September/October 2010 Western Retailer

J o u r n a l o f t h e We s t e r n H o m e F u r n i s h i n g s A s s o c i a t i o n

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September/October 2010

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www.WHFA.org

Over & Above Advertising Connecting With andCustomers Marketing!

Member Profile Motivating Your Staff— The Inkwell Home Store Without Spending a Dime!

CHANGE SERVICE REQUESTED Western Home Furnishings Association 500 Giuseppe Court, #6 Roseville, CA 95678 est.1944

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J o u r n a l o f t h e We s t e r n H o m e F u r n i s h i n g s A s s o c i a t i o n

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EDITORIAL STAFF Managing Editor: Melissa Dressler................................ mdressler@whfa.org Publisher: Melissa Robinson............................................ mrobinson@whfa.org

table of contents featured articles

Advertising Manager: Cindi Williams..............................cwilliams@whfa.org 2010 WHFA OFFICERS AND EXECUTIVE COMMITTEE

The World Around Us Connecting With Customers.......... 10

WHFA PRESIDENT Claudia LeClair - Fiesta Home Furnishings, Scottsdale, AZ...............(480) 951-3239 PRESIDENT ELECT Angel Lopez - Dearden’s, Los Angeles, CA........................................(213) 362-9600

Showroom Style Value Added Merchandising.......... 14

VICE PRESIDENT Chris Sanders - Everton Mattress Factory, Inc., Twin Falls, ID..........(208) 326-3407 TREASURER Valerie Watters - Valerie’s Furniture and Accents, Cave Creek, AZ....(480) 483-3327

Operational Excellence The True Cost of Home Delivery.... 22

SECRETARY Lael Thompson - Broyhill Home Collections, Aurora, CO...................(303) 360-9653 EXECUTIVE COMMITTEE CHAIR Marty Cramer - Cramer’s Home Furnishings, Ellensburg, WA...........(509) 933-2172 PAST PRESIDENTS

It’s All About Sales & Marketing Reaching Today’s Shoppers: Beyond the Internet to Integration............. 28

George Nader - Nader’s La Popular, Gardena, CA............................(310) 327-8585 Cherie Rose - The Rose Collection, Los Gatos, CA...........................(408) 395-7773 EXECUTIVE director Sharron Bradley - WHFA, Roseville, CA.............................................(916) 784-7677 AT LARGE EXECUTIVE COMMITTEE MEMBers Gary Absalonson - Walker’s Furniture Inc., Spokane, WA.................(509) 533-5500 Howard Haimsohn - Lawrance Contemporary, San Diego, CA.......... (619) 291-1911 Marvin Kerby - Kerby’s Furniture, Mesa, AZ.......................................(480) 834-3888 Karen Kohlman - West Harvard Furniture, Roseburg. OR.................(541) 673-4221 WHFA/NHFA Liaison David Harkness - Harkness Furniture, Tacoma, WA...........................(253) 473-1234

in every issue

WHFA Board Members Carol Bell - Contents, Tucson, AZ......................................................(520) 881-6900

Industry Beat. . . . . . . . . . . . . . . . . . . . . . . . . . 8

Buzz Burnett - Treasures Furniture, San Diego, CA...........................(858) 586-1900

Member Profile The Inkwell Home Store, Corvallis, Ore.. 18

Gene DeMeerleer - Furniture West, LaGrande, OR...........................(541) 963-5440 Chris Ehgoetz - Michael Alan, Lake Havasu City, AZ........................(928) 855-6067 Mark Flegel - Flegel’s Home Furniture, Menlo Park, CA....................(650) 326-9661

Program of the Month: Protect Yourself Against Fraud with Certegy. . . . . . . . . . . . . . . . . . . . . . 21

Eric Foucrier - Linder’s Furniture Mart, Garden Grove, CA................(714) 210-4848 Travis Garrish - Forma Furniture, Fort Collins, CO.............................(970) 204-9700 Giff Gates - Gates Furniture, Grants Pass, OR..................................(541) 476-4627 John Grootegoed - Elite Leather, Chino, CA......................................(800) 826-9971

Western Retailer Celebrates 20 Years: Melissa Robinson tells her story. . . . . . . . . 25

Eric Harms - Black’s Home Furnishings, Yreka, CA...........................(530) 842-3876 Jerome James - Hafer’s Home Furnishings, Manteca, CA.................(209) 823-2122 Julian Jeppe - Reeds Furniture, Agoura Hills, CA..............................(818) 597-7800 Chuck Kill - Bedmart, Tucson, AZ.......................................................(520) 887-7039

contact

Tim Koerner - Koerner Furniture, Coeur D’Alene, ID..........................(208) 666-1525 Don Lemieux - Naturwood, Rancho Cordova, CA..............................(916) 638-2424 Jeff Lindsley - Lindsley’s Home Furnishings, Grangeville, ID.............(208) 983-1040

Phone:

Robert Myers - Ashley Furniture HomeStore, Chico, CA....................(530) 345-2616 Mark Navarra - Jerome’s, San Diego, CA..........................................(858) 753-1549 Michael Nermon - Ergo Customized Comfort, Irvine, CA...................(949) 833-0338

est.1944

Scott Selden - Selden’s - Tacoma, WA...............................................(253) 922-5700 Mike Shuel - Meredith Furniture, Yakima, WA....................................(509) 452-6221 Tom Slater - Slater’s Home Furnishings, Modesto, CA......................(209) 522-9097 WESTERN HOME FURNISHINGS ASSOCIATION STAFF Executive Director: Sharron Bradley................................................(916) 960-0345 Asst. Exec./Marketing Director: Kaprice Crawford..........................(916) 960-0346 Business Manager: Janice Carlson..................................................(916) 960-0347

(800) 422-3778 (12 western states) (916) 784-7677 Online: www.WHFA.org Fax: (916) 784-7697 Mail: 500 Giuseppe Court, Suite 6 Roseville, CA 95678 Facebook: www.facebook.com/WesternRetailer Twitter: www.twitter.com/WesternRetailer

Events Manager: Cindi Williams.......................................................(916) 960-0277

Western Home Furnishings Association is the western affiliate of National Home Furnishings Association

Operations/Warehouse Manager: Jef Spencer...............................(916) 960-0386 Communications Planning Manager: Melissa Robinson................(916) 960-0349 Managing Editor & Webmaster: Melissa Dressler...........................(916) 960-0385 Membership Manager: Michael Hill..................................................(916) 960-0263 Member Services Specialist: Margie Jacobs...................................(916) 960-0199 Member Services Rep: Adam Gardner............................................(916) 960-0291 Accounting Assistant: Melody King.................................................(916) 960-2476

Contact WHFA at www.WHFA.org or (800) 422-3778.

est.1944

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WHFA

ACADEMY

RRC RETAILER

RESOURCE CENTER

September/October 2010

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You’ve probably heard the expression that “if you don’t mind, it doesn’t matter”. Too often in business, retailers get used to doing things “just because that is the way they have always done them”. They use “short cuts” that don’t save time, energy, or expenses. These become the “norm,” and they just don’t mind any more. However, in business, this is one time that just because you don’t mind, it DOES still matter.

Everything that you do, or don’t do, in your business impacts your bottom line. If you are looking for ways to dust off your processes and find new, more profitable ways to run your business, just imagine how helpful it would be to meet with other retailers and gain insights into the systems and processes used by the most profitable stores in your industry.

Now you can. With PROFITgroups you can join a team of retailers dedicated to helping each other build their businesses. These meetings generate ideas and eliminate obstacles to improve your bottom line… and that is when it matters most.

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I have learned more about operating a profitable retail furniture company through Colossal Meetings (and prior to that, “PROFITuniversity”) than any other meetings or organizational events I have attended. In addition to the educational aspect of these meetings, the contacts you make with like-minded business professionals have become invaluable. If you can only attend one business event this year, this is the one!

Mark S. Krueger President Kelly Furniture Kirksville, MO

Software | Consulting | Advanced Education | Sales Training Performance Groups | Freight Program | e-Commerce | e-Marketing

President’s Message

As local business owners, I think we all believe in supporting local charities through our businesses. The economy has affected charitable organizations from a financial aspect just as it has affected our own business. As partners in our communities it becomes our responsibility to figure out ways to help those less fortunate than ourselves. I would like to share some ideas with you from friends of mine in the home furnishings industry who have come up with fun and creative ways to generate donations to the charities that are important to them.

Dave Harkness, from Harkness Furniture, has been holding an indoor “Mini Golf Tournament” for the past 15 years and has donated over $150,000 to their local Rotary Club. They set up an incredible indoor miniature golf course and charge an entrance fee for each golfer which includes “greens fees”, dinner and drinks. Local businesses are solicited to sponsor holes at different levels of sponsorship and are rewarded with special recognition throughout the store. They also have prizes, a silent auction and raffles throughout the evening. It’s a win-win for everyone as Dave states that many of their customers become even more loyal to the store after participating in a fun and low pressure event, and while doing something so worthwhile for their local community.

