The Publication of the Home Furnishings Association
A lean warehouse can pad your bottom line
HFA member Shane Spiller â€” Spiller Furniture, Tuscaloosa, Alabama
High Point Market Issue!
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O P E N D A I LY 8 A M - 8 P M S H O P A D AY E A R LY â€” F R I D AY, O C T O B E R 2 1
Your vision. Our passion.
Lean inventory. 10 Avoiding the third-gen demise. 30
Beefing up your store’s Wi-Fi. 34
Leveraging Twitter. 46 New OT rules. 56
10 WHAT’S INSIDE 2. 4. 18. 24. 28. 30. 32. 40. 43. 44. 54. 56. 58.
HFA President’s Letter Editor’s Letter Member Profile: Red Door Interiors Product Focus: Upholstery Next Generation: Tom Gadbois Family Matters: Beware the Third Generation Take 2: Tepperman’s HFA@Work: Investing in Education High Point Market: HFA Seminar Schedule Member Benefit: Buying Source Program October Checklist Government Action: New Overtime Rules HFA Community
DEPARTMENTS Cover Story
10. Turning Inventory Sales & Marketing 16. Hold on to Your Customers 46. Tweet Your Next Sale 54. Decoding Your Target Audience Operations 22. 34. 38. 48. 50. 52.
Is Your Store Hitting the High Notes? Upgrading WiFi Help for the Holidays Cloud Financing for Your Store Make Your Next Sales Meeting a Hit Minimize Workplace Hazards RetailerNOWmag.com
OCTOBER | 2016
Haste and rashness are storms and tempests, breaking and wrecking business; but nimbleness is a full, fair wind, blowing it with speed to the haven.
President Jeff Child RC Willey
President-Elect Steve Kidder Vermont Furniture Galleries
Are you making your store an experience?
Vice President Jim Fee Stoney Creek Furniture Secretary/Treasurer Sherry Sheely Sheely’s Furniture
Mary Frye Executive Vice President email@example.com Membership Staff Jana Sutherland Membership Team Leader firstname.lastname@example.org Jordan Boyst email@example.com Sherry Hansen firstname.lastname@example.org Michael Hill email@example.com Dianne Therry firstname.lastname@example.org Kaprice Crawford Director of Education email@example.com Please call 800.422.3778 for membership inquires.
uring a visit with our son and daughter-in-law in the San Francisco Bay area we decided to go out to dinner. Searching on our phones we found a restaurant we wanted to try. Within five minutes our “cab” is there to pick us up and soon we are at the restaurant. What, no phone call? No hailing? No watching a meter? No money passing hands? Welcome to the concierge economy. No wonder taxi companies hate Uber. It’s easier, faster, cheaper and more pleasant. This is the new world we consumers are living in. The expectation of on-demand products and services is driven by the use of smartphones and our digital lifestyle. And you don’t need to be wealthy to have these conveniences. I recently heard some good news for brick-and-mortar retailers. There’s a small, slow shift by consumers back to the retail store. The research I saw said if an item is online or in a nearby store, 71 percent of respondents will buy the product in the store (that’s a 6 percent increase over last year). Consumers want to touch and feel the product, they want professional advice, they want a positive experience. Hence, we see Amazon and other online retailers opening brick-and-mortar stores. This is great news, but it comes with a caveat; the consumer has much different expectations than they did even five years ago, and we must be willing to change with consumer behavior. Companies like Uber have set a high bar for customer experience as they provide affordable help in real time. This concierge-like service for the masses is what we need to provide in our stores. We must provide prompt and personalized service, helpful recommendations and a quick and enjoyable checkout system. How do we do this? I wish I knew the answer but using technology to find our consumers preferences ahead of time or letting them book an appointment with the retailer are a couple of things that come to mind. Because only 27 percent of consumers feel that traditional brands (many of us) are trying to provide VIP-like service to everyday customers it will be easy to exceed their expectations. And exceeding expectations is how we create loyal customers. I know we have a long way to go in adapting to this concierge economy but that’s what makes retail fun and exciting. I hope you all have a great fall selling season.
Chairman Marty Cramer Cramer’s Home Furnishings
Sharron Bradley Chief Executive Officer firstname.lastname@example.org
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Jeff Child email@example.com
OCTOBER | 2016
ENGAGE FURNITURE SHOPPERS
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The man who follows the crowd will never be followed by a crowd. —Richard S. Donnell
Dan McCann Publisher email@example.com Lisa Casinger Editorial Director firstname.lastname@example.org
It’s time for your business to stand out from the crowd
Robert Bell Editor email@example.com Tim Timmons Art Director firstname.lastname@example.org Lynn Orr Advertising Sales Lorr@myhfa.org
Robert Bell Editor, RetailerNOW
Cassie Wardlow Digital Marketing Coordinator email@example.com Jordan Boyst Copy Editor firstname.lastname@example.org RETAIL ADVISORY TEAM Carol Bell Contents Interiors Tucson, Ariz. Travis Garrish Forma Furniture Fort Collins, Colo. Rick Howard Sklar Furnishings Boca Raton, Fla. Mike Luna Pedigo’s Furniture Livingston, Texas Andrew Tepperman Tepperman’s Windsor, Ontario This Month’s Contributors
Mayda Barsumyan, Janelle Bieler, Brooke Chaplan, Kevin Doran, Ginny Gaylor, Jeff Giagnocavo, Marty Grosse, David McMahon, Gerry Morris, Annie Pilon, Wayne Rivers, Martin Roberts, and Amitesh Sinha.
f you’re reading this, it can only mean one of two things: 1) You’re my mother, or 2) You’re still in business. If the latter, congratulations! Think of all the adversity you’ve faced just to read this letter. You fought through the 2008 recession and an everincreasing threat from big boxes. You’ve put in 60-plus-hour work weeks and spent many a weekend at your second home (aka your store). You’re probably feeling pretty good to have made it this far. But where will your store be in five years? Ten years? Fifteen? There are thousands of home furnishings stores in this country, and sometimes I think it’s impossible to tell them apart. “We’re Acme Home Furnishings. Family owned and operated for four generations. Our great grandfather started the business 83 years ago. Nothing’s changed in those 83 years. We still carry the finest selection, best customer service and greatest value in the area.” Sound familiar? I thought so. Ask yourself this question: Do today’s customers care how old you are? Maybe your loyal ones do, but, like newspaper readers, they’re a dying breed. What are you doing to attract the next generation of loyal customers? Everyone claims great value and excellent customer service. What are you doing to stand out from the crowd? Here’s my challenge for you: For one week, be the customer and define yourself from their perspective. Watch your staff from afar. Mystery-shop your store. Stand for something—anything. As long as it’s not what every other home furnishings store stands for. And remember, your store includes your online presence. Does your website look like every other home furnishings site? Now’s the time to separate yourself from the herd and leap ahead of your competitors. We hope this issue of RetailerNOW helps inspire you to do just that.
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Subscription: $70/year RetailerNOW, ISSN# 2166-5249, is published monthly (except March and December) by the North American Home Furnishings Association, 500 Giuseppe Court, Ste. 6, Roseville, CA 95678. POSTMASTER: Address changes to: RetailerNOW, NAHFA, 500 Giuseppe Court, Ste. 6, Roseville CA 95678. If you would like to stop receiving RetailerNOW, please send an email to RNOWunsubscribe@myhfa.org.
© 2016 North American Home Furnishings Association. Published by the North American Home Furnishings Association. Material herein may not be reproduced, copied or reprinted without prior written consent of the publisher. Acceptance of advertising or indication of sponsorship does not imply endorsement of publisher or the North American Home Furnishings Association. The views expressed in this publication may not reflect those of the publisher, editor or the North American Home Furnishings Association, and North American Retail Services Corp. Content herein is for general information only; readers are encouraged to consult their own attorney, accountant, tax expert and other professionals for specific advice before taking any action.
OCTOBER | 2016
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Get Real: Your customers know when you’re faxing it in In today’s digital world, where everyone is vying for attention, consumers are increasingly sensitive to marketingspeak and can tell when you’re acting. How can retailers stay true to their brand and make genuine connections with customers? We caught up with the NRF’s Retail Playbooks channel on popular user-generated blog Medium to curate some great examples of retailers and deal sites like Travelocity that use reviews, user-generated content, supply chain transparency and other tactics to demonstrate the authenticity of their brand and make online shoppers feel more confident about hitting the “buy” button. Share, don’t sell Your customers know when you’re trying to sell them on something, and that’s not a good feeling for them. A New York Times study on viral video found that viewers are five times more likely to share a video when it evokes feelings of awe and inspiration. Reviews, reviews, reviews. And more reviews No one can dispute the importance of Amazon.com’s reviews on the site’s success. Customers innately desire to follow the crowd, and reviews are one way in which influencers drive business to your brand via word of mouth. “People like us” Exclusive apparel shop ModCloth features photos of “people like us” wearing its vintage-style products. User-
generated content includes measurements such as height, waist and bra size to help other consumers feel more comfortable about purchasing. Social proof No amount of paid marketing can match what photos of your products on social media are worth to your consumer audience and their social circles. That’s why Travelocity shows your Facebook friends’ activity on individual review pages, and Sur la Table includes badges on individual product pages stating which items are most popular in cooking classes.
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OCTOBER | 2016
HFACHAT Why are manufacturers reps important to your business?
Hillside Furniture, Bloomfield Hills, Mich.
S & S Interiors, Panama City Beach, Fla.
Furniture Divano, San Diego, Calif.
Reps are important when we’re dealing with merchandise from far across the world and when we’re dealing with damage upon arrival. Whether it was the responsibility of the manufacturer based on how it was packed or it was the responsibility of the freight company, the reps can help us get this replacement or claim taken care of as an unbiased liaison between the retailer and the manufacturer.
Sales reps are important because they can keep us informed on updates of their product lines and give detailed explanations, and answer questions we have about the product. They also share activity and insight to the current trends of business gleaned from all of their sources, which sometimes help us to put into perspective how our little section of the business is performing in relationship to others.
Reps are usually up to date on product information. When employees find themselves in a situation where they can’t answer a customer’s question, a rep is just a phone call away, and they will, for sure, know the answer to whatever question might arise. Also, a good rep will know how to divide their territory, not to create a more than friendly competition between retailers.
AUGUST | 2016
JOHNSTON CASUALS | Showroom: 306
EQ3 | Showroom: 400
CASANA FURNITURE | Showroom: 400
Control your inventory before it controls you The faster you turn your inventory, the more you pad your bottom line. By David McMahon
OCTOBER | 2016
After poring over the numbers to his storeâ€™s HFA Retailer Performance Report, Shane Spiller realized that inventory turns at Spiller Furniture in Tuscaloosa, Ala., was a metric his organization needed to focus on.
OCTOBER | 2016
ERTAIN THINGS ARE TRUE ABOUT CHAMpion business people: They are constantly looking for ways to improve themselves. They can decide on a strategy. They can prioritize and execute tactical
A store with sales of
a 48-percent gross margin and an average inventory of
actions. Shane Spiller, the Home Furnishings Association’s 2015 Retailer of the Year, found an area where his business could improve. After poring over the numbers to his store’s HFA Retailer Performance Report, he realized that inventory turns at Spiller Furniture in Tuscaloosa, Ala., was a metric his organization needs to focus on. “I was fairly knowledgeable about turning your inventory, but I didn’t know how I compared to my peers,” says Spiller. “(The report) really opened my eyes to where we stood, which wasn’t good.” These days Spiller knows the importance of inventory turns. The key performance indicator is the result of maximizing sales while minimizing inventory held. Inventory turns is the number of times a business can sell its cost of inventory in a year. As Spiller puts it, “Once the factory is built, it’s all about how many 2x4s you can run through. We need to be moving more 2x4s.” Indeed, if you turn, or sell, your inventory faster, you generate faster cash flow—cash comes in quicker and goes out slower. This is because merchandise is held for less time, enabling a smaller inventory investment and lower associated carrying costs. We’re going to talk about how you can use turns to improve your business situation, but before we do you need to be familiar with some formulas involving turns (inventory is always at landed cost):
$2 million sells through its inventory roughly every 140 days. If that store increased sales by 10 percent and dropped its average inventory to $1.9 million, it would take only to turn its inventory.
Turns = Annual Cost of Goods Sold (COGS)/Average Inventory Carried 2. Annual Cost of Goods Sold = Merchandise Sales x (100% - Gross Margin %), or Sales - Gross Margin Dollars, or Beginning Inventory + Purchases - Ending Inventory 3. Average Inventory = (Inventory at Start of Period Inventory at End of Period)/2, or average over a series of periods 4. Days to Sell Inventory = 365/Turns To illustrate, take an operation that had annual merchandise sales of $10 million, 48 percent gross margin and an average inventory of $2 million. This operation would turn its average inventory carried 2.6 times during a year ($5.2 million COGS/$2 million average inventory). It would typically take the business 140 days to sell through its inventory. Now suppose they implemented actions that increase sales by 10 percent and dropped average inventory to $1.9 million. Their turns would jump to 3.01 times ($5.72 million COGS/$1.9 average inventory). It would now take them only 121 days to sell though their inventory.
OCTOBER | 2016
By the way, an operation in the top 20 percent of the industry, according to the 2015 HFA Retail Performance Report, would sell through its inventory in 100 days or fewer (365/3.64 turns). Imagine if one of those operations had three-month payment terms and it took them 90 days to sell through? It would have the cost of its inventory fully financed by its vendors! You can see why it’s well worth it to set business strategy around maximizing turns. “It’s all about how to buy, when to buy and what to buy,” says Spiller.
Strategy The strategy is high level. Turns can be used as a driver of strategic direction. To illustrate this, look at a store that produced 3.01 turns at $11 million in sales. The flow of their inventory is very average in their industry. Their cash flow may be average, as well, since liquidity is a symptom of turns. After recognizing this, the
Strategies for improving your store’s turns Strategy/Responsibility
Increase turns to 3.3 within one year. Operations manager with owner.
• Constantly monitor turn formulas • Discuss results for previous 12 months in the weekly operations meeting
• Cost of goods for past 12 months to date/average inventory for the period
Improve liquidity and cash flow. CFO with owner/group.
• Discuss results of turns impact on cash with ownership group on monthly basis
• Quick ratio = (current assets-inventory)/ current liabilities
Leaner merchandise flow. Inventory manager and buyer.
• Review vendors and categories with respect to turns • Buy only from areas of strength • Mark down areas of weakness • Increase speed of markdowns • Review progress in monthly merchandise meeting
• Turns, sales and GMROI in summary by vendor and by category • Amount of inventory in markdown status
Faster distribution of merchandise to customers and showrooms. Warehouse manager and merchandiser.
• Use systematic reporting and notifications to schedule deliveries quickly • Maximize use of delivery resources • Ensure over 95 percent of completed sales are scheduled for delivery or pick-up • Ensure 99 percent of merchandise available is displayed in showrooms
• Dollar value per truck/day • Percentage of completed sales orders scheduled • Percentage of available inventory displayed
Grow top line volume
• Ensure number of sales people are adequate for customer traffic • Increase the minimum standard for revenue per guest • Require minimum number of house call sales/month • Discuss above in weekly operations and sales meetings
• Monthly traffic/sales person • Sales/customer visits/sales person: month to date • Number of house call sales/sales person/ month
store’s management team could decide on using these metrics as a driver for their strategic direction. They could decide to split the difference between the top 20 percent and what they’re currently doing. They could create a strategy around achieving 3.3 turns. It would take the company 110 days to sell their inventory—10 days faster. An example of their strategic plan may include: • Achieving goal of increasing turns to 3.3 within one year. Monitor progress toward strategic goals throughout all departments. • Improving liquidity/cash flow as turns increase. • Achieving a leaner merchandise flow and better vendor and category mix.
