-Coast and Kannoa outdoor furniture. Décor Rest and Korson are both expected to have small displays on the show floor in Hall 3. CFS will host about 45 first-time exhibitors in 2017. They run the full gamut of products and services used by the majority of furniture retailers. Some also hail from a fair distance away from Canada’s borders. For example, Furninova is an upholstery maker based in Scandinavia. There are also at least two exhibitors from Pakistan including Happiness Office Furniture. Several are also based in China and Indonesia. Some are from closer to home, such as Blu Sleep Products, the Quebec-based specialist in pillows and other sleep accessories.

Several are also from aligned services such as Tactik Logistique, a delivery and logistics specialist; and, Picture This Toronto, a company specialising in three dimension photography for a variety of purposes. However, the big news on the exhibitor front was the return was the return of two high profile upholstery producers: Décor Rest and Palliser. Both skipped CFS in 2016. In terms of display space, Palliser will the largest exhibitor in CFS 2017, occupying Orion ‘B’, ‘C’ and ‘D’ in International Centre’s conference facility.

NEW SHOW FEATURES AND SOCIAL EVENTS

As has become traditional over the past 20 years or so, CFS will kick-off with the annual Canadian Home Furnishings Awards gala {see sidebar} which will be held on Thursday evening (May 25). This year’s dinner will also feature a keynote address by Robert Maricich, president and chief executive officer of International Market Centers, the owners of the World Market Center in Las Vegas and several showroom buildings in High Point, North Carolina including the International Home Furnishings Center. In addition to saluting the recipients of the 2017 Retailer of the Year Award – Leon’s Furniture Limited – and the Lifetime Achievement Award honouree – Dennis Novosel – the gala will also introduce the winners of the first Retail Sales Professional Awards, a program to recognise excellence among sales associates working at Canadian furniture, mattress and major appliance retailers. The following evening, to wind-down the first day of the show, the organisers will hold a cocktail reception in the lobby of the International Centre’s conference facility. This replaces the ‘Industry Bash’ held in 2016 and 2015. Richard believes after a tough day of working the show floors, attendees are looking for something more low key that will enable them to catch-up with old friends and business partners. For the past three years, Richard has hosted a ‘Town Hall’ at the end of each show to give both exhibitors and visitors the opportunity to provide feedback about the event and offer their own suggestions for improve. This year, the format will change. For an hour each day of the show, beginning at } HomeGoodsOnline.ca

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LUNCH & LUNCH PROMISES INSPIRATION

leading Canadian television personality, an expert on millennials and a second generation furniture retailer who turned around her family business will headline the first ever Lunch & Learn series at the 2017 Canadian Furniture Show (CFS), opening at the International Centre on May 26. “We are very proud of this line-up which will provide show visitors with a great opportunity to take a break at lunch time a get inspired,” CFS president and chief executive officer Pierre Richard said in announcing the series, which will be held at the stage set up in Hall 4 (follow the signs). Each segment will begin at 12noon on each of the three days the show is open. Kicking off the series on Friday (May 26) will be Sarah Richardson, an award-winning designer and television personality. Based in Toronto, she is best known for dramatic transformations that turn ordinary spaces into magazine-worthy rooms with an incredible wow factor. Richardson has hosted and produced eight HGTV lifestyle series where she shares a practical and inspiring approach to décor and design. Her shows, which have been seen in over 100 countries, include: Room Service, Design Inc., Sarah’s House, and Sarah 101. Her most recent series, Sarah’s Rental Cottage aired on HGTV Canada in 2015. Her new show premiers fall 2017. In addition to being a past contributor and columnist for the Globe & Mail and Chatelaine, Richardson was home design director and décor columnist for Good Housekeeping. She is also the author of Sarah Style and At Home Sarah Style, which was on the Globe & Mail best-seller list for over four months. Richardson has created two fabric lines for Kravet and has a growing line of signature products including custom furniture. Her company, Sarah Richardson KIMMBERLY CAPONE Design Inc., has clients throughout Canada, the United States and the United Kingdom. Saturday (May 27) will see David Coletto take the Lunch & Learn stage. A leader in online research methodologies as well as founding partner and CEO of Abacus Data, Coletto is an expert on Canadian millennials with a doctorate from the University of Calgary who also teaches and provides expert analyses to media. The Ottawa-headquartered Abacus Data delivers strategic advice and research design expertise to many of Canada’s foremost corporations, advocacy groups, and political

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leaders. Coletto has a wealth of experience in public affairs research, corporate and organizational reputation studies as well as youth research. He also leads Abacus Data’s Canadian Millennial Research Practice and helped a number of organisations – including the LCBO, the RCMP, the Calgary Police Service, Hudson’s Bay and the Ontario Ministry of Child & Youth Services – connect and engage with Canadian millennials. He is an adjunct professor at the Arthur Kroeger College of Public Affairs at Carleton University, where he teaches courses on polling and public opinion, political marketing, research and public affairs. He is also an instructor at the university’s Clayton H. Riddell Graduate Program in political management. “David is an outspoken proponent of transparency in the polling industry and SARAH is regularly called upon by media and RICHARDSON organizations alike to provide expert analyses of public opinion and research methodologies,” Richard noted. Wrapping up the series on Sunday (May 28) will be Kimmberly Capone, president and head buyer for Treasures, the retail operation started by her father more than 40 years ago. In her presentation – entitled Red to beyond Black... in just one year! – Capone will share her journey, process and secrets DAVID on how she reinvented her struggling, COLETTO family-owned retail business and quadrupled sales in a relatively short period of time. By providing design services paired with 3D technology, she’s now offering an unparalleled shopping experience that has customers waiting in line. Capone used her personal experience in the home accessories business, her interior design education, and experience in the real estate sales and staging businesses to forge a successful interior design career. She has designed commercial and residential spaces for celebrities and executives as well as everyday customers who take advantage of her complimentary in-home design service at Treasures, the retail showroom she operates in Toronto’s Yorkdale Shopping Centre. “When she’s not travelling around the globe to curate the most interesting selection of furniture, art, and home accessories for her clients, she’s busy designing her new line of sofas, chairs, ottomans, beds, curtains, and pillows,” Richard said. ■

4pm, Richard can be found in the registration area of Hall 1 for a ‘Chat with the CEO’ which will give attendees the opportunity to speak with him one-on-one. To supplement this effort, CFS organisers will also place suggestion boxes at the information booths in Halls 1 and 3. Two of the fun features from 2016 will return this year, including ‘The Spa’ where attendees can relax with a chair massage, breathe in fresh air at the oxygen bar or take a beauty break with a manicure. ‘The Pub’ will offer a full espresso bar as well as wine, beer and classic cocktails plus market-style sandwiches and salads. Both are located in Hall 2.

LUNCH & LEARN

Perhaps the biggest addition to the CFS line-up this year is the Lunch & Learn seminar series {see sidebar}. Each show day at 12noon, a seminar will be held on the stage set-up next to the food court in Hall 3. Kicking off the series on Friday will be interior designer and television personality Sarah Richard. She will be followed on Saturday by David Coletto, the CEO of Abacus Data. Rounding out the series will be Kimmberly Capone, president and head buyer for Toronto furniture retailer Treasures.

THE BOOTH AWARDS

In collaboration with SOFA, the CFS will once again stage the Best Booth Awards this year. First seen last year, this program aims to reward exhibitors who have gone above

The Gabe collection from El Ran features modern styling with a track-style arm. It features power recline as well as a power assisted headrest. It dual control also features a USB port. Group includes a loveseat and sectional.

and beyond to create a truly outstanding display. A jury of industry professionals will evaluate the booths on Friday with the winners being announced later that day. The awards will be presented based on the following criteria: creativity, imagination and originality; use of product, images and other visuals; and, overall appearance and visitor experience. ‘Gold’ and ‘Silver’ awards will be presented in several categories, including: booths 999 square feet and under; booths between 1,000 and 2,499 square feet; booths 2,500 square feet and over; ‘Best New Booth’ – exclusive to firsttime exhibitors; and, best SOFA showroom award. HGO MICHAEL J. KNELL is the publisher and editor of Home Goods

Online and all of its platforms. He has attended every edition of the Canadian Furniture Show for the past 30 years.