Another friend of mine, Chris Ehgoetz from Michael Alan Furnishings, had a “Party in Your PJs” fund-raiser. It was a 24-hour sleepless marathon held from Friday 6 p.m. until Saturday 6 p.m. They rounded up 15 “All Nighters” who were treated to a Happy Hour with champagne, appetizers and midnight munchies. The all-nighters solicited sponsors who pledged money which was donated to a local breast cancer organization. They had raffle prizes throughout the marathon and a portion of all sales on Saturday were donated to the charity.

Jeff McElheran, from McElheran’s Fine Furniture, partners up with his local food bank by taking $20 off their delivery charge if the customer has a hamper of food available for pick up at the time of delivery. Their first delivery to the food bank was about 550 pounds!

In my stores, I’ve set up a small area of home accessories and gift items of which 50 percent of the sale amount is donated to our local breast cancer charity. We sell items we would not normally carry in our stores, such as jewelry, but it’s an easy way to have an ongoing charitable program, and it makes the staff feel proud to be a part of giving back to our community.

So whether it’s a complicated fundraiser or something simple, the bottom line is that we should all be thinking of ways to contribute and have a bit of fun at the same time.

Claudia LeClair 2010 WHFA president

Happy giving!

Fiesta Furnishings / Brix Home Scottsdale, AZ (480) 951-3239 fiestaclaudia@aol.com

ON THE COVER The Inkwell Home Store in Corvallis, Ore. is this month’s Member Profile.

Please read their story on page 18.

Contact WHFA at www.WHFA.org or (800) 422-3778.

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Editor’s Message

The Importance of a Buddy

Melissa Dressler Western Retailer managing editor

Last July, I donned a wet suit, fins, mask, regulator and air tank to dive into one of the world’s most beautiful lakes, Lake Tahoe. The purpose of my dive was to show that I was qualified to receive my open water scuba diver certification through a variety of skills tests. Many of these tests involved working with my dive buddy. In diving, there are three reasons why you should have a buddy: practicality, safety and fun. Before each dive, buddies assist and examine each other’s gear. While underwater, you and your buddy often share experiences that no one else ever will and in the case that one of you runs out of air in your tank, your buddy can provide an additional air source so both divers can safely make it back to the surface.

Like diving, it is important to have a buddy (or buddies) in business. You may need recommendations on working with a new manufacturer or want to hear how others have implemented social media into their advertising plans. Well, who better to ask than other retailers in the home furnishings industry? If you don’t want a “buddy” that is in your local area, make an effort to connect with others through your Association by attending industry events and participating in groups that will allow you to create retail buddies from across the country! Wouldn’t it be nice to have someone to call to tell them about your long day in the store, and they understand what you are actually talking about?

One event where I have witnessed these retailer buddies being formed is during the WHFA Annual Conference. Every year I am still amazed at how much information retailers share with one another, and it is because they all understand the importance of having a friend in this industry. I believe in order to be successful, retailers today have to help themselves through networking and connecting with other retailers.

Lastly, isn’t it fun to have friends in the industry? This is an industry full of creative business people who like to have a great time—I have witnessed it at many industry events! By getting out of your store and making retail buddies, you might just find that you have even more fun in your business.

I hope you enjoy this issue of Western Retailer magazine and attempt to make new connections in the industry. A great time to start is during Markets or during the 2011 All Industry Convention in San Antonio, Tex., next April 30-May 2.

(916) 960-0385 MDressler@whfa.org

Follow us Follow Western Retailer magazine and WHFA on Facebook and stay up-to-date with the latest industry and WHFA news.

Visit these sites to “Like” us today!

Last month’s magazine is available online at www.WHFA.org.

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September/October 2010

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Contact WHFA at www.WHFA.org or (800) 422-3778.

Morris Home furnishings carries only the best brands.

GE Money is proud to be one of them.

In 1947, Morris Home Furnishings started with a single store and a belief in treating customers like friends. When the company decided it wanted to reach more customers, they shopped for a partner as carefully as they chose the quality brands they carry. GE Money, a division of GE Capital, has helped Morris grow from one store to 12, including eight Ashley Furniture Home Store showrooms, providing credit and service to tens of thousands of residents. How’s that for treating customers right.

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Industry Beat Bedmart Opens 28th Location in Carefree Bedmart, Arizona’s largest family-owned bedding retailer, has opened a new store in Carefree. Bedmart was recently honored as a “Retail Giant of Bedding” at the Fifth Annual Bedding Conference held by Furniture/Today magazine in Orlando last May. “We are honored to have our growth acknowledged by our industry, and I am very pleased to open a new store in Carefree,” said owner Chet Goldberg III. “My father, Chet Goldberg, Jr., was a long-time resident of Carefree. He was active in shaping Carefree into the wonderful place it is today. In many ways, opening this new store is like coming home.”

The Carefree store will carry a large selection of Serta, Simmons, Tempur-Pedic and other name brand mattress sets.

Leggett & Platt® Consumer Products Group Simplifies

The HW Home Girls Raise Over $21,000 at the 2010 Courage Classic

The HW Home team is proud that their Boulder Home Store manager Bev Needham and her riding team have raised tens of thousands for charities across the country. The HW Home Girls, a 17+ team of road warriors, recently raised over $21,000 for the Children’s Hospital Foundation’s Courage Classic 2010 held in Vail, Colo. This 3-day, 157 mile ride has raised over $22 million to date to support the foundation’s critical work for children. For more information on the Courage Classic, visit www.couragetours.com

One year after aligning its direct-to-retail sleep accessory product lines under one umbrella, Leggett & Platt® Consumer Products Group recently announced that it now will simplify its brand architecture and market ornamental beds and adjustable bed foundations under Leggett & Platt® brand names. The changes leverage the equity in the parent brand to provide a unified, easy-to-understand offering for both retailers and consumers.

Fashion Bed Group®, the company’s product brand for ornamental beds, day beds and futons will evolve into a sub-brand called Leggett & Platt® Fashion Bed™, strengthening the tie to the parent brand. Adjustables™ by Leggett & Platt®, the moniker used for adjustable bed foundations, will be retired, and products will be marketed under the Leggett & Platt® parent brand.

The brand strategy adjustments further integrate the organization’s full line of sleep accessories under the trusted Leggett & Platt® parent brand, enhance consistency and bring focus to the company’s differentiating value proposition. For more information on Leggett & Platt, visit www.leggett.com.

In Memoriam: James “Craig” Forsey, Texas sales representative Industry veteran James “Craig” Forsey passed away after a long battle with the rare disease, Multiple Systems Atrophy. He was 65.

Craig grew up in the furniture business working for his parents in their retail store in Salt Lake City, Utah. After graduation from the University of Utah and a two year stint with General Foods he returned to the industry as an independent representative covering the mountain states. In 1979, he relocated his family to Dallas where he represented several manufacturers, the most recent being England Upholstery.

Throughout his career Craig received multiple awards including salesman of the year for England and Guardsman. He also held many leadership positions including being a captain in the army national guard and president of the Colorado manufacturers representative association.

Memorial services were held on July 31. Memorial donations may be made in Craig’s name to www.igniteadream.com, a charity, established by his daughter Carrie Arsenault, focusing on providing athletic programs to kids that would not have access to it otherwise.

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Contact WHFA at www.WHFA.org or (800) 422-3778.

The World Around Us

Connecting With Customers With shoppers overwhelmed by commercial messages, furniture retailers aim to break through the advertising clutter with events that fill stores, engage customers, create connections and reverberate throughout the community by capturing media coverage and promoting interactive connections through social network sites like Facebook and Twitter.

W

Jo Fleischer freelance journalist

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hen it comes to what’s now called “community engagement,” many furniture retailers follow a pattern that’s been familiar for decades. Furniture stores sponsor local Little League teams, donate generously to fund-raising auctions and are also the first to give to family shelters and assistance organizations.

When making such important contributions, furniture retailers can expect the local paper to mention the donations in a short paragraph and, maybe, run a small photo. Despite the lack of recognition, furniture retailers continue to uphold a tradition of charitable giving that stretches back to a time when sofas and sideboards were delivered by horse and wagon.

Simply put, furniture stores—especially locally owned ones—are at the center of the business community in most towns, and, as a result, charities have come to rely on the willingness of

September/October 2010

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the owners of home furnishings stores to step up when fire forces a family from their home or the local women’s shelter needs additional beds.

It’s extremely commendable that furniture stores answer the call so often, even though those efforts rarely get the recognition they deserve.

Some enterprising furniture store owners take community engagement to an even higher level by, for example, taking a lead role in furnishing a show house to help an organization raise funds by showcasing the latest in home décor and design.

In fewer cases, furniture stores invite shoppers in for design seminars on topics like “Find Your Style” or “Color 2010” that typically attract a couple dozen people for a pleasant hour sweetened with some white wine and light snacks. As with the charitable efforts, these store events rarely gain any media attention, limiting the impact to the small number of attendees.

