HGO Merchandiser Winter 2017-2018

Michael Knell’s

HGO merchandiser HomeGoodsOnline.ca

WINTER 2017-18

Volume Six, Issue 4

RH TORONTO:

a fusion of food and furniture

The unbeatable flyer VdeV: A well curated store Spotlight on Superstyle at 50

The latest in digital advertising tech Cooper on the three steps to increased loyalty

CONTENTS

6

EDITOR’S LETTER SADDENED BY SEARS

The world of furniture retailing is certainly changing. We’re about to lose a giant of our business even though it could have been prevented but here and there we’re also seeing merchants with innovative thinking and active imaginations.

32

8

PROFILE A WELL-CURATED STORE

Pairing furniture with unusual goods – think cutlery, glassware and watches – can work, if housed in the right environment and curated by a merchant with something meaningful to say. As Ashley Newport tells it, customers in Montreal and Toronto are paying attention to what Fanny Vergnolle de Villers of VdeV is mixing and matching.

14

TRENDS THE UNBEATABLE FLYER

As more and more consumers consult their smartphones and computers for their retail needs, it might seem prudent for retailers to transition from print to digital advertising – but perhaps not as fast as they think they should. After all, as contributing editor Ashley Newport reports, research indicates the beloved flyer isn’t going anywhere anytime soon.

8 22

OPENINGS A FUSION OF FOOD AND FURNITURE

The retailer previously known as Restoration Hardware, now called simply RH, has opened what may be the most singularly unique high-end furniture store in Canada. Attached to Toronto’s Yorkdale Shopping Centre, Michael Knell reports it was designed to create a gourmet level shopping experience.

22 14 4 HGO merchandiser

28

GATHERINGS QFMA CELEBRATES 75TH ANNIVERSARY

The Quebec Furniture Manufacturers Association celebrated the 75th anniversary of its founding at its recent annual general meeting and conference which was held at the elegant Ritz-Carlton Hotel in downtown Montreal. Some 130 people from across the industry, including manufacturers, component producers and other suppliers, attended the three-day event.

30

TECHNOLOGY MYPIXEL: AN AFFORDABLE ENTRY TO THE FASTEST GROWING MARKETING TOOL

Advertising is expensive, even when it’s on the web. But a Montreal-based consulting firm has developed a new platform that should make finding and attracting customers to a retailer’s web site a lot more cost efficient while helping to build the brand. Our report is by first time contributor Greg Simpson.

34

SPOTLIGHT THANKS FOR THE MEMORIES

Upholstery house Superstyle is celebrating 50 years in business in 2017. It leadership believes the qualities that got it this far, building a quality product at a good price and supported by excellent service, will see it through for another half-century. Michael Knell reports.

38 40

INDUSTRY CALENDAR & ADVERTISERS’ INDEX ON RETAIL THREE STEPS TO INCREASED LOYALTY

Don’t define your business by what you sell on the floor. Define yourself by what you do to solve your customer’s problems. Donald Cooper maintains that making the customer’s life better will make you more money.

44

PASSAGES A PUNCH IN THE GUT

The demise of Sears Canada will change the face of retail in Canada, especially in furniture, mattresses and major appliances, where it has held a dominant position for decades. But, HGO’s editor Michael Knell notes it seems the industry is adapting and the consumer has moved on.

ON OUR COVER: The Design Atelier inside RH Toronto is a 5,000-square-foot studio anchored by four fully integrated workspaces where customers and the retailer’s design consultants can re-imagine a single room or an entire home.

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

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HomeGoodsOnline.ca

5

EDITOR’S LETTER

SADDENED BY SEARS

HGO merchandiser WINTER 2017-18 • VOLUME SIX, ISSUE 4

MICHAEL J. KNELL

The world of furniture retailing is certainly changing. We’re about to lose a giant of our business even though it could have been prevented but here and there we’re also seeing merchants with innovative thinking and active imaginations.

I

AM ANGRY AND DISTURBED BY THE FATE OF SEARS CANADA. EXPERTS from

the worlds of business and finance seem to agree its demise was unnecessary and what unfolded during the tenure of its last ownership group should be considered criminal. With its departure, some 16,000 of our fellow Canadians are going to lose their jobs and companies large and small throughout our industry are going to lose a lot of money.

From what I can discern, only the American hedge fund that squeezed a venerable retail institution dry is going to really benefit from the situation. I read recently some financial industry analysts believe the shareholders drained somewhere between $5 billion and $7 billion from the monetisation of Sears Canada’s assets.

Little or nothing was invested back into the company and when it sought protection from its creditors, we learned it owed its employees’ pension fund almost $400 million – money they are not likely to see. Furthermore, those employees who are left to close the doors on that last day probably won’t get severance pay.

As I note in my essay on the subject later in this issue, its departure is going to do a lot of damage to our industry. Literally scores of furniture, mattress and major appliance resources are going to lose millions of dollars – this will damage their ability to be profitable for years to come. For these suppliers, Sears Canada is a retail partner that cannot be replaced – there simply isn’t another one.

I’m also critical of those who lambasted Sears Canada for not embracing the internet and e-commerce. For the record, they were Amazon before Amazon was. If anything Sears Canada had better logistics and distribution than any pure e-commerce player operating in this country. Besides which, while it is growing, e-commerce is still a very small part of retailing as a whole. So that wasn’t really the problem.

In a few weeks, Sears Canada will be gone. But, there is lots of exciting stuff going on in our industry. Furniture, mattress and major appliance retailing is changing, evolving and giving consumers new things to think about. We showcase two of them in this issue. One is VdeV, a two unit independent operated by Fanny Vergnolle de Villers. Her take on selling furniture is décor focused and is coupled with candles and cutlery and other neat stuff.

Meanwhile RH – formerly Restoration Hardware – has opened a 70,000 square foot high-end store in Toronto’s Yorkdale Shopping Day that is fusing furniture with food from one of the trail blazing culinary artists in the U.S. This is certainly new and I wonder what lessons we’ll learn from their experience.

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

6 HGO merchandiser

ISSN 2291-4765

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

HGO This Week Home Goods Online.ca © 2017 Windsor Bay Communications Inc. All rights reserved.

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

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7

PROFILE

Pairing furniture with unusual goods – think cutlery, glassware and watches – can work, if housed in the right environment and curated by a merchant with something meaningful to say. Customers in Montreal and Toronto are paying attention to what VdeV is mixing and matching.

BY ASHLEY NEWPORT

A wellHEN A TYPICAL CONSUMER WALKS INTO

Fanny Vergnolle de Villers, owner/ operator of VdeV.

8 HGO merchandiser

a furniture store, she definitely expects to see an attractively presented assortment of case goods, sofas and accessories – not just all of those things plus a variety of handbags, jewellery, candles, kitchenware and other, more personal pieces.

Embracing every aspect of lifestyle retail can – and, in this case, does – work, especially if you’re Fanny Vergnolle de Villers, the owner and operator of the vintage/industrial furniture and home décor brand VdeV, which boasts locations in both Montreal and Toronto. Its boutique approach gives it the look and feel of a chic and welcoming home goods store that certain discriminating shoppers

curated STORE have grown to love. Unlike its more corporate (and even independent) contemporaries, it enthusiastically pairs armchairs and coffee tables with cutlery, bath products and fashion accessories like sunglasses.

“It’s about lifestyle; it’s a mix of things, all the categories get the same kind of attention – jewellery, bags, furniture, etc.,” Vergnolle de Villers explains, adding that while some categories tend to sell more at different times of the year, her overall sales mix is about half and half.

Vergnolle de Villers founded the first VdeV store – located on St. Laurent Blvd. in the Mile End area of Montreal – five years ago. After enjoying considerable success in what has become her home town, she headed west, opening

a second location on Ossington Ave. The first VdeV store in Toronto’s trendy Trinity Bellwoods (seen here) opened neighbourhood. five years ago on “Honestly, I fell in love with the city,” St. Laurent Blvd in she says. “I knew I wanted to expand the trendy Mile End the store and at the time I was looking area of Montreal. for a second spot, I visited Toronto and thought it would click with the city.”

Although Vergnolle de Villers studied political science at the Université de Montréal and, therefore, wouldn’t seem to be someone interested in launching a stylish furniture and accessories brand, design and décor runs in the family. Her mother owns and operates the popular } HomeGoodsOnline.ca

9

Furniture makes up about half of VdeV’s annual sales and anchors the store’s vintage/ industrial design verve, with the occasional splash of contemporary styling thrown in for good measure.

10 HGO merchandiser

Zone Maison – a six-unit brand also specialising in furniture, home décor and personal accessories with stores in Montreal, Quebec City and Ottawa.

“Growing up in that industry, I always had an interest in it. I was always aware of it,” she says. “My passion has grown since I’ve been more involved in the business.” That said she is emphatic that VdeV is a separate entity with its own unique identity.

