AFMA's retailer panel makes some great points
Jerry Epperson -- Furniture Today, January 20, 2002
The November annual meeting of the American Furniture Manufacturers Assn. was one of the best we have attended since our first in 1974. The program had outstanding speakers like former Ambassador Frank Wisner, who had great insights into the world situation; a bright young economist from Merrill Lynch, Gerald Cohen, who is enthusiastic about an economic recovery in 2002; a program about adapting in tough times by Harvard's Ronald Heifetz; and the political savvy and humor of the University of Virginia's Larry Sabato.
I was fortunate enough to moderate a panel of our finest retailers — Bill Child of R.C. Willey, Mel Wolff of Star, Irv Blumkin of Nebraska Furniture Mart, and Eliot and Barry Tatelman of Jordan's. Clearly a dream team who all have Warren Buffett's seal of approval. Each discussed a single topic, such as using non-furniture items to sell furniture, branding, big-box retailing, and how to make retailing more entertaining. Their presentations were terrific, and the questions and answers afterward were especially telling.
One point was the redundancy of product today. Since so much looks alike, retailers' floors appear the same although they may buy from different sources. Some of this is because of imports but it also reflects today's economy, when no one wants to take risks.
Speaking of new product, these retailers said the wait between unveiling and availability was damaging to enthusiasm, while opening up the opportunity for knock-offs. Could we get new product into the stores more quickly? Could we pre-test the product with consumers?
Retailers also need more product sizzle, preferably something that gives the floor salesperson something to talk about beyond price — a construction story, hidden features, an improvement in comfort or durability, the history of the manufacturer or background on the product's design. Even in branded goods, salespeople need to know how the merchandise relates to the brand, or the personality of the individual or entity whose name is on the product.
Also noted: Adding yet another brand on top of the factory brand and the store identity can dilute the value of each. Does the celebrity relate in some way to the home or fashion?
One great point regarded imports. If a retailer replaces a $1,000 cost bedroom with a $750 import, and sells the import for $1,500 vs. $2,000, the store has $250 less per sale to cover costs. Occupancy, warehouse and delivery costs are the same for both sales. Can the lower price generate enough turnover to cover the difference? Can you keep a higher margin on the lower-cost goods?
Today's lower prices are giving our consumers great value, without question, and offer an opportunity for our retailers as long as they recognize all the realities.
This was a great panel. You should have been there.
Opinion columns are available online at www.furnituretoday.com.
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