• Committing to faster distribution to reduce time held and not delivered. • Grow top-line volume through sales force management.
Tactics You can see the strategic points involve several departments. Purchasing, management of inventory, sales management, warehouse distribution and accounting are all involved. Everyone needs to be on the same page to get results faster. They all need to work together toward the common goal of getting to 3.3 turns. And that’s where tactics come in. Tactics are operational. They are the daily actions people in the organization execute to move toward achieving the overall strategic goals.
OCTOBER | 2016
Marking down slower inventory faster often leads to higher sales and profit growth which increases turns. If you can sell a “dog” quicker, there’s a slot that becomes open sooner. This allows faster testing of new product in the freed-up slot. Some of these new products will hit big and produce nice revenue. A fast floor opens the door
for sales growth.
The problem a lot of businesses struggle with is not having solid actions or measurements and failing to assign responsibility. Strategy is usually not the issue—execution of the daily tactics and constant reviewing are often to blame for average results. If an organization starts with a simple documented list like I outlined here and follows through, it will have a significantly better chance of achieving high-level targets. Turns is just one area of your business you may wish to focus on. It’s a great one because it’s a strategic metric that forces many people throughout the organization to work in sync. Other good strategic metrics are gross margin return on investment (GMROI), inventory to sales percentage and net income. You should track all these numbers and more together. Oftentimes the tactics to improve one metric will improve others. For example, GMROI is very much like turns, except GMROI is the turn of margin dollars over inventory rather than the turn of cost dollars over inventory (GM/Inventory). In fact, if your gross margin was 50 percent, your turns and your GMROI would be exactly the same. If you reduced inventory and kept sales the same, both metrics would grow by the same amount. The difference would come if you were able to grow your gross margin percentage above 50 percent. GMROI would actually then outpace turns because you would surpass the threshold where you get more margin then you pay in landed merchandise cost. This is the area in which most independent retailers should seek to perform. With a metric like inventory to sales percentage, generally the lower, the better. It is just using sales compared to inventory instead of cost and flipping the equation upside down (inventory/ sales). So if you are growing turns, you are likely decreasing your
inventory to sales ratio. And the tactics that I mentioned would improve both ratios. Lastly, with tracking the metric net income, the tactics for increasing turns will positively affect increased profitability, as well. With sales growth—provided margins do not fall and expenses do not rise—profit and turns grow. With less inventory carried on average, costs drop, and that increases profits. Costs drop because resources are used more efficiently and carrying costs are reduced in areas such as warehousing, delivery, damages, insurance and labor. In addition, a strategy to increase turns by marking slower inventory down faster often leads to higher sales and profit growth. This is because if you can sell a “dog” item quicker, there is a slot that becomes open sooner. This, in turn, enables faster testing of new product in the freed-up slot. Some of these new products will hit big and produce nice revenue. A fast floor opens the door for sales growth. The bottom line with using turns or any other performance metric as a business success driver is that there needs to be a strategy. There need to be tactics. There needs to be constant measurement. There needs to be people held responsible to prioritize and execute. David McMahon is a management consultant and performance group leader and event speaker with PROFITsystems, a HighJump product. He is a certified supply chain professional, enrolled agent and certified management accountant. David is also the current author of the HFA Retail Performance Report. He can be reached at firstname.lastname@example.org.
Learn more about managing inventory and increasing profitability from industry expert David McMahon’s video, “The Secrets of Inventory Management in Home Goods Retail.” View it at tinyurl.com/zzf96ho
OCTOBER | 2016
Working forward to building customer loyalty, one room at a time. Every furniture retailer is different, but all share a common ambition: to succeed. And it starts by serving customers better. Synchrony Financial delivers payment solutions that help drive traffic, increase average transaction size, and build repeat business. Whatever youâ€™re working forward to, we can help make it happen. Engage with us at synchronybusiness.com/furniture or 1-855-973-3552.
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Hold on to your customers (while attracting new ones)
Smart retailers engage customers with all types of media. It’s time to get smart. By Jeff Giagnocavo
successful retailer makes a sale to create a customer. A frustrated retailer gets a customer to make a sale. Which bucket do you fall into? At the risk of receiving hate mail, I’d venture to say most fall into the latter, getting customers simply to make sales. I can appreciate that most retailers are left wondering what they should do to create customers as a result of a sale. There’s a ton of things to do on a daily basis as a business owner. But, for the purposes of this article I’m going to focus on the number one task you should be focused on daily and that is the art of customer acquisition and long-term engagement. Recently this issue of acquisition and engagement was brought to my attention as a rude awakening that even with all I do to help my clients acquire life-long customers, there are
OCTOBER | 2016
always little things looking to chip away at this relationship. I was in my warehouse and found an updated vendor warranty registration card. What caught my eye was this vendor was giving away a free pillow, valued at $79, when the warranty was completed online by the customer. Now most might think this is a benign gesture of goodwill, but it’s not. This vendor is looking to harvest your customer for future sales. There’s no doubt in my mind that soon after my customers register their mattress they begin receiving marketing messages directly from this vendor. Much in the same the way they (the vendor) are going directly online with a mattress in a box and offering retailers, who have long supported them, a paltry affiliate commission. Mind you this is the same commission amount offered to most any Johnnycome-lately blogger in his bedroom on YouTube.
The reality is, this is a smart move. Most retailers will not like this in the short term, but in the long term there is payoff for all, if and when vendors share in the customer engagement spoils by directing the customer back to your store. Sadly, retailers have not made, for the most part, an investment in their business to continue a dialog after making sales. Therefore, most retailers are in the hazardous spiral of spending advertising dollars on new customers over and over in order to sustain their business. New customers and spending advertising money are the sole lifeline for success. It’s a perilous place to be in our retail world as it stands today. Meanwhile, an entire multi-billion-dollar industry has grown up in the last decade called inbound marketing. You may be more familiar with terms like email marketing, CRMs or auto responders. Those are all tools of a solid inbound marketing program and system. Your vendors are large, well-heeled companies and have come to the realization that they must do the heavy lifting of maintaining their brand with their customers, which you created for them with your blood sweat and tears. Most all major furniture and mattress brands have embraced inbound marketing and are actively engaging your customer that once thought of only you for their purchases. It’s not that this is a malicious movement, but it’s one born out of necessity. Brands like West Elm, Casper, Tempur-Pedic, Restoration Hardware and Z Gallerie have engaged the consumer directly and have done a fantastic job of building their brand as result of their effective marketing. Back to the bucket you are either swimming in, full of profit, or drowning in. Here are some smart ways to keep that customer yours for the long term so you can begin making more life-long customers from everyday sales. Smart retailers will look to engage their potential or current customers with a plethora of media they control. First and foremost is by way of an email list. You should absolutely be collecting emails, always. You should be sending engaging content emails sharing success stories of happy customers, case studies, happy sleeper stories and how you help your local community. Put your sales messages in the P.S. line—beyond the subject line the P.S. line is the second most looked at piece of email real estate. Second, you need an engaging social media presence. Remember to keep it 80 percent PBS (content) and 20 percent QVC (sales message). Remember it’s not social media if it’s 100 percent sales messages, that’s advertising and largely unwelcome. You don’t like it. What makes you think others do? Contests, trivia, cute pictures, relevant local stories and engaging product stories are most successful here. Third is video. YouTube is poised to be the number one search engine in the world by the end of the year. My 12-year-
old son searches for everything on YouTube. He and most of his generation are visual learners. Most every other generation has or is beginning to make this shift. This is a great thing as furniture and mattresses are visual items, chock full of fashion and visual impact that are easily discussed and displayed using video as a medium. Your smartphone has a wonderful camera in it. The key to good video is audio quality and picture quality. Shoot in landscape mode, use a tripod for stability, a Bluetooth remote for easy wireless recording start and stop, and pick up a Saramonic Smartmixer for improved audio. For $220 you have a great quality video you can produce on demand by yourself over and over. Start getting more out of you phone. Facebook Live adds a new dimension combining both video and social for a one-two punch. Use the knowledge you’ve curated over the years and discuss frequently asked questions; more importantly, take to video to share with your viewers the questions they should ask when buying furniture and mattresses. The fourth component of this circles back to where we began and where your vendors are already going. Today more than ever you simply must have a plan to properly manage all of this. This is important: You need complex, well thought out systems for every customer interaction, and more importantly an automation technology component to handle all of this for you so your to-do list can someday become manageable. This is the catalyst for success today. There are many ways to tackle this—search small business automation and you will no doubt find a wealth of options. In full disclosure you’ll find my company has a solution tailor-made for our industry, but regardless of whether you work with my company or with another, those who embrace automation technology that powers inbound marketing are succeeding and are well ahead of their competition. When a company like Casper or Tuft & Needle say they have built a world class customer service team at the heart of that team lies automation technology to help their business make a sale to get a customer. They began with the customer acquisition and long-term engagement in mind, not the sale. There’s a difference, and you can begin today to reverse the damaging effects of sale-centric-only marketing and promotion in your business. Your competition and vendors are doing this, why shouldn’t you? After all, you’re doing all the hard work anyway. You got the sale, you may as well keep the customer.
Jeff Giagnocavo is an HFA member, mattress retailer, and CSO of Infotail Systems, an Infusionsoft Certified Partner and creator of Automatic Mattress Profits. Jeff can be reached at email@example.com.
OCTOBER | 2016
TOP DRAWER A lot of people only dream about working for themselves. Robert and Connie Taylor actually took the leap and turned their dream into reality.
OCTOBER | 2016
FAITH IN EACH OTHER Robert and Connie Taylor took a risk when they decided to open their own furniture store. Thirty-nine years later, they’re still reaping the rewards. By Robert Bell
HIS MUCH HE KNEW: ROBERT TAYLOR COULD SELL furniture. Heck, he’d been doing just that for years. At the venerable Barker Brothers in Bakersfield, Calif., Taylor was one of the store’s top salesmen every year in the late 1970s. Here’s what he didn’t know: As good as he was selling for others, did Taylor have what it takes to sell for himself? For years he and his wife Connie toyed with the idea of starting their own furniture store. Now they were serious. It was 1977. The Taylors sold their home and made a tidy $10,000 profit, but it wasn’t enough to get the new business off the ground so he turned to his bank. “I remember sitting in the office talking to the banker who was about to give us a $15,000 loan,” says Taylor. “He sat me down, showed me the numbers and said, ‘Here’s how many sofas you have to sell in a year to pay off this loan.’ I just sat there looking at his math and thinking, ‘That’s a lot of sofas.’” A lot of people dream about one day running their own business and controlling their own fate in life. Not as many move beyond the dream to sitting in a banker’s office, pen in hand, staring at the numbers needed to make their dream a reality.
OCTOBER | 2016
HIGH END Red Door offers an extensive line of high-end furniture and in-home design services and packages.
The Taylors had two children and no house. There was really no other choice to make. He reached for the pen and signed the papers. *** Robert and Connie Taylor can laugh now—and they often do—at how Red Door Interiors came to be. The longtime HFA members laugh because they know it took equal doses bravado and foolishness to pull off what they did 39 years ago. The Taylors can also smile now—and they often do—at the blessings their faith has taught them to appreciate. “Could we do now what we did back then?” Connie Taylor asks, not waiting for an answer. “Absolutely because Bob is such a wonderful salesman and we both believe anything is possible. But it would be a lot harder. The industry has changed so much. We know we’ve been very blessed.” Barker Brothers, the venerable 10-store chain where Robert got his start selling furniture to some of California’s biggest celebrities, has long since gone out of business. Red Door Interiors is now the go-to store in Bakersfield for high-end furniture and accessories. The Taylors have blended impeccable customer service with professional salesmanship and a unique in-house interior design service that customers have relied on for more than four decades. It wasn’t always this way. From the start Robert Taylor was content selling middle-range furniture. “That’s where I always wanted to be was the middle,” he says. “I felt I could go to our customers who were looking for a (high-end) piece and tell them, ‘We have something that looks just like that, but for a lot less.’” For years that strategy worked, and Red Door Interiors grew. Eventually the Taylors moved to high-end furniture. “We serve
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a community that’s largely based on farming and oil and they expect a certain type of service and a certain product,” he says. “This wasn’t a big analytic study on our part, we saw the need and we moved in to fill it.” Today you can roam Red Door’s showroom floor and find Thomasville, Drexel, Hancock and Moore, Universal, Stanley, Bernhardt and, just recently, England. None of this happened overnight. The Taylors’ competition had many of the manufacturers locked in to exclusivity agreements, which meant the Taylors had to find other ways to attract customers. That’s when Robert Taylor decided to meet potential customers in their homes rather than wait for them to walk through his store’s (what else?) red doors. Connie Taylor and the rest of the store’s employees have years of experience in interior decorating. Employees will meet customers at their homes to find out what they need. “We ask questions and find out what it is they are in need of or wanting,” Connie says. “Then we go and fill that need.” Red Door’s sales staff will take pictures and measurements at the customer’s home, and put together a persuasive floor plan that is more powerful and persuasive than a showroom floor can ever be. “There’s just something about seeing the furniture in the environment it’s going to be in,” he says. Over the years Taylor’s been surprised at the client who seems attracted most to the plan: Men. “We write up the ticket and give them an itemized retail price and an itemized sale price and (men) really like that,” Robert says. “Men will take that piece of paper and see a bottom line of $10,000 or $15,000 and without even thinking about it say, ‘Let’s do it.’ Wives won’t. They want to think it out, but most end up agreeing with their husbands on all of it or a big part of it. I
can’t tell you how many times we’ve turned a $2,000 sofa into a $12,000 room because they’re seeing the whole setup in their home.” The only problem, says Robert, is finding the right people in the Bakersfield area to meet the customers and discover what it is they really want. “Some people can’t really tell you what they want,” he says. “That’s because they’re not sure themselves. The right salesperson helps get that out of them.” As much as the Taylors enjoy their business, they’ve been able in recent years to enjoy life away from the store, too. Seven years ago Robert started a youth basketball league at his church. The program has taken off and now consumes most of his Saturdays during the winter. Fortunately, the Red Door staff rallies around him and works every Saturday during the two-month season allowing Robert to focus on the basketball duties. “I’m really grateful for their sacrifices,” he says. “They know when the season’s over I’ll be back at work, but until then it’s nice knowing they’re watching over things at the store.” Robert also plays a lot of golf. He played as a student at what is now Northwest Nazarene University in Idaho. “Connie got me started back up a few years ago to get me out of the store, and I’m thankful she did,” he says. “I needed that one day out of the week to get away from the store and do something— anything—that didn’t involve furniture.” He laughs at the statement. “It’s funny because I really love this business,” he says. “I really love helping other people out, but you need that time away to refresh and refocus.”