“My mother and I work together all the time,” she continues. “She helps me a lot and I try to help her as well. Having two people in the same industry is definitely beneficial. We don’t have the same products, though. It’s a dynamic relationship for sure.”

While it’s no secret that the furniture business is a difficult one – as furniture is almost always considered to be more of a need than an anytime want – Vergnolle de Villers believes it’s incredibly helpful to offer customers a selection of bigger (yet affordable) items alongside smaller pieces they can buy on a whim to enhance their living room or compliment an outfit. It’s the variety that makes the store stand out while offering customers something special.

“Our selection is pretty unique and comes in different prices and different styles,” she says.

“The combination of uniqueness, originality and affordability makes us stand out. The store

evolves based on trends, but the vintage industrial vibe is a guideline for us.”

While VdeV honours its vintage appeal by sticking to pieces that speak to the trend, it’s also not afraid to keep things current and interesting by introducing new pieces with a more art deco or bohemian style. “There’s a lot of movement, but vintage/industrial always stands. It can be mixed with other styles,” its owner observes.

Interestingly enough, Vergnolle de Villers says customers don’t quite appear to favour furniture over personal accessories or kitchenware (think table settings and cutlery, not necessarily standard cookware).

“I think it’s half and half,” she observes.

“This time of year, the little items are doing well. More into summer, furniture will be bigger. There are moments when some categories do better than others,” she says. “But our mission is targeted around home decor.”

As for where Vergnolle de Villers sources her range of goods, she says they rely on a multitude of suppliers – both local and international. “It’s a wide variety of sourcing. We have used hundreds of suppliers, some are local and some are imported,” she says.

She benefits from visiting a small number of assorted trade events and from making connections with people who want to work with VdeV.

“There are shows and some people contact me directly,” she says. “In Toronto, so many local suppliers have learned about me and contacted me, so I found a whole other market. I really always keep it moving, sometimes we’ll move on if everyone is using the same supplier. I try to keep my customers interested. I want them to find something they can’t find anywhere else.”

She visits New York, Las Vegas and Toronto in search of new products to add to the floor.

“The New York NOW show is very interesting for us,” she says. “Las Vegas has everything that we need. It’s good to go once in a while, but it’s complicated to travel all the way there. I visit the Canadian Furniture Show as well.”

It should be noted New York NOW is a trade show targeting specialty retail with a focus on furniture, furnishings and décor. It is held twice a year at the Javits Centre in New York City.

To keep customers interested, Vergnolle de Villers focuses on balance. “I think of balance, such has having attention getting pieces along with staples that go with all décor – it’s about finding balance in keeping clients interested and intrigued.”

The store also focuses on is maintaining a mid-range price point. “Price points are varied,” she says. “A simple side chair could be $300 or an elaborate one might cost $1,700.

I would say that we’re mid-range. It’s not so cheap that you can necessarily furnish your whole house, but falling in love with a nice piece is affordable.”

One thing VdeV focuses on, much to the delight of its customers, is gift-able items (which is especially prudent this time of year). “It’s about gift-able items. I guess people are a little surprised that we offer so much, but the way we lay it out, it makes sense,” she says, adding that some pieces (say, a table) can support a display in the store, essentially making all the

items work together in a natural, organic way.

“It’s organic and it makes sense,” she says.

Vergnolle de Villers says sometimes certain products don’t really work in the context of the store but they also provide insight into what shoppers are truly looking for. “There are definitely categories that don’t work, but it’s about being flexible and responsive,” she points out.

Interestingly, Vergnolle de Villers says people don’t purchase disparate products – such as sofas and necklaces – together all that often. What usually happens is the customer who purchase a sofa or console table, often comes back to VdeV when it’s time to simply upgrade or rejuvenate their new (or newly renovated) home. “When you get settled in a new house or upgrade, you go through phases. You’ll start with bigger furniture and then move onto lamps, then take a break and add the layers – the throw, the pillows.”

Sometimes, people looking for one thing end up leaving with something else entirely. “A lot of people come in for a couch, but find the perfect gift for someone they love. People can come upon unexpected finds in the store,” she says.

Since retail in general is a tough business to succeed in, and furniture even more so, it’s impressive Vergnolle de Villers was able to launch not just one, but two stores in a short }

(ABOVE LEFT) Seen here

on a winter evening is VdeV’s original store in Montreal, located in the city’s trendy Mile End district.

(TOP) In the Montreal store, pillows are displayed with candles, frames and other items not usually seen on a furniture retailer’s floor.

(BOTTOM) Another eclectic

display pulling together goods from across the assortment as seen in VdeV Toronto.

HomeGoodsOnline.ca

11

Product from across the store’s assortment is merchandised and displayed collaboratively, as seen in this vignette in VdeV’s Toronto store.

12 HGO merchandiser

period of time – and in sought-after, on-trend districts, no less.

Fortunately, she didn’t have to have a laser focus on marketing or hire a team to spread the word. “It’s hard to take care of marketing, so word of mouth was the best way to market.

Word of mouth was the main way we had to reach out to people,” she says.

While word of her store travelled fairly fast, she also operates a stylish and comprehensive web site (vdevmaison.com) with online ordering options and spreads the word through social media. That said, she says it’s hard to tell how much of her traffic comes from Instagram posts rather than simple word of mouth.

“It’s hard to know. I think the most important part is to be active. We’re out there and we try to have the best social media that we can. I think that the street traffic has been more important than just social media.”

Vergnolle de Villers also said she has benefitted from the connectivity between Montreal and Toronto. “There’s such a connection between the two cities – some clients know our Montreal store and vice versa. But Toronto was a new market for us and we had to make people discover the brand.”

She also believes the store appeals to a wide

swath of shoppers – mostly because of the diversity of its offerings. “Because of our wide variety, we definitely have a wide variety of clientele. For now, our most common people are between 25 and 45 because we connect with that age group. But really, we have so many different customers. People from ages 20 to 80 would be happy. We have something that there’s not a lot of on the market, it’s easier to grab anyone’s attention,” she notes.

While further expansion isn’t out of the question, she’s quick to stress there are no definitive plans to either set up shop in another city or to add locations in Toronto or Montreal in the immediate future. “Yes, absolutely a third location is possible,” Vergnolle de Villers says. “We have to be careful and make sure the infrastructure will follow, but I’m open to the idea.”

In the meantime, she sticking with what’s been working so well for the brand thus far.

“Nothing official is in mind for the future – just carrying well-curated items,” she says. HGO A contributing editor to HGO Merchandiser, ASHLEY NEWPORT is a Toronto-based freelance journalist who writes primarily for trade and business publications. Her specialties include food, hospitality and emerging social/business trends.

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

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13

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BY ASHLEY NEWPORT

14 HGO merchandiser

I

T’S NO SECRET WE LIVE IN A WORLD

that’s both exciting and challenging – especially for retailers. At a time when consumer tastes are changing dramatically on an almost day-to-day basis, furniture, mattress and major appliance retailers might be at a loss when it comes to choosing the appropriate medium to reach out to consumers. For years now, the debate has persisted: digital or print?

It might be tempting to think it’s time to transition to entirely digital platforms – but retail store owners and managers might want to hold off on ditching print advertising entirely.

Over the past decade in particular, both national and local major print publications have grappled with declining revenues and falling readership as tech-savvy consumers have chosen to consume media delivered on their smartphones, laptops and tablets.

While this is a problem more specific to newspapers and magazines, retailers of all stripes have struggled to determine the best way to reach potential buyers and those who sell furniture, mattresses and major appliances are no different.

But while change is difficult and retailers have some tough decisions ahead, furniture aficionados who rely on the paper flyer (sometimes called the circular) can rest easy for now for according to discussions heard at the Retail Council of Canada’s (RCC) recent Retail Marketing Conference and Smart Flyer Forum events, the traditional flyer is still driving traffic and netting positive returns on investment (ROI) for retailers.

“Canadian shoppers have a love for value,” Lisa Orpen, vice president of national and multi-market sales for Metroland Media – which publishes some 110 community newspapers throughout Ontario – said at the RCC’s Smart Flyer Forum at the Delta Toronto Hotel. “We’re proud of finding a good deal at any income.

This drives the behaviour we’re seeing when it comes to flyer and coupon usage.”

The Smart Flyer Forum, which welcomed speakers and participants from organisations such as BrandSpark International – the Torontobased market research firm best known for organising the annual Canada’s Most Trusted Brands program – as well as retailers Walmart

Canada, RONA and Leon’s Furniture, among others, invited everyone to weigh in on an ageold marketing tool that’s still driving customers into furniture and other stores.

What the forum revealed, however, was the flyer cannot and should not be relied on as the best and most effective marketing tool. It must have some kind of digital component and be paired with a range of other advertising methods and strategies – including digital and, when and where applicable, radio and television.

In other words, retailers are best to consider omni-channel marketing.

“We interviewed 1,300 shoppers and measured mobile, desktop, aggregated sites, print usage and more,” Orpen told her audience.

