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Journal of the Western Home Furnishings Association

western retailer

October 2009

www.WHFA.org

Moving Forward from the Recession Maintaining the Financial Health of your Business CHANGE SERVICE REQUESTED Western Home Furnishings Association 500 Giuseppe Court, #6 Roseville, CA 95678 est.1944


E MERALD’S L ATEST I NSPIRATION T HE W OODLANDS U3170

D3170

Emerald Home Furnishings

T3170

Tacoma, WA High Point, NC Las Vegas, NV Customer Service: (253) 922-1400

www.emeraldhome.com

The Woodlands Collection features a Dining, Upholstery, and Occasional Set. The Upholstery group features 8 way hand-tied coil on coil springs, and plush seating. This fabric is chenille in a warm carmel color that contrasts nicely against the oak base trim. The fabric is comfortable and durable because of the 100% polyester construction and easy to clean. The multi color accent pillows tie in nicely with any room decor . They are constructed of a rayon and cotton blend and complement the group by providing comfort and style. The Dining and Occasional groups feature hardwood solids and oak veneers with a honey finish.


Journal of the Western Home Furnishings Association

western retailer

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

table of contents featured articles

Advertising Manager: Cindi Williams..............................cwilliams@whfa.org 2009 WHFA OFFICERS AND EXECUTIVE COMMITTEE

It’s All About Sales & Marketing

WHFA PRESIDENT Marty Cramer - Cramer’s Home Furnishings, Ellensburg, WA...........(509) 933-2172

Engaging and Working with the Online Consumer................. 12

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

The World Around Us

TREASURER Chris Sanders - Everton Mattress Factory, Inc., Twin Falls, ID..........(208) 326-3407

Moving Forward from the Recession.... 15

SECRETARY Valerie Watters - Valerie’s Furniture and Accents, Cave Creek, AZ....(480) 483-3327

Operational Excellence

EXECUTIVE COMMITTEE CHAIR Keith Koplan - Koplan’s Furniture, Vancouver, WA.............................(360) 695-3388

Maintaining the Financial Health of Your Business................................. 20

PAST PRESIDENTS George Nader - Nader’s La Popular, Gardena, CA............................(310) 327-8585 Cherie Rose - The Rose Collection, Los Gatos, CA...........................(408) 395-7773 EXECUTIVE director

Internet CRM — Six Basic Rules of Engagement........... 24

Sharron Bradley - WHFA, Roseville, CA.............................................(916) 784-7677 AT LARGE EXECUTIVE COMMITTEE MEMBers Gary Absalonson - Walker’s Furniture Inc., Spokane, WA.................(509) 533-5500 Howard Haimsohn - Lawrance Contemporary, San Diego, CA.......... (619) 291-1911

Showroom Style

Marvin Kerby - Kerby’s Furniture, Mesa, AZ.......................................(480) 834-3888 Lael Thompson - Broyhill Home Collections, Aurora, CO...................(303) 360-9653

Bringing Old Showroom Product to Life.................................... 28

WHFA/NHFA Liaison David Harkness - Harkness Furniture, Tacoma, WA...........................(253) 473-1234 WHFA Board Members Gene DeMeerleer - Furniture West, LaGrande, OR...........................(541) 963-5440

in every issue

Patti Evans - Consignment Plus, Walnut Creek, CA...........................(925) 927-6600 Greg Follett - Follett’s Furniture, Lewiston, ID....................................(208) 743-0177 Eric Foucrier - Linder’s Furniture Mart, Garden Grove, CA................(714) 210-4848

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

Giff Gates - Gates Furniture, Grants Pass, OR..................................(541) 476-4627

Board Member Q&A with Marvin Kerby. . . . . . . . . . . . . . . . . 8

Eric Harms - Black’s Home Furnishings, Yreka, CA...........................(530) 842-3876 Ron Hoesterey - Royal Mattress Company, Inc., Orange, CA............(800) 987-6925 Jerome James - Hafer’s Home Furnishings, Manteca, CA.................(209) 823-2122

Retailer Notes. . . . . . . . . . . . . . . . . . . . . . . . 10

Julian Jeppe - Reeds Furniture, Agoura Hills, CA..............................(818) 597-7800 Doug Kays - Premiere Home Furnishings, Los Angeles, CA.............. (310) 268-0811

Program of the Month: GE Money. . . . . . . . 18

Chuck Kill - Bedmart, Tucson, AZ.......................................................(520) 887-7039

Member Profile Cypress Furniture . . . . . . . . . . . . . . . . 22

Tim Koerner - Koerner Furniture, Coeur D’Alene, ID..........................(208) 666-1525 Karen Kohlman - West Harvard Furniture, Roseburg. OR.................(541) 673-4221 Don Lemieux - Naturwood, Rancho Cordova, CA..............................(916) 638-2424 Jeff Lindsley - Lindsley’s Home Furnishings, Grangeville, ID.............(208) 983-1040 Sandy Lundgren - Ideal Home Furnishings, Olympia, WA.................(360) 790-3955

contact

Robert Myers - Ashley Furniture HomeStore, Chico, CA....................(530) 345-2616 Mark Navarra - Jerome’s, San Diego, CA..........................................(858) 753-1549 Michael Nermon - Ergo Customized Comfort, Irvine, CA...................(949) 833-0338 Scott Selden - Selden’s - Tacoma, WA...............................................(253) 922-5700 Sally Servidio - Silverado Home & Design, Napa, CA........................(707) 251-0888 Mike Shuel - Meredith Furniture, Yakima, WA....................................(509) 452-6221

Phone:

(800) 422-3778 (12 western states) (916) 784-7677

Online:

www.WHFA.org

Fax:

(916) 784-7697

Mail:

500 Giuseppe Court, Suite 6 Roseville, CA 95678

est.1944

Tom Slater - Slater’s Home Furnishings, Modesto, CA......................(209) 522-9097

WESTERN HOME FURNISHINGS ASSOCIATION STAFF Executive Director: Sharron Bradley................................................(916) 960-0345 Asst. Exec./Marketing Director: Kaprice Crawford..........................(916) 960-0346

Twitter: www.twitter.com/WesternRetailer

Business Manager: Janice Carlson..................................................(916) 960-0347 Events Manager: Cindi Williams.......................................................(916) 960-0277

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

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

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

est.1944

western retailer western retailer

WHFA

ACADEMY

RRC RETAILER

RESOURCE CENTER

fast

October 2009

forward

Your Industry. Your Future. Your Decision.

3


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president’s message The competition is tough out there! One of the attributes of a downturn in the economy is that our competition gears up to attract customers, just as we do. I know that many of you consider the furniture store down the street as your competition, but I am not referring to any of us in the industry. I am talking about the Home Depots, the car dealers and the vacation spots of the world. I know that when the consumer decides to spend their dollars. We are all in competition for those dollars. The task at hand is getting the consumer to decide to spend their dollars on furniture. I can’t remember a time when talking with friends in our industry that one store did really well on a particular weekend and the rest of us did not. The World Market Center Las Vegas realized this and decided to do something about it. Last month’s National Home Furnishings Month campaign, created by Bob Maricich and his staff at the World Market Center, is the first genuine effort that I can recall by our industry to get our customer thinking about furniture. As president of the WHFA, I was privileged to be in on some of the early meetings regarding this effort. From my first exposure to the idea it was evident that even though we would all hope to benefit in some way from exposing the consumer to the idea of buying furniture, the staff at the World Market Center was trying to do something positive in a very non-selfish manner. I hope all of you got on board with this idea and promoted it in your local advertising. The World Market Center Las Vegas, its principals and staff really stepped up for the betterment of all of us. In a time when it would have been much easier to sit back and wait, they stepped up and took the bull by the horns. I, for one, am grateful to have this type of leadership — savvy and showing genuine concern for our industry. There are a lot of good ideas out there, but few who have the resources and the courage to bring them to fruition. If you missed getting involved this year, please help take this idea to the next level in the years to come. Our staff at the WHFA is ready to help you get in the game. To all of those people that helped get this off the ground, and especially to everyone at the World Market Center Las Vegas, thank you! I hope all of you will take the time to send an email or in some way thank WMC for defining what a true partner is.