Connie is also involved in the couple’s church. She’s also busy with her grandchildren, who often show up at the family’s house on a lake. “They keep me busy,” she says. “They keep me running, too.” But golf and grand kids should not be a sign the Taylors and Red Door are slowing down. Just the opposite. If 39 years selling furniture has taught them anything it is that success means always changing, always adapting. A few years back Red Door put its entire inventory—every piece of furniture in every fabric—on its website. “It was a big step for us,” Robert says. “I went in very hesitant and reluctant. Turns out it was a great decision.” Now comes another decision: How to handle a months’-long road construction project in front of their store that’s going to make getting in and out of the store a nightmare for customers. “It’s going to be a rough few months,” Connie Taylor says. “But that’s par for the course in this business. We’re always changing and adapting and selling furniture. That’s what we do.”
WHAT HFA MEANS TO ME
The Association provides a wealth of information that still guides and educates us after almost 40 years. We make a point of taking advantage of the conferences, resources, insurance savings, supplies and educational seminars. Just last week we used an attorney service made available to us from the HFA. All of those benefits more than cover our membership fees. I often find the latest RetailerNOW open on my desk with an article circled. Those educational articles really help us keep up to speed as our industry changes. Robert Taylor Red Door Interiros, Bakersfield, Calif.
TEAMWORK Robert Taylor had the sales knowledge. Connie Taylor had the design expertise. It’s been a pretty successful mix.
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Is your store hitting the right notes? By Marty Grosse
ave you ever had an earworm? That’s when a song plays in your head over and over again as if someone keeps mashing the repeat button. Recently a furniture store chain moved into my city and the Eagles’ song “New Kid in Town” came to mind. How would this “Johnny Come Lately” do in a new market? When I caught wind they were coming, I anxiously watched to see how they’d enter the market. Right on cue they seemed to be doing it correctly. Multiple locations were secured in hightraffic areas and spread across the city. Yep, they located close to other big-box furniture stores, which seems smart and logical. Press releases and public relations teams started to tease with a promise of new merchandise and, more importantly, a shopping experience that would be unique and different. All of this certainly whet my furniture appetite. Of course my local furniture friends told me how challenging it would be for the new kid in town to replicate success in a new market. Didn’t I know this is an extremely competitive market, already rich with furniture stores? Then the song started to play. “There’s talk on the street; it sounds so familiar Great expectations, everybody’s watching you...” “New Kid in Town” is on the Eagles’ “Hotel California” album. It’s one of the best-selling albums of all time. I’ve seen the Eagles in concert four times, starting in 1975 when they opened for Linda Ronstadt, and was never disappointed. Their consistency of talent and performance production makes it hard for me to say which concert was the best. But I digress. If you’re going to open new furniture stores and build on a winning formula, it makes sense to duplicate and keep consistent the qualities that brought you to the dance. Knowing of the chain’s success in another state, I anticipated that approach.
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Soon the advertising started touting fresh, new, exciting products by this new kid in town. They promised the in-store experience would be unique and different. I could hardly wait. (Kind of like the time I saw the Eagles reunite in the “Hell Freezes Over” tour.) Here’s how my visit went and what you can learn from it. • The store parking lot reminded me of the grounds after a concert. Trash and cigarette butts littered the area around the entrance. Had there been a trash can perhaps customers would have used it since the door clearly stated “no food or drinks allowed.” Keep your store entrance clean and inviting. Perception is everything and sending a signal that you care about the entrance of your store is a good perception to create. • I entered the store and didn’t see a single person. Perhaps this was the new and unique way to buy furniture the ads promised? Was it a low-pressure selling environment I was about to experience? Teach and expect employees to acknowledge and/or greet customers when they arrive, even if it’s a wave and welcome from a distance. This sends the signal you’re glad they came to see you. • Still wanting to know what was going to be unique and special, I looked for point-of-sale materials to perhaps explain what made this store different. Banners hanging from the ceiling reiterated the promise, but provided no specifics. Signage or video telling your story or giving customers information may just be what they need to help them make a buying decision. • Eager to check out this exciting new merchandise, but all I saw was brown, brown and more brown traditional upholstery. Eventually I found some colorful upholstery, chairs
and pillows but that brown dye had been cast. Make certain the entrance of your store is balanced with merchandise that represents style, selection and color. Change out the merchandise in the front of your store on a regular basis to keep it fresh and representative of your overall selection. • It was eerily quiet in the store as there was no background music. Music and even aromatherapy will help set a mood and a sense of energy within your store. Most concerts pipe in music before the show begins (but I steer clear of the aroma that floats through the air at some of the concerts I’ve attended). With technology today, the options for music and video are prevalent and a necessary in-store ingredient. The lack of employees and no music made me think I had entered a furniture store museum. • The store’s lighting didn’t seem to have a purpose. Some lights were cast on the floor. Others were highlighting an empty wall. I’ve seen some spectacular light shows at concerts. Great music with excellent lighting makes the whole experience special. If you have spotlights in your store, make sure they’re trained on the merchandise. Also, remember to replace those that are burned out. Yes, proper lighting makes aging rockers and even brown upholstery more appealing. • In some places there seemed to be key pieces missing from vignettes. Even worse, there were wide-open spaces elsewhere. Have you ever seen a band only set up half of the drum set? Does the sofa have a love seat with it? Does the dining room table have an accompanying china cabinet? At the very least invest in some signage that says pardon our mess so customers like me aren’t guessing as to why there’s an empty space on the floor. • The little coffee nook in the corner invited me to enjoy a fresh cup while I shopped. Unfortunately, the coffee pot was empty, which was for the best since there weren’t any coffee cups to use. Despite my best efforts, I’ve never been to a concert that ran out of beer. If you’re going to offer refreshments make certain you’re stocked and presenting properly. (By the way, that sign at the front door saying no food or drinks seemed a bit contradictory at this point.) Suffice it to say, the promise of new, exciting merchandise and a special shopping experience was like bad speaker feedback from a bad band. In today’s world, customers want new, fresh and different experiences when shopping. Marketing, messaging, merchandise and management, when properly executed, result in a four-part retail harmony that will keep your store’s tune in their heads. Sad to say I won’t be visiting this store four times and frankly don’t expect them to make it in the long run. By the way, I left without ever being approached by a salesperson. As I exited a lyric by Aerosmith popped into my head. “It’s the same old story the same old song and dance, my friend.” Can someone shut it off please? Furniche.com founder Marty Grosse has 35 years of home furnishings experience. He can be reached at firstname.lastname@example.org.
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Living Room Showdown Between leather and fabric, which will consumers choose?
By Ginny Gaylor
OCTOBER | 2016
American Leather’s Hudson Bison offers the best of everything— sofa, loveseat and recliner.
MERICANS ARE INCREASINGLY BUYING home furnishings and the proof ’s in the numbers. According to the Bureau of Labor Statistics, American spending on household furnishings increased by 15 percent last year. Furniture/Today’s December Retail Planning Guide projected continued sales growth for consumer spending on furniture and bedding, with sales of stationary sofas encompassing 15 percent of all furniture sales and stationary chairs contributing another two percent. Adding motion sofas and chairs increases the segment’s reach by another 10 percent. In all, upholstered furniture comprised at least 27 percent of all furniture sales in 2015.
The choice between leather and fabric Within the upholstered furniture category there’s a binary choice for consumers and retailers alike—leather or fabric? Both retailers and consumers must decide which option they want. For retailers the decision is about floor space and what sells. Consumers, of course, come with a different perspective. The purchase often hinges on several factors, ranging from price to versatility to durability. Dana Gibson, designer for Dana Gibson, sees upholstered furniture as the main focus for retail customers. “Upholstered furnishings command the most attention and enjoy the best returns for our retailers so they are focusing on the furniture,” she says. But Gibson feels leather plays an important role as well. “Leather upholstery is a luxurious step up and adds panache and a bonus texture to room settings.” In addition to the perceived luxury of leather, the material can provide consumers with a much-desired level of durability that fabric upholstery isn’t always able to offer. As a result, Edward Teplitz, chief commercial officer for Natuzzi Americas, finds many retailers will push leather over fabric, because the former outperforms the latter. “Consumers want consistency and prod-
ucts they can count on lasting,” he adds. Meanwhile, Sandy Teague, vice president of upholstery for Hooker Furniture, finds an important trend is a combination of the lavishness of leather with the comfort and practicality of motion. “Luxury motion is a hot category at the moment,” she says. “The consumer is willing to pay to customize this category.” Meredith Younger Spell, creative director at Younger Furniture, emphasizes the importance of perceived luxury with today’s consumer as well. “I like to call it ‘laid back luxury,’” she says. For Spell this means considering every detail and aspect when designing to ensure the upholstered furniture makes consumers feel comfortable and special, but not stuffy. “These products have the power to transform my mood, inspire me, and make me feel comfortable,” Spell shares, adding that consumers should walk away with the same impressions. At Emerald Home Furnishings, upholstery product manager Celeste Brayton says the company’s fabric pieces must be functional first and then stylish. “We’ve been seeing a demand for more deep-seating upholstery,” Brayton says. “We’ll be introducing multiple configurations—all with deep-seating comfort and a color story in High Point. We will have several frames that have color options. We typically don’t stock multiple colors on one frame but we are seeing that our customers like this option.” Other fabric trends Brayton is seeing: High-fashion chenille continues to grow a fan base and an uptick in interest in anything linen, while plush Bella type fabrics are starting to lose favor with consumers. Melissa Brown, vice president of marketing for American Leather, says, “Most of our retailers split the presence of leather and fabric approximately fifty-fifty. Key categories that are dominated by leather upholstery include home theatre and motion. Three out of every four American Leather Comfort Recliner sales are upholstered in leather.”
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BOLD & BEAUTIFUL Hooker’s Sam Moore Mavis chair pops in any room with it’s larger-than-life floral print.
Tips for retailers
Trends in leather When it comes to the latest looks in leather, American Leather’s Brown cites a shift in consumer demand to unique looks and designs. “There is a big emphasis on artisanal, oneof-a kind pieces and as a result, leathers with character like American Leather’s Haven or Flagstaff offerings are becoming more important. These leathers feature a high level of transparency in which natural markings are evident and a delicate top surface that will scratch and burst easily, making every piece of furniture completely unique. Additionally, each piece will change and establish even more character with time and use,” she explains. Other trends to consider include smaller frame designs and more modern styling. Teague says training sales staff to understand the nuances of leather types helps educate the consumer on the difference between leathers—semi-anilines, anilines and protected leathers. Teplitz mentions thin smooth leathers as well as sheering, where the leather purposefully wrinkles at the seams, as trends consumers will be clamoring for in the future.
When it comes to leather, not only is it visually beautiful and impressive, but for retailers the incentive to include leather upholstery on their floor revolves around the fact that it provides a strong return on investment. Best of all, there is a leather upholstery option for every home, if retailers take the time to uncover what their customers’ lifestyle demands are. With a little digging into a customer’s needs, retailers can be more discriminating in their recommendations. Younger Furniture works to inform retailers so they have all the details to share with customers so they can make an informed decision. Spell says the company has independent sales reps throughout the U.S. and Canada, as well as a quick ship program and an expansive website that provides a retailer resources section. The quick ship program gives customers the ability to customize their fabric and receive their upholstered furniture in less time. “The pieces ship in five days in 20 fabric options, and they are our best sellers,” Spell explains. Jessica Green, merchandising manager for American Leather, finds leather to be incredibly engaging from a visual and tactile perspective. She recommends displaying leathers that are natural as a point of difference. “Allow customers an opportunity to interact with a full piece that feels and looks amazing. Show them natural leather with character and let them fall in love with the subtleties and nuances. The beautiful distinctions showcased in natural leather are easier to appreciate when customers have a visual and tactile reference point. If customers require a higher performance option, offer them alternatives with protected and pigmented leather.” “When displaying a leather sofa in a vignette we like to add depth and texture by accessorizing and furnishing with accent fabrics,” Teplitz says. “This enriches and enhances the leather impact on the overall design of the space, showcasing it without overdoing it or being too matchy-matchy.” Perhaps what it all comes down to is consumers’ continued quest for something that expresses a bit of who they are. “As a designer I’ve seen a recent growing demand for leather. Consumers want something in their decor to create a sensation. Leather and look alike leathers in jewel tones and brights perform this role,” Gibson says. Ginny Gaylor is an award-winning writer and editor based in Greensboro, N.C. She has more than 15 years of experience writing about the home furnishings industry. She can be reached at ginnygaylor@gmail. com.
BONDED LEATHER: BE AWARE
COLORS GALORE Emerald Home Furnishings will debut several frames at High Point market with multiple color options. Emerald says it’s a new strategy in response to what customers are asking for. 26
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The Home Furnishings Association encourages members to follow the Federal Trade Commission guidelines regarding the marketing of faux leather products; it is advised that the word leather not be used in the description of any product that is not made with real leather. We also encourage retailers to check with their manufacturers prior to purchase about the specifics of the leather.
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MINUTES with Tom Gadbois
spent time working for a non-profit organization in the Twin Cities after graduating from college. I’ve always had a passion for helping others. I think what drew me into the furniture industry, and particularly FurnitureDealer.Net, is that my passion for helping others can translate into the business world. FurnitureDealer.Net’s core values align very much with my own, so it was a great fit. I’m excited about finding ways we can use data more effectively and efficiently to help our clients become successful multichannel retailers. Today’s online customer wants accurate information—pricing, availability, etc.—and they want it immediately. I think the challenge is developing the right kind of processes and tools so all of our retail partners can feature amazing online shopping experiences for their customers, which will then lead to increased sales and long-term customer relationships. I enjoy spending time with my friends and family away from work. Very clichéd, but also true. I enjoy Minneapolis, especially in the beautiful fall months, and am a life-long Vikings and Timberwolves fan, even after all of the perennial heartbreak they cause.
Why Next Generation Now? I love NGN because it gives me the opportunity to listen to fresh perspectives from young people from a variety of backgrounds. The furniture industry is composed of so many individual and unique companies, services, and people, and NGN allows us all to get together and learn from each other and have fun.
Tom Gadbois FurnitureDealer.Net Business Consultant
Words to live by “The secret of genius is to carry the spirit of the child into old age, which means never losing your enthusiasm.” —Aldous Huxley
HOME FURNISHINGS A S S OCI ATI ON 28
OCTOBER | 2016
One of Tom’s favorite pastimes is learning and collaborating with his teammates at FurnitureDealer. Net’s headquarters in Minnesota—especially when pizza is involved.