“There are few shoppers that use any channel exclusively – 5% use digital only, 15% print only, 37% web and print and 28% use omni-channel.”

The talk shed light on some interesting numbers.

Across all retail segments – furniture, mattresses and major appliances included – the love affair with the flyer is still very pronounced.

Attendees at the RCC forum were presented data that broke down the reasons why consumers still gravitate towards flyers: 19% are looking for deals; 34% are engaged with the brand; 26% are looking for utilitarian reasons; and, 21% are inspired by flyers.

The data also indicated furniture retailers enjoyed a flyer readership rate of 46% as of 2016. As far as the home improvement sector goes (which has ties to furniture, even though it’s not quite the same), data discussed at the forum revealed most people view flyers for utilitarian purposes. After that, people view them to be inspired. Beyond that, they consult them to find deals or out of engagement with the sector or brand.

ARE FURNITURE RETAILERS STILL USING FLYERS?

While advertising experts seem to believe flyers are still useful, do furniture, mattress and major appliance industry insiders share those views – or are they finding they have to pair them with other advertising media and strategies? }

“ We’re toning down our flyer usage to 35% to 40% lower than we were at five or six years ago.

I think we’re stabilising, we’re at a plateau if you will.”

Michael Vancura, executive vice president of retail for Mega Group.

HomeGoodsOnline.ca

15

Mike Walsh, president of Leon’s.

Pat Kelly, assistant vice president of furniture for Cantrex Nationwide.

16 HGO merchandiser

“We’re toning down our flyer usage to 35% to 40% lower than we were at five or six years ago,” says Michael Vancura, executive vice-president of retail operations for Mega Group – the Saskatoon based co-operative behind BrandSource Canada. “I think we’re stabilising, we’re at a plateau if you will.”

Vancura said online advertising is growing at a prolific rate, which is therefore prompting Mega Group to direct its advertising dollars accordingly.

“We manage web sites and digital promotions for our retailers and we’re putting more dollars into different mediums such as Google, Facebook. The mix is probably about 50% digital and 50% paper,” he explains, quickly adding, “We also do radio and TV.” Although Vancura doesn’t deny the flyer’s continued popularity, he says it’s not as cost effective as other advertising methods.

“Part of the flyer dilemma is people still like them and they have their place, but their distribution costs have increased,” he says, although he doesn’t think a transition away from the flyer is imminent.

“There’s always a place for the flyer. People who go online still use flyers and traditional mediums.”

The staying power of traditional media is also evident when you see how it’s being used by decidedly tech-savvy and online-oriented brands such as mattress specialist Casper and furniture and furnishings purveyor Wayfair.

“Wayfair and Casper are advertising in traditional media,” Vancura notes. “I see Casper advertising on billboards in Montreal, for example.”

Vancura’s experience isn’t at all unique to Mega Group.

During the RCC flyer forum, a session entitled The Value of the Flyer in Today’s Digital World: A Consumer’s Perspective drove home the notion shoppers are not committing to just one medium. The main takeaway from the talk was it’s best for retailers to “plan to spread content across multiple formats.”

For some businesses – even well-established ones with rock solid reputations – the flyer still remains one of the most prominent drivers of store traffic.

“We do 34 flyers a year and hit six million households,” says Mike Walsh, president of Leon’s Canada, one of the banners operated by the publicly-held Leon’s Furniture Limited, the country’s largest full line furniture retailer.

“We also do some online flyers and flyers with a digital component. When we ask how people heard about Leon’s, we hear flyers and word of mouth. We know it’s an incredibly important part of our business and something we’ll be using for the time being.”

Others have also found the flyer is still a big part of a retailer’s marketing budget and overall business.

“It’s in the millions,” says Patrick Kelly, assistant vice-president of furniture with Cantrex Nationwide (CNW) – the Montreal-based buying group that represents more than 1,000 retail outlets across the country in several categories including furniture, mattresses, major appliances, electronics, photography and floor coverings – when referring to how many flyers Cantrex prints and distributes on behalf its membership each year.

“Flyers are still very important to the furniture category,” Kelly says. “Furniture isn’t really an impulse buy, but a flyer will trigger a thought and the shopping process. Consumers probably hang onto furniture flyers more than shopping flyers.”

In terms of costs, retailers are still ensuring they have money budgeted for flyers, even if it’s not an enormous sum. In fact, though printing may not be quite as affordable as it once was, it doesn’t appear the flyer requires too much in the way of substantial investment.

“Advertising budgets really depend on sales and people will budget from 3% to 6%,” says Vancura when speaking to how much Mega Group members as a whole might spend on advertising in general. “We estimate that with $280 million in retail sales at 5% for advertising, that’s about $13 million. On average, advertising is about 4% and less than half is spent on flyers.

Somewhere between 1% to 2% is spent on traditional, so less than 1% would be spent on flyers.”

ARE FURNITURE RETAILERS EMBRACING OMN-ICHANNEL MARKETING?

Although no one is denying the flyer is effective, the RCC’s advice to invest in multiple marketing and advertising platforms is embraced by retailers of every size and product category.

“The real trend is towards omni-channel marketing,” says Kelly. “Digital is becoming more important every day. We will see a gradual decline in use of print media, particularly on the appliance side. The real story is Facebook marketing and website digital marketing. It’s exploding.”

The flyer was published recently

by Bennett’s Home Furnishings, a two-unit furniture retailer based in Peterborough, Ontario. ▲

ER

uslyg o l icu zin d i R a UP

S

“We do online flyers and all of our paper flyers have a digital component,” says Leon’s Walsh. “Millennials consumers will look online, but a large amount of customers still look for a printed flyer. The distribution is being optimised and changing.”

Others are still using all avenues available to consider spreading the word, as TV and radio advertising remains an effective tool. That said digital is unique in the sense it allows retailers to use audio and visual elements to hook consumers who are simply browsing Facebook.

“More retailers are using Facebook,” says Vancura. “We also produce 15 second event videos and they have entertainment value and will speak specifically to a brand event. We’re printing less year over year.”

For Vancura, it’s a matter of spending strategically.

“You’ve got to switch your marketing dollars and divvy them up amongst different media. Putting more towards digital, we’re seeing that continuing year over year. I don’t think flyers will ever necessarily go away – flyers still work for a lot of people.”

Retailers also have to know their market when deciding how to best reach consumers – and they shouldn’t be afraid to ask for help if they want to update or rejuvenate their advertising strategy but aren’t quite sure how.

“It’s driven by independent retailer’s marketplace. In some places, radio is more effective,” says Kelly. “A lot of time, it more depends on the owner – it’s their ability to understand and execute digital and print strategies and that’s where we come in. I would say people are far more aware of it now, but people need help building and executing.”

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Although consumers still tend to gravitate to traditional paper flyers, the digital renaissance has prompted furniture retailers to pair their traditional offerings with a digital component – something that helps ensure they target older shoppers who regularly peruse flyers and millennials who might be more inclined to look for deals or promotions online.

“We put them on web sites and Reebee (a popular flyer website),” says Mega Group’s Vancura.

“Every paper flyer will have some kind of digital component.”

Others agree that having digital presence is crucial.

“All flyers are added to Reebee and posted on web site and we can add pages and call out extra features,” says Leon’s Walsh. “It costs more }

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money to do that on paper, so digital gives us the flexibility to inform customers more.”

And while some retailers might feel digitalising flyers simply creates more work for everyone, it’s also important to remember it creates more opportunities.

“We’re exploring the ability of the online flyer to be more dynamic and personal,” says Walsh.

“That adds another layer that the printed flyer doesn’t have. Customers online will seek out

▲

Brault & Martineau, the Montreal-based retailer operated by BMTC Group, features all four of its major product categories in its flyers, including furniture, mattresses, appliances and electronics.

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18 HGO merchandiser

c1

4

our flyers and they can because they’re on Reebee. In the future, if you’re in a downtown condo, with geo-targeting capabilities, we can tell you about small-size furniture. It’s a smart, intuitive feature.”

Others say, going forward, the flyer will need to be augmented by digital and other advertising methods – especially since it’s always been tough to say that the flyer alone has driven traffic.

“We’re not able to measure based on flyers, but we look at multiple elements and it’s difficult to establish what worked better than another thing,” says Vancura. “We look at traffic in store, year over year sales, and on the digital side there are analytics to look at. It’s tough to judge the effectiveness of flyers when they’re paired with traditional media, but they should not be done alone, they should be backed up with a radio spot or a digital element.”

IS THE FLYER GOING TO DISAPPEAR?

While no one has a crystal ball, furniture retailers aren’t confident that the flyer – tried, trusty and true – will ever quite cease to exist.

“I continue to believe in and our retailers continue to support flyer as an effective part of our advertising. The only change is that it’s no longer the dominant advertising media that it was 10 years ago for furniture stores,” says Vancura.

Others think they’ll fundamentally change.