Marty Cramer 2009 WHFA president Cramer’s Home Furnishings Ellensburg, WA (509) 933-2172 marty@cramershomefurnishings.com

ON THE COVER We would like to thank Naturwood Home Furnishings, Roseville, CA for allowing us to take some pictures in their beautiful store.

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

western retailer

October 2009

5


editor’s message Preparing for the Upswing Over the last few months, many key economic indicators have started to improve — signaling the hopeful end of this recession. The stock market has been performing well and home sales are slowly starting to rise. While the numbers haven’t necessarily been reflected in retail sales, those numbers are sure to increase soon. For the last year, you have been preparing your business to survive the economic downturn, but now what do you need to do to prepare it for the eventual upswing? A recent slideshow was featured on Inc.com about Six Ways to Prepare for the Coming Upswing. They suggest to: 1. Invest in technology: Technological improvements — whether it is a new website, CRM or POS system, a delivery truck tracking system, etc. — will allow you to better serve your customers when business picks up. If cash is short, Inc.com suggests installing new technology in waves and testing the success of the new system before fully implementing throughout your business. 2. Snap up talent on the cheap: With the unemployment rate still running high, the job market is flooded with qualified candidates. Take this time to hire talented new employees eager for work. Bringing in new employees can bring your business fresh and new ideas. 3. Ramp up training: Inc.com suggests identifying your employee’s strengths and weaknesses and then investing in targeted training programs that will prepare them for the upswing. Also be sure all new hires are trained properly and each employee is ready to take advantage of new opportunities when they arise. 4. Form strategic partnerships: Make the most of having a little free time by making new partnerships that will help you out down the road. Network with other retailers and build partnerships that might offer your customer various opportunities for products or services. 5. Get to know prospective customers: Build relationships with current and potential customers. Find out their needs and how your store can better meet them. Invite customers into the store and hold an informal focus group to find out what they are looking for in their home furnishings purchases. 6. Cut costs strategically: You’ll never be able to take advantage of the upswing if you don’t survive the downturn. Inc.com suggests analyzing costs carefully and reducing your spending in ways that are unlikely to impair future growth. Put controls in place so spending stays in check after the rebound. Identifying your excess costs now will help you be profitable in the future. This issue of Western Retailer contains many great articles for helping your business, including an article from industry analyst Jerry Epperson on moving forward from the recession. Let’s all remain hopeful that the worst is behind us and start looking forward to the future.

Melissa “Mel” Dressler Western Retailer managing editor MDressler@whfa.org

looking forward

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

western retailer

September 2009

www.WHFA.org

to November 2009

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

Solution for Retailing Success Member Profile:

HW Home

6

• Training Your Sales Staff • The Cost of a Sale • Using Technology in Your Showroom Design

October 2009

... and much more

western retailer

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


Š2009 World Market Center LLC. All Rights Reserved.

New World. New Way.

www.lasvegasmarket.com


industry beat Therapedic adds Idaho licensee

Seated left to right: Todd Scheidt,terrority manager, Gerry Borreggine, president Therapedic, Steve Everton, partner and Chris Sanders, VP sales/partner

Everton Mattress has joined Therapedic International, as the licensee covering Idaho, Utah, much of Montana, Eastern Oregon, Eastern Washington and the Northeastern part of Nevada. The licensee will operate as Therapedic-Idaho for the top 10 mattress producer. Everton Mattress has been a Restonic licensee since 1972 and intends to continue with that brand. The company has been doing business in Idaho and the surrounding areas since 1925. “To have Therapedic as an additional brand will help us better serve our customers,” said Steve Everton, president of Everton Mattress. “We are very enthused about the possibilities it presents for us,” he said. “The addition of Everton gives Therapedic a greater presence in the Northwest,” said Gerry Borreggine, president/CEO of Therapedic. “With

Idaho added to our Seattle and San Francisco operations we now have the strength, like never before, to sell and service larger regional accounts in the Northwest region of the country.”

Bedmart Opens Two New Locations Bedmart, Arizona’s largest family-owned mattress retailer announced in July the opening of two new locations in the metro Phoenix area. “We are very pleased to be able to make shopping at Bedmart more convenient for our customers,” said Bedmart CEO Chuck Kill. “We are growing with the Valley. Both of our new locations have more than 6,000 square feet so that we can offer a selection of famous brands, including Serta and Simmons, in addition to many different types of mattresses being manufactured today.” Kill noted that today’s consumers are purchasing more mattresses made from Latex foam, a natural, renewable resource. Bedmart also carries the largest selection of Tempur-Pedic mattresses in Arizona. Bedmart started in 1988 with a single store in Tucson. It now has 28 locations throughout Arizona.

board

member

Q&A

Q What motivates, invigorates and inspires you about our industry?

A That new people still enter the industry to start selling furniture. Q What is the last book you read? A The Twilight series and a 10 book series called the Work and the Glory. Q If you could travel anywhere in the world, where would

with Marvin

A

ne onth tu ber m y r e v E m ard Me into Bo learn more Q&A to ur WHFA o about y embers. m d boar

Q What is the most overlooked secret to success? A No secret. Just hard work, honest service and offering a quality product. Q What did you want to be when you were growing up? A I’ve worked in the furniture business for 50 years. I started in grade school helping my Dad do deliveries.

Marvin Kerby Kerby’s Furniture President 422 E Broadway Mesa, AZ 85204-2020 (480) 834-3888 www.kerbysfurniture.com mkerby@kerbysfurniture.com 8

October 2009

you go? Probably Australia since that is about the only place I haven’t been to. But there is nothing like the good ole USA, especially Arizona!

Q What do you do for fun? A Ride and train horses. Q Why did you join the WHFA board? A I was asked and thought it would be good to give something to the industry, but found I’ve gained a lot more than I’ve given.

western retailer

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


Employee Benefits Specialist

Long Term Care Insurance

Six Myths of the Health Care Debate

A

s I sit here, Congress is preparing to reconvene for the next round of Health Reform “debates”. President Obama is also preparing a major address to a joint session of Congress on that very subject (finally). Regardless which of the proposed “plans” are finally adopted and passed into law, there are some basic misconceptions that need to be addressed. Newsweek magazine recently published an article titled “The Five Biggest Lies in the Health Care Debate”. The author actually addresses six “myths”. The first misconception to address ( a bonus beyond the six misconceptions if you will) is that there is in fact, a President’s plan. In fact, most of what is being discussed, opposed or, defended, is the House of Representatives plan, H.R. 3200. Hopefully, during his address to Congress, the President will finally let us know, with no uncertainty, just what it is the President supports for Health Care Reform. First; opponents of the House bill profess the bill allows the government electronic access to our bank accounts. FALSE! What it does call for, is electronic transfers from an insured to doctors or other providers for payments of services provided. Second; H.R. 3200 requires that a health commissioner decides what coverage / benefits we receive. FALSE. What the bill says is that a health exchange, a list of available private insurers and a government supported plan, will be provided so we can know what options are available. Then, we make the choice. Third; There will be a limitation of benefits offered to older, ill patients on Medicare. This is part of the “pull the plug on Grandma” absurdity. Think, who in