5 Minutes is a monthly profile of a Next Generation Now member. Next Gen Now is an HFA-hosted community of young industry professionals whose mission is to give voice to the needs and goals of the industry’s next wave of leaders. Connect with members at myHFA.org/ngn or Twitter @ngnow. RetailerNOWmag.com
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Beware the third generation Why do family-owned businesses seem to die just two generations removed? By Wayne Rivers
t a recent peer group meeting in western Kansas, we were taking a tour and learning a bit about the history of Foster Farms. In the early 20th century, Benjamin Butler Foster owned lumber yards in Kansas City, and he began to buy farm ground in western Kansas and eastern Colorado during the Dust Bowl era (talk about a confident entrepreneur! Was anyone else on earth accumulating farmland during the catastrophic Dust Bowl?). He eventually had more than 30,000 acres of farmland—a huge operation even by today’s standards. Ben Foster died in 1961, and Foster Farms was sold in 1965 to a partnership that included several family members. The partnership dissolved in 1969. The Foster family was incredibly successful by anyone’s account, and yet their family-owned business didn’t make it much beyond the death of the founding entrepreneur. The amazing arc of Foster’s business success prompted an insightful question from one of the peers: “If it’s true that family businesses go from shirtsleeves to shirtsleeves in three generations, what causes this?” Shirtsleeves to shirtsleeves in three generations? Maybe you’ve never heard this old saying, but it’s one that cuts across many cultures. The Japanese have a different way of saying it: “Rice paddies to rice paddies in three generations. The Scottish are a little less vague in their telling: “The father buys, the son builds, the grandchild sells and his son begs.” The Chinese don’t
OCTOBER | 2016
sugar-coat it: “Wealth,” they say, “never survives three generations.” We kicked around the question of why this so often happens and came up with three reasons why family businesses tend to fail within three generations. 1. Lack of shared vision. This sounds like a nebulous, “consultant–centric” concept, but it most certainly is not. Founding entrepreneurs like Ben Foster, whether they go to the trouble of writing it out or not, have a driving, compelling vision for their future success. As more people—family members, strongwilled non-family managers, and outside advisors—get added to the vision conversation, it becomes harder and harder to get everyone on the same page. Even for the largest, most successful family company, resources are very limited, and executives and owners must debate on and decide how best to allocate those resources. If one family faction advocates for expanding the lumber business, another advocates for investing resources in the agriculture business, and still another advocates for getting into a new line of business entirely, resources get stretched to or beyond the breaking point. Only by focusing like a laser beam on a shared, compelling common vision can groups of executives make decisions consistent with long-term inter-generational success. Finding multigenerational families in business together who genuinely have a common vision is exceedingly rare. 2. Entrepreneurs are quite rare. We spill so much ink advocating entrepreneurship and lauding successful busi-
ness leaders that we assume a huge segment of the population must be entrepreneurial. It’s not! Even if people happen to share the bloodline of a successful entrepreneur, the odds of them having the same drive, energy, ambition, and talent are very low. The conventional wisdom is that the children of successful entrepreneurs are more managerial than growth and innovation oriented; that is, they work harder to preserve the creation of the founder than to continue to expand it. 3. Complacency. Pat Riley is the legendary basketball coach and NBA executive behind the successes of the “Showtime” LA Lakers and Miami Heat. Riley doesn’t use the term complacency. He refers to it as the disease of “too much.” In sports, a talented young person works incredibly hard to excel in high school and college, and, if his dreams come true, he makes it to the rarified air of the pros. As a professional athlete, he continues to work to improve himself and his team until finally he reaches the pinnacle— a world championship. At this point, an athlete may have worked 20 years or more to achieve this singular goal—just as an entrepreneur has worked 20 years or more to become “an overnight success” in business. For an athlete or a business owner, it’s at this point where the accolades come rolling in. An athlete receives a huge contract, endorsements, lucrative invitations for speaking, and celebrity notoriety. A family business leader receives trade association or media attention, invitations to be on church, bank, or hospital boards, hearty attaboys from his professional advisors, and
How can I talk to my uncle about our family store’s future?
My uncle has been running our family store here in California the past 31 years. He’s told me repeatedly the business will one day be mine if I want it. I’ve told him I’ll be ready financially in about six or seven years. The problem is I’m not sure my uncle has the financial commitment to maintain long-term profitability until that day comes. He just bought a farmhouse in Oregon and I worry he’ll want to leave sooner rather than later, which is certainly within his right. He’s like a father to me so I don’t mind telling him my concerns, but any tips or pointers on easing into this conversation would be appreciated.
monetary rewards that allow for a fine home, vacation homes, automobiles, and an enviable lifestyle. All these things add up to what Riley calls too much. Once an individual, family, or management team has enough—however they happen to define the term—what is their incentive to do the backbreaking work and endure the increasing complexity necessary to continue to grow the enterprise? At some point they decide that it’s just not worth it.
You’re framing a business question as a family question. You need to have a grown-up discussion about the current and future plans for the store. Your concern is the store may not be there when you’re ready to take over. If you're committed to running the store, you need to be ready to pitch in now to make sure the business is in the shape you need it to be in. Family business isn’t for the faint of heart. There’s a story about a man who pulls out of his driveway for work and just sits there. His wife comes out of the house and asks, “What’s wrong, dear?” The husband replies, “I’m just waiting for all the lights on my route to turn green.” What are you waiting for? It’s pretty unlikely all the lights are going to turn green for you.
I once believed that the cliché about shirtsleeves to shirtsleeves, rice paddies to rice paddies—call it what you want—was a falsehood concocted by professionals to justify ever more complex planning for family businesses. After almost three decades of seeing family firms enjoy meteoric rises and predictable returns to earth, I am now convinced there’s a good bit of truth in the conventional wisdom. Sustaining a family business across the
generations is an incredibly difficult thing to do! Wayne Rivers is president of The Family Business Institute. He has appeared on The Today Show, CNN, CNBC and is an expert panelist for The Wall Street Journal. He can be reached at Wayne @wayne.rivers@ familybusinessinstitute.com.
From traditional to transitional, we’ve got you covered in solid wood. RetailerNOWmag.com
cresent.com | @cresentfurn | Showroom: #HPMKT - 220 ELM #201
OCTOBER | 2016
For Tepperman’s, the fifth time’s the charm By Martin Roberts
hen HFA member Tepperman’s retained me to design their fifth store, this one in Kitchener, Ontario, I knew what I was up against. Tepperman’s does everything firstclass; from display to marketing to technology. This was the first time in the 91-year-old company’s history they have used an outside design firm to develop a store’s interior and exterior. Talk about pressure! The new store is the result of planning and design work that began back in 2014. I wanted the design to leverage both modern features and the latest technology to create a consumer buying experience Tepperman’s clients have come to expect. The store looks nothing like any of Tepperman’s other stores. It houses a 50,000-square-foot home furnishings store, a 10,000 square-foot Bargain Annex, and a 10,000 square-foot dedicated warehouse facility. The warehouse is twice the height of the store, allowing it to accommodate delivery of containers and provide a facility for customers to pick up online orders. I wanted customers’ first experiences on entering the store to serve as something of a decompression area that allows them to adjust to the new retail store experience. Views from the entry area make it possible for shoppers to see the mattress department, the upholstery area, the electronics area, and the entrance to the Bargain Annex. They can also see the new appliance and kitchen design areas. In the middle of the store, a central consumer welcom-
OCTOBER | 2016
w -out nd pop ate the ne a g in u p t a n c e s Land ronts acc de. f store man’s faca r Teppe
ing station provides an inviting place for customers to connect with staff. There’s also a dedicated children’s play area, a café, and customer care area, all of which provide a welcoming experience. To eliminate the appearance of long aisles I created strike zones that are impulse buy areas. They interrupt the walkways and provide customer focus on new and exciting product introductions. Wall panels enhance the traditional store signage and help customers get to where they want to shop faster. Each department has a one-word tag: “Chill” in the refrigeration area, “Relax” in
Customers enter through a space that allows them to decompress and get their bearings before beginning the shopping experience.
the living room section, “Sleep” in the mattress section, and other definitions of human activity or living styles to encourage customers to know the use of each product category and create destinations within the store. The store’s exterior articulates the façade and creates a number of distinct shopping occasions. Local city ordinances called for windows that would create a consumer browsing downtown feeling. This idea was hard to achieve as the retailer wanted to avoid the maintenance of window displays and provide more perimeter merchandise displays. I satisfied both needs by using landscaping and pop out storefronts. The separate entrance to the Bargain Annex, gives customers looking for discounted products easy access to what they’re looking for.
ronics , elect g in d d e arate b fined by has sep tments, all de e r o t s The epar liance d and app nique to each. u signage
The store has now been open since early July and is performing at 100 percent above projections. This has created its own retail challenges and the management team is urgently addressing the operational aspects that this unanticipated success has made essential to maintaining a satisfying consumer experience. In a way, this is a measure of how successful the store is and as Andrew Tepperman says “This is the best type of problem to have.” The company is very impressed with the success of this new concept store and is looking to take this successful formula to existing stores and other markets.
ction for a nice distra o shop. rs e f of e on ime t The Kids Z nts some t re a p w llo a o children t
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Martin Roberts, a retail and design veteran, has more than 40 years of design projects to his credit around the world. His company, Martin Roberts Design, includes an award-winning team of retail consultants, architects and graphic designers. Roberts can be reached at firstname.lastname@example.org.
OCTOBER | 2016
Does your Wi-Fi need a workout? Consider these four things when beefing up your retail wireless system. By Amitesh Sinha
ustomers expect a seamless shopping experience between your online and in-store presence these days, which means offering Wi-Fi is no longer considered a luxury, it’s a necessity. And, offering Wi-Fi is one of the easiest ways you can provide a positive experience for your customers. Eighty percent of customers feel in-store Wi-Fi would influence their purchase decisions, according to research conducted by JWire. In other words, customers would be more willing to purchase from a store that provides Wi-Fi. Having in-store Wi-Fi doesn’t just offer internet access to your customers, it enhances their experience by allowing them to browse, place an order and make payments through their mobile devices. There are three important things home furnishings retailers should consider when upgrading or installing an in-store Wi-Fi solution.
Customize your network The key to servicing tech-savvy consumers and meeting the influx of applications and devices into the network depends on how you optimize your retail network. When implementing a network, you’ll have to take into account the context of users, devices, location, privileges, the applications used and duration of time. Consider investing in wireless hotspot equipment that provides the features you need in a retail environment—like being able to limit bandwidth, optimize roaming and cellular handoff and have captive portals that require users to accept Terms of Service (TOS). Traditional access points and routers don’t have these same robust capabilities. Some examples of high quality Wi-Fi hotspots include: Aerohive (the AP170), Aruba (the MSr2000), Cisco (the Aironet 1570), Meraki (now owned by Cisco), Ruckus (the T300 series). Apart from the hardware, consider installing a firmware that upgrades the features of the Wi-Fi connection. One example of firmware suitable for many WLAN routers is DD-WRT. It supports a lot of value-added features such as complex configurations, integrated captive portals, and support for third-party servers. Another good firmware is the CoovaAP firmware that offers many of the same features as DD-WRT firmware. However, it comes with additional functionality of allowing you to limit bandwidth on routers that don’t have such capabilities, as well as offer automatic log-in to the customers. This allows you to create a captive portal page that lets the user confirm he is
OCTOBER | 2016
accessing and agrees to use it based on your terms; and you can limit the amount of bandwidth or internet power guest users can have at any time. However, routers and firmware don’t have the ability to segregate private and public internet connections for more security to internal networks. One way to protect your internal network is by investing in a Fonera Simpl router from Fon. Apart from segregating the networks, it also allows putting a limit to the daily Wi-Fi access by customers. Another benefit of setting up in-store Wi-Fi access using this router is that it requires users to sign up with Fon to access the network that adds an additional layer of security to the wireless network. If you have a large retail setup, or want to offer Wi-Fi access to a large area, you should consider purchasing Open Mesh. This economical router offers both public and private wireless access including the usual features such as speed limits and captive portal; a captive portal is a Web page that the user of a publicaccess network is obliged to view and interact with, before access is granted. In addition, the hardware makes use of a proprietary mesh technique that allows easier installation.
Ensure compliance Installing a Wi-Fi network without focusing on security is a reckless strategy. This can make your store vulnerable to lawsuits. Without focusing on security of the Wi-Fi network, you are exposing customers to online attacks. If hackers can infiltrate the network and steal customer information such as credit card numbers, they can sue you to recover the loss. User privileges and identity are centric to VLAN/Wi-Fi SSID association and network access. It is also crucial for defining security policy in a VPN tunnel, firewall, or for application security. Users along with user groups define the QOS policies’ definition for traffic management, and establish service level throughout the various parts of a network and entire security policy framework. This allows you to monitor the traffic on your network and limit the availability to guest users. For example, you can set up a guest SSID with no user id or password and only allowing a certain amount of bandwidth so in case it goes over, it does not affect the working of your business critical applications. This model results from the fact that a particular user, especially staff or a store employee, is not restricted to using a single device or even location or the network access limited by SSID. Therefore, enforcing security and meeting PCI-DSS compliance is dependent on the network where users connect.
Why Wi-Fi? To avoid legal complications, implement a high-grade wireless security policy to protect your customers against hackers. Install enterprise grade firewall, antivirus, malware, anti-spam and website content filtering solutions. For a cool way to automate the authentication process, you should consider configuring QR codes with the router and embedded passphrase. This can be made possible by using a Wi-Fi QR code generator software easily found on the internet.
IBM surveyed shoppers and found that 45 percent of consumers use two or more device technologies to shop and make buying decisions, typically a laptop and cell phone. Today’s shoppers can choose from many outlets to shop, and expect a seamless experience in terms of placing the order, pickupand-delivery and exchanges-andreturn in any combination of outlets. Mobile connectivity is an essential part of this.
It’s important to strike a balance between both wired and wireless network infrastructures as well as deployment aids to your store’s bottom line. Rightsizing and integrating a wired/wireless network for optimum capacity, efficient utilization and balanced planning of respective wired ports versus the wireless network all add towards cost-effective IT for your store. When you have the right network platform, you can select an integrated access infrastructure that has deep visibility for the users and applications on the network. In other words, your IT administrator will be able to quickly and proactively troubleshoot and resolve problems before they affect any of your business services or end-user experience.
points, track network usage, monitor number of clients, track devices and OS used to connect to the Wi-Fi network, and configure limited access to the network based on specific device IP (internet protocol) address. A cool feature made possible by cloud controller software is splash page creation. This page can be displayed on the screen of the users who access the wireless network. You can create pages that highlight popular deals or items your users might be interested in knowing about. Wi-Fi access can improve overall customer shopping experience by allowing them to connect to the network thorough their mobile devices. It helps extend sales experience from the store into the mobile devices of the customers. As a result, a retailer can better serve customers based on their needs and requirements. You can promptly engage the customers and promote content and brand to your target customers. The end result is better customer satisfaction, increased conversion rates, and higher chances of repeat customers.
Cloud-control software Retailers should install a cloud control software for monitoring traffic and data. Using the cloud control software, you can perform multiple actions such as monitor load on access
Amitesh Sinha is a technology consultant based in North America with over 20 years of experience developing and deploying solutions for retail. He can be reached at email@example.com.
OCTOBER | 2016
HOME FURNISHINGS ASSOCIATION 800.422.3778 | myHFA.org |
Donny Osmond Home is a licensed collection of Coaster Furnitureâ€” a manufacturer in the HFA Buying Source program.