“They’re going to be more dynamic and more personal,” says Walsh. “There will be always a flyer in some capacity. How it’s done will evolve, but the flyer will always exist – it has to from a retail standpoint.”

But while the flyer model – the paper document showcasing the latest deals and promotions – might always exist, not everyone thinks the flyer as we know it will be around years from now.

“I honestly think they’re going to go away.

The marketplace is changing and the customer is changing,” says CNW’s Kelly. “We never thought Sears would go away. They’ll never go away 100% just like newspapers and magazines won’t. There will be a place for them, but it’ll be a question of cost effectiveness. Who knows what retail will be like in five years.” HGO A contributing editor to HGO Merchandiser, ASHLEY NEWPORT is a Toronto-based freelance journalist who writes primarily for trade and business publications. Her specialties include food, hospitality and emerging social/business trends.

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21

OPENINGS

A FUSION OF

food and furniture The former Restoration Hardware has opened what may be the most singularly unique high-end furniture store in Canada.

Attached to Toronto’s Yorkdale Shopping Centre, it was designed to create a gourmet level shopping experience.

BY MICHAEL J. KNELL

22

The Design Atelier is a 5,000-square-foot studio anchored by four fully integrated workspaces where customers and RH designers can reimagine a single room or an entire home.

R

H, THE HIGH-END FURNITURE

and furnishings retailer formerly known as Restoration Hardware, has opened The Gallery at Yorkdale, offering a store concept that’s certainly unique in this country with its fusions of luxury furniture and furnishings, design services with seamlessly integrated culinary offerings on par with that savoured in any resort favoured by the rich and famous.

The new centrepiece of this city’s Yorkdale Shopping Centre, RH Toronto covers four levels and almost 70,000 square feet of both interior and exterior display space. The publicly-held retailer said the space features what it describes as “artistic installations of home furnishings in a gallery setting.”

Entire floors are dedicated to three of the retailer’s merchandising strategies: RH Interiors, RH Modern and RH Outdoor (not included are RH Baby & Child and RH Teen). RH Toronto will feature an interactive Design Atelier, offering professional interior design services in a studio environment.

But the real differentiating factor is the incorporation of RH Hospitality, which is led by celebrated restauranteur Brendan Sodikoff and includes the RH Courtyard Café and the Barista Bar. “The vision for our new design galleries has been to blur the lines between residential and retail, and create spaces that are more }

Gary Friedman, chairman and chief executive officer of the Corte Madera, Californiabased Restoration Hardware, now known simply as RH.

HomeGoodsOnline.ca

23

An artist’s rendering of RH Toronto, one of three new concept stores from the former Restoration Hardware that fuses furniture with food.

It’s new open at Toronto’s Yorkdale Shopping Centre.

The Barista Bar inside RH Toronto is where shoppers can find coffee and freshly-baked pastries as they look over the store’s high-end furniture assortment.

24 HGO merchandiser

home than store. The next logical step was to further blur the lines between home and hospitality, with an integrated restaurant, wine and coffee bar,” Gary Friedman, chairman and chief executive officer of the Corte Madera, California-based RH, said in a statement.

“What we are doing goes far beyond attaching a restaurant onto a store – that’s been done before,” he continued, adding, “What’s unique is we’ve created a completely integrated hospitality experience, led by famed Chicago restaurateur Brendan Sodikoff, that reflects our taste, style and point of view. We’re proud to bring this first-of-its-kind concept to Toronto, one of the most metropolitan cities in the world.”

Sodikoff is the founder, CEO and creative director of Hogsalt Hospitality, a rapidly growing Chicago-based restaurant group spanning 14 concepts and 15 locations. Hogsalt’s portfolio includes such well-known establishments as Au Cheval, Bavette’s, Doughnut Vault, and

Gilt Bar in Chicago, as well as his first restaurant in New York – 4 Charles Prime Rib – an intimate supper club in the West Village.

Sodikoff has been named one of Chicago Magazine’s ‘100 Most Powerful People in Chicago’ and one of Crain’s ‘40 Under 40’. He has also been recognized by Bon Appétit, Food & Wine, and the Food Network, among others.

“I’ve felt a connection to Toronto for years.

It’s a city of innovation and inspiration. I’m excited to join Toronto’s vibrant restaurant culture and look forward to spending more time there with the opening of RH,” Sodikoff said.

RH Toronto marks Friedman’s ongoing collaboration with the California-based design architect James Gillam of Backen, Gillam &

Kroeger, a firm recognized as one of Architectural Digest’s Top 100 architect and design firms in the world.

Conceptualised as a grand-scale contemporary structure filled with fresh air and natural light, RH Toronto features an expanse of glass-and-steel French doors that open onto a streetscape with Boston ivy, geometric topiaries and towering trees rising out of a continuous boxwood hedge.

The gallery’s eastern entrance can be found inside Yorkdale Shopping Centre and features a terraced façade of Venetian plaster and a lush interior courtyard flanked by open-air loggias serving as the central location for the gallery’s hospitality experience, the Courtyard Café. Here, shoppers – or as RH calls them, guests – can sit beneath heritage olive trees and a 140-foot-wide skylight that washes the entire space with natural light while they enjoy a seasonal, ingredient-driven menu accompanied by a curated selection of artisanal wines and craft beers. This all-seasons oasis features elegant banquette seating layered with green velvet boxwood hedging, cascading English ivy, trickling fountains, glimmering lanterns and 19th century Rococo crystal chandeliers.

When arriving at RH Toronto from the west, visitors will pass through a 24-foot wide by 24foot tall threshold of glass and steel. Continuing into the gallery’s central hall with its 14-foot ceilings, guests will find the RH Barista Bar – a dramatic focal point defined by a Tuscan colonnade and facet-edged limestone slabs. Here, baristas approach coffee as an art, and guests can enjoy fresh house-made doughnuts and pastries.

Barrel-vaulted passageways lead to a classical arrangement of rooms featuring furniture and accessories from the RH Interiors collection.

(ABOVE LEFT) A view of

From here, visitors can ascend a grand double floating staircase spanning nearly 40 feet.

Natural light emanates from a second massive skylight four floors above, while an installation of 23 crystal Helix Chandeliers hanging 62 feet overhead highlights a composition of gilded antique mirrors that cascade down the stairwell to create an endless reflection and further illuminate the way.

Level two features the RH Design Atelier, a 5,000-square-foot studio anchored by four, 15foot custom tables offering a fully integrated workspace for customers, designers and architects to re-imagine one room or an entire home.

Here, guests can work with a team trained in the RH design ethos to create functional and elegant spaces. The space also features access to RH’s library of fabrics, leathers and furniture and lighting finishes to provide what the company believes is an unprecedented level of design services.

The Design Atelier also includes a Ben Soleimani rug showroom displaying the fourth- }

the sales floor at RH Toronto, featuring a smattering of the product assortment offered in its RH Modern catalogue.

(TOP) All of the presentations at RH Toronto are thoroughly accessories and on-trend, as well as being very high-end.

Looking at the RH Courtyard Cafè from inside the Yorkdale Shopping Centre.

HomeGoodsOnline.ca

25

A look inside the 12,000 square foot rooftop conservatory with glass and steel structure housing towering banana palms, heritage olive trees, exotic succulents and 20-foot ceilings at its apex.

26 HGO merchandiser

generation designer’s hand-knotted and handwoven rugs, and other specialised galleries for window treatments, bed and bath linens and bath hardware.

The third level houses a 12,000-square foot exhibition space for RH Modern, one of the largest curated and fully integrated assortments of modern furnishings, lighting and décor under one brand in the world. Developed in collaboration with a select group of designers, RH Modern’s design vernacular represents a fresh point of view, defined by a minimalist aesthetic, the finest materials and maximum comfort. This immersive experience is punctuated by a rhythmic progression of glass and steel French doors with corresponding Juliet balconies that line the perimeter of the floor.

At the top of the grand stair, guests arrive at the Conservatory & Rooftop Park. The 12,000 square foot garden space will first be experienced within a structure of glass and steel with towering banana palms, heritage olive trees, exotic succulents and 20-foot ceilings at its apex.

The indoor space opens onto a spectacular rooftop with mature Himalayan birch trees set within colossal steel planters accented with cascading English ivy. This one-of-a-kind destination features open-air pavilions, glimmering chandeliers and trickling fountains that further enhance intimate vignettes of RH Outdoor collections and frame iconic views of the Toronto skyline.

At press time, RH Toronto was only the second store in the network offering RH Hospitality being operated by the company in North America, the first being located at The Gallery at the Three Arts Club in Chicago. At third was expected to open late November in West Palm Beach, Florida. It replaces two previous Toronto locations, one on Yonge Street in the city’s downtown core and the other in Bayview Village.

In all RH operates four design galleries across Canada. In addition to Toronto, they are in Vancouver, Calgary and Edmonton. It also operates two outlets stores, in Milton, Ontario and Surrey, British Columbia.