707.829.8606 phone license# OE22529

their right mind would vote for such a thing? Not AARP which supports the bill. Everyone, Democrat, Republican, lefty, righty and in-between, would oppose such a draconian measure. Fourth; The bill provides for free coverage for illegal immigrants. Actually, the bill explicitly prohibits such support. It says, “individuals who are not lawfully present in the United States” will not be allowed to receive premium subsidies for health coverage. If they lie and obtain coverage and / or subsidies, they are breaking the law and will be punished. Fifth; A government panel (referred to as Death Panels) will offer suggestions as to what methods seniors can select to end their lives. FALSE! (see myth #3) What the bill does provide is payment to trained professionals, like personal physicians, to provide optional end-of-life counseling but, only if the patient requests such counseling. Sixth; Doctors will become salaried employees of the government. No, doctors will continue to negotiate their fees with private insurance companies as they do currently and, receive 5% more than Medicare pays for those enrolled on the public plan. There is much we need to do to address spiraling premiums and insurance industry mal- practices. Let’s at least have a civil, factual discussion so we “get it right” when a bill is finally passed. To get a quote for your health insurance needs contact Bob Aita, Aita and Associates, your WHFA Health Insurance Program consultant and broker at (888) 829-8606 or email Bob@aitaandassociates.com.

888.829.8606 toll-free www.aitaandassociates.com

est.1944


retailer notes

before

after

Supporting the Local Community by Jeff Stantliff

L

At a Glance WHFA Member: Jeff Stantliff Store Name: Bassett Furniture Portland Location: Beaverton, OR Email: jstantliff@bassettfurnituredirect.net Phone: (206) 383-8810

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October 2009

ast October we purchased our store in Portland, OR and wanted to get the word out to the community that we were open and had recently remodeled the store. We came up with an idea of getting the community together and redoing a teachers’ lounge at one of the local schools. We called the local CBS station and they came on board thinking it was a great idea. They then went out and got an appliance dealer to pitch in and we were able to call it “Bassett’s Teacher Retreat.” The CBS station did a story on the project and on their website, people from the community could vote for their favorite school to win the new teacher retreat. We took nominees and had them send pictures in of the teachers’ lounges. We finally narrowed it down to four finalists, and then put the four schools on the website for the community to start voting on a winner. There were over 450,000 votes; it blew everyone away. Some of the schools would have voting parties where they would bring pizza in and invite the children and their families to come in and vote for the evening. People could also come into the store or fill in a paper ballot if they did not have Internet access. We ended up selecting Concord Elementary School. We went in and designed the room, ordered the furniture and about the last week or two before school was out, we completely remodeled the teachers’ lounge. The teachers are excited about the new lounge, and we have received letters from them and the principal telling us how much it has raised their spirits. Throughout the process we had our Facebook page up, and we would give teasers along the way about how the project was coming along. Teachers and parents would come onto our Facebook page and register to become our friend on Facebook, leaving us comments about their kids being excited about this project. We then received primetime coverage on TV for the reveal of the lounge. Overall it has generated more business for us, with teachers and students’ parents coming in and wanting us to design their homes.

western retailer

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


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It’s All About Sales & Marketing

Engaging and Working with the

Online Consumer

W

Joe Capillo owner Top Line Strategies

12

October 2009

hen I was asked to write this article, there were three things that were to be central to the subject: How to teach salespeople to follow up and engage online (that’s two things), and to define what type of training salespeople should be given on how to work with a customer online prior to the customer’s visit to the store. Sounded easy to me, until I began to think and write. Suddenly the whole idea became something entirely different. Online engagement has to have a starting point, and that will probably be initiated by the consumer sending a message through a store’s website (contact us), or by clicking a link in a marketing email asking for more information about some product or offer made by the store. This begs the point of how important it is to know how the consumer got to you in the first place. Consumers responding to an email marketing campaign may or may not have given you permission to email offers to them. If they did this, they either voluntarily registered on the site — as they would through the use of your Room Planner or a “contact us” link — or gave their email address to a salesperson in the store.

western retailer

The way you handle each of these scenarios will be very different. Let me state my beliefs about the core of this whole online issue as I see it. I believe every store should sell furniture online at least to consumers in the market area they already serve. I believe that if you don’t do this in your area, someone else will (or has) and you will find yourself at a distinct disadvantage competitively as the nature of your target audience changes with each passing year. Coming along behind those aging babyboomers are all those Gen-X and Gen-Y people who are now into their 30s and 20s and have grown up shopping and buying online. Even those late boomers have learned to purchase online. These are the folks who would purchase from catalogs like Pottery Barn, Restoration Hardware, or Crate & Barrel, so online purchasing is not much of a change and could actually be a step-up for them because of the way people can interact with a well-designed website as opposed to a printed catalog. I further believe that you should be moving a lot of your advertising dollars to online methods beginning with email and the strong Contact WHFA at www.WHFA.org or (800) 422-3778.


social networks that will survive for the longterm. Email marketing has obvious benefits of being permission-based, immediacy of response, openness of tracking results in real-time and linking people to your website where a bigger story can be told. Plus, it’s cheap compared to all other media. If you blast to purchased lists you run the risk of being considered to be spamming, and lose some of the intimacy of permissionbased marketing, but that’s a different article. So, if a consumer makes an inquiry from your website regarding a product, someone has to respond to them. I think it’s better to have that response come from a person that they can subsequently talk to, like a salesperson, but the message must be scripted and controlled by management. There should be links in the response that allows the consumer to make further choices, such as one that takes them to a description of your free room planning services asks further questions about the project the consumer is working on — “Please tell us what you want to accomplish in your room.” This could be a link labeled “Mistake-Free Purchasing” offering your total satisfaction guarantee (which, of course, you have). Links might also be made to descriptions of your delivery and setup processes where the consumer can see and read about how great you are at this and see some customer testimonials to that fact. You’ll need to think about the kind of online response strategy that would go into the development of a call center such as those many of us have encountered when ordering by phone from, say Land’s End or L.L. Bean. These are very skilled, high-service people who have hundreds of scripted responses at their fingertips for responding to their customers inquiries. They also always seem to have a smile in their voice and a vocal demeanor of caring and focus on your needs. Their calls are randomly recorded and used for training and quality control by call center managers. At some point you will have to ask your online shopper to decide whether they would like to receive a call from a “home furnishings specialist” (salesperson), for more personalized help and to make an appointment to visit your store. These will be the consumers your people must be trained to handle from this point forward. Engaging people, whether online, on the phone or in the store requires one fundamental aspect; that the goal of the contact is to first understand, and then to be understood — that you make it about them, and not about you, your products or your promotions. After “thank you for contacting us” and introducing yourself, it would be a good idea to ask a customer-centric