OCTOBER | 2016
Come see one of the worldâ€™s most famous smiles
DONNY OSMOND in the HFA Retailer Resource Center 1st Floor Plaza Suites
Saturday 2:00-4:00 P.M. @High Point Market
OCTOBER | 2016
Help for the holidays The seasonal rush is coming. Is your store ready? Here are some recruiting strategies for meeting the demand. By Janelle Bieler
or most consumers, the holiday season begins when twinkling lights line houses and shopping catalogs arrive in mailboxes. For furniture retailers, however, it begins now with assessing their seasonal hiring needs. Last December, the National Retail Federation found that furniture and home furnishing stores experienced an 8.1 percent increase in sales year-over-year. After the New Year, the busy season continues for retailers as they restock merchandise and serve customers looking to take advantage of sales or snag the newest furniture design. Many furniture retailers must hire additional seasonal workers to account for this influx of customers. Whether you’re new to the game of seasonal hiring or need to perfect your plan, check out these simple recruiting strategies for building an efficient and cohesive seasonal workforce. Determine your company’s needs. Every business is different, so it’s important to discuss with your team what roles and shifts will require additional support during the holiday season before posting job openings. While it may be difficult to determine exactly how much additional support you’ll need, two ways to estimate your needs include: Asking regular customers if they’ll be taking advantage of your holiday sales and looking back at how busy you were last year to assess if a particular department was understaffed. Gathering this information will allow you to better understand how many seasonal hires you may need. Evaluate your company culture. Developing a solid seasonal workforce is essential to having a smooth holiday season. While assessing your company’s needs, think about the core values and culture of your brand. If customer service is your priority, then seek out candidates who are friendly, attentive and approachable. If your store is the place for the latest designs, candidates who are interested in and knowledgeable about industry trends are a good bet. Additionally, think about the characteristics shared by your top performers. Are they outgoing and friendly? Do they rely on teamwork to make a sale? Once you’ve identified common threads, prioritize those traits when vetting candidates. Recruit people who know the company. According to Adecco Staffing’s The Business of Seasonal Hiring survey, 35 percent of U.S. adults were looking for or knew someone who was looking for a seasonal job in 2015. A great way to find
OCTOBER | 2016
candidates who will fit your company’s needs and culture is to begin your search within your own network and with people who understand your business: • Past Employees. Savvy employers will stay in touch with past seasonal employees, understanding that this group of people is a great resource for filling your pipeline of seasonal candidates. Aside from knowing your stock, these workers understand the culture and processes of your company. • Employee Referral Programs: No one knows your company better than your employees. Give your existing employees the opportunity to recommend people from their network for seasonal positions. Since candidates come pre-approved by your employees, this type of program can significantly reduce the chance that you’ll receive applicants who don’t fit the company culture. • Partner with a Staffing Agency. Staffing agencies are a great resource for taking the stress of holiday hiring off your shoulders and allowing you to focus on more important things, like running your businesses. These partners take the time to understand your business and will do the legwork behind identifying and interviewing qualified seasonal employees that fit within your company. • Ask the Tough Questions. Nothing ruins the holiday season like a salesperson who can’t handle pressure or an unorganized stockroom attendant. Take a moment during the interview process to ask candidates the tough questions. Propose a hypothetical situation and see how they answer. Ask: What would you do if someone’s piece of furniture is on back order and they come to the store demanding a refund? Answers are important to understanding if a candidate embodies the core values of your company even under pressure. Whether you’re trying to end the year on a high note or clear out your shelves to restock for the next season, it’s important to have a strategic plan in place to secure quality workers who will help you successfully attain your seasonal goals.
Janelle Bieler is regional vice president of Adecco Staffing. She can be reached at AdeccoInsights@adeccona.com.
T H E RIG HT D ATA SHA R ING SOLUTI ON I S H ALF TH E BATTL E. When it comes to driving sales for todayâ€™s successful furniture retailer, the ability to access and share accurate product data is a top priority. Amber Engine has created an easy-to-use digital destination that empowers retailers to quickly and conveniently manage product data for every brand they carry. Finally, one of the biggest problems of the home furnishings industry is solved. Visit us today to learn more about how Amber Engine makes your product data work for you.
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OCTOBER | 2016
Investing in Education Four times a year, retailers go back to school at the Retailer Resource Center. Don’t miss our High Point Market seminars! By Robert Bell
ike every other home furnishings retailer, Joe Critelli scrambles to wedge in as many visits to manufacturers as he can during Las Vegas and High Point markets. But he’s smart enough to know that market is about more than just buying. It’s about learning, too. Critelli, owner of Critelli’s Furniture in St. Catharines, Ontario, frequently sits in on a half dozen or more learning seminars at the Home Furnishings Association’s Retailer Resource Center during markets. As he tells it, buying product is a small part of running a home furnishings store. “I’m a firm believer you can never be smart enough in this business,” says Critelli. “Our industry will never become less competitive than it is today. That means if you’re not moving forward, you’re really moving backward. These seminars keep me moving forward.” Critelli is the fourth-generation leader of his family’s store. His daughter Julia will be the fifth generation. “My daughter is going to have to be better at this than I am, just as I had to be better
than all the family members before me,” he says. The Retailer Resource Center, or RRC, offers retailers like Critelli free seminars—from marketing to inventory management to sales—for growing their business. Check out page 43 for this market’s seminar schedule. Kaprice Crawford, the HFA’s educational director, puts together the impressive list of industry experts who come to speak at the RRC seminars. She says members have a strong say in what topics are presented. “Nobody knows their business better than our retailers themselves,” says Crawford. “We listen to their needs and then go looking for the experts to address those needs.” Critelli advocates attending as many RRC seminars as possible. “Success comes from a lot of little things,” he says. “There is no single major solution that makes a business a success. It’s a thousand little things being implemented over time. That’s why I come to the RRC. To learn those thousands of little things that keep my business going.”
Joe Critelli, of Critelli's Furniture, says HFA’s market seminars help keep his business moving forward. They’re an essential component to his market schedule.
OCTOBER | 2016
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ACA/Advertising Concepts ...............................................39 ColorAd .......................................................................... 26 FurnitureDealer.net ..........................................................37 Furniture Wizard ............................................................... 6 Imagine Advertising.........................................................13 Knorr Marketing ..............................................................15 Mail America .............................................................20, 21 Moso Graphics ..................................................................9 Spectrum Marketing........................................................12
BUSINESS CONSULTING FurnitureCore/ImpactConsulting .........................18, 19, 29 JRM Sales & Management, Inc. ......................................11 7YVÃ„[HIPSP[`*VUZ\S[PUN.YV\W .........................................17
13 STAFF OFFICE 12
FINANCIAL SERVICES Crest Financial................................................................ 36 Merchants Preferred........................................................33 Synchrony Financial .............................................16, 31 ;PKL^H[LY-PUHUJPHS*VTWHU` ........................................ 40 TEMPOE ......................................................................... 10 Trekstone ...........................................................................7
PRODUCTS and SERVICES (TILY,UNPUL ....................................................................3 Blink Signs ..................................................................... 30 )LZ[)\`MVY)\ZPULZZ ............................................34, 35 Guardsman ......................................................................25 HFA .............................................................................14 FUJIFILM ...........................................................................5 RTUI ................................................................................24
SOFTWARE MicroD, Inc. ...................................................................1, 2 4`YPHK:VM[^HYL ........................................................41, 42 796-0;Z`Z[LTZH/PNOQ\TW7YVK\J[ .......................22, 23 Podium ............................................................................27 STORIS......................................................................43, 44
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INSURANCE & WARRANTIES
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OCTOBER | 2016
Along with the many business service providers showing in the Retailer Resource Center, HFA is proud to feature Endorsed Program Partners. When researching your next partner, look for the Endorsed Program icon for exclusive HFA member discounts and/or services.
HOME FURNISHINGS A SSOCIAT I ON
HIGH POINT MARKET SEMINARS 2FWREHU)LUVW)ORRU3OD]D6XLWHV
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8:15am â€“ 8:45am
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219'4$1156Ĺ?2WNNVJG6TKIIGTVQOQTG6TCHĹżECPF Greater Sales!
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Doug Knorr, Knorr Marketing
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Connie Post, Connie Post Designs
1:00pm â€“ 2:00pm )KXG;QWT%WUVQOGT'ZRGTKGPEGC$KI$QQUV Scott McLaren, Fortegra
1:00pm â€“ 2:00pm 5VC[KPIQP6QRQH;QWT%QORGVKVKQP Ron Cooper, PMP Sales
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SUNDAY, OCTOBER 23 8:15am â€“ 8:45am 219'4$1156Ĺ?2TQXGP.QY%QUV#FXGTVKUKPIVJCV +PETGCUGU6TCHĹżECPF5CNGU Doug Knorr, Knorr Marketing
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Rose Oldenkamp, ColorAd
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HFA High Point Market seminars sponsored by:
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Kimmberly Capone, Treasures Furniture and Ross Barlett, ViewIT Technologies
OCTOBER | 2016
Is Your Buying Group Free? (Ours is.) By Mary Frye
he Home Furnishings Association has entered new territory . . . buying program territory. The HFA Buying Source program, to be exact. You may be wondering did we really need another buying group? The answer is we probably didn’t need just another buying group but rather one with its heart in a non-profit industry association. Buying groups make sense. The purchase volume of a group of retailers allows for pricing and rebates that benefit both the buyer and the seller. The Association has even been asked what took us so long; why hadn’t we offered this service before. As you can imagine, we were busy doing other “association things” like government relations, education, networking, identifying and developing industry specialized services like insurance and financial programs, and compiling collective intelligence from some of the brightest and most generous business owners that own and operate retail companies. However, buying groups began to morph into quasi-associations and we were faced with the question of whether we were doing the best job of meeting members’ needs without harnessing the buying power of the “unaffiliated” retailers, those not aligned with one of the established buying programs. And that led to the research, analysis, and deliberation that has become the HFA Buying Source program. The Buying Source program is focused on assisting members by maximizing their purchasing power for furniture and bedding lines for their stores. Eligibility for the Buying Source is now a benefit of HFA membership. There is no additional cost and participating retailers can begin seeing savings as soon as they identify themselves to their vendors and place orders as part of the HFA
OCTOBER | 2016
Buying Source. Association membership reps can assist members with this simple process. The HFA Buying Source program will offer significant savings with vendors that many retailers already do business with. These savings help members be more profitable and more competitive in their market place. While the Buying Source won’t open up lines that are unavailable to you because of territory exclusives, you will become acquainted with and recognized by vendors who you may not be doing business with now. When all things are equal—style, quality, availability—the vendor who is most profitable to you may become your new “favorite” source! If you have a special program that is more advantageous to you than what is offered by the Buying Source, keep using it. The Buying Source is intended to add value to your purchasing power. If you have a vendor who isn’t on the Buying Source program now, please let us know and we’ll do our best to add them to the program. The HFA is known for providing money-saving and time-saving services to members. We believe the addition of the Buying Source program takes the value of HFA Membership to new heights! If you haven’t been contacted about the HFA Buying Source, contact the Association or visit myHFA.org/hfa-buying-source and get started today.
Mary Frye is the Home Furnishings Association’s executive vice president. She can be reached at firstname.lastname@example.org or 916.757.1162.
The Membership Team during High Point Market Plaza Suites â€“ 1st floor
Free Buying Program RECEIVE REBATES ON FURNITURE PURCHASES YOU ALREADY MAKE PRICING DISCOUNTS, REBATES, & TERM CONCESSIONS
Activate and Start Saving Today 800.422.3778 myHFA.org/OMHbuyingsource | 800.422.3778
Tweet Your Next Sale How to start advertising on Twitter for only $50 By Annie Pilon
ant to advertise on Twitter but not sure where to start? Especially if you have an advertising budget of $50 or less, it’s important to know how to get the most bang for your home furnishings store’s buck. Retailers often think of other social media sites like Facebook when trying to push out their message, but Twitter also offers a variety of advertising options for all types of businesses. To learn about making the most out of your Twitter ad budget, check out the tips below.
Choose your objectives The most important thing you need to decide before you advertise on Twitter is what you want to accomplish. When advertising on Twitter, you determine your budget and pay a set amount each time your objective is met. So if you want to gain Twitter followers, you set your budget and create a Twitter followers campaign. Then each time that campaign helps you gain new followers, your bid amount is taken out of your advertising budget. The bid amount varies based on the type of objective and how much you’re willing to pay. But Twitter lets you know what others are bidding for the same types of ads so you can be competitive. You can choose from objectives like growing Twitter followers and engagement or increasing website clicks and engagement and more. If you’re unsure about what type of campaign to go with, don’t sweat it. Twitter even has a tool that helps you make those decisions based on your store’s goals. To access it, go to “Create new campaign” from your Ads dashboard and select “Help me choose” from the drop down menu.
Select the right ad type Once you have a goal in mind for your store, you’ll need to tailor your ad to that goal. For example, if you want to gain Twitter followers so you can get more potential customers into the early stages of your sales funnel, you probably want to go with a sidebar ad that promotes your account in the “who to follow” section. But if you’re promoting something more specific, like a sale section of your website, then you could choose a Promoted Tweet ad instead. There are also more specific options available like Promoted Trends if you want to get people talking about your recliners.
For instance, you might consider targeting those who have searched for words like “sofa,” “recliner” and “dining room table,” or those who have interacted with Twitter content that included those words or phrases. If you only narrow your audience by gender and location, then you’re likely to reach a lot of people who simply aren’t interested in what you have to offer.
Choose your timing Twitter also gives you the opportunity to select the timing of your campaigns. You can start a campaign immediately and run indefinitely. But if you’re promoting a seasonal offering, a sale or a launch of a new line for your store, you may want to consider the timing of your campaign carefully so you’re not spending those precious advertising dollars on results that don’t work toward your main goal or don’t match the content you’ve decided to promote.
Highlight content that aligns with your goals The actual content of your ad needs to align with your goals and your intended audience if you want it to be effective. So if you’re promoting a tweet, you need to carefully consider which tweet will best resonate to get the results you want. Or you can craft a new tweet to best align with those goals and appeal to people on Twitter. The actual content on your website matters too, if one of your goals is to get people to convert on your website. So if you’re paying for people to sign up for your newsletter, you need to make sure that your sign-up form is displayed prominently and in a way that’s likely to appeal to your audience. A snappy headline, the offer of a freebie and a disclaimer about how you won’t spam those who sign up can go a long way.
Keep an eye on analytics Once you decide on the right ad type, audience and time frame, you’re ready to launch your campaign. But your work isn’t done. Far from it. Throughout your campaign, keep an eye on your analytics to determine whether or not the results you’re getting are worth the investment. You might also find it necessary to pause your campaign and make changes if you’re not seeing the results you’re after. Alternatively, you might consider trying out a few different ads so you can compare and contrast the results. If you find one ad is significantly more effective than the others you’ve been using for your particular needs, then you know where to focus your efforts going forward.
Narrow your audience Twitter also offers retailers the ability to narrow the audience for each ad campaign. You can select a relevant audience based on demographics like gender, location, language and device. But you can also use keyword targeting to get even more specific about who sees your ad. 46
OCTOBER | 2016
Annie Pilon is a senior staff writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. Sign up for free small-business stories and tips at smallbiz.com
Does your advertising really drive traffic? If your advertising isnâ€™t generating traffic and increasing sales, you need a new agency, one that thinks like a retailer. Since 1982 Horich Hector Lebow has made a meaningful, measurable difference in the success of its clients, clients with over $1.4 billion in annual sales. HHL has done this by focusing exclusively on furniture and mattresses, providing a responsive one-stop solution for planning, creative and production, and for placement of print, broadcast and digital media.