A company spokesperson told Home Goods Online, RH will open three other food-infused galleries in New York, Nashville and Yountville, California during 2018. In all, it currently operates a total of 85 stores, including six in Canada and a single location in the United Kingdom. In the first half of its current fiscal, RH reported sales of US$1.18 billion. Furniture accounted for 63% of its total sales mix.

It operates a Canadian web site at: restorationhardware.com HGO MICHAEL J. KNELL is the publisher and editor of

Home Goods Online and all of its platforms.

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

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27

SLEEP IS LIFE’S GREATEST PLEASURE.

GATHERINGS

QFMA CELEBRATES

Mario Marcil of Polymark; Jacinthe Brouillard; Greg Brown of Camlen Furniture; Jessica Viau and Raphael Langlais of Structure 2000.

Pierre Richard, president and CEO of the QFMA with Pablo Rodriguez, chief government whip and Member of Parliament for the Quebec riding of Honoré-Mercier.

Marie-Hélène Gagné and Hélène Picard, both of Coup de pouce; Catherine St-Jacques and Claude de Lanauze of Hettich Canada.

28 HGO merchandiser

Denis Bergeron of Artopex; Gilles Genest of Fonds de solidarité FTQ and Carole Lauzé; and, Jacques Laroche of PréviBois SantéSécurité.

Philippe Darveau of Meubles BDM, Stéphane Grisé of Tactik Logistique with Nathalie Doucet; Karine Côté and Hugo Charest, also of Tactik Logistique.

75 ANNIVERSARY th

The Quebec Furniture Manufacturers Association celebrated the 75th anniversary of its founding at its recent annual general meeting and conference which was held at the elegant Ritz-Carlton Hotel in downtown Montreal. Some 130 people from across the industry, including manufacturers, component producers and other suppliers, attended the three-day event that began with a tour of the state-of-the-art factory operated by HVAC equipment maker Stelpro.

Andréanne Paquin and David Gelinas, QFMA board member and executive vice president of Zedbed; JeanPhilippe Deveault of Canadel; and Véronique Sauvé of Jaymar.

Guy Tousignant of Mirabel Matelas and Sylvie Trudeau.

QFMA president Pierre Richard with Alexandre Paquette of Trica, who was elected to the association’s board of directors for the first time.

S WE REPORTED WHEN WE TURNED

the Spotlight on the factory group in our Fall 2017 issue, for the past 45 years it has been most closely associated with the Canadian Furniture Show, this country’s only national industry trade event.

But according to Pierre Richard, president and chief executive officer of both QFMA and CFS, the association’s most important work is advocacy for and promotion of the interests of furniture makers in Quebec. What many may not realise is the QFMA is only non-profit industry association left in North America whose focus is on the furniture manufacturing both for the retail/residential as well as contract, commercial and hospitality markets.

As he reported to his members during the weekend, the QFMA is growing its membership.

At least 25 companies have joined the association so far this year. Of its 145 members, at least 100 are furniture manufacturers, a sizeable number of whom turned out for the convention.

The conference agenda was all about helping his members thing about the future, which Richard believes is very bright, pointing out his members have combined payroll expenses in excess of $1 billion annually and generate direct taxes of more than $340 million every year. His members constitute the seventh largest manufacturing sector in the province and shipments have been growing steadily in each of the past few years.

The meeting concluded with the election of board members. Elected a director for the first time was Alexandre Paquette of Trica Furniture, the St-Jerome, Quebec-based manufacturer best known for its bar stools and dining chairs. HGO HomeGoodsOnline.ca

29

TECHNOLOGY

MyPixel:

an AFFORDABLE ENTRY to the

FASTEST GROWING

marketing tool

Advertising is expensive, even when it’s on the web.

But a Montreal-based consulting firm has developed a new platform that should make finding and attracting customers to a retailer’s web site a lot more cost efficient while helping to build the brand. BY GREG SIMPSON

O

NLINE DIGITAL ADVERTISING HAS GROWN

into a global marketplace with an estimated value of $230 billion. It has been best harnessed mainly by those with the deepest pockets. While a wide range of businesses can buy ad space on any given web site, large advertisers – usually corporate giants with vast resources – and their marketing agencies usually lock down the latest cutting edge technologies and techniques before any one is really aware of its availability. Digital marketing was one of those techniques but thanks to a relatively small and unknown disruptor based in Montreal, there’s an opportunity for small and mid-sized retailers to get it on the action.

Programmatic digital advertising has become both the standard and the emerging trend of online marketing. Typically requiring in-house specialists or third-party firms dedicated to its successful implementation, the costs associated with programmatic advertising often fall beyond what a significant portion of Canadian retailers – particularly familyowned independents – can afford.

30 HGO merchandiser

Advertising exchange District M believes it has found a way to bring small and medium-sized businesses – including independent furniture, mattress and major appliance retailers – to the digital marketing table by creating MyPixel, a platform they say delivers an entry point into this technically complex marketplace.

Five years of facilitating digital advertising exchanges helped District M realise the need to streamline the process and create a level of affordability to even the playing field – one that would allow independent and smaller businesses access to these resources. They understood many don’t have the resources to learn such a technical speciality, so they put their expertise into creating the MyPixel platform. The plan is to bring all the complexities of advertising exchanges and real-time bidding into one place and then deliver them in a platform anybody can use. It’s simple as signing up and creating a campaign.

District M’s chief marketing officer Adrian Pike explains programmatic advertising, it “typically means that we can tie up advertisers...with web sites and based on information

Adrian Pike is chief marketing officer to District M, the Montreal-based creator of the MyPixel digital advertising platform.

we’ve captured about the viewers of that web site we can display ads that are relevant to them.”

This gives retailers the unique ability to use their online stores to increase traffic, promote return visits, and reinforce brand awareness through a process called retargeting.

To put it quite simply, when the visiting consumer leaves the retailer’s web site, advertisements that encourage reengagement go with them, using the visiting consumer’s geographical location to provide relevant content.

“You want to retarget people who have visited your web site with adverts for your store,” Price explains, “as simple as that, so when they’ve been to your web site, you can then retarget them with offers, campaigns, and even brand association. Adverts that sort of follow them around and when they see it, they’ll see your brand in the corner with, you know, an image and a contraction to take them to your web site or to a conversion page.”

The true selling point of a retargeting campaign using programmatic digital advertising tools is one with relevance for businesses of all sizes: the efficient use of mar-

keting dollars. The goals of a retargeting campaign is to increase the amount of re-engagement – that is, the number of return visits – by the visiting consumer and build the retailer’s brand recognition. With repeat exposure, the probability that the visitor will become a buyer increases. The longer the retailer is able to maintain an online presence and engage with higher levels of traffic, a profile of likely buyers can be created. Over time, using the data retargeting data collection, campaigns can be fine-tined to find those consumers most likely to shop either in the retailer’s brick and mortar store or on his web site. This also helps the retailer get the most out of his advertising budget. } HomeGoodsOnline.ca

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MyPixel is a platform the allows the advertising retailer to follow a consumer who visits his web site as she travels to other sites across the world wide web.

Prospecting is a technique takes retargeting to the next logical step. Rather than simply engaging with browsers (that is, potential customers) that have already visited the retailer’s web site, prospecting uses information gathered from the site’s analytics to build a profile of what a typical or ideal browser (that is, potential customer) would look like.

The platform will then seek out potential consumers with similar profiles and display advertisements to drive traffic.

Pike says this would be like “putting up a nice display so that the people that are in the area can see the store.”

The first iteration of the recently released MyPixel boasts a feature that streamlines the user’s ability to create his own digital marketing campaigns. By utilising District M’s network of over 7,000 web sites and using the platform to fine tune targeting based on the analytics, MyPixel has the ability to maximise the retailer’s marketing dollar while promoting the store’s brand consistently on the web.

Through late December and early January 2018, District M will increase the number of features as well as the depth of detail to the program’s analytics, which will give rise to a platform that is able to provide prospecting functions as well.

In what would typically require a significant investment – even from a small independent retailer – MyPixel’s baseline price of $3 per day during active campaigns appears to bring a sophisticated but necessary marketing avenue within reach.

Since MyPixel requires no subscription fees and incurs no cost to the advertising retailer when inactive while being responsive to all levels of investment, Pike believes this platform offers a degree of flexibility most small, growing independent businesses could put to good use in an everchanging marketplace.

In 2016, The Canadian Internet Registration Authority

“You can go online, create an account and in a few minutes you’re ready to start building your campaigns.

Now, a small business owner can have access to the same kind of platform that big brands use.”

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MyPixel’s other advantage is it can be used for as little as $3 a day.

reported while Canadians spent more than $136 billion online, fewer than 60% of Canadian companies had any online presence whatsoever. However it is described – online shopping, e-commerce or whatever other label – this is a retail segment primed for growth.