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

question like, “Tell me what you’re trying to accomplish today?” Stop right there and allow the consumer to respond. You already should have some information about the consumer such as name, zip code, address, item of interest, etc. from their registration on your website. The point of all this is to show that the issue is far more complex than would be thought from the original question around how to prepare our salespeople to engage consumer’s online. So, let’s look at a more pro-active use: Follow up with store shoppers who do not buy. There is abundant empirical evidence that a very large majority of consumer store visits do not result in a sale being made. It is my experience that first-time shoppers on a furniture purchasing project make their purchase less than 15 percent of the time on their first visit. For the best salespeople, this could be as high as 18 percent to 20 percent, while for the poorest performers it might be as low as 10 percent or less. The reason for this can be found in consumer research regarding how people make decisions around home furnishings purchasing, but suffice here to say that these are highly-considered purchases with complex consequences when mistakes are made by the buyer. The second time they visit your store on the same project, your close rates will be 70 percent or higher. It makes sense therefore to make one of your first-time visit goals to get them back a second time, and the best vehicle for this is, I believe, email contact by permission. Follow up is one of the two critical sales imperatives that every salesperson must be good at to be a high-performing, highearning employee. The other is dealing with rooms first, through sketching and room planning. Here are some ideas around using email as your primary follow up tool: 1. It’s recordable and reviewable by sales managers. You know the job is being done. 2. The message can be designed by management to ensure consistency and proper focus, while allowing room for personalizing part of the message. 3. Receiving email addresses from shoppers requires that you earn the right to have it, so your engagement process has to be solid and valued by the consumer. 4. You can include links that offer your customer options and reinforce the story you tell in your store, keeping them engaged. 5. You can request appointments for those high-value return visits, thereby ensuring a high-level of service and being proactive in getting non-buyers back into the store. The training for this kind of communication is not much different from the training you would provide for telephone calls made by salespeople if you did any training on this. You want to ensure that the right message is delivered every time, so some bullet-point scripting will have to be done, and you also have to keep the contact as personalized as possible by dealing with customerspecific issues. Not difficult to do with a little conference room thinking. One thing that has become obvious to me over the decades is that if you want a consistent, specific message to be delivered to your customers at any stage in the customer engagement process, you must write it down, build western retailer

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training around it and coach to that standard through observation of performance. Your salespeople have to know what message you want to deliver to your customers on every aspect of their experience. That’s one way you manage your customers’ experiences with your store. Your customers who first meet you online at your website who are working on some kind of room-based purchasing project (basically all of them) develop a feeling about your store and their relationship with it that is like the “theater-of-the-mind” concept from the early days of radio programming, but is far more visually-based. Their “experience” is what they want it to be and will be influenced by the look, feel and customercentric nature of the website. Your top priority has to be to get them to register and request more help if they need it. Otherwise, your priority must be to allow them to buy right now from your in-stock selection of best selling products that you can deliver now. Either way, you’ll get contact information to do a couple of things: First, say thanks and offer more help; second, attract them into the store where the relationship can be further enhanced by connecting to the customer’s projects

for now and for the future. Your website has to offer the promise of an enhanced experience to those who require more hands-on help and those who just want to get something right now with a minimum of time and effort. Consumers who make their furniture purchases in a relational mode seek this kind of long-term connection with individual salespeople and stores. Those shoppers who make their furniture purchases in a transactional mode won’t be as receptive to the “let’s engage and build a relationship” message, but are far more likely to buy online. That’s why you have be prepared to sell to them right there, right now! You have to remember that all consumers are not the same. There are no absolutes around motivations, perceptions, attitudes or outcomes. These issues are all strategic aspects of developing your company’s web-to-store persona and delivering a first-class customer experience.

Joe Capillo is the owner of Top Line Strategies, a sales consultancy specializing in retail furniture. He has been a salesperson, sales manager, store owner, and consultant. See him at www.joecapillo.com and join his discussion groups and blogs. His first book, “Living on the Top Line” will be published in October 2009.

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Call Jef Spencer, warehouse manager, today to place an order. (916) 960-0386 • (800) 422-3778 • www.WHFA.org

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Follow us on Twitter for product updates and promotions. www.twitter.com/WHFAproducts

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


The World Around Us

Moving Forward from the Recession

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s we are writing this, there has been a series of modestly positive factors impacting our economy. Existing home sales have grown three consecutive months (sequentially, not year-toyear), home prices did not fall last month, consumer confidence has bounced up slightly from an extreme low and the unemployment rate did not go up last month. Is the worst over? We hope so. Perhaps the better news is that some people believe the worst has passed. Our president says it has, and several respected economists see real GDP growth in the second half of 2009, fed by government spending and inventories beginning to grow for seasonal reasons. Historically, our best months for furniture sales have been September, October and November, largely because the peak months for home sales are in the summer. Unfortunately, actual home sales this year, on a year-to-year basis, were substantially lower than 2008 or almost any year you want to name. As a result, we may not have the same housing-caused benefit this year. On the plus side, however, we are not about to hear about another pending collapse of our banking system and the need for emergency bank bailouts like we faced last September. Also, we have a year’s worth of various spending incentives, consumer rebates and reinforcing of the financial system under our collective belts. Has it all worked? Of course not, but it never does. The unprecedented severity of this recession has demanded extreme measures and all anyone can do is hope that these corrective measures will Contact WHFA at www.WHFA.org or (800) 422-3778.

work if not now, then soon. So what can you do? First, are you cowering or striding forward? It is easy to remain in a bunker mentality, but if you don’t show confidence in the future, no one in your business will. Second, remember that this economic mess has been more localized than any other. The housing collapse has been severe in some regions, states and cities and nearly non-existent in others, primarily in the mid-west. Do not assume the national headlines on housing, employment or banking always relate to you and the markets you serve! Housing is always local. Almost 75 percent of the foreclosures, for example, have occurred in six states. Third, look around. Almost everyone has tried to save money by deferring some maintenance. Make your store look like you want business. Replace the stale signage, get rid of the logos and catalogs of lines you no longer carry and bring new furnishing on your floor. Give your consumer something new to look at and your salespeople something new to sell. Fourth, review your mix. The average monthly decline in furniture sales since last October has been between 15 percent and 20 percent, but one-third of that decline has been from a change in mix. Everyone has focused on entry-level price points for the last year, but is that what your customers really want? Fifth, take advantage of being a survivor. The failure of competitors in your market have orphaned many households who once bought western retailer

Jerry Epperson founder Mann, Armistead & Epperson, Ltd.

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The time is right to try something different.

from those stores. Aggressively reach out to those consumers, and to the many new households that are emigrating from city to city seeking employment. You might be able to buy customer lists from the former store owners. Sixth, are you the largest in your market in any category — mattresses, youth, solid wood, recliners, contemporary, home office, entertainment cabinets, massage chairs, etc.? If so, promote it. Let your customers know the largest selection of ??? is at your store, not a specialty store. Seventh, commercial real estate is suffering, and this may be a great time to improve your store facility and location at very good prices. Eighth, update your media mix. With Twitter, satellite radio, cable and Direct TV, Internet newspapers, and the rest, are you

reaching your consumer efficiently? Finally, the time is right to try something different. Instead of “No, No, No”, try “Oh, No! Recession Values”. Give extras instead of unrealistic and overdone discounts, or offer to take trade-ins, sort of a “cash for clunkers”. Encourage salespersons to reach out to old customers with preferred customer promotions and to let them know about new lines. Few credible economists are predicting that the recovery will show the same vigor on the way up that it did on the way down, but, in our opinion, the second half of 2010 should be the best seasonal selling season our industry has experienced since 2006. Even so, you need to gain share now while others are reeling.

Wallace W. “Jerry” Epperson, Jr., CFA is one of the founders and a managing director of Mann, Armistead & Epperson, Ltd. Jerry head the research efforts and has in excess of thirty years of experience in the publication of hard/soft dollar research which focuses on demographics, consumer products, furnishings (residential and contract) and related issues. More specifically, Jerry’s research in the furnishings industry is recognized on a world-wide basis for its in-depth coverage of suppliers, manufacturers and retailers. Contact Jerry at: wwe@maeltd.com or online at www.maeltd.com.

important to support our industry. That being said there are many tangible benefits to belonging to WHFA. WHFA is an investment rather I believe it is

than a donation. As the Executive Director of the Pacific

WHFA takes care of the support/ educational side of our industry and allows us to Furniture Dealers,

concentrate on our merchandise programs.