Contact WHFA at www.WHFA.org or (800) 422-3778.

New Traditions So, what can furniture store owners do to change long-established patterns? How can the impact of a store event be multiplied through social media outlets like Twitter and Facebook? What attracts large numbers of customers—and media attention—to an in-store educational event?

Room & Board attracted a surge of shoppers to its flagship store in Edina, Minn., late last year with an eco-themed store event that was part exhibition, part retail-tainment and part educational forum. Cargill’s BiOH® polyols business—which makes the soy-based ingredient that replaces a portion of the petroleum used in foam for upholstery cushions and mattresses—working in partnership with the Minneapolis College of Art & Design (MCAD), helped Room & Board present a weekend event that increased store traffic, attracted media and reached other shoppers through social media outlets.

MCAD Students created a display sofa to show how much Prior to the weekend event, students from MCAD foam can now be replaced with soy-based materials. created a number of in-store exhibits that offered lessons in how soy-based cushion foam is reducing environmental footprints in a way that entertained shoppers as it educated them. The team of MCAD students earned a $5,000 award for their engaging educational displays, which showed how more earthfriendly materials are being incorporated in furniture. As an example, a sofa was marked with bold graphics to show that more than a fifth of the foam within it can now be made with soy-based materials, replacing petroleum and helping farmers throughout the U.S. Also, a sculpture made of gallon jugs illustrated how much petroleum is replaced when consumers select a soy-based material in their new furnishings. There were also interactive exhibits for kids, as well as seminars on green living.

Multi-Faceted Community Engagement

The Power of TV and Facebook Store Manager Preston Long said store traffic was about one-third higher than a typical Saturday. “Activity was high and there was good energy around the event, which is exactly what we strive for,” said Long.

In addition, WCCO, a CBS affiliate in Minneapolis filmed a segment in the store for its weekend newscast, and the event also gained other local coverage that helped raise awareness of Room & Board and its sustainable product offerings throughout the Twin Cities. The impact of the success of the in-store event continued to reverberate for weeks afterward though videos and photos that were featured on the Experiencebioh.com website as well as Facebook and Twitter.

The foundations for the success of the Room & Board weekend event, including the use of social media prior to the weekend to attract shoppers, have been laid out in a document that Cargill’s BiOH® polyols business is making available to retailers wishing to create their own version of a Soy Style event.

More information is available in their Retail Event Guide available at http://www.bioh.com/retail-resources.html

Roller Skates, Wine, Cheese and Rising Sales Leon & Lulu, Clawson, Mich., holds scores of in-store “events with purpose” each year—including everything from wine-and-cheese fundraisers for charities to visits from the Bloodmobile and, recently, a pet adoption fair. Last year, the home furnishings store, housed in a former roller rink, hosted 65 events.

Co-owner Mary Liz Curtin says the goal is to help Detroit-area charities while ensuring a steady stream of first-time visitors, many of whom become customers and, more importantly, return with friends. “They have a good time, and they’ll tell friends and come back to the store,” she said. “It seems to be working because our sales were up 20 percent last year,” Curtin said.

Contact WHFA at www.WHFA.org or (800) 422-3778.

Engaging community events involve at least two of these elements, but the goal is to achieve all five of the following: 1. A compelling call to action that increases store traffic, especially first-time customers, over a weekend or an even longer period 2. Interactivity: Web tools, including Facebook, can engage customers in registering for event, contests and giveaways and allow them to alert friends.

3. An overwhelmingly positive customer experience to encourage return visits 4. Media coverage: Event messages gain wider circulation that can be multiplied via your website, Facebook, YouTube and Twitter.

5. Social Media: By posting pictures and video immediately after the event via Facebook, Youtube and Twitter, the event message continues to reverberate by enabling shoppers to view photos/ video and share with friends.

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Bob’s Random Acts of Kindness van delivers $1,500 in donations to local charities each month.

The 15,000-square-foot store has a large kitchen and bar area, and charitable groups are encouraged to use the facility for both meetings and social events. A sampling of events during a single month (July 2010) includes Networking-A-Palooza, a get-together and fundraiser for area professionals, and an all-day Red Cross Blood Drive. In addition to providing the space to charities at no cost, Leon & Lulu has 150 lunch plates and dessert plates (and silverware) on hand for use during events, and the retailer even gives the groups coffee to serve and

other necessities. All a charity has to do is bring in a caterer and a bartender (if desired) to raise funds by requesting a donation for admittance to the event. Leon & Lulu, which usually keeps the sales floor open during the events, donates 10 percent of sales to the charitable group whose members are shopping.

At the store’s website (and Facebook page), shoppers can find an extensive calendar of upcoming events, blog postings and photos and video of the latest happenings. Curtin, a retail consultant, has credited the events with helping the store achieve profitability by its fourth month in business and grow into a multi-million-dollar business—despite a tough business climate in the Detroit suburb since opening in 2006.

Bernie & Phyl’s, Norton, Mass., has long been known for fun store events, including a Sleeping Beauty-themed event in partnership with Radio Disney that had children (and parents) visiting the chain’s six stores dressed as characters from the movie for in-store scavenger hunts and trivia contests. The real draw in the event that was featured prominently on the chain’s website was that the first 50 families who registered for a Sleeping Beauty prize package received a DVD of the Sleeping Beauty movie a couple of weeks before its official release. The Sleeping Beauty prize package included a child’s bedroom along with sheets and other items associated with the film.

Random Acts of Kindness

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Effective July 2010: • New FLSA child labor regulations • New mandatory break for nursing mothers (If you have purchased a poster from WHFA in the last 12 months — you will automatically receive updates and remain compliant.)

Be complient for only $39.95!

(Includes free compliance subscription service for 12 months from date of purchase)

Call WHFA today to verify that you are in Labor Law Poster compliance at (800) 422-3778.

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Bob’s Discount Furniture, Manchester, Conn., takes to the streets with a high-profile Random Acts of Kindness Van that delivers $1,500 in donations to a different local charity each month.

Bob’s operates 39 stores throughout New England.

Shoppers get involved by filling out a Random Acts of Kindness request at their local store (or via the chain’s website), and the retailer selects a different entry each month and makes a surprise visit to a charity each month to deliver the donation. During July, the Bob’s Van focused on the state of Maine with visits to five elementary schools and three community organizations, each of which received $1,500. Bob’s has always been generous with donations to charitable groups, but rarely publicized those gifts until in the last few years, said Cathy Poulin, the chain’s public relations director. Now, the company’s charitable events, which are focused largely on children’s causes, have a far higher profile thanks to its van and store events such as one recent event that encouraged children to win prizes by bringing pet donations for the Humane Society to Bob’s stores in Connecticut. She has said the Bob’s Van is a little like the Prize Patrol, and media outlets often cover its surprise visits to charities.

Contact WHFA at www.WHFA.org or (800) 422-3778.

In May, Bob’s customers took more than 2,000 donations of pajamas and books to the company’s furniture stores for the Pajama Program, a national charitable program that delivers sleepwear to children who need it.

Art Van Furniture, Warren, Mich., also hit the road this year to deliver $1 million in 50 grants to a variety of non-profit organizations.

The gifts of $5,000 to $50,000 celebrated the retailer’s 50th year and were focused on Michigan-based human services and children’s programs.

Art Van’s management team traveled 500 miles in 50 hours to deliver the $1 million in donations to charities across Michigan, where the company operates 30 stores. The unique and generous road show attracted extensive media coverage in the many towns the executives visited, and also connected with shoppers through Art Van’s very active Facebook page. Incidentally, the retailer’s Facebook page (“Fan Art Van”) is a model of how to engage shoppers through a series of interactive features like Ask Amelia (the chain’s lead designer) and contests to award tickets to events like an upcoming Justin Bieber concert.

The Best Seats In Petco Field Community engagement isn’t solely about charitable giving. For example, California’s Jerome’s Furniture serves up a lot of fun in connection with Major League Baseball’s San Diego Padres with its Best Seat Lounge. By entering a random drawing before each home game, Jerome’s shoppers can win access to the best seats at Petco Field, a large comfy section that’s big enough for the winner and three friends.

The winners also receive a prize pack and are recognized on a large stadium screen during the game. The seats along the third base line have been written up in a variety of San Diego-area media outlets and even get national exposure on some broadcasts. Plus, Jerome’s has a very active Facebook page where it’s clear there are a large number of fans throughout the region clamoring for the Best Seats at Petco Field.

In the Boston area, Jordan’s Furniture has ensured that its recent customers are keeping a close eye out on the hometown team every time a member of the Red Sox steps up to hit in Fenway Park. As part of a promotion announced earlier this year, Jordan’s customers will get their money back if a member of the Red Sox manages to hit a large target on a Jordan’s sign in the outfield. The retailer has announced that it expects to award customers up to $40 million if the target is hit this season (before Oct. 2). If the target remains unblemished by a home run, Jordan’s will give 20 percent coupons to every customer who made a purchase during the season.