While still a miniscule share of total sales, e-commerce is the fastest growing sales channel for furniture and home furnishings stores in Canada. According to Statistics Canada, e-commerce sales for these stores totalled $261.5 million in 2015 (the latest year for which data is available), up 14.2% over the prior year. It should be remembered that three years earlier e-commerce sales for furniture and home furnishings stores were less than $98 million.

This past August, Home Goods Online cited a report from One Click Retail, a U.S. consulting and research firm, maintaining Amazon.ca sales of furniture and mattresses were valued at $30 million for the first seven months of 2017. Most industry insiders believe the Canadian branch of online home décor giant Wayfair were higher – possibly reaching the $50 million mark.

Further evidence of the growing strength of the web as a sales channel for furniture and home furnishings can be found in IKEA Canada’s latest summary report, which reported e-commerce sales of $184.6 million for its 2017 fiscal year, an uptick of 26.7% from the prior year. This gave the channel an 8.5% share of overall revenue, much higher than the industry as a whole.

Online retail is heavily dependent on strong brand awareness coupled with malleable advertising campaigns and the ability to penetrate unconventional markets. District M believes MyPixel can provide an entry point for small business to create, manage, and optimise their entire programmatic digital marketing experience. Mr. Pike sums it up, “the goal is that it’s pretty much turnkey.

“You can go online, create an account and in a few minutes you’re ready to start building your campaigns,” Pike said. “Now, a small business owner can have access to the same kind of platform that big brands use.”

District M can be found on the web at districtm.net HGO GREG SIMPSON is a freelance writer based in Port Hope,

Ontario. This is his first assignment for Home Goods Online.

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33

SPOTLIGHT

Thanks for the mem Upholstery house Superstyle is celebrating 50 years in business in 2017. Its leadership believes the qualities that got it this far, building a quality product at a good price and supported by excellent service, will see it through for another half-century.

BY MICHAEL J. KNELL

T Laine Reynolds (left), vice president of sales and marketing is seen here with Superstyle’s second generation president and chief executive office Danny Colalillo. They make up the company’s senior management team.

34 HGO merchandiser

HERE’S A REASON WHY COMPANIES

celebrate their 50th anniversary. It’s a very difficult thing to achieve. Someone once noted that for every 1,000 new businesses launched in Canada in any given year, fewer than ten would make it that long.

So, when achieved, it should be celebrated.

Celebrating such as occasion in 2017 is Superstyle Furniture, the Toronto-based stationary upholstery house. Since its founding by the late Giovanni (called John) Colalillo and his brother, Domenic, it has evolved and grown to the point where it is now an industry leader.

The story of how Superstyle came to be is a familiar one. John Colalillo immigrated to Canada in 1958 at the age of 20 on the advice of his

mories

grandfather. The following year he went to work for the now defunct Newport Chesterfield.

In 1964, he started Futurama Chesterfield in partnership with his brother-in-law, Mario Colalillo (who later went on to found Edgewood Furniture).

When that partnership ended three years later, John and Domenic started what was then called Superstyle Chesterfield, in a 5,000 square foot factory. In those early days, John Colalillo acted as president, sales representative, order collector and fabric cutter.

In 1972, he moved Superstyle and its now 30-member work force to a 15,000 square foot building in another part of the city. Ten years later, the company moved once again to a

70,000 square foot factory on Norfinch Drive.

In 1985, he started Trend Line Furniture, a specialist in modern and contemporary upholstery. Shortly thereafter, he founded Simmons Upholstery Canada, now one of this country’s largest producers of sofa beds.

The current home to Superstyle Furniture – a 120,000 square foot factory in the Toronto suburb of Vaughan – was built in 1998. TrendLine continues to occupy the Norfinch Drive facility, giving the company some 200,000 square feet of manufacturing, head office and showroom space with a workforce approaching 200 people.

John Colalillo passed away in 2010. His son, Danny is now the second generation president }

The group includes both the Model 34 occasional chair and an L717 from the LeatherBrand collection in red.

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The Superstyle 34 occasional chair offers a generous scale with sweeping arms for a sophisticated silhouette.

A statement piece that is detail-rich yet offers extraordinary comfort.

The L717 from Superstyle’s LeatherBrand offers a clean contemporary look with a smartly scaled two-over-two design. The side-bolsters and striking chrome legs add character. The richness of the genuine top-grain leather enhances the appeal. This is perfect for contemporary or transitional environments.

and chief executive officer of the family owned company. His daughter, Mary, also works for the company as does his wife, Joanne.

In 2008, John Colalillo and Mario Colalillo were honoured with the Lifetime Achievement Award by the Canadian Home Furnishings Alliance (CHFA) in recognition of their contributions to the industry.

“Collectively they are involved with a stable of leading brand names in the upholstery sector,” then CHFA chairman Laine Reynolds said in announcing the honour. “There is always a great need in business for people who are professional, who have integrity, give good counsel to their employees and are respected by their customers and peers. Both

Described as elegant and impressive, the 9707 group is the latest addition to Superstyle’s ‘Inspiration Home Collection’. The fabric combinations add to its slightly formal attitude. This suite offers all the value-enhanced features including carriagecoil support system and super-cel premium seating.

36 HGO merchandiser

of these men exemplify these qualities and deeply deserve this honour.”

Reynolds is vice president of sales of marketing for both the Superstyle and Trend-Line brands, a position he has held since 1993.

‘Thanks for the Memories’ has been the company’s theme for its 50th anniversary celebrations.

“The most important part of our 50-year history is the fond memories of the great relationships this company has built with a countless number of people across the industry in this country,” Reynolds explains. “While Superstyle is proud of its many accomplishments, we also recognise the critical factor in our success has been the dedication of our staff and supplier as well as our retail partners – it’s those connections that have made the company’s 50year journey most enjoyable.”

Reynolds noted getting to the 50-year milestone forced the company to be both agile and innovative in its product offerings. “The line also changed over the years,” he said. “We expanded the lifestyle mix and added depth to the price ladder by growth the premium end of our Superstyle labelled assortment with the addition of LeatherBrand and Vogue. We offer a wide assortment of unique designs as well as an impressive range of fashionable textiles – in both leather and fabric.”

Superstyle has also staked out a reputation as a ‘custom’ or ‘tag’ order specialist with goods in the traditional and transitional style categories, with seating that sports both a carriage-coil spring system and high density foams. Trend-Line focuses on the ever-expanding contemporary and modern style genres while Simmons Upholstery Canada is primarily a brand name hid-a-bed specialist, although it does offer some stationary upholstery as well as an assortment of curated occasional chairs.

While the company products can be found on the floors of national retailers such as Leon’s Furniture, Hudson’s Bay, Bowring and Brault &

This grouping joins the 9707 sectional with a model 34 occasional chair creating an on-trend vignette that should appeal to a consumer seeking to create a transitional-style environment for her home.

Martineau in Quebec as well as the three furniture buying groups – Cantrex Nationwide, Dufresne Retail Solutions Group and Mega Group – it also partners with a growing number of independent furniture stores across the country.

Among them are Toronto’s Chesterfield Shop; destination retailer Stoney Creek Furniture of Stoney Creek, Ontario; and, Tepperman’s, the five-unit regional chain headquartered in Windsor, Ontario.

While it has been an active exporter – at one time it had a good working relationship with a department store in Japan – it doesn’t sell to any retailers in the United States. And, that’s by choice. “While over the years we have enjoyed export activity throughout various parts of the world we have deliberately avoided the massive U.S. market in order to maintain focus on our primary market, Canada, where we still have much growth potential,” Reynolds explains.

And they are ready to tackle the challenge.

“Our key competitive advantage is that we are a big-small Canadian company,” Reynolds says. “This allows us to be very responsive to the ever-changing marketplace. Additionally, we provide our retailers with innovative, yet highly saleable products, successful express programs and reasonable lead-times, customorder expertise, trouble-free quality, respectable margins and distribution protection – all backed up with a reliable level of service; and

most importantly providing consistency in our support all these benefits.”

Moving forward, Reynolds believes the key to growth is leveraging Superstyle’s strong industry brand to grow market share geographically in those areas of the country where it has sales potential while at the same time aligning itself to aid those retailers in its network that are planning for growth. “Especially those who are positioning themselves for the long term,” he says.

He also believes from a product perspective, the company’s LeatherBrand will be an important growth driver. “We will continue to expand this extremely successful business platform by giving it a more contemporary and modern look in both styling and leather articles,” he says.

“It sounds corny but our tag line – Crafted

by Canadians since 1967 – still resonates with a marketplace that wants quality product offered by reliable, long-standing and successful Canadian companies,” Reynolds says. “I believe for the next 50 years, Superstyle has a very promising future. We’ll continue to set goals and create more memories.” HGO MICHAEL J. KNELL is the publisher and editor

The late John Colallilo (left), founder of Superstyle Furniture is seen here receiving the 2008 Lifetime Achievement Award from Hugh Owen, past-chairman of the Canadian Home Furnishings Alliance at a gala held in his honour.