Thanks for the memories...

RY SA

ER I

AT IN CELEBR

123 Ashbridge Circle, Woodbridge, ON L4L 3R5 905.850.6060 superstylefurniture.com

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BUYING GROUP DRIVE CFS ATTENDANCE

etail buyer attendance at the Canadian Furniture Show (CFS) is driven, for the most part, by this country’s three buying groups: Cantrex Nationwide (CNW); the Dufresne Retail Solutions Group (DRSG); and, Mega Group. All three use the event in slightly different ways, but all three agree the show is vitally important not just to their members, but to industry at large as well. All three will have a presence on the show floor. It should be noted all three also sit on the CFS organiser’s national advisory committee. All are expecting a solid turnout from their members to the event and between the three should host a total of about 260 stores over the three days of the show. “Initial indications are there will be less members attending this year versus last year,” DRSG director Steve Braniff reports while noting he’s still anticipating more than half of the 135 retail operations on his member roll to attend CFS this year. DRSG will occupy over 5,000 square feet in the International Centre’s conference facility where plans to unveil the group’s 2017 mattress line-ups, which will be the major focus of their efforts. Beyond this, Braniff anticipates his members will use CFS to preview new product and build relationships with vendors. “Our members tend to come to preview what’s new as our core programs are already put into place,” Braniff says. CNW assistant vice president Pat Kelly is expecting more of his members to come this year. “I’m expecting an

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increase this year as the timing is somewhat better and with the return of Palliser we should see a stronger turnout,” he said, adding his members are keenly interested in new product and show specials, which he described as “the two keys to attending any show.” The group itself will be adding to its various private label initiatives. “We will also be introducing new product and programs that will add to our members’ toolbox,” Kelly said. Meanwhile, Mega Group expects to host a slightly larger number of its members to CFS, many of whom will start the weekend attending to the group’s annual general meeting of shareholders. At that time, they will also vote to replace vacancies on their board of directors. Michael Vancura, the group’s executive vice president of retail, said they will host a range of marketing and merchandising sessions for the members of BrandSource Canada just before the show as well as the now traditional ‘Mad Dash’ where group vendors offer attending member deeply discounted show specials. They will also host their usual fundraising dinner for Ronald McDonald House. The burning question for CFS exhibitors is whether attending group member are at the show to buy. All three execs report good results for 2016 although business so far this year has been spotty. “We had a very good year in 2016 and we were very pleased with the results,” Kelly says. “January was very strong, then we had some real ups and downs by week over February and

March but for the year-to-date we are very pleased with our performance.” “DRSG member same store sales achieved better results than the industry did,” Braniff reports. “We had above industry average results in the furniture, mattress and appliance categories.” Like his colleagues, Braniff also reports a tough first quarter, which despite some uneasiness in the opening months actually generated a little year-over-year growth. Looking out past CFS, group execs are reasonably optimistic about the rest of 2017. “We see 2017 being another good year for DRSG members,” Braniff says. “The first quarter had a slow start but picked up in the last month and that momentum at retail looks to be building.” While there is a lot of concern about the future of NAFTA and what that will mean for the furniture industry as a whole, they are mostly pleased that the value of the dollar gives their members the freedom to support Canadian suppliers. “This is great for the Canadian furniture industry,” Braniff says, adding, “DRSG has supported ‘Buy Canadian’ since our inception in 2006 and will continue to do so where we can.” “There’s no doubt 2017 will continue to be a little unpredictable and while the currency may continue to be an issue, we are overall optimistic about the year,” CNW’s Kelly says. “Hard work and good marketing will always support growth and that will be our focus for the year.” “I’m cautiously optimistic,” Vancura adds. ■

Charlotte is the latest addition to Avant Glide collection from Dutailier, which describes its style as “slightly bohemian” with streamlined curves and lines that come together in perfect harmony, creating a look to blend with the coziest of decors.

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AWARDS GALA TO SALUTE LEON’S AND DENNIS NOVOSEL

he Canadian Home Furnishings Alliance (CHFA) has named Leon’s Furniture Limited as its Retailer of the Year for 2017 and will bestow its Lifetime Achievement Award on veteran retailer Dennis Novosel, founder of Stoney Creek Furniture, the destination store just outside Hamilton. Both will be honoured at a gala to be held immediately prior to the opening of the Canadian Furniture Show. This is the second time Leon’s has been awarded the accolade. The publicly-held and family-managed full line furniture, mattress and major appliance retailer was also the first ever to receive the distinction when the CHFA – then known as the Ontario Furniture Manufacturers Association – launched to awards program in 2001. Furthermore, awarding Novosel the Lifetime Achievement Award is also a departure for the organisation. Since it was launched in 2001, it has been awarded to Canadian furniture and mattress manufacturers in recognition of those individuals who over their career made an exemplary and sustained contribution to both their industry and the community in which they lived. Novosel is the first retailer to be awarded the distinction. LEON’S HAS GROWN AND CHANGED

“A lot has changed at Leon’s since being recognised as the CHFA’s

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Retailer of the Year in 2001,” CHFA chairman Laine Reynolds said in his announcement. “Over the last 15 years, Leon’s has embarked on a period of rapid expansion – adding 30 new locations across Canada, including four new stores in British Columbia. Now, with showrooms from coast to coast, Leon’s is the only furniture retailer in Canada with a brick-and-mortar presence in every province.” He noted Leon’s made a significant investment in high-end and commercial appliances with its acquisition of Appliance Canada in 2007. “The integration of Appliance Canada allowed Leon’s to enhance their competitive position in the appliance category and provided Leon’s with a presence in the growing wholesale sector,” he said. Leon’s celebrated a significant milestone in 2009 DENNIS when they became one of NOVOSEL the few Canadian retailers to celebrate its 100th anniversary. “To celebrate, president and chief executive officer Terry Leon embarked on a crossCanada tour and visited every corporate and franchise store to personally congratulate each associate on being part of this historical achievement,” Reynolds said, adding the company also unveiled a bronze statue in Welland’s Chippawa Park immortalising company founder Ablan Leon. Then in 2013 Leon’s acquired their biggest competitor – and recipient of the Retailer of the Year award in 2004 – The Brick in a $700 million deal that resulted in the establishment of one of the world’s largest network of home furnishings retailers. “This acquisition allowed Leon’s Furniture Limited to maximise efficiencies through large scale purchasing and procurement which, to

this day, continues to provide enhanced values to both Leon’s customers and shareholders,” Reynolds said. “As a result of these acquisitions, Leon’s Furniture Limited has grown annual sales from $450 million in 2002 to over $2.0 billion in 2015 – which represents growth of over 340%.” He also praised the retailer for remaining committed to their humble beginnings and the values they established over 100 years ago by continuing to give back to the communities in which they operate. They are active supporters of the Boys and Girls Clubs of Canada, local hospitals and various other charities such as Wounded Warriors and Breakfast for Learning. NOVOSEL’S LIFETIME OF COMMITMENT