“We took out insurance. So, we are rooting for the Red Sox to make the Monster Hit and for our customers to win free furniture,” said Eliot Tatelman, CEO and president of Jordan’s Furniture. “We are thrilled to sponsor a fantastic baseball team in a wonderful city with loyal fans,” he adds. “And hit or no hit… the customers win 20 percent off their purchase!”

Over the summer, Tampa Bay media (and the blogosphere) has been filled with discussions about a unique Kane’s Furniture promotion with MLB’s Devil Rays and Papa John’s Pizza. In short, ticketholders win a free pizza any time the Devil Rays pitching staff strikes out 10 or more batters during a game. To qualify, baseball fans bring a ticket stub or an Internet coupon to a Kane’s to receive a gift card for a 10-inch pizza. It’s so popular, local sports columnists routinely point out whether a Devil Rays win triggered free pizzas for fans, and a quick Google search shows scores of postings from fans celebrating or bragging about collecting on the free pizza offer.

Jo Fleischer is an East Coast based freelance journalist. He has been writing about the home furnishings industry for the past eight years.

Contact WHFA at www.WHFA.org or (800) 422-3778.

High Point

MARKET WEEK Oct. 16-21

www.highpointmarket.org

The next six days that matter.

www.highpointmarket.org/facebook www.highpointmarket.org/linkedin www.highpointmarket.org/twitter www.highpointmarket.org/youtube www.highpointmarket.org | 800.874.6492 | info@highpointmarket.org

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Showroom Style

Value Added Merchandising I Jim Green Furniture Retailing 101 consultant

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am the ultimate consumer. I’m a sucker for a well-planned and executed promotion whether I’m in the market for a new suit, a TV, a car or anything else for which I plunk my money down. I compare items and I analyze what I will be receiving for the amount of money I am asked to spend. This is pretty much the definition of “value” as it relates to the market place, “What you get for what you pay.”

“Value” really is the only measure of comparison that a consumer has available to determine which item to buy. It is often the difference between a customer buying from you or from your competition. When one item has additional value when compared with another competing item at the same price, the choice between the two items is fairly clear, barring other mitigating issues, (i.e. store loyalty, service, brand preference, etc.). I believe that it is this element that is at the very core of effective merchandising, compelling marketing and powerful selling.

“Value added” is, or should be, at the forefront of the list of goals that every merchant should have when he or she begins to create an assortment.

It should be at the heart of every marketing plan aimed at profitably selling that assortment.

And, it should be the primary tool a retail sales associate employs when selling that assortment.

It may be unrealistic, perhaps unattainable, but the aim should be that every item in the assortment should possess added value when compared with similar items that are sold by the competition. This is only one part of the “value added” strategy, however. The second part lies in training the sales force about every “value added”

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element of the items they sell, then training them how to use it as a prime selling tool. An item that has added value over an item the competition offers may well be of little use if the sales associate isn’t aware that additional value is present or understand how to use it as an advantage in their sales presentation.

“Value added” may take a wide variety of forms, not all of which may be immediately apparent. Also, for “value added” merchandising to be effective, the added value must be recognizable and/or explainable.

At this point, I would like to point out that there is nothing about which I write here that is particularly new or monumentally earth shattering. Most of it is basic furniture 101 tactics. Sometimes, though, we all need to be reminded and be sure that newer merchandisers charged with organizing an assortment understand how to implement these tactics.

1. PRICE REDUCTION Obviously, the price of an item is half of the equation in determining value. All other things equal, if your company offers a particular sofa and your competitor offers a similar sofa but your’s is $100 less in price, your less expensive sofa will exhibit greater value. There is a subtlety here that I would like to point out. Suppose there are two sofas that are the same, one priced at $999 retail; the other the merchandiser found a way to retail for $899. You may wish to consider the scenario as a $999 sofa that has been priced lower at $899.

Or, you may consider the sofa to be an $899 sofa with the value of a $999 sofa. I know that this is a Contact WHFA at www.WHFA.org or (800) 422-3778.

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finely described nuance, but this is the gist of the concept of “value added”; that you are offering to sell an item that appears to exhibit greater value than a competing item that is priced the same.

Let’s take that $999 sofa, for example. If a retailer wishes to buy from the same resource, there are three main ways to go about reducing costs in order to arrive at a lower price sofa without appearing to lose value.

Each may seem self evident but they all bear reminding.

A. Negotiate, negotiate, negotiate. This is of course the most obvious and most buyers, new or old, understand that the cost offered by the vendor is not necessarily the cost they are willing to accept. Negotiating is an entire science unto itself; but, learning to reach an agreement with the manufacturer on a lower price for an item will result in the added value you wish to offer your customer. Two quick tips for newer buyers: One, you don’t ask; you don’t get. Two, always have a reason for needing a lower price (other than greater profit for you).

B. Frame selection. When a merchandiser goes to market and sees a stunning sofa that is perfect for the retailer’s customer base, they are generally (unless it is a particularly innovative silhouette) reacting to how the sofa is dressed rather than the frame style itself. By and large, an outstanding fabric combination will be highly saleable on any number of frame styles in the vendor’s line. (The reverse is not necessarily true; an unappealing fabric combination will generally not be a big seller no matter what frame it is used on). This is the second way a merchant can affect price without lessening quality: use a lower price frame style with an elegant fabric combination.

Value appears to be added.

C. Fabric selection. Often, mills offer fabrics in lower grades that look to a consumer to be very lush and expensive. The reality is the retail customer has no idea what a fabric costs. An excellent merchant may use this fact to great advantage. By dressing a more expensive frame in a lesser grade fabric with a rich look (possibly using more expensive fabrics for accent pillows, trims, etc.) cost is lowered, quality is preserved and value appears to be added.

High Point

www.highpointmarket.org

Oct. 16-21

2. CONSTRUCTION FEATURES A second device in adding value is in exploiting certain construction features inherent in the product that may have an advantage over more common construction methods. The significant issue to consider however, is that the advantageous feature must in some way benefit the consumer, otherwise there is no “value added”.

For example, a sofa selling for $999 built with 8-way hand tied coil springs has a benefit to the consumer over a $999 sofa built with sinuous wire springs (I know many manufacturers might argue this point but this example is simply illustrative of the message). Coil springs provide a more even, comfortable seat, should last longer and are less likely to bottom out. In this example, clearly value has been added at the same retail price.

However, if one manufacturer employs a machine to install a certain component of an item while another manufacturer installs it by hand there may be an advantage to the manufacturer but no real benefit to the consumer. The savings may simply go to profit the furniture maker and no real value has been added.

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3. BELLS AND WHISTLES A third strategy is to add appealing accents to a lower priced frame and fabric combination. Pillows, bolsters, trims, weltings, interest tailoring, etc.

Contact WHFA at www.WHFA.org or (800) 422-3778.

www.highpointmarket.org | 800.874.6492 | info@highpointmarket.org

western retailer

September/October 2010

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can all make a sofa appear much more expensive than it is. This is where some real merchandising talent and taste level enters the picture. A few bells and whistles can add much more apparent value to an item than the cost to do so would indicate.

4. EXCLUSIVITY Another method of adding perceived value is to offer items that can be purchased nowhere else in the marketplace. This, of course accomplishes two positive results. First, by offering product that can only be purchased from your company there is an element of allure and distinctiveness that has been added. Second, the item is incomparable and unshoppable. The consumer is unable to perceive a price or define a value. Value has been added.

5. INNOVATIVE OR UNCOMMON FEATURES Retailing products that offer innovative or uncommon, useful, functional features can also result in adding value. Merchandise that performs functions other than what may be obvious will add value. When the Simmons Company introduced a sofa that converted to a bed in 1930, value was dramatically added to that couch. Edward M. Knabush and Edwin J. Shoemaker invented and began manufacturing a porch chair that actually reclined to a more horizontal position and then in 1929 began marketing a fully upholstered chair that amazingly reclined. The first upholstered LaZ-Boy incorporated historic added value to say nothing of introducing an entirely new category of furniture products. Furniture with phone jacks, electrical outlets, USB ports, and hidden storage all demonstrate “value added”.

6. RETAILER SERVICES Some “value added” elements are less definable such as services rendered by the retailer. Retailers that offer free design services, especially “in the home” clearly offers additional value. Free or immediate delivery means value has been added.

7. MANUFACTURER SERVICES The services some manufacturers offer may also add value to the merchandise for the customer.

Some manufacturers ship a very large selection of the merchandise in a matter of days, not weeks or months.

This availability of instant gratification benefits the customer and adds value. Some upholstery manufacturers offer special order, quick ship-programs for some of their products that are easy to use for the consumer. This, too, adds value.

“Value Added” is really a mind-set that should be at the heart of retailing. It requires the merchants to merchandise with a purpose and the sellers to sell with a plan. It means having a message and backing it up.