At the time, each award recipient had a star in the constellation Ursa Minor named in their honour via the Star Registry organisation.

of Home Goods Online and all of its platforms.

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

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INDUSTRY CALENDAR January 4 to 7, 2018 TUPELO FURNITURE MARKET Tupelo, Mississippi tupelofurnituremarket.com January 9 to 12, 2018 CES Consumer Technology Association Las Vegas Convention Center Las Vega, NV ces.tech January 9 to 16, 2018 ATLANTA INTERNATIONAL GIFT & HOME FURNISHINGS MARKET America’s Mart Atlanta, GA americasmart.com

ADVERTISERS’ INDEX

January 15 to 21, 2018 IMM COLOGNE THE INTERNATIONAL INTERIORS SHOW Koelnmesse GmbH Cologne, Germany imm-cologne.com

January 18 to 21, 2018 INTERIOR DESIGN SHOW Metro Toronto Convention Centre North Toronto interiordesignshow.com January 28 to February 1, 2018 LAS VEGAS MARKET World Market Center Las Vegas, NV lasvegasmarket.com January 30 to February 1, 2018 THE INTERNATIONAL SURFACE EVENT (TISE) Mandalay Bay Convention Center Las Vegas intlsurfaceevent.com January 28 to February 1, 2018 TORONTO GIFT FAIR CANADIAN GIFT & TABLEWARE ASSN. International Centre Toronto Congress Centre Mississauga, ON cangift.org

February 25 to 28, 2017 ALBERTA GIFT FAIR Canadian Gift & Tableware Assn.

Edmonton Expo Centre Edmonton, AB cangift.org February 26 to March 1, 2018 PRIMETIME Cantrex Nationwide Gaylord Palms Resort Orlando, FL nationwideprimetime.com March 8 to 11, 2018 MALAYSIAN INTERNATIONAL FURNITURE FAIR Putra World Trade Centre Kuala Lumpur, Malaysia miff.com.my March 14 to 16, 2018 ISPA EXPO International Sleep Products Assn.

Charlotte Convention Center Charlotte, NC sleepproducts.org

Pages 2-3 Phoenix AMD International 41 Butler Court Bowmanville, ON L1C 4P8 T: 800.661.7313 phoenixamd.com

Page 13 Zucora 552 Clarke Road London, ON N5V 3K5 T: 800.388.2640 zucora.com

Page 27 Magniflex 1000 5th St., Suite 220 Miami Beach, FL 33139 T: 905.481.0940 magniflex.com

Page 5 Stearns & Foster Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 stearnsandfoster.ca

Page 19 Protect-A-Bed 1500 S. Wolf Road Wheeling, IL 60090 T: 519.822.4022 protectabed.com

Page 33 Las Vegas Market 475 S. Grand Central Pkwy.

Las Vegas, NV 89106 T: 702.599.9621 lasvegasmarket.com

Pages 20-21 Serta Canada 40 Graniteridge Road, Unit #2 Concord, ON L4K 5M8 T: 800.663.8540 sertacanada.com

Page 39 Malaysian International Furniture Fair Putra World Trade Centre Kuala Lampur, Malaysia 2018.miff.com

Page 7 Canadian Furniture Show 101-1111 Saint-Urbain Montreal QC H2Z 1Y6 T: 514.866.3631 canadianfurnitureshow.com

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April 14 to 18, 2018 HIGH POINT MARKET High Point, NC highpointmarket.org May 25 to 28, 2018 CANADIAN FURNITURE SHOW Quebec Furniture Manufacturers Assn.

International Centre Mississauga, ON canadianfurnitureshow.com May 28 to 30, 2018 STORE 2018 Retail Council of Canada Toronto Congress Centre Toronto storeconference.ca June 3 to 6, 2018 SHOWTIME International Textile Marketing Assn.

High Point, NC showtime-market.com

Page 43 Tempur-Pedic Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 tempurpedic.ca Page 48 Home Goods Online P.O. Box 3023 Brighton, ON K0K 1H0 T: 613.475.4704 homegoodsonline.ca

HomeGoodsOnline.ca

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ON RETAIL

THREE STEPS TO INCREASED LOYALTY Don’t define your business by what you sell on the floor.

Define yourself by what you do to solve your customer’s problems. Making their life better will make you more money.

H

ERE IS A SIMPLE THREE-STEP

ILLUSTRATION: ADOBE STOCK/ARTINSPIRING

process that I use with clients around the world to help them increase loyalty, sales and profitability. They pay me big bucks for this information and here it is for free – and, it could transform your business!

STEP 1 DEFINE YOUR BUSINESS BY HOW YOU ‘HELP’ NOT BY WHAT YOU SELL Most businesses make the mistake of defining themselves by what they sell. “We sell computers, insurance, cars, mayonnaise or seats on airplanes.” Whatever it is they sell, that’s how they define themselves.

The problem is when we define ourselves by what we sell our focus tends to be on us and our need to sell more. It’s all about ‘us’. In order to get passionately focused on our customers, it’s far more useful to define ourselves, not by what we sell, but by how we and what we sell helps our target customers.

Here’s a great example. Over the past few years, I’ve spoken at several conferences for mortgage companies. When asked what business they are in, the answer was always the same, “We sell mortgages!”

Let’s look at what their business sounds like when we simply redefine it by how they help

people and not by what they sell. “We’re in the business of helping people buy a home and to own that home mortgage-free as quickly, conveniently and inexpensively as possible.”

Isn’t that the mortgage company you’d want to deal with? Why? Because they’re focused on helping you do what you want to do. A question I love asking clients is, “Are you trying to get customers to do what you want them to do or are you committed to helping them do what they want to do?”

So, using the mortgage company example above for guidance, set an hour aside in the next week to sit down with some of the best minds and hearts in your business and define yourself by how you and what you sell helps your target customers, functionally, emotionally and financially.

BY DONALD COOPER

STEP 2 MAKE A LIST OF ALL THE HELP YOUR TARGET CUSTOMERS NEED THAT IS IN ANY WAY RELATED TO CHOOSING, BUYING OR USING WHAT YOU SELL Having redefined yourself by how you help, take time to think and feel like a customer. Sit down with your team and start making a list of all the help your target customers need in order to know about you and the value you offer, to wisely choose and effectively use what you } HomeGoodsOnline.ca

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Think ‘WOW’. Think ‘amazing’. Think about what has never been done before. Think and feel like a customer and have the creativity and the courage to create compelling customer-owning value and experiences at every touch-point. sell as well as what kind of help they need that is in any way related to doing business with you.

Think of what products, services, information and coaching, convenience, confidence, kindness and encouragement, payment methods or terms they might need to have a complete, successful and stress-free experience shopping in your store and selecting what you sell. To jump-start your creativity, consider these four simple questions.

1 2 3 4

Do all of our target customers know about us and all the value we offer? How can we help them know more about us?

Functionally, emotionally and financially, what are people really trying to do when they’re buying and using what we sell?

What do they want or need to know to wisely choose and effectively use what we sell?

How do they want to feel when they do business with us and every time they ‘use’ what they buy from us?

STEP 3 HOW WILL YOU DELIVER THAT HELP BETTER THAN YOUR COMPETITORS? Now that you know exactly what kind of help your customers need, get creative. Start thinking of how you will effectively, consistently and profitably deliver help while doing it better than your competitors.

Ask yourself, what can be done to help them to know about your store and the value it offers?

How can you help them to do what they’re trying to do? How can we help them learn what they want or need to know and what can we do to help them to feel the way they want to feel?

Think ‘WOW’. Think ‘amazing’. Think about what has never been done before. Think and feel like a customer and have the creativity and the courage to create compelling customer-owning value and experiences at every touch-point.

In my days as a retailer of ladies fashions we used this same three-step process to fundamentally redefine the customer experience. We were the first in the world to put four hooks in a change room. We offered electric reclining massage chairs for husbands, a pirate ship play

42 HGO merchandiser

area for kids and instant birthday parties for customers shopping on their birthday. We offered free drinks, free diapers, diaper wipes and cream for young mothers in distress and a magic sign that invited customers to, “Please take as many items in the change room as you wish!”

We priced merchandise honestly, didn’t manipulate customers into buying stuff they shouldn’t while generally offering more help, kindness and real value than any of our competitors, most of whom told us that we were ‘nuts’.

Our customers loved us, raved about us to their friends and came back over and over again.

How did we do it? Rather than saying, “we sell ladies clothing” we defined ourselves as being in the business of helping women to look good and feel good. We took the time to think and feel like a customer. We cared passionately and we constantly asked two powerful questions, “What’s possible?” and “what’s next?”

You can’t do everything at once, but something can always be ‘next’.