“Dennis Novosel decided early in life that he loved the furniture business and he never looked back,” noted Reynolds, who also serves as vice president of sales and marketing for Superstyle Furniture. “When Dennis was 13, he worked in a used furniture store and moving business with his father. Already an entrepreneur at 16, he bought a pick-up truck and started his own furniture delivery business. “In 1969, Dennis opened a 5,000 square foot furniture store of his own with just four employees, which was expanded to 30,000 square feet in the mid-1980s,” he continued. “Stoney Creek Furniture eventually expanded to a 125,000 square foot store before opening a second location in Vaughan in 2015.” Most recently, Novosel acquired Artage International, the Toronto-based occasional case goods specialist. In the summer of 2016, he retired from Stoney Creek’s day-to-day

operations although he remains chairman of its board of directors. Novosel was named the CHFA’s Retailer of the Year in 2006. In 2010, Stoney Creek Furniture was also the first Canadian furniture merchant to be named Retailer of the Year by what is now called the Home Furnishings Association (HFA), the U.S. retail group based in California. He was also the first Canadian to serve as its president, which he did in 2004 when it was still called the National Home Furnishings Association. He has also been deeply involved in several other industry organisations such as the High Point Market Authority and the Interior Design Society. He also served on the board of the American Furniture Hall of Fame Foundation. For the past two years, Novosel has sat on the advisory board to the Canadian Furniture Show and was recently elected to the CHFA board of directors. “Dennis’ commitment to business excellence is matched only by his dedication to giving back to local charities and global organisations,” Reynolds said. “He supports many Hamilton and area causes including Ronald McDonald House, Dr. Bob Kemp Hospice, Hamilton Food Share, and the Heart & Stroke Foundation, among others. Since 2002, Dennis has twice gone to Haiti with Joy & Hope of Haiti to help build two schools, an orphanage and a training centre.” In 2006, he travelled to Mozambique to help construct a church and school. The following year he helped build latrine and safe sanitation centres for schools in Kenya. “We are very fortunate that our industry has so many remarkable people and organisations within it and their success deserves to be celebrated,” Reynolds said. “The awards not only spotlight individual talent but they also serve to enhance our industry and raise our collective profile. This year’s gala will be held on May 25 at the Universal Event Space in Vaughan, Ontario. The evening begins with a reception at 5:30pm, followed by dinner at 7pm and the awards presentation at 8pm. ■

AT-A-GLANCE SITE: International Centre; 6900 Airport Road, Mississauga, Ontario, Canada L4V 1E8 (near Pearson International Airport, Toronto) OWNED AND OPERATED BY: Quebec Furniture Manufacturers’ Association DATES: May 26, 27 and 28, 2017 SCHEDULE: 9am to 6pm, all three days. WHO AND WHAT: Approximately 230 exhibitors showing residential furniture, mattresses, lighting, rugs, juvenile furniture, and decorative accessories in Hall 1 to Hall 4. Other exhibitors include suppliers of related products and services of interest to furniture and home furnishings retailers. The event’s 300,000 square feet of display space includes the permanent showrooms found in the SOFA annex of the International Centre and a number permanent showrooms located in the Greater Toronto Area. MARKET WEBSITE: www.canadianfurnitureshow.com SOCIAL MEDIA: Facebook.com/CanadianFurnitureShow; Twitter.com/CdnFurnShow; Pinterest.com/CdnFurnShow FUTURE DATES: 2018 – May 26 to 28; 2019 – May 25 to 27; 2020 – May 23 to 25

LUNCH AND LEARN All three sessions will be held at 12noon at the stage in Hall 5. FRIDAY, MAY 26: SARAH RICHARDSON Richardson is an award-winning designer and television personality, known around the world for dramatic transformations. She is the host and co-producer of eight HGTV lifestyle series seen in over 100 countries, and has a growing line of signature products. SATURDAY, MAY 27: DAVID COLETTO Founding partner and CEO of Abacus Data, and leader in online research methodologies, Coletto is an expert on Canadian millennials. With a doctorate from the University of Calgary, he also teaches and provides expert analyses in the media. SUNDAY, MAY 28: KIMMBERLY CAPONE Capone will share her how she reinvented her struggling Canadian family retail furniture business and quadrupled sales by providing design services paired with 3D technology to create an unparalleled shopping experience.

MARKET EVENTS CHFA AWARDS: The Canadian Home Furnishings Alliance will host its annual gala honouring the recipient of the 2017 Retailer of the Year – Leon’s Furniture Ltd. The evening will also salute the 2017 recipient of the Lifetime Achievement Award – Dennis Novosel, founder and chairman of Stoney Creek Furniture. It will be held on Thursday, May 25 beginning at 5:30pm at the Universal Event Space, located at the corner of Highways 7 and 27 in Vaughan, Ontario. COCKTAIL RECEPTION: Friday, May 26 beginning at 6pm in lobby of the International Centre’s conference facility. MEET THE CEO: Visitors can chat with Pierre Richard, president and CEO of both CFS and the QFMA in the registration area of Hall 1 each day of the show from 4 to 5pm. This is an opportunity for attendees to voice their concerns and offer suggestions to improve future events. HomeGoodsOnline.ca

INNOVATIONS The Naked Mattress was launched last year by mattress industry veterans Juan Sanchez and Deanna Bartucci.

The boxed bed:

SELLING THE MATTRESS ONLINE

A massive shift in consumer behaviour has prompted some brave – and, in some cases, quite successful – entrepreneurs to forego the traditional showroom in favour of shipping mattresses directly to the customer’s door without her ever seeing the real deal. The crazy thing is, it seems to be working.

FEW YEARS AGO, A WRITER FOR BUSINESS INSIDER, THE U.S. business news web site, sang the praises of

Casper’s boxed mattress and vowed to never buy a mattress in store again. She wasn’t the only convert. As anyone who manufactures or retails mattresses knows, the innovative, Manhattan-based start-up has been wildly successful so far, attracting such big name investors as Leonardo DiCaprio, Tobey Maguire and Adam Levine. The concept – shipping a compressed mattress in a modestly-sized box directly to the consumer’s doorstep – resonated with the modern shopper who preferred the ease, simplicity and quickness of purchasing

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BY ASHLEY NEWPORT

goods online. Indeed, Casper was named one of Fast Company’s Fifty Most Innovative Businesses earlier this year is widely believed to have had sales of US$200 million last year. Casper entered Canada with a casper.ca site in November 2015. Needless to say, the online mattress business has exploded in recent months with competing start-ups popping up at an almost furious rate. The trend has also been embraced by a number of Canadian entrepreneurs, some with experience in the mattress business and some without. Among them are Endy Sleep, Naked Mattress and Sleep Envie, all headquartered in Toronto. Joining them is Novosbed, which calls Edmonton home and then there’s Haven Mattress, located in New Brunswick. It’s also important to note that are a number of traditional brick-and-mortar furniture and mattress retailers selling mattresses to consumers using an e-commerce platform. Among these are Sears Canada, Leon’s, The Brick, Brault & Martineau and Mattress Mart. Sleep Country Canada, this country’s biggest mattress retailer is expected to go live with its e-commerce platform sometime in the first half of 2017. Interestingly enough, HGO recently reported – contrary to the seemingly powerful online shopping trend – that e-commerce only accounted for 2.2% of all retail sales in this country in 2014. While statistics were for 2015 weren’t available at press time, Statistics Canada also reported e-commerce accounted for just 1.8% of sales by furniture and home furnishings stores that year. It is important to note Statistics Canada divides the retail community into two groups: ‘location-based retail’ or ‘brick and mortar’ stores; and, ‘non-store retailers’ which includes ‘pure play’ e-commerce merchants such as Novosbed and The Naked Mattress as well as other catalogue and mail order vendors. In its most recent report, the agency said ‘non-store retailers’ had sales of $7.51 billion in the trailing 12 months ending February 2017. Their sales are currently growing at a rate that is about 10 times higher than location-based retail. Selling online has also become a growth driver for many brick-and-mortar stores, both inside and outside of the furniture and mattress segment. For the first nine months of 2016, Canadian location-based retailers had e-commerce sales of $2.95 billion. So with e-commerce doing well, it makes sense that more business owners are taking the plunge.

WHY SELL MATTRESSES ONLINE?

“In the last five years, we saw a deterioration of the customer experience in store and we didn’t know why,” says Juan Sanchez, co-founder of The Naked Mattress. “Was it the consumer not having patience to go into the store and learn? Was it the salesperson trying to get a quick deal? Was there too much selection? Obviously Caspar has let people know that it’s okay to buy a mattress online and we’re in the same kind of category.” Sanchez worked in sales for another mattress manufacturer before launching the Torontobased platform with Deanna Bartucci, the company’s president, about a year ago. “We knew we wanted to take the mattress thing online, we just didn’t know how. We wanted to make it simple, make it quicker, make it much more enjoyable,” he says. Others, such as Haven Mattress, are also trying to give consumers something unique and, above all else, simple. “We started Haven for a number of reasons. Mostly we see the furniture industry being prime for disruption,” says co-founder Kellie Amis. “Some of the old paradigms around the ‘customer journey’ needed serious reconsidering. Haven’s goal was to simplify an intimidating shopping experience and through our vertical integration, offer value for the money.” Some of the new players, like Sleep Envie are looking to reinvigorate what they see as a tired business model. }

Seen here in their New Brunswick office, Kellie and Scott Amis are the founders of Haven Mattress.