101 Schilling Road, Suite 30, Hunt Valley, MD 21031 800-878-8989 Reach us at the Market at 443-957-3538 or email@example.com
OCTOBER | 2016
By Mayda Barsumyan
loud computing is one of the most important forces fueling today’s retail world. The ability to store data in remote servers and access it whenever users need it has truly improved operational efficiency in ways never before thought possible. As such, the emergence of the cloud has essentially revolutionized how stores do business. One of the key areas that benefitted from the dawn of cloud computing and its subsequent widespread adoption is the financial aspect of business. Moving to the cloud has transformed the finance function of many home furnishings stores by improving automation, optimizing data processing, reducing capital requirements and providing employees greater access to critical data, which makes collaboration and project management easier. Moving your financial data to the cloud is not something only large businesses are taking advantage of. Even small- and medium-sized home furnishings businesses can benefit profoundly from such a migration. In fact, many stores already do, and the idea of moving financial information and other important data to cloud-based systems is seriously being considered by many other sectors. A recent study by Gartner Research revealed that 47 percent of the organizations surveyed planned to migrate their core enterprise resource planning (ERP) systems to the cloud within the next three years. Disciplines within these ERP
OCTOBER | 2016
systems include financials, human capital management, and procure-to-pay. Here are some of the reasons how using the cloud can positively impact your store. It can help organizations financially. One of the primary reasons driving interest in cloud computing is its ability to give organizations the ability to pay only for what it currently needs in terms of technological infrastructure. Migrating to the cloud positively impacts the balance sheet because cloud services are typically made available to companies on a subscription basis. Thus, companies don’t need to shell out significant amounts of financial resources up front because they don’t have to invest in software, hardware, or services they don’t really need. Flexibility and mobility. Cloud computing allows employees to access important corporate data from a variety of devices and various locations. Whether the user is in on the showroom floor, in the warehouse, or away at furniture market, data can be accessed in just a few clicks. Furthermore, cloud services also enable an organization’s IT department to be flexible and to easily adapt to ever-changing business needs. For instance, a user can quickly update forecast numbers from intelligent market insight and have the flexibility of incorporating external data worldwide. It is a scalable investment. Organizations don’t have to worry about their servers running out of storage space or their tech infrastructure becoming obsolete.
Cloud-based systems typically adapt well to changing business needs because service providers offer many options for system upgrades. Cloud-based systems give users confidence that they’re one step ahead of their operational needs and that they’re using technologies that are efficient and scalable at the same time. It improves security. Although there are many myths regarding the possible security issues that may affect cloud-based systems, the reality is that well-managed, well-run cloud providers actually offer a higher level of security than what their clients can get from on-site equipment. Cloud providers have expert staff to maintain the environment, and they specialize in security practices and measures that safeguard client information from various risks. Furthermore, because cloudbased systems use remote servers, clients can be at ease knowing their data can be recovered in the event of an accident or a disaster that takes place at their company’s physical location Moving financials to a cloud-based system can transform a business significantly. Professional consultants can help companies get started with migration efforts by providing the knowledge and resources necessary to make a hassle-free transition. Mayda Barsumyan is CEO and founder of Business Escalation, Inc., a technology consultation and implementation company. Follow Mayda @ BizEscalation. This article originally appeared in smallbizdaily.com.
Are your sales meetings an excuse to nap? Maybe it’s time to shake things up. Starting this month, a three-part series designed to do just that.
By Gerry Morris
ou are cordially invited to a mandatory meeting.” This is an actual memo greeting one former retail giant used to announce all upcoming sales meetings. While humorous on the surface, this veiled threat was met with a collective groan. It was emblematic of the heavyhanded approach creating a rift between sales staff and management. The resulting double digit turnover rate certainly must have contributed to the retailer’s demise. While this is an extreme example, unfortunately, a collective groan is not unique to the above mentioned retailer when it comes to sales meetings. It doesn’t have to be like this. Conversely, sales meetings can not only be “less dreaded” they can actually become the lifeblood for increased productivity with many ancillary benefits for everyone. Blogger and speaker Dr. Michelle Rozen believes that companies can create “a culture of communication” resulting in improved productivity, job satisfaction, lower absenteeism and, in turn, lower turnover rates. When employees feel their voice is heard and their worth is validated, they have more of a sense of belonging to the company. Effective sales meetings can be a great forum for that, boosting morale while equipping associates. Imagine a sales staff actually looking forward to and enjoying sales meetings. This article will explore some ideas to make that a reality. At its essence, a sales meeting is two or more people coming together to communicate information with the purpose of facilitating sales. That’s it. From brief and casual, to lengthy and formal, face-to-face meetings are the key platform for communication between company employees. What’s the most important motive, big picture, umbrella, over-arching goal of sales meetings? To equip sales associates to provide better service to attract shoppers and turn them into loyal long-term customers, consequently increasing sales and profits, right? Can there be anything more important?
OCTOBER | 2016
Common complaints about sales meetings “If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be ‘meetings’.”—Humorist Dave Barry
Meetings tend to be: • • • • • • •
Too long Sacrificial of personal time or being away from the sales floor Boring, redundant, repetitive Brow beating for poor performance All talk, no action or follow through Disorganized, lack of focus or objectives or goals One-way monologues
Obviously the solution to these issues is to do the opposite. That is recommended. But in addition, let’s explore some specific ideas that can not only make sales meetings more effective, but also entertaining, exciting, empowering, educational and probably several more adjectives that start with “e.” Set the mood: It’s up to the one giving the meeting to set the mood, and that can start well before the actual meeting. “Dear Valued Staff, we’re looking forward to helping you increase your sales at our upcoming meeting Saturday, come hungry and ready to learn something new!” A somber matter-of-fact tone is not very inspiring or uplifting. Start with an inspirational message. Remind everyone of the real goal.“We’re here to serve those who are gracious enough to give us the opportunity to earn their business.” Meeting leaders should take more of an approach like a coach getting a team ready for a game. Provide a multisensory experience: Sights and sounds, scents? Why not make it fun? Can we put those words together? Home furnishings is a great category of goods to sell, and can be fun.
Imagine selling insurance or burial plots. Ugh. Add some upbeat background music as everyone arrives along with great snacks. In place of the expected donuts and coffee, try some more nutritious options like a fruit tray, breakfast sandwiches, gourmet coffees, herbal teas or fresh juices. Surprise them and keepâ€™em guessing. Believe it or not, PowerPoint can be effective. No black bullet points on a white screen though. I once did a seminar using slides from Young Frankenstein where the monster was the customer. Dr. Frankenstein (the late, great Gene Wilder) was the salesman and Igor was the sales manager. While fun and funny, I had really good information to offer. Years ago, one of my sales managers rode into a meeting on a donkey, saying we need to get off ourâ€Ś you know what. While Iâ€™m not suggesting you employ farm animals, you can imagine it got quite a laugh and set the tone for a fun meeting. Every meeting should have a well-planned agenda with time constraints and a stated, focused, clearly-defined goal, along with objectives and achievable tasks. Presenters or meeting leaders must be fully prepared and ready to go. Starting and stopping on time is a must. Interact and engage: People tend to tune out one-way monologues. Presenters should pepper the meeting with questions and seek input. Itâ€™s important to keep the meeting under control though. Field only the information that is pertinent to everyone. Specific issues should be addressed in a different forum. Give assignments ahead of time so others can participate and contribute. Reward and recognize: While performance issues are very much a part of sales meetings, reward and incentive go a lot further in group meetings than brow beating. Not a good time for pink slips. Out of respect for those who struggle, poor performance issues should be addressed behind closed doors. Thereâ€™s a lot more to say about making sales meetings effective. Be sure to watch for next monthâ€™s issue where Iâ€™ll explore and present ideas for different types of meetings. If you want to attract enthusiastic loyal customers, create a culture of enthusiastic loyal sale associates. Effective meetings can play a vital role in that worthy goal.
Gerry Morris has more than 20 years of experience in the mattress industry. In partnership with The Furniture Training Co., he offers a premium online training course, â€œSell More Mattresses with Gerry Morris.â€? To view the course, visit furnituretrainingcompany.com
This is the first of a three-part series about improving sales meetings. â€” NEXT MONTH â€” More Ideas for Effective Meetings: (Ideas from the experts)
NOMINATE A WINNER
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Minimize On-the-Job Dangers A safe store takes planning and training, but it’s well worth the investment. By Brooke Chaplan
hen you think about all the risk you might be exposing your company to, workplace safety should rank high on any home furnishings store owner’s priority list. One accident can result in serious injuries to you or one of your employees. That can translate to a prolonged loss of productivity. And that could be just the beginning of your problems. You and your store could also face hefty civil and regulatory penalties that can threaten your business’ very existence. With so much at risk, doesn’t it make sense to be proactive in working to minimize on-the-job dangers in your workplace? Acting before rather than after is the best way to avoid unforeseen circumstances and costs later on. Let’s get started.
Planning First things first: Carefully assess the safety issues that threaten your employees and your facilities. Only after you know the types of materials that can cause problems and the vulnerabilities of your equipment, can you begin to craft a good safety policy. Part of the planning process should include defining and documenting every work process used within your store. This is not a one-time process. Just as in life, you never stop planning when it comes to safety. As time passes, your procedures and facilities will change so periodically conduct a review of your plans to ensure you and your managers stay aware of safety concerns.
Compliance Make sure your employees understand general rules that govern your human resources. Special rules might apply to your industry, so find out what laws and regulations are applicable to your industry. If you depend on the use of delivery trucks, a different set of rules might apply. Compliance often requires expensive precautions, but they can help keep you and your business safe.
Prepare Despite your best intentions and precautions, occasional accidents will likely occur during business. Get ready by having appropriate emergency gear stationed around your facility to minimize the damage. Start with basic equipment such as fire extinguishers and first aid kits, then get the emergency equipment that meets the particular needs of your business. If your store works with any wood-finishing materials or chemicals, you might need eye-wash stations. Delivery drivers who are out on the road all day will probably need safety flares and other equipment that can help in the inevitable event of a breakdown. Contact a wrongful death attorney or an accident attorney if you feel like you need help understanding how to prepare properly for an accident. Brooke Chaplan is a freelance writer and blogger. For more information, contact Brooke via Twitter @BrookeChaplan.
Training Every employee should complete safety training before starting with your firm to ensure they understand the safety issues that affect their job. After learning the best security practices for your company, your employees should receive thorough training for the tasks you expect them to perform. When people know how to use their tools and equipment properly and have a high awareness of safe work habits, you will be well underway to creating a safer environment for you and your employees.