Jeff Weinstein, owner, Mattress Factory Outlet, Vancouver, WA WHFA Member Since 1994

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Western Home Furnishings Association 800.422.3778 • www.WHFA.org

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


WHFA


Program of the Month WHFA’s New Consumer Financing Program with

GE Money is Surprisingly Simple

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HFA and GE Money have joined forces to provide WHFA members with a consumer financing private label credit program. From the easy to fill out one-page dealer application to the quick approval and up and running in less than seven days, to the extremely competitive finance rates, this new program for WHFA members is surprisingly simple. GE Money has been a home furnishings credit provider for over 60 years, servicing over 5,000 locations and will now be adding WHFA members to the mix. They offer a full complement of financing programs to meet the demands of the diverse home furnishings industry and have a dedicated and tenured marketing and client relationship team specialized to service WHFA members.

GE Money Business Center Makes customers and help improve your cash flow with fast credit funding. Plus, this program allows you this program unique to request instantaneous credit-line increases for Kaprice Crawford WHFA marketing director Program through WHFA’s partner

The Business Center is your one-stop source to manage your GE Money financing program. This online password-protected service is the key to running your financing program that drives sales. With just a few clicks, your sales can be stronger, your staff more efficient and your marketing more effective. With the Business Center, available only from GE Money, you’re in control of your financing program.

Sales — Fast and Easy Transactions The online Business Center processes your online credit applications easily. You can quickly run sales so you have more time with your

revolving programs and with the online estimator you can help consumers find the program that offers the right payment options.

Marketing — Drive More Traffic to Your Business With the online Marketing Toolkit you can create your own customized marketing materials from direct mail, store signage, website offers and email and billing statement messages. Plus, you can easily build effective marketing campaigns with your own open-to-buy and best customer lists right at your finger tips. Also, once you are a part of the WHFA / GE Money program you will be included on the gemoney.com shopping

With Payments Deferred Interest

Quarterly Rebate .25% with Volume of $150,000 Months

GE Money Base Rate

3 Months

0%

6 Months

1.95%

12 Months

3.99%

15 Months

5.99%

18 Months

7.99%

WHFA* Member Pricing 0% 1.56% 3.19% 4.79% 6.39%

No Payments Deferred Interest GE Money Base Rate

0% 2.75% 5.49%

WHFA* Member Pricing 0% 2.2% 4.39%

*Pricing effective through 2/28/10. WHFA discounts given as a monthly rebate.

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


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locator webpage that gets about 2.5 million visits a month from consumers.

Operations — Greater Control and Efficiency The Business Center gives you access to your own customer data. You can generate reports showing your credit applications and funding data. You can utilize the activity reports for employee incentive programs and you control the level of access for all your end users.

Training Resource Center Your staff will benefit from the online self-paced training modules only found in the Training Resource Center. This online support and training will help you understand how financing strengthens your business. It is available 24/7 for your staff with individual training and group webinars. The Center includes self-paced training modules on how to sell financing for your sales staff, tutorial training on application and sales processing, plus step by step guides on integrating financing into your marketing. Each simple and engaging course is seven to ten minutes long and each course is designed specifically for the furniture industry.

Credit Line Assignment Technology Because of their experience in consumer financing GE Money works to focus not only on approval rate for you the dealer, but also on assigning adequate, usable credit lines to your customers the first time. GE strives to meet as many sales as possible with the “Meet the Sale� system logic which utilizes requested sale amount when assigning lines and having senior underwriters available for situations requiring manual review for certain credit profiles.

Call to get started on the GE Money program today! (800) 422-3778

Equal Payments GE Money Base Rate

WHFA* Member Pricing

24 Months

11.45%

9.16%

36 Months

14.45%

11.56%

48 Months

15.45%

12.36%

Months

*Pricing effective through 2/28/10. WHFA discounts given as a monthly rebate.

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

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Operational Excellence

Maintaining the Financial Health of your Business

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verywhere you turn nowadays you can find advice on how to maintain your personal financial health — where and how much to invest, personal budgeting, improving your credit score, etc. It’s a bit harder to find simple, understandable guidance on how to maintain your business financial health. Outlined below are key techniques you should use to maintain your business’ financial health, regardless of the financial condition in which you are in. Whether your business is in sad shape or pretty good shape, here are some ideas to implement:

Management

Mike Hulser financial management consultant The Biz MD

• Your entire management team must understand that you are in the money business (earning a profit and generating cash), not the furniture business. Selling furniture is your means to the end of making money. • Management must take personal responsibility for the financial performance and position of the business. No blaming the economy, the government, the weather, etc. • Management must be aligned. Regardless of how vigorous the debate might have been, the decision is always reported out as unanimous. • You must employ a fact-based management process to bring to bear the talents of your management team on the issues and opportunities facing the business. No spectators allowed.

Key Metrics Usage • What’s important? Typically, the answers might include sales, margins, inventory turnover, customer satisfaction, etc. If it’s important, measure it. Generally, things that get measured get better. • At the end of a weekly management team meeting, the attendees should be able to answer the question, How’d we do last week? with specific facts and figures. • A management team that is on top of their numbers should never be surprised by 20

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the monthly financial statements. If you are looking at the right things daily and weekly, you should be able to predict what the financial statements will say.

Financial Planning, Budgets, Forecasts Most of us would not start out on a drive across the country without consulting a map and planning a route. The same applies to your business, where your financial plan, your budget, is your road map. Your financial plan, which should at least be annual, broken into months and appropriately detailed, deserves healthy discussion and debate among your management team. The plan should attempt to match results desired with resources required. One pitfall to avoid — don’t have your controller or accountant simply come up with a budget spreadsheet and email the finished product out to everyone. A major benefit of the budget process is the results versus resources debate. It helps drive ownership. Once you have a solid, logic-based financial plan, management’s challenge becomes making it come true.

Cash Forecasting and Management Cash is the lifeblood of the business, period. If the business runs out of cash, it dies and it ceases to exist. Bankruptcies are caused by a lack of cash, not a lack of (accounting) profit. Your cash position must be continuously, highly visible. I recommend the use of a forward Contact WHFA at www.WHFA.org or (800) 422-3778.


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looking rolling 13 week cash flow forecast. Forecasted inflows minus hard costs (personnel, facilities, debt and taxes) equals what is available to suppliers. You cannot disburse money that you do not have. In optimizing your cash position, you want to be sure to: • Tightly control your payables disbursements. • Steadfastly pursue collection of your receivables, if you have any. • Keep your inventory turning. Keep fast sellers in stock. Liquidate dead stock for whatever you can get for it, even if only pennies on the dollar. • Control your appetite for facilities improvements. Because these often don’t hit the P&L in a big lump, it is easy to rationalize not a big deal — mistake!

Financial Reporting and Analysis NBA players check the scoreboard every time they run up and down the court — every 24 seconds! There is a message there: You need to know the score and the information needs to be timely, accurate and comprehensive. If all you are getting now is simply a monthly P&L and balance sheet and you are getting that six, eight or ten weeks after the end of the month, you are in trouble. What you need is: • Financial statements delivered absolutely no later than the 15th of the following month. • The P&L should be both current month and year-to-date and compared to plan and prior year actual. • The balance sheet should be compared to prior month, prior year end and prior year. • Other highly desirable information — inventory turnover or GMROI by product, payables aging by supplier, receivables aging by customer (if applicable), sales and margin by product, etc. • And one or two pages of analytical commentary, highlighting issues and opportunities hidden in the numbers.

