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AFMA hears retailers on key issues

By Carole Sloan -- Furniture Today, November 18, 2001

Potential confusion
Beyond furniture
A successful big-box formula
Making it fun

NEW YORK — NEW YORK — A panel of high-powered retailers, all part of the Berkshire Hathaway stable, discussed a range of marketing issues last week at the American Furniture Manufacturers Assn. annual meeting here.

Addressing the importance of brands in the furniture business, Mel Wolff, chairman and chief executive officer of Houston's Star Furniture, admitted "the more I got into the subject, the more confusing it became," citing the sometimes-ignored differences between branding and marketing.

Branding, he argued, is a way of reaching the target consumer in a way that is enduring. "Enduring is the word that separates 'branding' from 'marketing'," Wolff said, and the two shouldn't be confused.

Another critical part of the discussion, he said, is whether the store is or should be the brand.

Potential confusion

Wolff used Thomasville and its successful Ernest Hemingway collection as an example of the potential confusion between marketing and branding. "They had to market the three names — the Thomasville name, the Hemingway name and the store name — and it is one of the most successful marketing programs."

But, he asked, "When the Hemingway name plays out, what happens? Thomasville has a brand. Hemingway is marketing, not a brand."

Wolff said La-Z-Boy is "the most recognized furniture brand. It's an enduring brand that says reclining chairs to most people — instant recognition. It provides added value to the Star name."

He pointed to Henredon and its Ralph Lauren Home license as an example of "the layering on of a brand with another brand. The Henredon name is a well-recognized, quality brand, and when they partnered with Ralph Lauren it took branding to the next level — instant acceptance as a style leader."

In contrast, Wolff cited Lexington's Arnold Palmer Home collection "as a successful marketing venture. I'm not sure how much it meant to the female customer. It was well designed and well presented, but is there residual value after it plays out?"

As for retailers as brands, Wolff said, "Jordan's is the brand, and there's no parallel to the strength of Ethan Allen; they're in a class by themselves. And Crate & Barrel is the brand and they buy to the brand. As others try to catch up, Crate has moved on."

Beyond furniture

Bill Child, chairman of Salt Lake City-based R.C. Willey, discussed the importance of non-furniture business to a furniture retailer.

He broke out sales figures for a recent Saturday at the company's newly launched Las Vegas superstore. In furniture, tables produced $26,000; living room, $70,000; leather, $46,000; mattresses, $56,000; La-Z-Boy, $39,000; bedroom, $86,000; and dining room, $76,000.

Then Child cited strong sales in electronics and appliances — TVs, $117,000; refrigerators $53,000; other appliances $54,000; video, $10,000 — to illustrate his point that non-furniture items are essential to R.C. Willey's success.

A successful big-box formula

Discussing what it takes to succeed as a big-box retailer, Irv Blumkin, chairman and CEO of Nebraska Furniture Mart, cited his company's formula: vision and values, integrity and honesty, leadership in the community, a clear and focused strategy … and capital. "Cash is king," he said.

Above all, he said, "Know what you know and know what you don't know, and have a passion for the business."

Blumkin also outlined what he believes is critical to the success of manufacturers: "on-time delivery, quality products and information, technology to carry it out and funds to build your name in the market."

Turning to Nebraska Furniture Mart's planned 2003 foray into Kansas City, Blumkin noted that "25% of the community knew of us. The metro market has between a million and 1.8 million people and it's way underserved. There also is a friendly local and state government."

Making it fun

Posing the questions, "How many people like to buy furniture and how many people like to have fun?" Barry Tatelman, CEO of metro Boston's Jordan's Furniture, outlined the company's widely recognized success in bringing fun to the furniture shopping experience.

Eliot Tatelman, Jordan's president, added, "How many people go to a furniture store just to shop when they don't need furniture?"

The entertainment factor is well thought out, the Tatelmans said. For instance, the Motion Odyssey Movie theater, placed in the back of the store, forces customers to walk through.

"The first year we had a half million people and exposed them to the store and fashion products," said Eliot. "We treat furniture as impulse items, and it works."

Mel Wolff, chairman and chief executive officer of Houston's Star Furniture argued that branding is a way of reaching the target consumer in a way that is enduring.

Barry Tatelman, left, and Eliot Tatelman, leaders of Jordan's Furniture in Avon, Mass., describe how their approach to retailing aims to turn furniture into an impulse purchase.

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