OCTOBER | 2016
HFA members have access to a number of insurance and compliance programs as well as information on industry-specific regulations.
OCTOBER | 2016
OCTOBERCHECKLIST STAFF The holidays don’t ŚĂǀĞƚŽďĞŚĞĐƟĐ͘ Start searching for any holiday hires you think ǇŽƵŵŝŐŚƚŶĞĞĚ͘dŚŝƐǁŝůůŐŝǀĞ ǇŽƵƟŵĞƚŽƚƌĂŝŶƚŚĞŵĂŶĚƐĞĞ ŝĨƚŚĞǇ͛ƌĞŐŽŝŶŐƚŽǁŽƌŬŽƵƚ͘ /ĨŶŽƚ͕ǇŽƵ͛ůůŚĂǀĞƟŵĞƚŽĮŶĚ ƌĞƉůĂĐĞŵĞŶƚƐ͘ZĞŵŝŶĚǇŽƵƌ ĐƵƌƌĞŶƚƐƚĂīƚŚŝƐŝƐƚŚĞŝƌůĂƐƚ ĐŚĂŶĐĞƚŽƵƐĞǀĂĐĂƟŽŶƟŵĞ ďĞĨŽƌĞƚŚĞďƵƐǇƐĞĂƐŽŶƐƚĂƌƚƐ͘
Week 1 _______ 3-8
ACCOUNTING DĞĞƚǁŝƚŚǇŽƵƌWĂŶĚĚŝƐĐƵƐƐ ĂƐƚƌĂƚĞŐǇĨŽƌϮϬϭϳ͘ŶĞǁǇĞĂƌ ďƌŝŶŐƐŶĞǁƐŵĂůůͲďƵƐŝŶĞƐƐƚĂǆ breaks you might be able to take ĂĚǀĂŶƚĂŐĞŽĨ͘ PROMOTION dŚŝŶŬĂďŽƵƚĂŽŶĞͲĚĂǇŇĂƐŚƐĂůĞ ĨŽƌŽůƵŵďƵƐĂǇ͕KĐƚŽďĞƌϭϬ͘ ͞ŽŵĞĚŝƐĐŽǀĞƌƚŚĂƚƉĞƌĨĞĐƚ piece of furniture and take an ĞǆƚƌĂϭϬƉĞƌĐĞŶƚŽī͊͟ TRAVEL Las Vegas Market is three months ĂǁĂǇ͘,ĂǀĞǇŽƵďŽŽŬĞĚǇŽƵƌ ƌŽŽŵ͍tŚǇŶŽƚŐŝǀĞŝƌďŶďĂ try? PROMOTION Live in a state ǁŚĞƌĞŚƵŶƟŶŐŝƐ popular? Think ĂďŽƵƚĂ͞,ƵŶƟŶŐtŝĚŽǁ͟ƐĂůĞ ƐŽŵĞƟŵĞƚŚŝƐŵŽŶƚŚ͘
Week 2 _______ 10-15
TECHNOLOGY When’s the last ƟŵĞǇŽƵĐŚĞĐŬĞĚ your online ƌĞǀŝĞǁƐ͍ŚĞĐŬŽƵƚ'ŽŽŐůĞ͕ Yelp, Yahoo and your local ĞƩĞƌƵƐŝŶĞƐƐƵƌĞĂƵ͘/ĨǇŽƵ see something you don’t like, consider a public (online) display ŽĨŵĂŬŝŶŐƚŚŝŶŐƐƌŝŐŚƚǁŝƚŚƚŚĞ ĐƵƐƚŽŵĞƌ͘
TECHNOLOGY 'ŽŽŐůĞǇŽƵƌŬĞǇ ďƌĂŶĚƐ͘^ŚŽƉƉĞƌƐ search for products and brands more than store ŶĂŵĞƐ͘/ƚƚĂŬĞƐƵƉƚŽϰϱĚĂǇƐĨŽƌ ǁĞďƐŝƚĞĐŚĂŶŐĞƐƚŽƌĞŐŝƐƚĞƌǁŝƚŚ ŵĂũŽƌƐĞĂƌĐŚĞŶŐŝŶĞƐ͘/ĨǇŽƵƌ ƐƚŽƌĞŝƐĚŽǁŶƚŚĞ^KůŝƐƚ͕ǇŽƵ͛ǀĞ ŐŽƚǁŽƌŬƚŽĚŽ͘
TRAINING ŽŵŵŝƚƚŚŝƐŵŽŶƚŚƚŽƌĞĂůůǇ ůŝƐƚĞŶƚŽǇŽƵƌƐƚĂī͘>ŝƐƚĞŶƚŽ ƚŚĞƋƵĞƐƟŽŶƐƚŚĞǇ͛ƌĞĂƐŬŝŶŐ ĐƵƐƚŽŵĞƌƐĂŶĚƚŚĞŝƌƉƌŽĚƵĐƚͲ ŬŶŽǁůĞĚŐĞƐƚĂƚĞŵĞŶƚƐ͘/ĨƚŚĞǇ͛ƌĞ ŽŶƉŽŝŶƚ͕ŽīĞƌĂůŝƩůĞƉƌĂŝƐĞ͘/Ĩ ŶŽƚ͕ŽīĞƌƚŽŚĞůƉ͘
HUMAN RESOURCES ϭ͘WŝĐŬĂũŽďŝŶǇŽƵƌƐƚŽƌĞ͘Ϯ͘ ^ĞƚǇŽƵƌƟŵĞƌĨŽƌϭϱŵŝŶƵƚĞƐ͘ ϯ͘hƐĞƚŚĂƚƟŵĞƟŐŚƚĞŶŝŶŐƚŚĞ ũŽďĚĞƐĐƌŝƉƟŽŶ͘ϰ͘ZĞƉĞĂƚŶĞǆƚ ǁĞĞŬ͘^ƚĂŶĚĂƌĚŝǌĂƟŽŶĞŶƐƵƌĞƐ all of your employees perform ƚŚĞĞǆĂĐƚƐĂŵĞƉƌŽĐĞĚƵƌĞĂŶĚ ƉƌŽǀŝĚĞƐƚŚĞĞǆĂĐƚĞǆĐĞůůĞŶƚ ƐĞƌǀŝĐĞĨŽƌĞǀĞƌǇĐůŝĞŶƚ͘
MARKETING ŽǇŽƵŚĂǀĞĐƵƐƚŽŵĞƌƐǁŚŽ seemed to disappear along ǁŝƚŚ:ŝŵŵǇ,ŽīĂ͍ZĞĂĐŚŽƵƚƚŽ ĐƵƐƚŽŵĞƌƐǁŚŽ͛ǀĞŶŽƚďŽƵŐŚƚ from you in the past three years ĂŶĚŵĂŬĞƚŚĞŵĂƐƉĞĐŝĂůŽīĞƌ ƚŚĞǇĐĂŶ͛ƚƌĞĨƵƐĞ͘
OPERATIONS ŶĂůǇǌĞǇŽƵƌĐŚĞĐŬŽƵƚ ƉƌŽĐĞĚƵƌĞƐ͘tŽƌŬŽŶŵĂŬŝŶŐ them as smooth and quick as possible because the holidays ĂƌĞĐŽŵŝŶŐ͘
Week 3 _______ 17-22
SOCIAL MEDIA WƌĞƉĂƌĞĂŶĞĚŝƚŽƌŝĂůĐĂůĞŶĚĂƌ ĨŽƌǇŽƵƌǁĞďƐŝƚĞďůŽŐĂŶĚŽƚŚĞƌ ƐŽĐŝĂůŵĞĚŝĂĐŚĂŶŶĞůƐ͘ŝŵƚŽ ƉŽƐƚƐŽŵĞƚŚŝŶŐŶĞǁĞǀĞƌǇĚĂǇ ƚŽŚĞůƉŝŶĐƌĞĂƐĞǇŽƵƌǁĞďƐŝƚĞ͛Ɛ ^KĂƚƚŚĞƟŵĞŽĨǇĞĂƌǁŚĞŶ people are scouring the internet ƚŽĚĞĐŽƌĂƚĞĨŽƌƚŚĞŚŽůŝĚĂǇƐ͘
TECHNOLOGY ^ƉƌƵĐĞƵƉǇŽƵƌǁĞďƐŝƚĞďǇ ĂƐƐŝŐŶŝŶŐĂĚŝīĞƌĞŶƚĐŽŵƉĞƟƚŽƌ͛Ɛ ǁĞďƐŝƚĞƚŽĞǀĞƌǇƐƚĂīŵĞŵďĞƌ͘ Their mission: Find something ĂǁĞƐŽŵĞ͕ĂŶĚďƌŝŶŐŝƚďĂĐŬƚŽ ƐŚĂƌĞǁŝƚŚƚŚĞƚĞĂŵ͘
OCTOBER | 2016
SALES If you’re the boss, get out of the Žĸ ĐĞĂŶĚƐĐŚĞĚƵůĞŵŽƌĞƟŵĞ ŽŶƚŚĞƐŚŽǁƌŽŽŵŇŽŽƌƚŚĞƐĞ ĐŽŵŝŶŐŵŽŶƚŚƐ͘^ŚŽƉƉĞƌƐůŝŬĞƚŽ ŵĞĞƚƚŚĞďŝŐĐŚĞĞƐĞ͘WůƵƐ͕ǇŽƵ ŵŝŐŚƚůĞĂƌŶƐŽŵĞƚŚŝŶŐ͘
What’s on your October checklist list? ͞/ǁĂŶƚƚŽĮŐƵƌĞŽƵƚƚŚĞďĞƐƚ ǁĂǇƚŽƉŽƐŝƟŽŶĂŶĚŽƌŐĂŶŝǌĞ ŽƵƌĚĞƐŝŐŶĐĞŶƚĞƌƐŽŽƵƌƐĂůĞƐ ĂƐƐŽĐŝĂƚĞƐĂŶĚĚĞƐŝŐŶĞƌƐĐĂŶǁŽƌŬ ĐŽŵĨŽƌƚĂďůǇǁŝƚŚĐůŝĞŶƚƐ͘͟
DISPLAY WůĂŶŶŝŶŐƐŽŵĞ,ĂůůŽǁĞĞŶĨƵŶ͍ ĞŐŝŶƚŚŝŶŬŝŶŐĂďŽƵƚŚŽǁǇŽƵĐĂŶ ĚƌĞƐƐƵƉǇŽƵƌƐƚŽƌĞŽƌǁĞďƐŝƚĞƚŽ ŐĞƚƉĞŽƉůĞŝŶƚŚĞŵŽŽĚĨŽƌƚƌŝĐŬͲ ŽƌͲƚƌĞĂƟŶŐĂŶĚďƵǇŝŶŐ͘ 54
Week 4 _______ 24-29
>ŝŶĚĂEŝŐďƵƌ EŝŐďƵƌ͛Ɛ&ŝŶĞ&ƵƌŶŝƚƵƌĞ tĂƵƐĂƵ͕tŝƐĐ͘
TO m ALL SI yh G fa NG N .o N UP rg /n EVE FO gn N R -e TS ve nt s
SATURDAY, OCTOBER 22, 2016 Market Crawl
Starting at 5:00 p.m. FurnitureDealer.net showroom Join the NGN group at High Point Market for a showroom WHY[`JYH^S;OPZPZHNYLH[^H`[VUL[^VYRZLLHSS[OLKPќLYLU[ showrooms in High Point, and most importantly, have fun! Text NGN to 58632 to receive updates throughout the night.
SUNDAY, OCTOBER 23, 2016 Lunch with Leaders 11:30 a.m. – 1:00 p.m.
Caroline Hipple Norwalk Furniture
Larry Klaben Morris Furniture
Josh Hudson Hudson’s Furniture
What would you ask an industry leader? Big-name industry leaders are opening their busy schedules for lunch mentoring sessions with next-generation home furnishings professionals. This exclusive opportunity provides you with quality MHJL[PTL^P[O[VWPUK\Z[Y`L_LJ\[P]LZ^OVJHUVќLYPU]HS\HISL advice, give feedback on your ideas, and become mentors in your career. Build partnerships faster than your predecessors did! Limited availability. Reserve your spot today! Go to myhfa.org/ngn-events.
MONDAY, OCTOBER 24, 2016 FurnitureLand South
Store Tour 1:00.p.m. – 3:00.p.m. Ready to experience the world’s largest furniture store? Let’s go! Next Generation Now members will enjoy an exclusive, behindthe-scenes tour of FurnitureLand South’s 1.3 million-squarefoot showroom. This top 100 retailer is a family-owned, second generation business with a sprawling campus that includes the world’s largest 18th-century highboy replica, a cutting-edge distribution center, a design center and outlet, plus a Starbucks HUKH:\I^H`>HSR[OLÅVVY^P[ORL`Z[HќL_WSVYL[OLKPќLYLU[ areas and ask questions.
(]HPSHISL[V[OLÄYZ[5L_[.LULYH[PVU4LTILYZ9LZLY]L`V\YZWV[ today! Go to myhfa.org/ngn-events.
Home Furnishings Association | 500 Giuseppe Ct., Suite 6, Roseville, CA 95678 | 800.422.3778 | membership@myHFA.org RetailerNOWmag.com OCTOBER | 2016 55
The DL on the new OT rules A new law dramatically expands overtime protection. Here’s how it affects your store. By Lisa Casinger
n May, the Department of Labor issued its new overtime rules that go into effect December 1. There are two key components to the rule—one, the annual salary threshold skyrockets from $23,660 ($455 a week) to $47,476 ($913 a week). Two, this threshold will automatically increase every three years. Before you panic, let’s breakdown what this means, which of your employees are affected, and what you need to do. This rule applies to all employers, regardless of number of employees or average annual sales. There is no grace period or easing into this rule incrementally and it’s a final ruling from the Labor Department, so you can only imagine the repercussions of not complying (not to mention the possible civil suits). There are no changes to the standard duties
OCTOBER | 2016
test, which is how you determine if an employee is non-exempt or exempt. (See sidebar.) All employees are eligible for overtime compensation unless they are paid a salary, that salary is more than the threshold ($47,476), and they qualify as exempt per the primary duties test. If they meet all three of these requirements they are not eligible for overtime. Many furniture retailers compensate salespeople with some form of commission and/or bonus package. In these cases, up to 10 percent of the $47,476 salary may come from incentive payments or non-discretionary bonuses (a predetermined amount awarded based on meeting specific criteria). However, these payments have to be made at least quarterly. Your first step is to identify which of
your exempt employees are making less than $47,476 a year and decide if you need to raise their salaries to bring them up to the threshold or reclassify them as non-exempt. If you do reclassify employees there are a number of variables to consider. • Will they make the same salary in an hourly format? • Will this include expected overtime or will the employee be able to earn OT? • Will their benefits change? • You’ll have to adhere to meal and hourly breaks, as well as any other labor laws specific to non-exempt employees. Carefully weigh the pros and cons of reclassifying employees and make sure to clearly communicate any changes in compensation policies, overtime oppor-
tunities and expectations with your staff. Some exempt employees may feel as if they’re being demoted if they’re reclassified as non-exempt so it’s important to explain the new overtime rules and how they could negatively affect the business if these measures aren’t taken. The Home Furnishings Association recently hosted a webinar presented by the U.S. Chamber of Commerce (HFA members can view this and all webinars on-demand through the member-only portal) during which Allison Dembeck, an executive director with the Chamber, outlined some of the issues with the new rules. These include: The new salary threshold is too high, especially for small businesses; only a portion of nondiscretionary bonuses and commissions count toward the threshold; the annual automatic increase violates the Administrative Procedure Act; and there is no
grace period or phased-in increase. Realistically speaking, there’s no way to stop the rule. You must prepare now. There’s no legal avenue to pursue right now because the Labor Department has the authority to raise the threshold. When the first automatic increase goes into effect, there might be grounds for litigation because the department is bypassing procedures in automatically raising the threshold. Congress could pass a joint resolution, but that would have to be signed by the President and that’s not going to happen under this administration. There is House Resolution 5813, the Overtime Reform and Enhancement Act proposed by Congressman Kurt Schrader (D-Ore.). While this bill wouldn’t stop the rule, it offers a more realistic plan by phasing in to the $47,476 threshold over three more years ($35,984 this year,
$39,780 in 2017, $43,628 in 2018 and $47,476 in 2019) and removing the automatic updates. It would require the Labor Department to go through a formal rule-making process for increases, which brings transparency to its actions. The best course for employers is to be prepared to make the necessary changes by December 1 and, if this overtime rule will be a burden for your business, urge your Senators to introduce and co-sponsor a companion bill to H.R. 5813 and urge your Representatives to co-sponsor.
Lisa Casinger is the government relations liaison for HFA and the editorial director for RetailerNOW. Contact her at firstname.lastname@example.org.
Employee Classifications Duties Test
As you’re working to comply with the new overtime rules, this is a good time to take a close look at how your employees are classified. Paying someone a salary and calling them a manager does not automatically mean they fall under the exempt status. To be considered exempt an employee must meet duties tests as outlined by the Department of Labor. The duties tests have not changed under the new overtime rules. For each category, each test must be met.
Executive • The employee must be paid a salary not less than $913/week (starting December 1) • Their primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise • They must regularly direct the work of at least two or more other full-time employees or their equivalent • They must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.
• The employee must be paid a salary not less than $913/ week (starting December 1) • Their main duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers and include the exercise of discretion and independent judgment with respect to matters of significance.
Professional • The employee must be paid a salary not less than $913/ week (starting December 1) • Their primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment. • The advanced knowledge must be in a field of science or learning and the knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
OCTOBER | 2016
HFACOMMUNITY Magnolia stars a hit with Star Furniture shoppers Nearly 2,000 fans of Chip and Joanna Gaines showed up at Star Furniture in Houston recently to see the celebrities and their new line of furniture.
HFA member Star Furniture of Texas lived up to its name this summer when a couple of stars, Chip and Joanna Gaines, showed up at the company’s West Houston store to help launch Joanna’s new furniture line, Magnolia Home Furniture & Accessories, from Standard. Nearly 2,000 people showed up for the couple’s appearance. Some arrived when the store opened at 10 a.m. even though the Gaineses weren’t scheduled to appear until that evening. The appearance was publicized with an invitation to a select group of Star’s best customers, but the main driver was social media with email support, said Michael Galloway, vice president of advertising and new media for Star Furniture. “We began cultivating a list of people who were interested in the collection when we launched in late May,” said Galloway. “Our digital strategy was focused on growing interest from those with an affinity for all things Magnolia using search engine marketing and retargeting. Chip and Joanna are wildly popular with the TV show “Fixer Upper.”” Magnolia Home is shown on all of Star Furniture’s floors with display space ranging from 2,000 to 2,500 square feet depending on the footprint. The store’s display mirrors the experience of visiting the wildly popular Magnolia Market at the Silos in Waco, Texas, the couple’s hometown business. Galloway said the line has been well received by customers and has attracted many new faces to the store. “The broad appeal of this group is like none I’ve ever seen. It crosses all age and economic boundaries,” he said.
OCTOBER | 2016
HFA member Star Furniture used social media and digital marketing to announce Chip and Joanna’s appearance at the store.
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OCTOBER | 2016
HFACOMMUNITY HFA hosting Leadership Immersion program in Colorado Back by popular demand, the Home Furnishings Association is sponsoring its third annual Leadership Immersion Experience, this time at American Furniture Warehouse in Boulder, Colo. For three days—December 6-8, HFA members who are also Next Generation Now members will get the opportunity to go behind the scenes of one of the industry’s Top 100 retailers, and learn from its iconic CEO, Jake Jabs, and his team. “The Leadership Immersion Experience is an extraordinary opportunity for
HFA’s young professionals around the country,”said Sharron Bradley, HFA’s CEO. Lael Thompson, of Broyhill Home Collections in Aurora, Colo., was one of five HFA members who attended last year’s Leadership Immersion Experience in Miami at El Dorado Furniture. “There was something in every meeting that I learned and could take back home to implement,” Thompson said. “Everything from operations and inventory right down to price tags and wiping down fingerprints. It was amazing.”