Human Resource Processes Your employees are your primary differentiator, either an asset or liability or sometimes both. Your competitors have products, facilities, ad campaigns and computers, just like you. The one thing they don’t have is your people. In getting the most out of your people, you want to be sure to recruit for talent/personality and train for skills. Make sure personal responsibilities are clear, clarify the organization structure (who can tell who what to do, who makes what rules), continuously push for and expect strong performance and eliminate poor performance(ers). Lastly, remember the old adage, People do what you pay, not what you say. Make sure your compensation programs encourage what you want people to do. Is it sales? Sales at a certain margin rate? Inventory turnover? GMROI?

Key Relationships and Communications You are surrounded by stakeholders — customers, suppliers, employees, banker, CPA, insurance agent, landlord, ad agency, etc. They all have a vested interest in the state of your business. Be sure to maintain ongoing, solid, fact-based communications with all of these groups. If your business hits a rough spot, it is one or more of these groups that will help get you through it.

Mike Hulser, a nationally renowned Financial Management Consultant and Turnaround Specialist who does business as The Biz MD, can be reached at (808) 672-0220 or mike.hulser@thebizmd.com.

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

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Member Profile

Cypress Furniture Hayward, CA

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Melissa Dressler Western Retailer managing editor

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ypress Furniture in Hayward, CA has been manufacturing upholstered furniture for over 50 years. Originally operating as Umphred’s Furniture, today Cypress Furniture gives each product the time and attention it did when it first opened. “We are proud of how we make our furniture,” said owner Jim Berrens. “We make it the same old-fashioned way that we always have. With so many new companies out there that are cutting corners through production and using particle boards and MDF, we stand out by building it with solid hardwood.” Cypress Furniture is eco-friendly in the materials they use as well as the product that is built. All of the frames that Cypress Furniture builds are from sustainably forested alder wood and are built to last for decades. “We believe how it is built makes a product green as well,” Jim said. “By building a high-end piece of furniture, you do not have to replace it as often and therefore you are not filling up landfills with sofas that only last three to four years. We feel this is very important for our business.”

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The durability of the Cypress Furniture frames has stood the test of time. Jim recently had a customer call the factory asking to have a sofa that she originally purchased from the company in 1963 reupholstered. “She brought in the receipt and it was from an old fashioned typewriter. It simply said ‘Special Sofa’. She bought the one sofa for $459.50 back in 1963,” said Jim. “We are very proud to see that our frame lasted through a family of four kids for over 40 some years. To me, that is what is more important to sustainable furniture — how long it lasts.” While the quality of Cypress Furniture product is evident, it is their manufacturing process that makes them unique. Since everything is built by hand, they have a niche on being a custom upholstery shop. “We deal with many designers who will bring in a sketch of an idea, or an old photo of what they want, but they may want to make the arm deeper. Or, we will have designers bring in their clients and we can tailor the sofa to them — if the client is taller, we can raise the seat height and increase the depth to Contact WHFA at www.WHFA.org or (800) 422-3778.


have it to fit the customer and their needs,” Jim said. “It is almost like Goldilocks when people visit our showroom — this one is too small, too deep, too big, until we find just the right fit.” Finding the right fit is an important part of a customer’s visit to the factory but Jim also likes to give them a tour of the 25,000 square foot facility. Having been in sales for years, Jim knows that one of the issues of selling sofas to customers is that they don’t know what is in it. By giving the customer a tour of the factory, the customer is able to watch the production of their piece and is involved in the process. Once the customer has chosen their piece, a frame is built to the customer’s specifications and then it goes to the spring department. “In this department, we can once again customize the piece for the customer,” Jim mentioned. “If we have someone like a professional football player purchasing the sofa, we will use a heaver gage spring to be able to support a larger person.” Next, the piece travels to the fabric department. All of the fabric is inspected and then cut individually to create less waste. From there, the piece goes to the upholstery department where it meets the trimmers and upholsterers. “The upholsterers create the body of the piece and the trimmers finish it off. We also build our own cushions so we go back to our original meeting with the customer to determine the appropriate type of fill for that cushion to make sure it is not ‘too hard or too soft. Each cushion is then built specifically for that frame and customer preferences,” said Jim. If there are specific details to a piece that need to be met, Cypress Furniture sets up a final “sitting” to ensure they have complied. “We value our relationships with the designers we work so closely and directly with. I feel that their reputation is on the line, so I take it very seriously that the designer puts the perfect product in their customer’s home. So if there are specific details that need to be met, we will have the designer and customer come back in for a final ‘sitting’ to make sure everything meets their needs before it is completely finalized. We will mock-up cushions and arms so the customer can get the experience of what it will be like once it is completed,” Jim said. Along with their quality products, Cypress Furniture tries to keep their overhead costs low in order to sell the product at the best price possible. Cypress Furniture’s attention to the customer and detail has made them very successful and popular with their clients. In the future, Jim would like to create a signature line and incorporate it in with their custom work. With the future addition of a signature line, Cypress Furniture will continue to serve their customers with honesty, integrity and exceptional quality products. Contact WHFA at www.WHFA.org or (800) 422-3778.

At a Glance Business Type: Manufacturer Employees: 21 Showrooms: Leflar Ltd. at Seattle Design Center, J. Scott Waterman Showroom at San Francisco Design Center, McNamara & Hirschman at Phoenix Design Center and JM Design Center, in San Jose Website: www.cypressfurnitureinc.com WHFA Member Since: 2009

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Operational Excellence

Internet CRM — Six Basic Rules of Engagement

I Dave Berger director of product management STORIS Management Systems

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t amazes me. Why do so many home furnishing retailers still not see the investment value of a sophisticated website? From a CRM/customer service perspective it is becoming the number one way to engage consumers and convert them to loyal customers. Even with our accelerated techno-evolutionary environment there currently is no cost-effective way to artificially and synthetically replicate the act of coming into a showroom to touch and feel the product. But the home furnisher should offer to make that the only reason the consumer needs to come into the showroom. Especially since more consumers are choosing the web as a preferred method of shopping. Did you know that although consumer in-store comparison shopping and purchases have drastically decreased, 94 percent of online consumers are still spending more or the same amount of time doing comparison shopping and 93 percent are spending more or the same amount of time purchasing online? It is not only the online comparison shopping that is increasing, but actual online sales as well. In 2009, projected total sales of goods and services procured online will reach $235 billion, which is a 15 percent increase from 2008. Yet 70 percent of all furniture retailers still do not provide the ability for a consumer to make a purchase via an online e-store. I think what makes this more surprising is that 40 percent (single store) and 20 percent

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(multi-store) of home furnishings retailers still do not have websites. Even though the top five ecommerce category increases in 2008 were: 29 percent - video games, consoles, and accessories 25 percent - home, garden, and furniture 25 percent - sports and fitness 13 percent - event tickets 9 percent - consumer electronics And having a website with location, directions, phone number and a select few products listed with minimal information, will not necessarily translate into a viable revenue generator. If your business has a website, but is not that unique, you are probably offering an e-store that is not maximizing its potential. Interestingly, although 51 percent of online shoppers prefer a unique, interactive shopping experience because they find it gives them more information and a better sense of the merchandise, 45 percent say that all sites seem the same, with price and availability of merchandise the only main differentiators. This is indicative of e-commerce “me-too”, with many websites lacking individual personality, sophistication, and brand awareness. Now, you may have already realized that your business needs to launch a site or improve the one you have, but it is not a high priority. Maybe you’re a proponent of the theory that although Contact WHFA at www.WHFA.org or (800) 422-3778.