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MANUFACTURING THE E-COMMERCE GOODS

“We are truly building a relationship. In the early days, it’s all about building trust. Testimonials and social media are great ways to open a dialogue with the target group.”

The real competitive strength of e-commerce mattress retailing is shipping. The product can be delivered right to the customer’s front door.

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“I was intrigued by the disruption of the mattress industry and saw an opportunity to offer a customised sleep solution, while other companies take a-one-size-fits-all approach,” says Joy Elena, founder of Sleep Envie. “I also wanted to provide a more enjoyable shopping experience with a minimal impact on both the wallet and the environment. We believe by customising [the customer’s] sleep choice, all other aspects of their lives can be optimised. Sleep is a crucial part of everyone’s life so we wanted to create a lifestyle with sleep.”

Most e-commerce mattress players design the product they sell as each brings something different to the market. Some, such as Casper, actually manufacture the product itself. Others partner with an existing mattress manufacturer while they concentrate on marketing, sales and customer service. “We partner with Foamco out of Vaughan, Ontario in terms of warehousing and manufacturing so we can focus on marketing and customer service,” explains Naked Mattress’ Sanchez. (Foamco also sells mattresses to independent retailers across the country under the ‘Dreameasy’ brand and launched its firstever mattress for the e-commerce market at the Canadian Furniture Show last year.) The Naked Mattress uses a two-piece design. “We separated the pocket coil from layer of foam at the top,” he says. “Throughout the years, we would see mattresses come back or be thrown out because a few inches of foam at the top were wearing or undesirable, but pocket coil was in great condition. The design [of the traditional mattress] is flawed in that sense. If foam fails, you shouldn’t have to buy a whole new mattress. You don’t buy a new car when your tires wear out. With us, people can replace a part of mattress at a fraction of the cost.” On their site – thenakedmattress.com – Sanchez and Bartucci ask the customer to select both the size and comfort level of her mattress. Haven also partnered with a Canadian mattress manufacturer – Springwall Sleep Products – and promotes its assortment as ‘Made in Canada’ on its site – a havenmattress.ca. “We did all the design and testing in house and used Canadian industry experts from Springwall Sleep to help us with some of the key engineering issues around the new roll pack technology,” says Kellie Amis. “They are a great partner as we have complete creative license and get exclusives on many of the design and manufacturing details. We handmake Havens daily in New Brunswick and ship free to anywhere in Canada.” For now these merchants are focused on selling their own brands and aren’t all that interested in offering product made by the more established manufacturers. “No, [we won’t sell mattress brands from other manufacturers],” says Amis. “We tend to be fussy about all the details and quality control.” Sanchez says while he can’t see Naked Mattress selling mattresses with brands

other than his but he does see expanding the assortment to include more accessories. “I can’t see myself selling other people’s mattresses, but I can see myself selling other people’s accessories, such as box springs, sheets and pillows. Some box springs that we’re looking at are shipped in a box and come with 25-year warranties. If the Naked Mattress is the last mattress you have to buy, we’d like a box spring like that too,” he says.

At Sleep Envie – which can be found at sleepenvie.com – the idea of displaying product in store seems a little more counterintuitive, but a pop-up isn’t out of the question. “We would consider [selling products in a store], but it is not our target market,” says founder Joy Elena. “A pop-up shop is a realistic possibility. We are also working on sleep stations at events and other interesting and unique ways to spread out brand.”

GOING BRICK-AND-MORTAR

SETTING THEMSELVES APART

Recently, Caspar was back in the news after launching a network of in-store galleries at West Elm, a subsidiary of Williams-Sonoma. The network includes one Canadian location to date, at the brick and mortar West Elm store in Toronto’s Liberty Village neighbourhood. This was after it hosted its Canadian Nap Tour in the spring of 2016, bringing its ‘Napmobile’ to Vancouver, Calgary and Toronto. Others have expressed interest in trying to reach the consumer in similar ways. “I do think we could sell our product in store, but not in a traditional brick-and-mortar retailer,” says Sanchez. “Their philosophy is to show as much product to as many people as possible. If they offered my product, it would almost contradict what they’re trying to sell. They want to sell entire mattresses, and I’m saying you don’t need to do that, you just need to replace the three inches on top.” Still, he does see opportunity with less conventional partners. “A less traditional retailer who can offer just one mattress, I can see a great partnership. HomeSense would be a perfect marriage for us, for example. But there’s nothing in the works right now. We’re looking at number of pop up scenarios that we could do this summer. That’s something we’re actively considering. We understand some people want to see and touch the mattress,” Sanchez remarks. Haven Mattress is also on board with the idea of creating a brick and mortar presence, but is proceeding cautiously. “We have spoken to a number of brickand-mortar retailers. So far no one has embraced the changes we are looking to make in the customer’s journey,” says Amis. “A potential partner would need to be focused on convenience and low risk purchase decisionmaking for the Haven prospects. Exceptional ‘no problem’ service levels and 100% follow through. Our team is always on the hunt for these exclusive partners.”

With change comes upheaval and with upheaval comes challenge. While it’s true there’s an incredible opportunity for savvy sleep marketers to deal directly with the consumer, it’s also true companies have to make themselves stand out – especially since the e-commerce marketplace is welcoming more and more players and, therefore, getting more and more crowded. “We weren’t blessed to start with, say, Caspar’s funding,” says Sanchez of The Naked Mattress. “We love what Caspar is doing because they’re telling people it’s okay to buy a mattress online. We’ve been on The Shopping Channel, gone to trade shows and used social media and a referral program. Social media marketing has worked well. Everyone thinks it’s free and it is, but the time that you have to spend on posting stuff and engaging people is expensive and time consuming. Sometimes we get it right.” }

Sleep Envie uses this photo of a couple jumping on their mattress to demonstrate its quality. Their box can be seen in the left-hand corner.

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Like most other mattress e-tailiers, Sleep Envie sees growth potential for both sales and touch points with the consumer by adding accessories to their assortments, such as the pillows seen here.

Haven has focused on relationship building. “We reach our consumers through relationships,” says Amis. “We are truly building a relationship. In the early days, it’s all about building trust. Testimonials and social media are great ways to open a dialogue with the target group.” Amis believes it helps the company is different from traditional mattress retailers. One of those points of difference is Safe Haven – a program where they donate a clean bed to those in need for ten it sells. “[We differ in terms of] pressure, price integrity, convenience and transparency. [There are] no plaid jackets, there’s value for the money and social enterprise that donates new clean beds to less fortunate Canadians in need,” she says.

HOW ARE SALES?

That is – no pun intended – the million dollar question. It’s one thing for a business model to be innovative. But, it’s entirely another for it to generate cash flow. For Sleep Envie, the monthly numbers are encouraging. “We’ve had about 5,000 unique visitors since we launched September 29, 2016,” says Elena. “We are still fairly new and are averaging about two to three mattresses a week, plus other products are moving now.” As for return rates, Elena and Naked Mattress’s Sanchez say customer dissatisfaction appears encouragingly low. “So far, the return rate alarmingly low – we have a 0.7% return rate where industry average is 5%,” Sanchez reports. “People who test and try are returning more than people who looked for five minutes before clicking on a mattress. We think it’s because we have other options in terms of toppers. People might go from medium to soft and we’ll swap out the topper, and that seems to be okay with everyone.”

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WHAT DOES THE FUTURE HAVE IN STORE?