Retailers in every industry claim value. To be effective, added value has to be evident and must observable, apparent, and/or demonstrable. If all those in the company involved in sales, merchandisers, marketers, and sales associates alike, buy into the approach both the company and the consumer will benefit.

Jim Green has worked in the furniture industry for over 35 years in mid and senior level merchandising and marketing positions. He was the second-in-command for a top 30 company, in charge of merchandising marketing and sales, followed by a stint as divisional merchandise manager for furniture and bedding for a large, Florida based department store chain.

He then worked in the manufacturing side as the Florida representative for a number of well known furniture makers.

He earned an MBA in management in 2004 and published his three-volume series of books, “Furniture Retailing 101” in 2008.

FURNITURE RETAILING 101 Three-Volume Set by Jim Green The Next Best Thing to Real World Experience This book series, written by industry veteran Jim Green, will help bring new entrants into our industry up to speed and help them become far more productive and effective, faster. This series should be required reading for anyone entering the furniture industry with its practical, nuts and bolts information that is timely and accurate.

Includes all three volumes shipped in a handsome slipcase: The Business, The Merchandise and The Strategic Concepts.

WHFA member only price $54.95 + shipping and handling. This discounted price is available only on the WHFA website at www.whfa.org or through your WHFA membership representative at (800) 422-3778. Individual book pricing available.

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Contact WHFA at www.WHFA.org or (800) 422-3778.

Member Profile

The Inkwell Home Store Corvallis, Ore.

Amy and Pat Lampton, owners of The Inkwell.

F

Melissa Dressler Western Retailer managing editor

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orty-six years ago, Grant and Gail Cornelius opened the doors to “The Inkwell”. Selling primarily stationary, books and a small amount of imported Scandinavian furniture, the small store was located in the heart of Corvallis, Ore. Ten years later, the store was purchased by two couples, Jack and Mary Jane Lampton and Mary’s brother and sister in-law Bob and Nancy Adams. In 1978, only four short years later, The Inkwell’s current owner, Pat Lampton, joined the family business. At this time, the store was expanded from 5,000 square feet to 8,000 with the addition of a mezzanine level. With more space, The Inkwell was able to show more furniture.

Over the years, Pat learned the business and eventually bought out his parents’ and Aunt and Uncle’s shares in the company. In 1990, Pat and his wife, Amy, had full ownership of The Inkwell and continued to grow the business. “Seven years ago, we took over an adjacent space of 10,000 feet that now houses home furnishings, accessories and lamps,” Pat said. “We have continued to expand, and we have changed the nature of the original store over time to meet changes in the community

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and marketplace. What started off originally as a stationary store that sold greeting cards and custom picture framing has now turned into something entirely different.”

Today, The Inkwell Home Store sells a variety of gifts, tabletop items, kitchen accessories, along with the home furnishings. Their extensive product line-up offers customers a variety of reasons to visit the store. “In this town, it is a good combination of products. We drive traffic into the store with the gifts and kitchen areas, and it then exposes people to the furniture selection,” said Pat. “Often times, people don’t visit a furniture store unless they are looking for furniture. With having the other products available, it gives customers the opportunity to come in and be exposed to the furniture along with the other products.”

Even during a slow economy, the product selection at The Inkwell has helped drive traffic (and the kitchen department has even grown during this time). Being located in a college town with their unique product mix also helps bring in new customers. Out-of-town visitors can often Contact WHFA at www.WHFA.org or (800) 422-3778.

be overheard saying that they wish their city had a store similar to The Inkwell. “There is not a week that goes by that we don’t have a couple people say, ‘I wish we had something like this in our town,’ and they are sometimes from large cities like San Francisco and Seattle!

It makes some of the more frustrating times in retail more worth it with that kind of positive feedback. People seem to appreciate what we are doing,” Pat said.

With such a variety of products, Amy, who is the primary buyer for the store, is constantly buying new items. Within this year alone, she has attended The Atlanta Gift Show, The Seattle Gift Show (twice), Las Vegas Market (twice), Chicago International Housewares Show and will be attending October’s High Point Market. “While it keeps me busy, I really do enjoy the buying side of the business because it allows me a bit of creativity on what to bring in next,” Amy said. “When I am on a buying trip, I know that if I like an item, my customer, for the most part, will like it. There are always a few things that surprise you but I have a good sense about the products and often get advice from our salespeople.”

While Amy handles most of the buying, Pat oversees the advertising for the store.

The Inkwell still uses traditional advertising mediums like television and print, but they are also utilizing more online opportunities to connect with their customers. Within the last year, The Inkwell has started connecting with their customers via the social media tools of Facebook and Twitter. “It has just been a realization that social media is where the market is going for information, especially younger people,” Pat said. “If you look to where your future business is, they are using social media. People well into their 30s are very savvy in these mediums and are using them to communicate with one another, so we are trying to reach our customers and develop new ones through it as well.”

Even though some of their posts are about sales or new products in the store, Pat and Amy really see Facebook and Twitter as a tool to build relationships with their customers and community. Since it is a voluntary action for a customer on Facebook or Twitter to “Like” or “Follow” your business, it is important for them to build a great relationship with current and future customers. “Connecting with them online seems to help with the psychological barriers that people have to get over, especially when they are visiting the store for the first time,” Pat said. “Getting them into the store Contact WHFA at www.WHFA.org or (800) 422-3778.

is a big hurdle. Once they get into the store, you have to treat them right and let them know that you are glad that they are here. Be helpful to them—if you don’t have it, recommend to them where they can get it or offer to special order the item. This is the kind of service that is lacking in many business transactions today, and we feel that in our niche, it is important to focus on the personal service and emphasis with our customers that we appreciate them being in our store and are willing to do whatever it takes to make them happy.”

Along with connecting to their customers through social media, Amy and Pat are very involved in the local community by participating in local service clubs and by participating in community events. They both find that one of the benefits of being a business owner in a smaller community is that it allows them to be involved and contribute to the wellbeing of the community that is a vital aspect of their business.

Every September and March, The Inkwell, along with the other businesses in downtown Corvallis, invite local wineries into the area for a Downtown Wine Walk. This successful event usually draws 1,2001,500 people into the downtown area.

Each winery sets up shop in a different business, and then attendees purchase a glass and visit each store for a tasting.

“We sell glasses and are a major outlet for the event,” Pat said. “We probably get 800-900 people in our store in a four-hour period—many of whom would have never come through our doors if they hadn’t been there for the event. Once they are exposed to our Photos by Micha Sanders, www.michaphotography.com. business, they come back later.”

Since retail is often more hours than a typical full-time At a Glance job, Amy and Pat are looking Type of Store: Full-line forward to retirement and taking Founding Year: 1964 on new challenges. They don’t Employees: 20 have a plan for what will happen to The Inkwell Home Store as Number of Store Locations: 1 of now, but they hope to have it Top Manufacturers: Natuzzi, continue as a successful business Ekornes, Lazar that continues to contribute to WHFA Member Since: 2000 their community. www.theinkwellhomestore.com

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Meet the New Members Congratulations to our newest WHFA Members El Colchon Mattress Sylmar, CA

A & C Billiards & Barstools

Elegant Home Furnishings

Adjustable Beds & More, LLC

ER Piano

Affordable Furniture

Forbes Furniture

Alexander’s Furniture & Accessories

Fruehauf ’s Patio and Garden

City of Industry, CA Oregon City, OR Chino, CA

Tucson, AZ

Amador Furniture & Mattress Jackson, CA

American Furniture Co. Grand Junction, CO

American Mattress Eugene, OR

Stockton, CA

Sacramento, CA

BedCo Mattress Superstore Newberg, OR

Bedford Furniture & Upholstery Sterling, CO

Los Angeles, CA Kent, WA

Boulder, CO Bend, OR Beaver, UT

Berkeley, CA Tulare, CA

Eugene, OR Eagle, CO

Pleasant Hill, CA

California Carpet Company

Great American Furniture Inc

Comfort Zone Oxnard, CA

Creative Leather Furniture Chandler, AZ

Custom Comfort Mattress Company Inc. Anaheim, Ca

Delta Mattress & Sofa Outlet Store Eureka, CA

Douglas Bedroom Design Nampa, ID

Dovetail Furniture Los Angeles, CA

Dynamex

Fullerton, CA

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Orem, UT

Tempe, AZ

San Diego, CA

Stephies Furniture Los Angeles, CA

Vernon, CA

Super Buy Furniture

Lakeport, CA

Valencia, CA

Las Vegas, NV

The Chestbed Store Sonoma, CA

San Francisco, CA

The Elephant’s Trunk

Living Space Furnishings Sacramento, CA Los Angeles, CA

Bremerton, WA

Greenbaum Home Furnishings Guchi Interior Design Roseville, CA

Hacienda Furniture Las Vegas, NV

Harmony Home Furnishings Cedar City, UT

HD Buttercup, L.P. Los Angeles, CA

Klamath Falls, OR

Billings, MT

Garden Grove, CA

Managhan’s Furniture

Ultimate Furniture & Accessories

Maple Cottage

United Furniture

Mattress Land by Sleep Fit

Urban Mattress

Mattress Outlet

W & A Interior Consultants

Moore’s Sleep World

Wisers Furniture

Natural Stone Source

Wright’s Furniture

Libby, MT

Oakdale, CA

National City, CA

Santa Rosa, CA

Fresno, CA

Henderson, NV Eureka, CA

Lynden, WA

San Luis Obispo, CA

Whitefish, MT

Oak World Discount Furniture Eureka, CA

Heaven On Earth Furniture

Palace Furniture

Home Accent Warehouse

Palomas Interiors

Home Furnishings Good Prices

Park Avenue Flooring & Design

Loveland, CO

Brentwood, CA

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Thornton, CO Torrance, CA

Oregano Mountain Home

Salinas, CA

Elk Grove, CA

ToadnWillow

Hearth & Home Furniture & Gifts Lander, WY

San Francisco, CA

The Howard Miller Company

Magic Furniture LLC.