A consumer physically walks into a store, looks at a product, sees a price tag, wants to know if the product is in stock, and expects answers quickly. That is exactly what a website should be able to do: give immediate answers.

online shopping is a growing trend, it is not something a large enough percentage of the population has embraced. Or, online purchasing is mostly used by “kids” downloading video games, music, and ringtones. In fact, 80 percent Gen-X (33-44 yrs old) and 70 percent Gen-Y (20-32 yrs old) purchase online, while only 38 percent of the Millennials (teens) do. Although Baby Boomers (55-64 yrs old) are currently the least likely to purchase online (it is increasing), they do represent 33 percent of the total web surfing population. More importantly, they are the population’s wealthiest demographic. The market for their online business is wide open. Some say big ticket consumers’ work/family commitments do not leave them much personal time to spend on a PC shopping via the Internet, and instead use it for email. If that is true then consumers have less time to travel to the store to shop. Factually, more people are using their mobile phones for texting and emailing anyway. So, how much time are people spending on the web? In April 2009, the average monthly home web user dedicated over 38 hours surfing online, averaging over 1 hour per surfing session. During the course of a browse session, users spent less than 1 minute per webpage. This could indicate users found the information they wanted quickly and moved on to the next page, or did not find what they were expecting and most likely moved to another site/page. That is the difference between a good website and a bad one. One can presume that a business without a quality e-store solution is less likely to engage consumers who are making the time to shop online and make purchase decisions over the Internet. I suggest six basic rules of what an e-store should offer to ensure maximized potential of engagement with consumers. First, a website is an actual showroom location — not an information desk — with the benefit of being open 24/7 and with minimal overhead. Every positive aspect incorporated into the professional presentation of a brick-and-mortar

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

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©2009 Merchant Services are provided by Banc of America Merchant Services, LLC™ and sponsored by Bank of America, N.A. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

continued on page 26 Contact WHFA at www.WHFA.org or (800) 422-3778.

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location should be considered. Utilize the same graphics and color schemes within the store (including promotions/ad campaigns) and on the site. The presentation stakes are a bit higher for furniture retailers in this respect. Human tendency is to expect a more enriched understanding of colors, design, and form/function from a home furnisher than an automotive accessories or hardware retailer. It is important that the presentation of the e-store is of a high quality, with a consistent awareness of the home furnisher’s brand. Secondly, ensure the site is easy for consumers to navigate and find thorough information. This includes such things as proper placement of icons or images, menu structure, homepage topics, screens/tabs, and the actual information itself. Site features and services should be easily accessible and easy to use. There may be a need to offer lots of services, but if the consumer cannot figure out how to access them or find information, then it is a lost cause. Since the average surfer views a web page in less than one minute, there is little time to make a positive impression on the consumer. With previous experience in web designing software, knowledge of XHTML, Java, etc., one can create and publish a site. But if not an expert in this field, I believe a business should hire the services of a professional web designer. There are many form and function design principles such as the Gutenberg Diagram, Fitts’ and Hick’s Laws, that should be adhered to in the creation of the site. This brings me to the third thing your site should offer: plenty of detailed information. With a website, detailed information can be presented easily. Using images of products represents a big piece of this solution. It is nice when consumers can view an image of the product, but even better when the image can be enlarged on the fly and shown at varying angles for a better visualization of the finer details of the product’s craftsmanship. Make sure details such as the dimensions of the product are also displayed. Let the consumer know if it is in stock. Display the actual images of the color swatches that the product can be ordered in, if the manufacturer does not have an image of the product in differing colors. Provide shipping lead times. Ensure that promotion pricing is being properly displayed. Additionally, any recommended accessories, associated merchandise collections, or other add-on items should be automatically displayed on screen in a way that lets the consumer know they are there, but not so that the consumer is prevented from easily clicking a link. A variation could be to display images of the most popular add-on items purchased for a specific product or suggest other products that are similar in style. This streamlines the consumer’s research time and makes it easier to shop an e-location. Eighty-five percent of online consumers stated they purchased items that they were previously unaware of on a particular site. So, add-on/impulse online purchases do exist. I think it is important to say that manually maintaining a website can be very labor intensive. However, a retail management system should be able to seamlessly integrate with your website to reduce the maintenance of a site with automation, thus requiring less IT resources. A fully integrated RMS can feed the site to display information such as accurate pricing, quantity available, images, etc., in real time. Conversely, any information entered by the consumer on the website should

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be fed into the RMS in real time. Remember, a site is the same as a store. A consumer physically walks into a store, looks at a product, sees a price tag, wants to know if the product is in stock, and expects answers quickly. That is exactly what a website should be able to do: give immediate answers. It is amazing how real-time information empowers human beings when making decisions. In fact 91 percent of online consumers are more confident about their purchases after researching the product online, and feel reassured that they are getting the best deal. So if a consumer has shopped a home furnishings’ e-store and then comes in to their showroom, there is a high percentage of converting them into a customer. When a consumer cannot find information, or needs a specific question answered, having a fail-safe like a ‘live-chat’ feature is huge. Throughout your website there should be several opportunities for the consumer to click a link and chat via instant messaging with an actual person. Whether that is available from an icon next to the product details, or in the order entry section, the more opportunity to use this, the better the online shopping experience is for the consumer. This leads to the fourth rule of what a website needs: the ability to enter a transaction. Remember consumers will do some research first, so they may want to create a shopping cart that can be saved and reviewed later. This should require minimal information from the consumer so the process can be expedited. If that consumer decides to become a customer, the ability to convert the cart to an order must be available. Additionally, the capability to enter a repair/service order should be provided. Again, this must be done in real time, with your RMS integrated 100 percent with the website. This should allow for entry of e-orders with encrypted credit card payments and pre-authorizations, as well as a service for consumers to apply and receive approval for financed credit. Another great convenience for a consumer is to not have to walk into the store to buy a gift card for someone; they can buy the gift card and have it emailed to them, all from their PC. Both site and store must provide the same level of informative services, like checking order status, regardless of whether the order was created on the site or in the store. Real-time detailed information is not only a benefit to the consumer, but to the retailer as well, which leads to the fifth function an e-store must have: analysis of detailed shopping to conversion stats to spot trends, identify top performing products, and capture crucial CRM data. There should be plenty of opportunity for a consumer/ customer to register an email address for things

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


such as membership/customer loyalty rewards programs, special promotions, monthly/weekly advertising sales, clicking to exit a site, and surveys. The site should ask for their information. A sales associate/designer should ask for a person’s name when they are actually in the store, so the expectation should be the same from the website. The site should not come off as intrusive or outright pushy. But make sure it is somewhat aggressive, since being aggressive is a good thing on the Internet. Remember, a main reason consumers use the web is to perform research and comparison shop. So they are aggressively looking for deals. Consider that when asked if aggressive online sales of big ticket items made them more likely to make a big ticket purchase via the Internet, online consumers said they had or were planning to buy the following top three items: • 30 percent tvs and home entertainment • 20 percent home improvement products • 12 percent indoor furniture Even though Indoor Furniture was only the third best, all three of these categories revolve around each other, so the other top two reflect very positively on the third. This sets up my sixth rule: people need to be able to easily locate a website. The Internet offers search engines to make it easier to research and surf. There are keywords that search engines use to reference a website, but unless one is an expert in creating websites, there may be some difficulty implementing this correctly. Additionally, a site should allow users to recommend it to others via hyperlinks, automatically emailing a URL or specific product links to other individuals. That is a great way to foster electronic WOM (word-of-mouth) and ensure new prospective customers can locate the site. The Internet has become the way in which consumers want to engage a business more than they have done ever before. Having a 100 percent fully integrated sophisticated website/RMS provides a foundation of engagement opportunities to convert consumers into loyal customers. Contact WHFA at www.WHFA.org or (800) 422-3778.