It can be hard to predict the future – especially when a trend is just taking off. That said this group of Canadian e-tailers are hopeful that a slow and steady climb will yield the best results. “I’m happy with results so far, but there’s always room for improvement,” says Sanchez. “If you grow too fast, you’re not growing properly. I’d rather grow smart.” Other companies, like Haven, see more dramatic growth on the horizon. “We see our business growing like a rocket,” says Amis. “Our customers are fueling this growth. It’s their feedback that models our direction. We are now weeks away from our second, more affordable offering. More convenience items are in various stages of testing and we plan to have a wide complementary line to offer our Haven customers.” Elena is also hopeful. “We believe Sleep Envie will become a respected Canadian lifestyle brand by building the trust of our customers. We see ourselves emerging as a national leader in the online mattress industry.” Beyond Haven, Naked Mattress and Sleep Envie there are several other Canadian mattress e-commerce providers currently competing for the consumers’ attention. The most notable among these are Endy Sleep, also based in Toronto and Novosbed of Edmonton. They are all part of a wave that is striving to disrupt the mattress in retail. It’ll be interesting to see how they grow over the next few years. HGO A Toronto-based freelance journalist who writes primarily for trade and business publications, ASHLEY NEWPORT is a Contributing Editor to Home Goods Online. Her specialties include food, hospitality and emerging social/business trends.

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PROFILE

Embracing CHANGE

A look at how one woman dramatically transformed her fledgling family’s business model by, in essence, reinventing the wheel and taking risks – something that ultimately quadrupled her company’s sales. BY ASHLEY NEWPORT

There aren’t many independent furniture stores in malls. But the Yorkdale Shopping Centre in Toronto has been home of Kimmberly Capone Interior Design for some time now. It advertises ‘complimentary design consultations’ regularly and everywhere.

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IMMBERLY CAPONE, THE president and head buyer of Treasures/Kimmberly Capone Interiors, is an endearingly confident and engaging speaker. She’s someone who is more than happy to share the ‘secrets’ to her success and unafraid to pair her overall sage advice with a helping of candid anecdotes. The operator of the Treasures/Kimmberly Capone retail stores in Toronto’s upscale Yorkdale Shopping Centre has been getting a lot of well-deserved attention lately for successfully re-inventing a veteran brand and quadrupling sales. At a time when furniture and home decor retailers – anyone in the furniture industry, really – is grappling with tighter margins and the more challenging economy that’s remained ever-so-slightly unsteady since the economic downturn of 2008 (which was almost a decade ago now, believe it or not), it’s encouraging to see someone happily roll with the punches and do things a little differently. Especially when it comes to rejuvenating an established brand. Kimmberly Capone Interiors is the moniker recently given to Treasures, a company that was founded by Capone’s father almost 40 years ago. The retail store began with one

location, then called The Brass Touch, in Brampton’s Bramalea City Centre. Over time, the brand grew and Capone’s family opened more locations throughout the GTA. “The brass market was huge and we opened up one store and it ended up being five or six stores,” Capone says. “When brass started to go out of style, we got a store in Sherway Gardens [in the Toronto suburb of Etobicoke] and decided to change our name to Treasures. They kept continuing with building those stores and we had 10.” Over time, the brand grew even more successful. “We got a warehouse and we did our own manufacturing,” Capone says. “Treasures lasted until this year and we opened Kimmberly Capone Interiors because Yorkdale gave me the opportunity to have another store right beside Treasures and they thought we could test the market.” Capone has amassed experience not just from spending years operating a family business, but also from studying interior design and business at the post-secondary level (she attended both Ryerson and Sheridan), obtaining a real estate licence and spending time in the home staging industry. But experience aside, economic downturns and changing consumer attitudes can be difficult to navigate – especially when you’re trying to persuade shoppers to invest in pricier goods. While Treasures was – and is – a tried and true operation, it’s undergone an absolutely massive rejuvenation and is a very different business from what it was in its heyday. As everyone in the industry most certainly knows, higher-end pieces (be they upholstered }

Capone’s new store in the Yorkdale Shopping Centre is filled with vignettes of furniture and accessories designed to inspire the customer and help her look at the product in new ways.

Capone always advises retailers to have a well merchandised store, and admits to drawing inspirations from merchants such as Crate & Barrel and Pottery Barn.

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Kimmberly Capone admits accessories are her store’s real strength although furniture is beginning to play a bigger role. She wants the customer to feel free to wander about the store, not just looking but touching the product as well.

Kimmerbly Capone, the president and head buyer for Treasures/Kimmberly Capone Interior Design will be a feature speaker at the upcoming Canadian Furniture Show.

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or case goods or accessories) can struggle to find buyers at a time where retailers are “wheeling and dealing” and racing to the bottom price-wise. “I was in Florida in 2015 at the Tony Robbins Master [The Game] Business Class, and he said you can’t beat anyone on price,” she says. “Our store looked beautiful, but people would shop somewhere else. You have to beat [competitors] on value-added service. I thought, ‘huh, it’s interior design for people who can’t afford hourly designers.’ What I knew as a retailer was that you don’t have to charge by the hour.” After the Tony Robbins talk inspired Capone to reinvent the wheel, she immediately worked to implement the new business model and eventually made it work – even though people were skeptical that the plan would generate sales. While it’s no secret that it can sometimes be harder to sell higher end pieces to more budget conscious consumers, it’s also well known that shoppers have become more design savvy with the growth of HGTV, Pinterest, Instagram and Houzz. For that reason, Capone decided to play to people’s design interests by offering them beautiful room makeovers with some complimentary perks that traditional interior designers might not offer – and they did it even though Treasures did not have a stellar first year at Yorkdale. “We tested a new concept,” begins Capone. “Our first year at Yorkdale was a disaster. The sales weren’t terrible, but the rent was so high it was hard to make ends meet. I decided to revamp the business. We offered free design consultations with 3D renderings.”

The model, which might seem a little counterintuitive, actually prompted customers to follow through on their makeover ambitions because they weren’t paying designers by the hour and therefore weren’t becoming quite so fatigued by the process. “A lot of projects don’t get completed,” says Capone. “Wealthy people even run out of tolerance to spend hourly, people don’t see the value in that. Vendors don’t see value in discounting products to designers. I used a faster paced model where we focused on one room at a time with 3D renderings. If people like the one room, it’s easy to go forward after that. Today is our second year anniversary with that business model. We’re going to do $5 million in one year in sales.” But while the model has been a success, it didn’t take off overnight. “It hasn’t been an easy climb, there were a lot of readjustments and tweaking,” she says. As for how it works, it begins with a complimentary design process. Capone’s team measures the room that clients are interested in renovating (and they’ve redesigned a wealth of rooms in homes across the GTA) and take photos. The first appointment takes place at the client’s home and second one is held in the store a week after the first. “We present their before pictures and do an intake sheet and learn what they want. When we show them the 3D renderings, the presentation takes three hours. We pick whatever products they want that’s in our store and we only do the big pieces, such as sofas, window treatments, coffee tables, area rugs. If they buy the whole room, they opt into our complimentary accessory program.” If customers like the big pieces and opt in, Capone’s team goes to their home a week later and style the room with art, lamps and other accessories. “We learn who they are and what they want and what they love. Accessories are 30 per cent of the sale. It’s tough work, it takes a lot of time.” In a way, the business model works because it’s empowering to customers. They get to look at products and accessories in store and see how they’ll function in the home pre-purchase. They also get to lean on experts who can make tougher decor choices that might intimidate someone not used to renovating a space. “People walk into a space that they would never finish themselves,” Capone says. “We help people visualize the space and let them know how it’ll feel once it’s complete. They see their space in 3D rendering and see where their TV is and where the dog bed will go. By the }

On the horizon awaits our spectacular collection of furnishings and alluring objects for every home and lifestyle.

“I’m passionate about this because I live and breathe it every day. People [whose homes we’ve designed] have baked for us. When we reveal, people are sometimes crying.”

Left: Upholstered headboards have proven to be popular with higher-end customers shopping at Kimmberly Capone Interior Design. Right: This sofa is part of another well merchandiser vignette inside the store.