The program features an agenda developed to showcase the finely tuned operations of one of the most successful retailers in the country. With visits to the distribution center, corporate headquarters and a local retail storefront, attendees will have exclusive access to American Furniture Warehouse executives and key staff members. HFA members can contact HFA’s education director, Kaprice Crawford, at 800-422-3778 ext. 102 or email her at firstname.lastname@example.org for more information.
Hall of Fame to induct HFA member Robert Wo Longtime HFA member Robert Wo, chairman of C.S. Wo & Sons, is one of five furniture industry leaders who will be inducted this month in the American Home Furnishings Hall of Fame during High Point Market. Joining Wo in the 2016 class are John Bray, chairman and CEO of Vanguard Furniture; Robert B. Currey, founder of Storehouse Inc. and Currey & Co.; Art DeFehr, chairman of Palliser Furniture Upholstery; and Richard Frinier, who runs Richard Frinier Design Studio. Wo, whose company earlier this year was honored by the Home Furnishings
Association as the 2016 Retailer of the Year for member stores with sales above $10 million, is known throughout the industry. He opened a family general store in Honolulu and turned it into one of the Top 100 retailers in the nation. Wo is best known for his reaction to a port strike in Honolulu in 1949. Instead of waiting for the strike to end, Wo began manufacturing his own furniture in Hawaii. C.S. Wo & Sons eventually grew into several store brands with a wide range of price points for consumers. Today that decision has paid off in the form of a 50 percent market share in Hawaii. As famous as Wo is in the industry as a retailer, he’s just as well known in manufacturing circles. As a director of the National Association of Furniture Manufacturers, Wo put together the first national furniture manufacturing equipment show
in 1972 in Kentucky. After the show, Wo ran into Larry Moh on their flight home. The chance encounter eventually led to a partnership and the founding of Universal Furniture, the first company to import furniture from Asia in mass volume – and eventually one of the world’s largest manufacturing companies. Wo served on the board of directors of the National Association of Furniture Manufacturers and the National Home Furnishings Association, which later became the HFA. Wo founded the Wo International Center, a program that promotes international and global studies for students attending Honolulu’s Punahou School, and the C.S. Wo Foundation, which supports charitable organizations. This year’s ceremony will be held Oct. 23 at the Sheraton Greensboro Four Seasons to accommodate more guests.
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HFACOMMUNITY Tiderwater recognized as Diamond sponsor by HFA Tidewater Finance Company has become a Diamond sponsor in support of the Home Furnishings Association’s regional events. The Virginia Beach, Va.-based, privately owned consumer finance company strives to provide credit opportunities to consumers who may have experienced financial difficulties in the past, but currently demonstrate the initiative and ability to establish positive payment patterns. Tidewater focuses on near-prime and non-prime applicants, bringing value to
its retail partners by helping them capture sales they’d otherwise lose. “Our exciting new partnership with HFA will give its members access to a company with 25 years of experience approving credit-challenged customers,” said David Minero, Tidewater’s national sales manager. Tidewater’s sponsorship will help the HFA provide more regional events, which
provide great networking and education opportunities for retailers and other members of the industry. Most recently Tidewater participated in HFA’s Colorado Rockies event in July. “We had members as far away as New Mexico and Wyoming gather for a night of baseball and networking,” said HFA’s executive vice president, Mary Frye. “This is our third year hosting the Rockies event and as always it was a fun and worthwhile time. We couldn’t provide these types of events without sponsors like Tidewater.”
Welcome New HFA Members The HFA recognizes and welcomes the following new members to the Association:
Bend Upcycle, Bend, Ore.
Five Points Furniture, Oxnard, Calif.
Roaring Fork Furniture, Glenwood Springs, Colo.
Danto Furniture Company, Detroit, Mich.
Jubilee Furniture, Las Vegas, Nev.
Rockridge Furniture & Design, Oakland, Calif.
Do you have something for the HFA Community? Send your information and hi-res photos to Robert Bell, email@example.com.
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ICFF Miami October 5-6 Miami ICFFMiami.com
High Point Market October 22-26 High Point, North Carolina Highpointmarket.org
2017 Atlanta International Gift & Home Furnishings Market January 10-17 Atlanta Americasmart.com
Atlanta International Area Rug Market January 11-15 Atlanta Americasmart.com
Winter Las Vegas Market January 22-26 Las Vegas Lasvegasmarket.com
Dallas International Lighting Market January 18-22 Dallas Dallasmarketcenter.com
Dallas Total Home & Gift Market January 18-24 Dallas Dallasmarketcenter.com
NY NOW February 4-8 New York City Nynow.com
Tupelo Spring Furniture Market February 23-26 Tupelo, Mississippi Tupelofurnituremarket.com
High Point Market April 22-26 High Point, North Carolina Highpointmarket.org
International Contemporary Furniture Fair May 21-24 New York City ICFF.com
johnthomasfurniture.com OCTOBER | 2016
ADINDEX 220 Elm (336) 884-8220 220elm.com 220elm @220elm Page 9 Amber Engine (877) 615-2121 amberengine.com amberengine @amberengine Page 39 Coaster (800) 221-9699 ext. 1217 coasteramer.com Page 36-37 Connie Post (304) 736-7283 conniepost.com Page 49 Cresent (615) 975-4862 cresent.com Cresent.furniture @cresentfurniture Page 31 Furniture Wizard (619) 869-7200 furniturewizard.com furniturewizard @furniturewiz Page 53 High Point Market (336) 869-1000 highpointmarket.org HighPtMarket @hpmarketnews Page 7 Horich Hector Lebow (800) 878-8989 hhladv.com Page 47
Imagine Advertising & Publishing (866) 832-3214 imagineadv.com Page 60-61
Nourison (201) 368-6900 nourison.com Nourison @nourison Page 35
Jofran jofran.com JofranInc Page 63 John Thomas Furniture (a division of Whitewood Industries)
(336) 472-0303 johnthomasfurniture.com johnthomasfurniture Page 62 Las Vegas Market (888) 962-7469 lasvegasmarket.com facebook.com/wmclv @worldmarketctr Page 29 MicroD (800) 964-3876 microdinc.com microdinc @microdinc Page 3 Myriad (800) 676-4243 myriadsoftware.com Myriad Inside Back Cover Northwest Furniture Xpress (828) 475-6377 nwfxpress.com Back Cover
ProfitSystems (800) 888-5565 profitsystems.com PROFITsystems @PROFITsystems Page 27 STORIS (888) 4-STORIS storis.com STORIS.solutions @STORIS Page 5 Surya (877) 275-7847 surya.com SuryaSocial @SuryaSocial Inside Cover Synchrony Financial (800) 422-3778 nahfa.org Page 15 Tidewater (800) 535-4087 x6553 tidewaterfinance.com Tidewater Finance Company @TidewaterMotor Page 23 Truckskin (877) 866-7546 truckskin.com TruckSkin @TruckSkin Page 8
To advertise in RetailerNow contact Lynn Orr at (916) 757-1160. RetailerNOWmag.com
SEPTEMBER | 2016
NOWLIST DIY at its coolest Lithuanian designer Mindaugas Zilionis turned to Kickstarter to develop his SPYNDI ŵƵůƟĨƵŶĐƟŽŶĂůĨƵƌŶŝƚƵƌĞ͘/ƚ͛ƐĂƐĞƚŽĨϲϬͬϳϱ interlocking natural birch plywood pieces that you put together according to the curve ǇŽƵǁĂŶƚƚŽĨŽƌŵ͘/ƚƐĞƌŐŽŶŽŵŝĐ͕ ĐƵƐƚŽŵŝǌĂďůĞĂŶĚŝŶĚŽŽƌͬ ŽƵƚĚŽŽƌ͘
WĂƌĂĚŝƐĞĨŽƵŶĚ dŚĞƐĞĂƌĞƚŚĞƚŽƉϭϬƐƚĂƚĞƐ ǁŚĞƌĞǇŽƵĐĂŶƌĞƟƌĞƌŝĐŚ͕ ĂĐĐŽƌĚŝŶŐƚŽĂ'KĂŶŬŝŶŐZĂƚĞƐ survey: ĞůĂǁĂƌĞ͕DŝĐŚŝŐĂŶ͕ /ŶĚŝĂŶĂ͕DĂƌǇůĂŶĚ͕&ůŽƌŝĚĂ͕ EĞǁ:ĞƌƐĞǇ͕WĞŶŶƐǇůǀĂŶŝĂ͕ DŝƐƐŝƐƐŝƉƉŝ͕KŚŝŽand'ĞŽƌŐŝĂ͘ dŚĞƐƵƌǀĞǇĐŽŶƐŝĚĞƌĞĚƚĂǆĞƐ͕ ůŝǀŝŶŐĞǆƉĞŶƐĞƐ͕ďĂŶŬŝŶŐ͕ ŚĞĂůƚŚĂŶĚƐŽĐŝĂůƐĞĐƵƌŝƚǇ͘ Source: Gobankingrates.com
ĞĂƵƟĨƵůůǇƌĞƉƵƌƉŽƐĞĚ dŚĞ^ŽŶŝŶŬĞďƵīĞƚ͕ĨƌŽŵĚĞƐŝŐŶĞƌĂǀŝĚƋƵŝŶŝ͕ ŝƐŵĂĚĞĨƌŽŵƌĞĐůĂŝŵĞĚǁŽŽĚĂŶĚƚŚĞĨƌŽŶƚ ƐƉĞĐŝĮĐĂůůǇŝƐĐŽŵƉƌŝƐĞĚŽĨƐůĂƚƐƵƐĞĚŝŶƚŚĞ ůĂĐƋƵĞƌŝŶŐƉƌŽĐĞƐƐĨŽƌŚĂŶĚĐƌĂŌĞĚĨƵƌŶŝƚƵƌĞ͘
ƌƟƐƚDŝĐŚĂĞůĞŝƚǌ creates agri-sculptures ƚŚĂƚĚŝƐƚŽƌƚĚŽŵĞƐƟĐ ƉŝĞĐĞƐ;ůŝŬĞĨƵƌŶŝƚƵƌĞͿ͘ He “planted” Tree in ĂŶƵƌďĂŶĐŽͲŽƉĨĂƌŵͬ community garden; ŝƚ͛ƐϯϮĨĞĞƚůŽŶŐĂŶĚ ĐƌĂŌĞĚĨƌŽŵƉŝŶĞ ĂŶĚďůƵĞƉŝŶĞ͘
OCTOBER | 2016
ĞƐƚͲƉĞƌĨŽƌŵŝŶŐƌĞƚĂŝůƐƚŽĐŬƐŽĨƚŚĞůĂƐƚ ĚĞĐĂĚĞ;ƌĂŶŬĞĚϭͲϮϬͿ͗ŵĂǌŽŶ͕ŽůůĂƌ dƌĞĞ͕ZŽƐƐ^ƚŽƌĞƐ͕ŽůůĂƌ'ĞŶĞƌĂů͕d:y͕ ĚǀĂŶĐĞƵƚŽWĂƌƚƐ͕DĐŽŶĂůĚ͛Ɛ͕ ,ŽŵĞĞƉŽƚ͕ĂƌƚĞƌ͛Ɛ͕<ƌŽŐĞƌ͕s^͕ ŽƐƚĐŽ͕^ƚĂƌďƵĐŬƐ͕>ŽǁĞ͛Ɛ͕&ŽŽƚ>ŽĐŬĞƌ͕ ƵŶŬŝŶ͛ƌĂŶĚƐ͕tĂůŐƌĞĞŶƐ͕&ŝŶŝƐŚ>ŝŶĞ͕ tĂůͲDĂƌƚĂŶĚdĂƌŐĞƚ͘
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sĹ?Ć?Ĺ?ĆšĹ˝ĆŒÇ‡Ä‚Ćš,Ĺ?Ĺ?ĹšWĹ˝Ĺ?ĹśĆšDÄ‚ĆŒĹŹÄžĆšÍ•KÄ?ĆšĹ˝Ä?ÄžĆŒĎŽĎŽÍ˛ĎŽĎ˛Ä‚ĆšĆšĹšÄž ZÄžĆšÄ‚Ĺ?ĹŻZÄžĆ?Ĺ˝ĆľĆŒÄ?ÄžÄžĹśĆšÄžĆŒÍ•Ĺ˝Ĺ˝ĆšĹšÎˇĎ°Í˛WĹŻÄ‚ÇŒÄ‚^ĆľĹ?ĆšÄžĆ? Ä‚ĹśÄšÄ‚ĆšĹ˝ĆľĆŒsĹ?ĆŒĆšĆľÄ‚ĹŻÄžĹŻĹ?Ç€ÄžĆŒÇ‡dĆŒĆľÄ?ĹŹĹ˝ĹśĆšĹšÄžÄ?Ĺ˝ĆŒĹśÄžĆŒĹ˝Ä¨ tÄžĆ?ĆšĹ˝ĹľĹľÄžĆŒÄ?ÄžÎ˜'ĆŒÄžÄžĹś^ĆšĆŒÄžÄžĆšĆ?Í˜ WWW.CORYCOMPANIES.COM Â‡3+21( -1000 email@example.com
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Stop by our booth JSV drinks, a demo, PLUS a drawing to win a new iPad Air!
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in the Retail Resource Center Point of Sale
Logistics & Delivery
Accounting & Finance
Mobile & eCommerce
The scariest thing about “Black Friday” is not having Spectrum on your team. Discover the Difference
SEE US AT THE RRC, SPACE #12 1.888.4.STORIS
Engage with us at SynchronyBusiness.com/furniture or 1-855-973-3552 Credit is extended by Synchrony Bank. Â© 2016 Synchrony Financial
THE FIRST CHOICE FOR SECONDARY FINANCING Stop by for Sweet Treats Every Afternoon Saturday - Monday from 2:00 pm - 4:00 pm
Plaza Suites | 1st Floor Retailer Resource Center | #40
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United Steel Storage, Inc. 8059 Fairoaks Court Jonesboro, GA 30236
High Point Furniture Market
Phone: 770-603-3230 Fax: 770-603-3229
Engineering & Consulting Services Come see us at Booth# 32
BOOTH #10 Retailer Resource Center
Check out our NEW website: USSIPartners.com
Precision engineering is key!
THE WAY WE WERE
hat’s my grandfather on the left, Osmon Merrill, and one of his employees. My grandfather started the company in 1928 as a gas station and an appliance store that eventually evolved into selling some furniture before becoming a full-line furniture store. He also sold Atwater radios door to door. He was a very busy man. That building’s no longer there, but I remember spending my days there and playing with the adding machines. They were very entertaining! A few years after my grandfather started the
business the Depression hit. It was a bad time to be in business. I remember asking him once how he made it with a wife, four kids and a business. He said it wasn’t easy. He remembered writing checks for food knowing he didn’t have the money in the bank and really feeling the pressure to sell a radio or something the next day to cover the check he wrote. That’s a tough way to raise a family and make a living, but he somehow made it happen. We’re a fourthgeneration store now. We don’t have it as hard as my grandfather. We have our own challenges but I still love coming in here every day. Bob Merrill Merrill’s Furniture, Ellsworth, Maine
Share your old photograph and memory by contacting Robert Bell at 916.757.1169 or email@example.com
OCTOBER | 2016
VISIT US AT
High Point Market | October 2-25, 2016 Plaza Suites, 1st Floor HFA Retailer Resource Center
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