Escondido, CA

San Diego, CA

The Futon Shop

Lucas & Howard Furniture Inc.

Downey, CA

Visalia, CA

Sweet Dreams Mattress Gallery

Lloyd’s Custom Furniture

Bellevue, WA

Montbello, CA

Stage 1 Furniture

Living Collections

Futon and Sleep

Grand Furniture

CitiClosets

Portland, OR

Orangeburg, SC

Phoenix, AZ

Broadway Furniture

Campbell, CA

Tempe, AZ

Southern Accents Inc.

Leon Furniture

Fusion!, LLC

Riverside, CA

Sleep E-Z USA, Inc.

Lakeport Furniture & Design

Furniture Mania

Good Nite Sleep Center

Campbell Furniture Gallery

Oceanside, CA

LA Furniture Store

Boise Mattress

Placentia, CA

Riverside Discount Furniture

Kreiss Collection

Furniture Corporation

Gateway Furniture

Portland, OR

Mesa, AZ

Kimlor Mills

Better Bed & Back Boise, ID

Marysville, CA

Howie’s Furniture

Fountain Valley, CA

GateHouse no. 1

Spokane, WA

Folsom, CA

Just Like The Model

Furniture 4 Less, Flooring For Less

Stockton, CA

Richardsons Sierra Seating

Johnson Interiors & More Inc.

Furnish.

Premier Furniture Gallery Relax The Back

Ketchikan, AK

Bert’s Furniture Barn Bellingham, WA

Downey, CA

Hometown Furnishings

Furniture Interiors

Aria Furniture

Home Impressions Fine Home Furnishings

Portola, CA

Glendale, CA

El Centro, CA

Anaconda, MT

Find out how Membership to WHFA can help your business.

Call WHFA at (800) 422-3778 or email mbrship@whfa.org

Contact WHFA at www.WHFA.org or (800) 422-3778.

Program of the Month

Protect Yourself Against Fraud

D

o you need to utilize check guarantee for your business? The answer may seem less important as the number of checks being written decreases year after year; however, the amount of check fraud is rising.

Check guarantee programs are designed to limit the risk of check acceptance by a retailer.

They can be tailored to meet the needs of almost any business. In the most basic structure, they provide a retailer with the security of receiving their funds for insufficiently funded checks and stop payments by filing a claim form. For a slightly higher fee, a retailer may choose to have the bad checks sent to their check guarantee company, which in return sends the money directly to the retailer’s account. This process gets the funds into the retailer’s account quicker and removes the manual process of filing a claim form.

A newer, and more automated option, is the electronic check. In the old paper check acceptance scenario, the customer’s check goes through channels, handled by numerous people, before making its way to the bank. An electronic check system streamlines the process by removing middlemen and decreases opportunities for errors or omissions. It authorizes the transaction, transfers the funds electronically from the point-of-sale to an automated clearing house (ACH), and forwards it to a bank for processing.

Electronic checks bring value to your business in many ways. They cut down on administrative back-office support; simplify reconciliation procedures; reduce deposit and returned check fees; and provide faster access to funds. The above benefits are some of the most common options available for check guarantee programs.

WHFA partner Certegy Check Services, the largest check guarantee company, brings a comprehensive suite of transaction services specifically designed for the furniture industry utilizing a wide variety of state-of-the-art check authorization and settlement solutions along with proven collection technologies for delinquent accounts. Check guarantees can be processed from most credit card processing machines or through special equipment designed to read checks.

In the process of doing business we always are seeking ways to improve cash flow and convert receivables into cash. Check guarantee services can help you do just that by taking the burden of chasing after bad checks and focusing attention on your business’ needs. For more information on the WHFA endorsed program with Certegy please contact your WHFA Membership Representative at (800) 422-3778.

Contact WHFA at www.WHFA.org or (800) 422-3778.

western retailer

Kaprice Crawford WHFA marketing director

September/October 2010

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Operational Excellence

The True Cost of Home Delivery

W

Kevin Truett Speedy Delivery LLC director of business development

hile retailers know quite a bit about how the activities on their floor affect sales (how many UPs, closing rates, average sale, etc.), many retailers, when asked, are unaware of what they actually spend on deliveries each year. If you’re still offering in-house deliveries, it’s important to know and understand what your true costs are.

Every home furnishings retailer wants to improve their bottom line and increase profitability, however, there’s a significant hole in your wallet that’s eating up your profits with each and every delivery. In all cases, your cost to deliver goes well beyond a tank of gas and the hourly wage of a couple employees.

To begin, you must identify and control your costs in three major areas as it relates to your deliveries: labor costs, operational costs and vehicle costs.

Labor Costs When considering labor costs, many retailers fail to calculate the underside of the iceberg. If a single delivery takes one hour round trip and requires two of your employees at $12 per hour, you just see the tip of the iceberg. However, the underside of the iceberg reveals your direct labor costs which include: FICA, unemployment, health and welfare, vacations, turnover and worker’s compensation insurance.

Take a look at one example of the direct cost for a typical employee: • Wage: $12 / hour • Worker’s compensation insurance: $0.65 (6.5 percent) • Pension plan: $1.00 ($1.00 / hour) • Med/Social Security: $0.77 (7.65 percent) • Personal / Sick time: $0.20 (five days) • Holiday time: $0.20 (five paid holidays) • Vacation time: $0.40 (two week vacation) • Health insurance: $3.34 (monthly cost of $550) 22

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Total direct cost for this employee is $18.56 per hour, based on the above examples. With this common scenario, a one hour delivery now has a direct cost of over $35 in labor expense but it doesn’t stop there. In the case of unexpected absenteeism, there is also the great expense of acquiring temp labor and providing them proper training. Often, retailers overlook the hours their management spends simply managing the entire delivery process and fail to attribute that portion of their salary to delivery cost.

Operational Costs If you’re like most retailers, you’ve kept good records to track your operational cost over the course of a year. But even some of the strongest retailers that keep the best of records fail to tie some of their operational costs to their very source—home deliveries.

Don’t make the common mistake of chalking up these operational costs to the cost of doing business. These are the costs directly associated with home deliveries: routing, service issues, discounts, property damage, product damage and adequate equipment such as dollies, pads, straps, uniforms, etc.

Even route optimization is critical in improving efficiency to lower delivery cost.

Whether you route your deliveries yourself or utilize specialized logistics software, routing requires both skill and time, both of which come with a price.

Also overlooked are service issues and how expensive they are to resolve. From missing product to damaged product, studies show that your typical exchange can cost up to five times the original delivery cost and all too often, these costs exceed the margin or even the total cost of the item. In addition, there are costs associated with unnecessary customer agitation, future lost business and negative word-of-mouth advertising.

And of course, we can’t ignore the customer’s floor we just scratched or the smudge mark on Contact WHFA at www.WHFA.org or (800) 422-3778.

your customer’s brand new mattress they just purchased. In Furniture World magazine, over 400 of their readers participated in an online survey that showed 62 percent of those surveyed stated that damage was their No. 1 delivery issue.

I’m sure your delivery crew does their very best to make every delivery incident free, but should an unfortunate accident take place, this cost adds up and over the course of time should be averaged out and considered part of your direct delivery cost.

Vehicle Costs Years ago, I purchased my first Mercedes Benz and got an incredible deal. After performing much research, taking test drive after test drive and comparing prices at every lot, finally I was the proud owner of the car I had always wanted.

Three months later, I wasn’t so sure I wanted it. I spent $4,000 on repairs to the automatic air ride system and $349 on my first oil change.

Today, the U.S. Energy Information Administration is pricing diesel at $2.90 per gallon. That’s $.36 higher than this time last year. That rarely goes unnoticed and most of us like to think we pay close attention to every

detail. But even after all the research and comparison shopping I did before purchasing my Mercedes, I failed to consider the true cost of even a simple oil change. Now I know, you’re probably not running a fleet of Mercedes, but there are always other delivery vehicle expenses that should be considered part of your direct cost, such as insurance, registration, maintenance, repairs and even depreciation.