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end of their presentation, we know who they are and what they’re using the room for.” The act of easing people into the reno helps make the transition easier for the customer, especially since the average room makeover costs about $10,000. “Design is easier for us because we have loads of accessories and art, but it’s hard for customers. Customers get a finished product, they don’t have to worry about that room.” And while everyone has a different experience, it appears Capone’s approach has satisfied a wealth of customers. As for why, she says that customers respond well to the upfront approach and complimentary Services – especially since no one is interested in wasting time or money. “We get a ton of referrals and a ton of people who come back. We have the floorplans ready, we tell all the decision makers to be present at the presentation because [the renovation is] pricy. We don’t charge anything up front. People don’t want to waste money. They don’t

want to overspend on something they’re not in love with. They’d rather get the money, value and service and get something they love.” Interestingly enough, the customer-friendly approach didn’t emerge from any sort of organic drive to revolutionize the business – it came, Capone says, because something drastic had to be done. “I did this out of desperation. Money was running out and the model wasn’t working. People loved the store, but it wasn’t working. Now, it’s working.” When it comes to growing a reinvigorated brand, a tight focus on marketing is important. Although Capone is something of a public design figure – she’s appeared as a finalist on HGTV’s Designer Superstar Challenge, provided expertise to various design publications and traveled worldwide to accumulate products for her store – she’s been careful to hone her social media marketing campaigns and fill her well-curated website with numerous videos chronicling her team’s most impressive room renos. “Our social media is out of control,” she says. “We do videos and people love it.” Capone also says she benefits from her Yorkdale location, as the mall functions as a retail hub for the entire GTA. “Our clients come from everywhere. Yorkdale is an anomaly because it’s different. Today, we’re working in Mississauga and Nobleton and Ajax. We’re going from Oshawa to Burlington. We do 20-30 consultations a week.” As of now, the brand employs three full-time designers and three interns. The team works together to measure and photograph clients’ homes and create questionnaires that help pinpoint customer wants and needs. And while customers can buy bigger ticket

furniture items, the brand still focuses heavily on accessories. “Accessories was our strength all along. We floor a lot of furniture now and feature little vignettes. We have shelving units, sofas, coffee tables, rugs and more.” In terms of clients, it helps that the brand has satisfied a few celebrities. Capone says her company has designed spaces for NHL hockey player Brad Boyes, professional soccer player Jermain Defeo and nationally acclaimed former athlete Pinball Clemons. “Even people with a lot of money like good value, no one likes to be ripped off or sold things that are too expensive. We have one price for everybody, nothing is hidden. Everything is very transparent.” While Capone’s story is an inspiring one on its own (it’s hard to maintain an ailing brand, let alone completely resurrect it), her personality – namely her candidness – makes her success a little extra exciting. Especially since she openly admits that she did not enjoy being on HGTV’s Designer Superstore Challenge. “I did the worst work of my life on that show,” she says. “You’re set up for failure. It’s not authentic. I have to sleep on ideas. It was hard because I’m such a perfectionist.” That said, there was a small silver lining. “It was a good experience to learn how hard it is to be on camera.” As for what the future holds for Capone and her company, she’s currently working on sharing her experience with others (she will be giving a talk at the upcoming Canadian Furniture Show in Mississauga, Ont.), moving into a new space in Yorkdale and continuing to generate positive reactions from clients. When it comes to spreading the word, Capone is actually hoping that other retailers mimic her strategy. “I hope people do copy us, the industry needs us,” she says. “I’m passionate about this because I live and breathe it every day. People [whose homes we’ve designed] have baked for us. When we reveal, people are sometimes crying. We may cost five to 10 per cent more because we don’t offer discount. There’s no free delivery or set up. Furniture is going downhill in terms of sales with no growth with three per cent profit margins. Having heard all that, how do we revamp this?” While Capone offers price incentives in the sense that she doesn’t charge by the hour or attach fees to initial visits and consultations, she is aware that her products cost more

and hopes that clients treat her company as something higher-end and justifiably costly. “You wouldn’t ask for a discount at Holt Renfrew, but people do it with furniture because they’ve been taught that they can.” In terms of growth, Capone says she recently opened a brand new 50,000 square foot warehouse in Mississauga that will soon house the brand’s administrative team. She’s also canvassing shows – including the High Point Market – to both find new products and promote some of her own. “I designed a line in India under my name and I’m hoping to sell accessories internationally,” she says. As for whether or not she’ll expand her operation, she admits that the idea is nervewracking. “Expanding scares me because it’s so much work and we don’t know if our business will do better with more retail locations. More people shop online now. Having multiple locations is not easy,” she says. “I would consider having more space. There are no indie furniture retailers in any mall in Canada. The margins aren’t great and rents are enormous.” But regardless of whether Capone pursues a more aggressive expansion plan in the future, it looks like her current business model will continue to capture attention organically. “We’ve gotten so many referrals,” she says. “We grow by word of mouth and Facebook and Instagram. I’ve had to learn as I go, business models have to change. You can’t stay still.” As for tips for other retailers, she says a wellcurated look is key. “Have a well-merchandized store. Crate and Barrel and Pottery Barn are cohesive and everything is floored to sell. Make sure your store is amazingly merchandised. That was always our strength.” HGO

The Kimmerbly Capone process begins with a home visit. A week later, the customer is invited to the store to view a set of 3D renderings on a work station such as this to get an idea of what the renovated space will look and feel like.

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IDEAS

HAVE YOU MET THE MILLENNIALS? Born in the years starting in 1980, these people are the largest consumer group in Canada and the descendants of the Baby Boomers. The acknowledged expert on the Canadian Millennial gives an introduction to this demographic cohort that will determine the future of furniture, mattress and major appliances retailers for literally decades to come.

MILLENNIALS ARE ALL THE

rage today. You can’t open the TV, a magazine or a news website without someone writing about my generation. And it’s understandable given the influence my generation is having on pretty much everything. I define the Millennial Generation as representing those born between 1980 and 2000. We are looking at consumers today who are between the ages of 17 and 37. As you would expect, there are substantive differences between someone aged 17 and 37 including their level of maturity, their stage of life, level of education, household income, and independence from parents or guardians. But Millennials, whether 17 or 37 years old share far more in outlook, experience and

communication than does that 36-year-old with someone only 10 years older. These shared experiences, shared context is what make generations unique. To understand Millennials, you first have to understand where we come from; who and what our major influencers were and are. The starting point is our parents. Millennials were raised by Baby-Boomers and the general prosperity of their families and broader society and the way in which they were raised ingrained in them exceptionally high-levels of optimism and self-confidence which are enhanced by their parents’ expectations of them. They grew up in a world of positive-reinforcement, helicopter parenting, and constant feedback. However, high expectations also create an environment with a large amount of pressure }

BY DAVID COLETTO

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and stress; Millennials are not immune to anxieties and self-pressure that the modern world has thrust them into. Millennials are also digital natives. We grew up with technology and have made it a central part of our lives. To the 90% of Millennials who own a smart phone, that device is our most trusted assistant. It’s our bank, our travel agent, our newspaper, our telephone, our music player, and our weather person. That device lets us watch the video content we crave, order food, and get us from one place to the next (by using the Uber app in many cities). And to the 75% of Canadian Millennials who check Facebook at least once a day, social media is how we stay connected, find out what’s happening in the world, and increasingly the way we learn about and connect with brands. The combination of social media and mobile technology has also created a perfect-storm of connectivity that changes the way millennials consume and process media and news content; source credibility is being steadily overtaken and trumped by interesting content of a diverse variety and range. Millennials are not looking for their parents’ newspapers or TV shows. Instead, they consume information that appears on the news feeds, shared by people in their networks they trust, are interested in or want to hear things from. We have moved from a world where people actively seek out news and information to a passive one, where the information we consume is delivered to pre-curated news feeds, isolated from people, perspectives, and ideas outside of our networks. Half of Canadian Millennials tell us through survey research that their smart phone is the primary way they access the internet. So that very small screen is our gateway to an unlimited amount of information, and is likely the way we are doing research about your business. And let me make clear: If you’re not online in a meaningful way, your store or brand basically doesn’t exist. One final dimension is critical to understanding Millennials: we are entering “adulthood” much later in our lives compared with previous generations. This stress and anxiety we feel in our lives is compounded by

Each year for the foreseeable future, 270,000 new Millennial households will be formed in Canada. That’s 1.35 million new households who will be looking to furnish their new homes over the next five years.