David Berger has over 20 years experience in retail consulting and training. Currently the Director of Product Management, David has been with STORIS Management Systems, a leading retail software solutions and services provider for Big Ticket retailers, for the past 13 years with a strong focus on product design, quality assurance and user experience. For additional information please contact him at dberger@ storis.com.

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Showroom Style

Bringing Old Showroom Product

to Life

S

easons come and go, but inventory often stays the same. Keeping your showroom displays fresh and inviting can be challenging, particularly with older product, but it’s vital that you maintain this as a priority in an effort to keep your customers’ attention. Whether you are working with year-round product or are trying to sell something that just hasn’t moved, your goal should be to entice your audience with new ways to look at old things.

Nicole Leinbach Reyhle founder Retail Minded

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October 2009

Create Excitement through New Displays Have you ever been to a store that you know exactly where to find your item? Grocery stores to apparel retailers to discount supercenters thrive in having certain products always in the same place. Their customers know exactly where to get what they need. For showrooms, however, this is not the case. When customers are purchasing furniture, often they have no idea

western retailer

what they need. It’s your job as a retailer is to create an atmosphere that makes them want to learn more about all that you sell, not just some of what you sell or what they may have come specifically to your showroom for. Keeping your showroom fresh with interesting displays will encourage your customers to take the time to learn about all that you offer. A great display shouldn’t last forever, though. It should be on your to-do list to create new displays that will encourage a new shopping direction. Often what wasn’t seen on a previous visit by a customer can be re-introduced through a new display on their next visit. Taking the time to re-invent your showroom floor with engaging displays will communicate to your customers that you have new things to offer, even if you know your “new” things are actually old things. The idea is to constantly re-invent your space so that customers believe you are offering new things to them each time they visit. The savviest of customers may catch onto your merchandising

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


strategy, but allowing them to see old product in a new light often is the push they need for you to make an additional sale.

Showcase Products in Unexpected Ways It’s easy to merchandise product with what it is expected to be merchandised with, but taking the time to create displays with unexpected merchandising strategies often leads to new customer interest. Using products that aren’t for sale, but help showcase what is for sale, is a great way to highlight product that you want to move. In addition, displaying product in untraditional ways that scream for attention is an effective way of catching your customer’s eyes. Your goal should be to create conversation through your unique displays that will lead to the opportunity for sales. Getting your customers to talk about product they wouldn’t typically be drawn to is a great way to get orders written. Use the opportunity of surprise in your displays to help capture these conversations and ultimately, sales. While displays may be great in opening up the opportunity for conversation, the product within that specific display may not always be what your customer will want. If this is the case, help direct your customer to what it is they are looking for by leaning on your display as your conversation opener. Sometimes getting your customers to talk can be a challenge in itself, so having something that captivates their attention and opens them up for conversation can serve as your chance to get inside their heads. With your guidance, let the conversation lead to what it is they are looking for or how it is you may be able to help them. Encourage them to view other products, tour your showroom and learn from you regarding what it is you have for sale. The display may not get that specific product within it sold to each new customer, but it can still serve as a selling tool to help with other sales.

Combine the Old And The New Don’t let old inventory get stale with the excitement of new inventory taking over your showroom. Intertwining the old and the new can be effective in selling both. Cross merchandising these products will definitely help with sales. Old pillows? New sofa? Combine the two! Using your showroom space as a floor plan that blends both old product and new product rather than separating them will keep your customers engaged in all of your merchandise — not just what recently arrived into your showroom. While it may be enticing to have a sale area, avoid putting products into this space unless absolutely necessary — if at all. Instead, concentrate on combining your product so that it seamlessly blends together within your showroom. If you do this effectively, you may just fool yourself into seeing old product in a new light as well. In addition to merchandising, offering an incentive for a combined purchase of the old and new can be very effective in moving older goods. For example, you can offer regular price on all the newest pieces for sale, but promote a discount for older product with the purchase of something “just arrived”. Make sure to keep the value — in price, quality and style — of each product just as exciting, though. You don’t want them to think just because something is old to you means it will be old to their customers, too. Use signage that compliments your merchandising strategies as a way to communicate this exciting offer. A clean, professional sign in a frame on an end table is a polished way of sharing this incentive. It also helps to directly Contact WHFA at www.WHFA.org or (800) 422-3778.

communicate this valuable promotion to your customers as they are planning their purchases.

Keep Timeframes to Yourself When you walk through your own home, you instinctively are aware of how your home came together over time with the addition of new furniture, photos, collectibles and more. Similar to your home, your showroom evolves at a pace only you and those working in the showroom often are truly aware of. Let the arrival times of your product be your secret and rather than announce what’s new or just arrived, let your product speak for itself. By combining some of the previously mentioned strategies and eliminating the need to communicate the age of your inventory, you don’t have to worry about your products being viewed as “stale” or even the need for them to be “on sale”. With your help, the product within your showroom should sell itself for what it is – not for how long you have had it. Lean on this as a selling tool and encourage your customers to think the same continued on page 30

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continued from page 29

should timeframe come up in conversation. Looking at this from a new perspective allows both you and your customers to engage in new shopping and selling strategies that will hopefully help in your inventory sell through, as well. Each showroom and each assortment of product will be different. Determining how to move all your inventory — old and new — within your showroom should be based on your individual goals, clients and more. Introducing a variety of strategies may be effective in supporting your business needs, however leaning on one versus another may work best, too. There is no sure-proof way of how to get rid of excess, old inventory, but recognizing that it exists and needs to be moved in new ways is a great first step. Consider which strategies are

advertisers index

best for your business and execute a plan to help get things moving rather than sitting still. If you find out that some product simply isn’t selling despite all merchandising and selling efforts, offer a warehouse sale to help push this product out of your showroom while also allowing for you to open up showroom space and spending dollars. This should be among your last efforts since your return on your investment will not be as profitable, but sitting on too much inventory isn’t profitable, either. Finally, in an effort to keep old inventory moving, make sure to determine what old means to your business. Does one season or two seasons in stock equal old? Maybe more, maybe less. Whatever old is to your showroom, keep up with your inventory so you can respond accordingly to necessary merchandising and selling strategies to get things moving and sold. After all, that’s the goal — right? Contributor Nicole Leinbach Reyhle is founder of Retail Minded, A Boutique Support Firm & Blog for independent retailers and wholesalers that offers project based and customized support, general consultations and professional blogs to retailers and wholesalers nationwide. Learn more about Retail Minded by visiting www. retailminded.com and by following Retail Minded on Twitter at @RetailMinded.

advertising inquiries & rates

Furniture Wizard.............................................27..................... (619) 869-7200

Contact: Cindi Williams, WHFA Events Manager, 500 Giuseppe Court, Ste. 6, Roseville, CA 95678. (916) 960-0277 E-mail: cwilliams@whfa.org. Subscriptions: $35.00/year, USA. Published by Western Home Furnishings Association, a National Home Furnishings Association affiliate, in the interests of retail home furnishings dealers, manufacturers, ­distributors and sales people. Distributed to retail merchants handling ­furniture, ­accessories, bedding, floor coverings, and specialty home furnishings in ­Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming. Mailing list compiled by WHFA. Official publication of Western Home Furnishings Association, which is ­responsible for editorial content and advertising policy. The views expressed in articles appearing in Western Retailer are not necessarily those of Western Home ­Furnishings ­Association. Western Retailer magazine is copyrighted by Western Home Furnishings Association. October 2009, all rights reserved.

Furniture World Magazine............................11..................... (914) 235-3095

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

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Western Retailer focuses on western market trends in the furniture, bedding, flooring and accessories industry. It highlights industry finance, state legislation, retail store layout and design, transportation, retail advertising trends, retail store computerization, insurance, succession planning and industry social events.

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


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October 2009 Western Retailer