Of course, insurance and registration requirements never go away and depreciation is one of the most overlooked vehicle expenses. Like I did with my Mercedes, failing to take even the smallest details into account can cause you to overlook the true costs of your vehicle.

So what’s the solution?

Now that we’ve taken a closer look at our true delivery cost, it’s easy to understand why so many retailers are now contracting their deliveries to a third party delivery company. Many retailers are finding that contracting their deliveries to a third party delivery company allows them to better control their costs, minimize their liabilities and offer superior customer service throughout the entire customer’s experience.

What happens to your labor cost?

When contracting out your deliveries, your labor dollars are allocated to the specific needs so your store and your employees can now focus on productivity and sales. Many third party delivery companies will even promote your brand and do an excellent job

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We bring customers to your door

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representing your store; however, you aren’t liable to pay their wages, taxes or benefits. Employee absenteeism will no longer affect you, and you don’t have to worry about vacation pay, sick pay or holiday pay; you’re not going to pay for that either.

What about operational cost?

Professional delivery companies are experts at what they do. They are trained to carefully carry out each delivery with the utmost care, keeping your product in perfect shape. They

employ the latest in route optimization keeping your deliveries efficient while saving you valuable time and resources.

Once your product is on the truck, the liability then falls on the carrier.

A smudge, a rip or any other damage found by the customer is now repaired or replaced by your delivery company, saving you thousands in operational expenses and any potential repairs to damaged property.

What about vehicle cost?

Most top rated delivery companies operate late model vehicles that reflect the standard of excellence their clients require. Imagine how nice it would be if you didn’t have to worry about insurance, registration, DOT requirements or breakdowns.

When utilizing a third party delivery company, those liabilities fall on them and in the case of any breakdowns, they provide a replacement vehicle immediately at no cost to you. Retailers that outsource their deliveries enjoy worry free vehicles they can count on, they never have to purchase another vehicle again, or worry about their depreciation. Your third party delivery company is taking care of the delivery trucks that service you all year long, but you’re only paying for deliveries when you need them.

So, when calculating the true cost of your deliveries, don’t just look at the tip of the iceberg but also your costs that float just below the surface and often times out of sight. The true cost of home delivery consumes your time and includes unnecessary headaches.

Remember the cost of a simple oil change and don’t let the cost of small details slip away from you. Consider hiring a third party delivery company and leave deliveries to the delivery experts so your employees can focus on what they do best—sell furniture!

Kevin Truett has over 10 years of business management experience and joins the team of executives at Speedy Delivery LLC with a combined 50 years of management experience in the home furnishings industry. Over the past 20 years, he has coached hundreds of leaders across the country and spent nearly seven years as a project manager consultant to Wells Fargo Bank. He now serves as the director of business development at Speedy Delivery LLC and resides in the state of Oregon with his wife and three children. For more information on Speedy Delivery, visit www.speedydeliveryllc.com.

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Contact WHFA at www.WHFA.org or (800) 422-3778.

Celebrating 20 Years

Celebrating 20 years of Home Furnishings Reporting Twenty years ago, Western Retailer magazine (then known as Western Reporter) blossomed from being a small newsletter, to a full magazine. Join us throughout this year as we look back at the last 20 years with stories, past articles and fun.

and one a wedding, three children rs, yea 12 A HF W at ng I started worki time. officially say it’s been a life home ownership ago. I can ows was iation in 1998, Don Mead oc ass the at ng rki wo gan When I be ity to produce the ger. It was my responsibil the member the communications mana bo ployee hand oks, write em d an ory ect dir hip ers ng with WHFA memb ine, update the website alo gaz ma ter por Re rn ste We ly with profile for the the job was working direct their of rt pa te ori fav y M s. tie d tell many other du ir employee handbooks an the ild bu to hip ers mb hings industry the WHFA me lot about the home furnis a d rne lea I . ine gaz ma stories for the s industry was full of Melissa Robinson time. I also found that thi of nt ou am rt r aile sho a Ret n in businesses. ster We t heart and soul into their publisher/designer wonderful people who pu a joined the er I started, and Chris Tejed but together we 1998-present Don left a few months aft f, sel my d ris an team consisted of only Ch the e, tim the ine production, At gaz m. ma n tea s tha round more communication ckg ba ng tisi ver ad an m producing came fro worked on designing and ver accomplished a lot. Chris ne d ha I s, ion cat bli pu d ourselves to create rned a lot and really pushe lea and although I knew how we y, ntl Joi . ard bo on limits. A little coming magazine and stretch our a magazine prior to Chris the n sig de uld wo we r he . Toget the magazine in to build a quality magazine the production of the magazine—we actually split Sometimes you out n the back (or vice-versa). insight to how we worked sig de uld wo I d an lf, ha front mless. half! Chris would design the styles; however, we always tried to make it look sea n sig de nt ere diff nts, we did a could tell two et. Due to budget constrai dg bu the s wa e om erc ov ant that we to Another obstacle we had lor when we could. This me it was a co g din ad , ite wh d an ck in bla w, but majority of the magazine d I can laugh about it no an ris Ch ts. ou lay r ou th t allow us to ve wi e sparse budget also did no really needed to be creati Th ys. da se tho in ck ba there would be nights lot of hard work and long part books out! Of course, cli the get to d ha we So articles. The ages. snapshots to place in their purchase high-quality im th wi us ply sup uld wo rs write that helped earn smiles on our faces when the love for the magazine s wa it d an s, ard aw d an nors magazine earned high ho s. y as publisher, I those award the Western Retailer. Toda of r she bli pu to ted mo d printers, as well After Chris left, I was pro ly with the advertisers an ect dir rk wo et; dg bu in ses photos, Editor keep the magazine expen ows us to purchase stock all w no et dg bu r ou h ug , worthwhile, tho as design the magazine. Al rk our magic every month to produce a high-quality ll wo r hard work!

Melissa Dressler and I sti ders. I hope you enjoy ou rea r ou for ine gaz ma al o bed and the house education as we tuck our children int d ste au exh are I d an nd ry minute of Every night, my husba ing strong, and I enjoy eve go ll sti is ine gaz ma the t might need a paint job, bu producing it for you!

Melissa Robinson

Contact WHFA at www.WHFA.org or (800) 422-3778.

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Buyers made the Retailer Resource Center (RRC) a mustsee stop during Market week. Whether they were starting their day with the buyers’ breakfast, visiting new business service providers, attending educational sessions or enjoying an Astro Pop, attendees once again found the RRC as the place for all of their non-buying Market needs.

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Contact WHFA at www.WHFA.org or (800) 422-3778.

Next Generation-NOW hosted its kick-off party during August’s Las Vegas Market and saw over 75 future industry leaders in attendance. The party took place in the World Market Center’s One Six Club, and the group enjoyed networking while taking in views of Las Vegas, and enjoying food and drinks.

While the group of future leaders met, they also discussed future endeavors the group would be making. These endeavors include the use of social networking platforms, educational events, mentoring and another party during the October High Point Market. For more information on Next Generation-NOW visit www.whfa.org or call (800) 422-3778.

Major Sponsor:

Contributing Sponsors: Aspenhome, Associated Volume Buyers, Emerald Home Furnishings, Lane Home Furnishings, La Crosse, Pacific Furniture Dealers, Simmons, Western Home Furnishings Association

Contact WHFA at www.WHFA.org or (800) 422-3778.

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It’s All About Sales & Marketing

Reaching Today’s Shoppers:

Beyond the Internet to Integration

R

etailers are up against a number of challenges. Chief among them are the shoppers who drove sales in boom times have scaled back in the recession, and up-and-coming consumers don’t respond to timetested advertising strategies like their predecessors did. In fact, it’s difficult to pinpoint exactly how to reach customers today.

Up-and-coming consumers have come of age with the Internet and have unique expectations when it comes to shopping. For instance, they comparisonshop online from the comfort of a chair before setting foot in a store. They spend little time reading newspapers in print; instead, they turn to the Internet for news, information, entertainment and social connections.

Today’s sophisticated shoppers demand a seamless experience from browsing to purchasing, whether it’s online or in the store. Retailers need a well integrated marketing program that marries an online presence with everything happening offline. Such a program means that a retailer’s website is dynamic and reflects the physical store and merchandising as well as any promotions, advertising or collateral in use. It also requires reaching out to consumers through the tools and applications that they regularly use.

Three Key Steps Toward Integration Marketing dollars can be scarce, particularly in a recession, so it’s important to make sure that money is well spent. While some retailers may not have the resources or in-house capabilities to revamp an entire marketing program from scratch, some small steps can get the ball rolling and move toward a more integrated—and effective—strategy.

Shirley Griffiths Banner Marketing vice president of sales

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1. Maintain a Website A website is one of the best ways to reach customers, communicate your brand and draw shoppers to your physical store location. For many shoppers, a webpage is the new store front.