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the delayed entry into adulthood and time it takes many to achieve major life milestones like becoming financially independent, getting married, or having children. Like their Baby Boomer parents, almost all Millennials see these milestones as priorities and yet cannot reach them as easily as it seemed for their parents’ generation. Due to extended periods of education, uncertain employment opportunities, and the rising cost of housing, many must put their plans on hold until later in life, when they are in a better financial position to achieve them. That means delayed homeownership, delayed family formation, and likely delayed purchasing of home furnishings. The generational change we are experiencing is profound and very consequential. Because of the size of the generation (there are approximately 10 million in Canada today) and how different it is from previous generation, Millennials are causing substantial disruption to all markets, including those who manufacture and sell furniture, mattresses and major appliances. Consider this statistic from the Canadian Housing & Mortgage Corporation: each year for the foreseeable future, 270,000 new Millennial households will be formed in Canada. That’s 1.35 million new households who will be looking to furnish their new homes over the next five years. That’s 2.7 million consumers browsing websites, visiting retail locations and making decisions about brands and designs will end up in their homes. So if your business isn’t thinking about Millennials today, it’s time you did. I will be a keynote speaker at the Canadian Furniture Show in Toronto on May 27 at 12pm. I’ll share my perspective on my generation and offer tangible recommendations on how to position your business to take advantage of this huge market. www.canadianfurnitureshow. com/trends-and-activities/presentation. I’m also excited to be working with HomeGoods.ca on an exciting project that will study the preferences and behaviours of Canadian Millennials when it comes to home furnishings and major appliances. We will share more in the coming weeks. HGO DAVID COLETTO is the chief executive officer and

founding partner of Abacus Data, a full-service market research firm based in Ottawa. David is one of Canada’s leading experts on Millennials and generational change and operates the website www.canadianmillennials.ca. Find out more about David and his firm at www.abacusdata.ca.

Zucora is Canada’s largest provider of home furnishing protection programs. For more than three decades we’ve been building a legacy, rooted in our industry-wide reputation for outstanding service for national, regional and independent home furnishing retailers.

HomeGoodsOnline.ca

For more information, please get in touch: 1 800.388.2640 | info@zucora.com | www.zucora.com

PRODUCT STRATEGIES

THE MATTRESS: A TECHNOLOGICAL

MARVEL

BY MICHAEL J. KNELL

F ONE WAS TO ASK THE MAN OR WOMAN ON

the street if a mattress is a technological marvel, the immediate answer is most likely to be no. Having surveyed several of Canada’s leading mattress manufacturers, it could be reported that’s not quite correct. In fact, whether its technology incorporated into the construction of the mattress itself; technology used in the manufacturing process; or, technology used to support the interaction with the consumer, the making, marketing, selling and use of this rectangle used to sleep on has become a technologically sophisticated endeavour. Technology is also impacting the mattress business in other ways. The emergence of the ‘pure play’ e-commerce retailers (see ‘The boxed bed – selling the mattress online’ elsewhere in this issue) are beginning to change how the industry interacts with the consumer. What’s not immediately appreciated is they are not just disrupting retail; they are also disrupting manufacturing as most of these players make and sell their own product assortment. Generally speaking, the ‘pure play’ e-tailers aren’t offering the consumer established mattress brands. But most Canadian mattress company executives agree the fundamentals haven’t changed. It’s all about building a better bed that’s delivered to the consumer at the best possible price while providing solid margins to the retailer. For most that means using technology to ensure profitability and cost efficiency throughout the supply chain. “Creating value for the retailer and the end consumer is the best way to ensure profitability,” said David Gèlinas,

36 HGO merchandiser

executive vice president of Zedbed, the specialty mattress maker based in Shawinigan, Quebec. “Cost efficiency is something we never stop working on for a smaller company like Zedbed, it’s a must.” He believes many mattress manufacturers are missing the value proposition. “They continue to bring to market fairly similar products year after year or they tend to copy each other,” he says. “It’s very difficult to increase the price of the goods when you proposition isn’t different from anything else on the market.” The need to create differentiation while adding to their value proposition was partly why Zedbed acquired the license to manufacture the Natura World brand last year. “We now have two specialty bedding brands and can claim to produce the largest range of all-foam mattresses in Canada,” Gélinas said. “We continue to pour own highdensity foam. This gives us a unique and exclusive feel. We also manufacture adjustable beds to order.” Most industry executives agree the two biggest mattress technology advances of recent years has been the widespread integration of gel and other cooling materials in to the mattress itself, coupled the movement of the adjustable bed out of the specialty/healthcare market into the mainstream. Steve Millar, vice president and general manager of Tempur Sealy Canada (TSC) notes this evolving mattress technology has significantly slowed the price pressures the industry suffered in the years immediately following the 2008 recession. “Our unit selling price continues to increase year-over-year,” he says, adding this has been fueled by the expansion of company’s Tempur-Pedic, Stearns & }

The higher price points, greater comfort and overall better quality offered by its Stearns & Foster label has been driving growth for Tempur Sealy Canada. The company believes it’s in these ‘better’ and ‘best’ categories where retailers can really differentiate themselves, especially from the ‘pure play’ e-commerce specialists.

HomeGoodsOnline.ca

Top: Zedbed, the foam specialty producer as created a line of mattresses specifically designed to all traditional Canadian retailers to compete with the ‘pure play’ online mattress purveyors. The familyowned manufacturer also provides support for the retailer including educational materials and drop shipping. Bottom: Adjustable beds, such as this model from Sealy Posturepedic, have crossed over from the healthcare/ institutional market to the mainstream consumer market to become one of the fastest growing categories in today’s mattress business.

Foster and Sealy Posturepedic brands, all of which occupy suggested retail price points above the entry level. These are brands, he adds, “that continue to drive traffic and conversion in the store. From our market data, we continue to see the trend that average unit selling price is accelerating while unit growth is flat to down.” TSC retail partners are also building profit in other ways. “In the past three years, we have seen the average ticket grow with retail sales associates selling higher ticket mattress as well as by increasing their attachment rates to adjustable beds and accessories including specialty pillows and mattress protectors,” Millar says. Gélinas concurs accessories are key to continued growth in both top line sales and bottom line profit. “Retailers have to increase revenue through improving an often under-developed area of the bedding business: top-ofbed accessories,” he enthuses, noting in his experience over the past four years, the upticks in AUSP (average unit selling price) have been “marginal” at best. “Selling mattresses is not enough,” Gélinas says. “From protectors to adjustable

38 HGO merchandiser

beds to pillows and comforters, retailers have a good chance to increase revenues by at least 10% or more.” He notes often the customer goes to a big box store to buy those needed accessories for the simple reason that the sale associate doesn’t present them when the mattress is sold. “Having more accessories on the floor – not just in the system – is a great way to remind the sales associate they are there to be sold,” Gélinas said. From Millar’s perspective, the retailer’s best action plan to grow his bedding business using the latest in technology – technology found in the product, technology used to market the product and technology used to interact with the customer. “Many of our brick and mortar retail partners are seeing increasing success with e-commerce based platforms,” he notes. “We are continuing to work with them to help improve their online presence with improved digital assets from our marketing group.” Eric Besner, vice president of sales and marketing for Simmons Canada, believes the technological revolution in mattresses is only just starting. “We are soon going to see the advent of smart technology in beds,” he explains, adding Simmons expects to introduce the Sleep Tracker into the market at some point this year. This innovation is designed to give the user indications of how he or she sleeps, so measures can be taken to make improvements. “It’s about helping the consumer get a better night’s sleep on a good mattress,” Besner said. Something similar was introduced by Magniflex – the Italian mattress manufacturer – earlier this year. Smartech is described as an integrated sleep system that combines an adjustable base, a mattress and a large number of sensors to record a wide variety of data on the user and her environment. The data points include: the time the user wakes up; the hours slept; the user’s average heart rate and its fluctuations throughout the night; the user’s average respiratory frequency; the brightness and noise }

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Launched at the Las Vegas Market earlier this year, the Smartech sleep system from Magniflex will detect snoring and then adjust itself until it is gone. Advanced technology such is this is currently driving the new product development efforts of almost every mattress manufacturer.