Here’s another example. The medical imaging division of General Electric sells complex and expensive MRI and other imaging equipment to hospitals and medical clinics. But, by understanding what life is really like for their customers, they sell more than that. They sell help. They sell financing, training and maintenance contracts – and, for those customers who want a total solution, GE will install, staff and operate a complete medical imaging department on a revenue-sharing basis.

So, what kind of help do your target customers need that is in any way related to what you sell. What will you commit to do in order to deliver that help better than your competitors?

Trust me; you’ll sell more by helping more! HGO A regular contributor to Home Goods Online, DONALD COOPER has been both a world-class manufacturer and an award-winning retailer. Now a Toronto-based business speaker and coach, he helps business owners and managers rethink, refocus and re-energise their business to create compelling customer value, clarity of purpose and long-term profitability. For more information, or to subscribe to his free, monthly management e-newsletter, go to www.donaldcooper.com

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PASSAGES

Calvin MacDonald, then president of Sears Canada, is seen here inspecting on of the upholstery displays in the Whitby Sears Home Store.

A PUNCH in the GUT I

T IS ONLY MATTER OF WEEKS BEFORE

The demise of Sears Canada will change the face of retail in Canada, especially in big ticket where it has held a dominant position for decades.

But it seems the industry is adapting and the consumer has moved on.

BY MICHAEL J. KNELL

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Sears Canada passes into history. The last of its network – which at one time included over 100 department stores, 50 or so Sears Home stores, travel offices, a service network as well as over 1,000 catalogue pick-up locations across the country – will shutter for the last time. An ignoble end for a company which had a profound impact on this country’s economy and, in many ways, was the most influential retailer the industry has known.

In reviewing all the reportage the demise of Sears Canada has generated in recent weeks and months, one theme is reinforced time and time again: how preventable it was.

For much of the past three decades, Sears Canada has been one of the most powerful furniture, mattress and major appliance retailers in the country. Big ticket home accounted for 40% of annual revenue year in and year out. In its last full year as a reporting public company, sales in those three categories (along with other hardlines such as barbeques, snow blowers and lawn mowers) were in excess of $1 billion.

At its peak, sales were probably double that.

Even though sales had been on a downward spiral for some time, it remained a powerhouse and a member of a club that had only three other members: Leon’s Furniture Limited, operator of Leon’s and The Brick, the largest furniture, mattress and major appliance retailer in the country; IKEA Canada; and BMTC Group, the Quebec-focused owner of Brault & Martineau, EconoMax and Ameublements Tanguay.

The real question at this point is: where will that $1 billion in business go and how long will it take to get there? Most industry executives Home Goods Online spoke with agree there will be a transition period, but it may not be as long as one would think. Most also agree that while the exit of Sears Canada is sad and unfortunate, it is literally also an once-in-a-lifetime opportunity for ambitious independent retailers who are willing to invest for growth.

WHY IT WENT WRONG

There are many reasons why it all went so wrong, but most observers – both those who worked inside Sears Canada or were active suppliers to the company – assign most of the responsibility to an owner who was more interested in monetising its assets than investing in the future.

Many also believe the decision to sell the credit card – to J.P. Morgan Chase about a decade ago – was the true beginning of the end.

They note during the glory days, there were more Sears Canada credit cards in circulation than there were households in the country.

Furthermore, 70% of its sales were on the card – not just for big ticket items such as furniture and major appliances but for everyday items as well. For many Canadian households, it was the most important tool in the shopping box.

What’s more, at its prime approximately half of all cards in circulation were active – that is, they had outstanding balances owing at the end of the month. The card was also the primary driver of its catalogue. (It should also be noted that it wasn’t until about ten years ago that Sears began accepting credit cards other than its own.)

Many observers also note that during the heyday, the catalogue business was so sophisticated, with a distribution network that }

The Sears Home store in Whitby, Ontario opened to a lot of fanfare in the fall of 2013. Its format was to be adapted by all of the other stores in the network.

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The major appliance department inside the Whitby Sears Home store.

reached into every corner of this country it was literally unmatched by anyone anywhere.

Several of those the writer spoke to said Sears Canada was Amazon long before the Amazon we know today.

SEARS AND BIG TICKET

In addition to the card and the catalogue, the other major driver behind Sears Canada’s success was big ticket. For the past three decades – in fact, until quite recently – it was the largest major appliance retailer in the Canada, with a market share around the 25% market. This was due in large part to the trust the Canadian consumer had in the Kenmore brand name.

(As an aside, it should be noted that BrandSpark International, the Toronto-based market research firm and organiser of the Most

46 HGO merchandiser

Trusted Brands awards program, gave the 2017 award for most trusted major appliance retailer to Sears Canada.)

More often than not, Sears Canada was the number one mattress retailer in the country as well. While the competition in this category was a little more intense – thanks to the efforts of The Brick and Sleep Country Canada – its market share rarely drifted below 15% although it was relegated to the number two spot in certain regions across the country.

While they were definitely a major force in furniture retailing, they weren’t the runaway leader, at least in recent years. But throughout the period from the 1970s to the 1990s, they were the style leaders. To a great extent, what they put on their floors – whether on the pages of the catalogue, in a traditional department store or in one of their Sears Home stores – determined what the consumer was going to buy, whether from them or one of their competitors.

What’s interesting to note is that over the past decade or so, the senior management of Sears Canada barely acknowledged the company’s dominance in big ticket. Many outsiders are critical of the failure to embrace big ticket and use the categories to aid in the rebuilding of the rest of the business. It was a $1 billion business senior management effectively ignored.

Many observers pointed out that many of Sears Canada’s merchandising leaders came

Many observers also note that during the heyday, the catalogue business was so sophisticated, with a distribution network that reached into every corner of this country it was literally unmatched by anyone anywhere. from the apparel and accessory side of the department store business and saw big ticket as logistical nightmare. Besides which, there were better gross margins in socks, shirts and underwear. But, they didn’t sell enough to right the ship.

A PUNCH IN THE GUT

The exit of Sears Canada will be a punch in the gut for many furniture, mattress and major appliance resources in Canada.

A quick read through the published creditors’ list gives some insight into how Sears Canada’s demise will wipe out the profit margins of many of them – whether the supplier in question is an independent furniture manufacturer or part of a multi-national mattress or appliance concern – not just for this year but for several years to come.

For many of these resources, Sears Canada was one of their largest – if not their largest – retail partner and it represented a significant percentage of its overall business. For many, it’s not a retail relationship that can be replaced. There simply isn’t another Sears Canada to be found in Canada or in North America for that matter. And, it’s unlikely there will be another retailer of similar size emerging in the foreseeable future.

It also wouldn’t be surprising if some smaller manufacturers don’t recover from the fall of Sears Canada.

There is consensus among observers that most Canadian consumers have already moved on and very few of them will be upset by the passing of Sears Canada. Many of its competitors have been, over the past couple of years positioning themselves to take advantage of the changes in the marketplace.

On the major appliance front, Home Depot Canada is rapidly claiming the pole position in the white goods market and is aggressively promoting itself as a category leader. At least two strong regional players have entered into strategic partnerships with capital investment firms to bolster their ability to meet the demand. The best example is the Calgary-based TriWest Capital Partners, which made an equity investment a few weeks ago in Coast Wholesale Appliances, the Vancouver-headquartered white goods specialist with stores throughout Western Canada as well as two in the Greater Toronto Area.

Sleep Country Canada’s return to the public equity market two years was part of a strategy to fuel the sleep specialist’s growth over the coming few years. Its short-term goal is to reach a sales plateau of $600 million annually, which will make it the dominant mattress merchant in the country.

Leon’s Furniture Limited – this country’s largest full-line furniture retailer – took over the leases of eight former Sears Home stores in early 2016, including four which enabled it to bring its Leon’s banner to British Columbia for first time in its 100-year history.

Meanwhile, IKEA Canada is in the opening phases of an aggressive expansion program that is intended to double both its store count and annual revenue by 2025. If successful, that will give the home furnishings giant some 24 full-size stores from coast-to-coast with yearly sales in the $3 billion range.

The Canadian consumer has moved on.

Other retailers are moving to pick up the slack.

While they may not get everything they are owed, the majority of Sears Canada’s furniture, mattress and major appliance suppliers will find and exploit new opportunities. The only ones who will truly suffer by this will be the 16,000 or so people who used to work there. HGO MICHAEL J. KNELL is the publisher and editor

of Home Goods Online and all of its platforms.

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

Under Calvin MacDonald’s ‘Build the Core’ strategy, mattresses were designated as a ‘hero’ category for Sears Canada – one of the product segments where the retailer still mattered to the consumer.

EDITOR’S NOTE: This report was the culmination of discussions with a host of people from throughout the industry.

To encourage greater frankness, their names and job position were not disclosed. Each of them has my thanks for their insight and knowledge.

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FURNITURE • BEDDING • APPLIANCES • CONSUMER ELECTRONICS • ACCESSORIES 48 HGO merchandiserLAMPS & LIGHTING • FLOOR COVERING • RETAIL SERVICES