According to a 2010 social shopping study, PowerReviews and the e-tailing group found that 20 percent of online shoppers start with a brand’s website and 18 percent with a retailer’s website.

If the digital “store front” lacks personality and up-to-date information, however, it’s likely that a

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customer will move on to another brand or shop.

Maintaining a website calls for more than simply having a Web address with basic store information. Keep your site current with merchandise that mirrors what’s available in the store, and update the content often to communicate promotions and special offers that can draw customers in. Remember, if customers are searching for a particular item, it’s likely that they’ve already compared products and prices online. Retailers that stand out with unique incentives can turn a website visit into a store visit and sale.

Also, a well functioning website creates an important opportunity to engage consumers and capture sales leads. By encouraging shoppers to register on your website, you can build a database of customers interested in your products and brand. You may want to have website visitors register for special offers, contest entries, regular news updates or sneak peeks at new collections. With captured names and email addresses, marketing efforts can be expanded

Contact WHFA at www.WHFA.org or (800) 422-3778.

as well as extremely targeted at little additional cost.

2. Use Traditional Advertising Strategically Consumers in the market for bigticket items for the home still look at direct mail, circulars and advertisements.

However, such pieces of advertising can only tell part of a story. Use these traditional forms of advertising to reinforce what your company is doing online and at the retail location. Simply adding a website address to each piece of advertising can increase traffic on your site and in your store.

To further support online efforts, consider using traditional ads to facilitate promotions specifically designed to drive consumers to your website. For example, circulars can direct shoppers to go online to register in order to print out a coupon for a one-time discount. Also, use traditional ads to remind customers to visit the website for details on special promotions as well as the latest information on merchandise, upcoming events and other news.

Online reports also can provide insight to how shoppers are arriving at your digital storefront. Reports can specify if customers are coming directly to a store’s site by typing in its address, being directed by a search engine like Google, or arriving by way of a referral site like Facebook. Knowing how customers find a particular store can help assess the effectiveness of a marketing program as well as help target future marketing. continued on page 30

A new era of stability and reliability.

3. Track and Measure Results A crucial element in any marketing strategy is to track and measure results.

Doing so allows retailers to see which aspects of a program are delivering customers and sales, and which elements aren’t. This feedback helps retailers adjust their tactics and possibly reallocate valuable marketing dollars.

Tracking tools like top products searched can provide insight to current consumer interests, while online reports, often available through your website provider, can provide a wealth of sitespecific information. For instance, reports typically include site traffic data, which tells retailers how many visitors are accessing their website. By comparing data to time periods in which certain ad campaigns or promotions were initiated, retailers can get a sense of consumer response simply by checking the level of activity online. In addition, monitoring the clicks to promotional offers provides a sense of how attractive consumers view your offers.

Contact WHFA at www.WHFA.org or (800) 422-3778.

Together, we can offer you more.

Bank of America and First Data have joined forces to create Bank of America Merchant Services — offering you an even higher level of stability and reliability. Take advantage of our combined power for greater efficiencies, more options, and peace of mind with your payment processing, all focused on your convenience and success.

est.1944

© 2010 Banc of America Merchant Services, LLC. All rights reserved. All trademarks, service marks and trade names referenced in this material are the property of and licensed by their respective owners.

Merchant Services are provided by Bank of America, N.A. and its representative Banc of America Merchant Services, LLC. Banc of America Merchant Services, LLC is not a bank, does not offer bank deposits, and its services are not guaranteed or insured by the FDIC or any other governmental agency.

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continued from page 29

Developing More Sophisticated Strategies For retailers who are very well versed in digital media and the opportunities presented therein, it may be time to consider more sophisticated strategies that branch out online and really target customers where they spend their time.

Social media, such as Twitter and Facebook, allow consumers to spread the word about their own product favorites and experiences. In one study by research firm Chadwick Martin Bailey, it was reported that 33 percent of Facebook users had become fans of brands on the network. Retailers can establish their own Facebook pages, encourage customers to become fans, and use the pages for news and product updates, all while keeping the look and tone of content similar to other marketing materials to maintain an integrated approach.

Other marketing tactics, such as search engines, are also getting more targeted and effective. In its social shopping study, PowerReviews and the e-tailing group found that 57 percent of online buyers started with a search engine. Certain techniques—such as enhanced content—can help retailers propel their sites to the top of search engine results, and tools like Google Analytics and customized dashboards can help in measuring and refining efforts.

Finally, as more consumers adopt Web-enabled phones, mobile marketing will be another avenue that retailers can explore. In an April 2010 survey, PriceGrabber. com reported that 35 percent of consumers with Webenabled mobile phones used them to engage in some

sort of shopping behavior: browsing, researching or purchasing. Given expectations for growth in this area, a strong online presence will be even more important to driving sales.

Integration: Key to Sales Growth Today’s consumers have a wealth of information at their fingertips, thanks to an explosion of technological devices and applications in recent years. Although shoppers have become harder to reach by traditional means, an integrated approach to marketing can help retailers make valuable connections. By intertwining traditional and new media strategies—and ensuring that each supports the other—retailers can increase not only website traffic, but store traffic and sales.

Shirley Griffiths is the vice president of sales at Banner Marketing, which helps business grow through an integrated marketing approach. She can be reached at shirleyg@bannerretail.com or (800) 843-9271.

Learn more about the WHFA partnership program with Banner Marketing, contact your WHFA Membership rep at (800) 422-3778.

Advertising Inquiries & Rates

Aspenhome............................................................. 9..................................... (602) 442-5600

Contact: Cindi Williams, WHFA Advertising Manager, 500 Giuseppe Court, Ste. 6, Roseville, CA 95678.

(916) 960-0277 E-mail: cwilliams@whfa.org. Subscriptions: $35.00/ year, USA. Published by Western Home Furnishings Association, a National Home Furnishings Association affiliate, in the interests of retail home furnishings dealers, manufacturers, d ­ istributors and salespeople.

Distributed to home furnishings retailers handling f­ urniture, ­accessories, bedding, floor coverings and specialty home furnishings in ­Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming.

Mailing list compiled by WHFA. Official publication of Western Home Furnishings Association, which is ­responsible for editorial content and advertising policy.

The views expressed in articles appearing in Western Retailer are not necessarily those of Western Home F ­ urnishings A ­ ssociation.

Western Retailer magazine is copyrighted by Western Home Furnishings Association. September/October 2010, all rights reserved.

Bank of America..................................................... 29.................................... (800) 422-3778

Western Retailer:

Advertisers Index Please support the advertisers that support your magazine.

Advertiser

Page

Phone/Website

Banner Marketing.................................................. 23.................................... (800) 422-3778 Emerald Home Furnishings................................... 2..................................... (800) 685-6646 Furniture Wizard.................................................... 17.................................... (619) 869-7200 GE Money................................................................ 7..................................... (866) 209-4457 High Point Market..............................................13 & 15................................ (800) 874-6492 iFurniture.net.......................................................... 24............................www. iFurniture.net Micro D............................................................ Back cover............................. (800) 964-3876 PROFITsystems, Inc............................................4 & 31................................. (866) 453-5010

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Read by furniture retailers in the West

Distribution: Western Retailer is read by more than 10,000 home furnishings retail store personnel handling furniture, accessories, bedding, floorc overings and specialty home furnishings in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming.

Marketing Philosophy: Western Retailer focuses on business market trends in the furniture, bedding, flooring and accessories industry. It highlights sales, marketing, operations, showroom design, trends, succession planning and industry events.

Contact WHFA at www.WHFA.org or (800) 422-3778.

If your business was in

would it be chosen last for the team?

Winning in the retail arena takes more than just the right product at the right price. In this fiercely competitive world, if a business does not change and evolve to meet new needs and demands, they will be chosen last in the most important game of all – the consumer game. Winning businesses are winners because they do things differently. They have fabulous customer service and follow up, and their business processes are designed to get things done efficiently. They just make it easier to shop at their store.

PROFITsystems has the tools to help you go from being a bench warmer to being the most valuable player. Where can your game be improved?

Our Total Retail Success System can help you improve your game where you need it most.

Make your business an MVP. Visit us at:

www.profitsystems.com 800.888.5565 “Using PROFITprofessional, we learned to manage our inventory and our profitability has improved substantially. We are able to stay ahead of our competition.”

Chuck McMillin McMillin’s Furniture Inc. Yale, MI

Making Retailers More Profitable

Software | Consulting | Advanced Education | Sales Training Performance Groups | Freight Program | e-Commerce | e-Marketing

Come and get it.

It’s not just about being online. It’s about inspiring and engaging the consumer.

That’s what MicroD-powered websites do. In fact, over 85% of the top 100 brands and retailers use MicroD to: • Enable consumers to configure thousands of products online.

• Achieve higher search rankings — store & products.

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To get the full picture, call 800-964-3876. Or email sales@microdinc.com

www.microdinc.com Online marketing solutions for the furniture industry.

Please visit us at High Point Market, RRC booth #2, Oct 16 - 21, 2010.