Tempur-Pedic has become one of the fastest growing brands in the Canadian market in recent years. Originally marketed as employing the foams used by astronauts, it has always embraced advanced technology in its development.

level in the bedroom, and so on. The sensors are built into the mattress. It’s interesting to note, Smartech has an estimated retail price point of $22,999. Other technology advances will take will take a more evolutionary tack. Gèlinas, for example, believes mattresses will take a page from the upholstery handbook. “We can expect a new way to build mattresses that will allow people to customise their sleep system and decide their own comfort level,” he says. He also expects the use of air chambers in spring, foam and hybrid mattresses will be perfected in the not too distant future. This technology should offer several interesting solutions around temperature control and support adjustment. These air pockets could also serve to hide sensors. “These solutions are not really new but sales in this category and floor placements are marginal,” Gèlinas says. “This could be the next important advancement.” These advances in technology, however and wherever they are used, have become vital tools in an ever changing and challenging competitive environment. At retail, the mattress business seems to have divided itself into three broad segments: e-commerce, with both ‘pure play’ competitors – such as Casper, The Naked Mattress and Novosbed; in the independent retailer, whether a mattress specialist or a full-line furniture merchant; and, the ‘majors’ – a group that includes nationals such as Sleep Country and Leon’s to big box operators such as Costco. “The challenge for the independent is the majors are getting more aggressive than ever,” observes Steve Amis, vice president of sales and marketing for Springwall Sleep Products. “And the independent has to tell a different story. The consumer wants convenience and that’s where the independent can shine.” All of these industry execs agree plotting a path to growth is no simple task in 2017. There are a lot of variables, but it can be done. “I don’t expect to see major changes in the competitive market,” Gélinas says. “For sure, we see online mattress

40 HGO merchandiser

sales becoming bigger and bigger. Retailers who are not interested in selling online are going to lose market share. My advice to our retail partners is to start working on a real and strong e-commerce strategy to sell more beds on their own web site. Their offerings have to be better than the online mattress retailers and we are here to help.” It’s a refrain common to all of the mainstream mattress manufacturers serving the Canadian market. They all acknowledge it’s vital for every mattresses and bedding retailer to have an online presence. It doesn’t matter how great the store is, how on the mark the assortment is or how above average the service is – if the store isn’t online, it isn’t anywhere. But the store also has to have more. “Retailers should focus on having a broad selection on mattress technologies and price points,” Millar says. “There is not a one price fits all strategy. There are many difference consumer demographics that have different needs.” While innerspring and encased coil technologies continue account for the majority of mattress sales, Millar points out the memory foam segment continues to grow. Consumer preferences continue to revolve around ‘support’, ‘pressure relief’ and ‘comfort’ when mattress shopping. “We are also seeing trends towards ‘cool’ and ‘clean’ as additional wants in shopping for a mattress,” he says. Industry executives also see continued growth in the mattress business, from manufacturing to retail. “While we expect to see the continuing trend of unit sales for the industry to be flat while the average unit selling price increases,” Millar says. “Our retail partners continue to drive merchandising based on a broad selection of price points and a logical step-up for the consumer.” “I’m forecasting growth as the economy is going to get better than it was a few years ago,” Gélinas says. HGO MICHAEL J. KNELL is the publisher and editor of Home Goods

Online and all of its platforms. He has observed, researched and written about Canada’s furniture and mattress industry for the past three decades. He can be reached at mknell@ homegoodsonline.ca.

INDUSTRY CALENDAR May 26 to 28, 2017 CANADIAN FURNITURE SHOW Quebec Furniture Manufacturers Assn. International Centre Mississauga, Ontario canadianfurnitureshow.com

August 13 to 16, 2017 TORONTO GIFT FAIR CANADIAN GIFT ASSOCIATION International Centre Toronto Congress Centre Mississauga, Ontario cangift.org

May 30 to 31, 2017 STORE 2017 RETAIL COUNCIL OF CANADA Toronto Congress Centre Toronto storeconference.ca

August 15, 2017 CHFA ANNUAL GOLF CLASSIC CANADIAN HOME FURNISHINGS ALLIANCE Caledon Woods Golf Club Bolton, Ontario chfaweb.ca

June 8 to 11, 2017 TUPELO FURNITURE MARKET Tupelo, Mississippi tupelofurnituremarket.com

ADVERTISERS’ INDEX

July 30 to August 3, 2017 LAS VEGAS MARKET World Market Center Las Vegas, Nevada lasvegasmarket.com

August 20 to 23, 2017 PRIMETIME CANTREX NATIONWIDE Sands Expo Convention Center Las Vegas, Nevada nationwideprimetime.com August 27 to 30, 2017 ALBERTA GIFT FAIR CANADIAN GIFT ASSOCIATION Edmonton Expo Centre Edmonton, Alberta cangift.org

Pages 2-3 Phoenix AMD International 41 Butler Court Bowmanville, ON L1C 4P8 T: 800.661.7313 phoenixamd.com Page 5 Stearns & Foster Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 stearnsandfoster.ca Page 7 Canadian Furniture Show 101-1111 Saint-Urbain Montreal QC H2Z 1Y6 T: 514.866.3631 canadianfurnitureshow.com Pages 10-11 Cantrex Nationwide 9900 Cavendish, Suite 400

St-Laurent, QC H4M 2V2 T: 514.335.0260 F: 514.745.1741 cantrex.com Page 13 Superstyle Furniture 123 Ashbridge Circle, Woodbridge, ON L4L 3R5 T: 905.850.6060 F: 905.850.6061 superstylefurniture.com Page 15 Zuo Canada 450 Port Royal O., Suite 402 Montreal, QC H3L 2B8 T: 514.382.6661 zuomod.ca Pages 20-21 Serta Canada 40 Graniteridge Road, Unit #2

September 13 to 15, 2017 HOME IMPROVEMENT ERETAILER SUMMIT Rosen Shingle Creek Orlando, FL eretailersummit.com September 28 to October 1, 2017 INTERIOR DESIGN SHOW VANCOUVER Vancouver Convention Centre West Vancouver, BC vancouver. interiordesignshow.com

November 16 to 18, 2017 ANNUAL CONFERENCE QUEBEC FURNITURE MANUFACTURERS ASSN. Ritz-Carlton Hotel Montreal afmq.com/en November 29 to 30, 2017 IIDEX INTERIOR DESIGNERS OF CANADA Metro Toronto Convention Centre - North iidexcanada.com

October 1 to 3, 2017 ANNUAL CONVENTION MEGA GROUP Vancouver megaconvention.ca October 14 to 18, 2017 HIGH POINT MARKET High Point, North Carolina highpointmarket.org

Concord, ON L4K 5M8 T: 800.663.8540 sertacanada.com Page 25 Magniflex 1000 5th St., Suite 220 Miami Beach, FL 33139 T: 905.481.0940 magniflex.com Page 29 Las Vegas Market 475 S. Grand Central Pkwy. Las Vegas, NV 89106 T: 702.599.9621 F: 702.599.9622 lasvegasmarket.com Page 32 Protect-A-Bed 1500 S. Wolf Road Wheeling, IL 60090 T: 519.822.4022 protectabed.com

Page 35 Zucora 552 Clarke Road London, ON N5V 3K5 T: 800.388.2640 zucora.com Page 39 Tempur-Pedic Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 tempurpedic.ca Page 46 Home Goods Online P.O. Box 3023 Brighton, ON K0K 1H0 T: 613.475.4704 homegoodsonline.ca

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