Room-in-a-box merchandising gaining steam
By Tom Edmonds -- Furniture Today, February 15, 2004
HIGH POINT — HIGH POINT — Producers believe they may have found a way to help even their most price-sensitive retailers generate bigger furniture sales tickets.
Two of the room-in-a-box merchandising concepts shown in High Point last October have been successfully tested by major discount chains, with larger rollouts now in the planning stages.
O'Sullivan Furniture's multi-piece bedroom comes in a single box with a selling price of less than $200 for a nightstand, headboard and a chest of drawers. With NASCAR as a licensing partner along with drivers Jeff Gordon, Terry and Bobby Labonte and Tony Stewart, the program was a success in the first round of tests at a major discount chain.
The retailer is now planning to put it in at least 300 stores, said Mike Franks, vice president of strategic planning for O'Sullivan.
"We're excited about this because it solves a big problem and makes bedroom more than just an item business in the discount stores," Franks said. "It addresses the primary problem for a discounter."
Over the years, discount stores have been able to sell dressers and nightstands as individual items. But headboards have rarely worked in this channel because they don't typically fit well on display gondolas. As a result, total bedroom sales haven't lived up to their potential in the discounter channel.
Founders Furniture, another source that introduced room-in-a-box merchandising last fall, believes it has found a winner on two fronts with its program of assembled and RTA furniture.
"Both have exceeded our initial expectations," said Phil Miller, vice president and general manager of the Thomasville unit. The RTA box — $199 for a dresser, mirror, nightstand and full-size headboard – has been through a successful test and will soon be rolled out to 1,300 stores.
"Individually, each of these items sells for less than $99," Miller said, noting that the retailer simultaneously reduces SKUs but enjoys a dollar-volume increase with this concept.
The assembled furniture packages have performed well for Founders, too, Miller said. The company introduced three multi-piece adult groups, each at $399 retail, and two youth groups at $349. Working with Top 100 retailers such as Nebraska Furniture Mart and Badcock, Miller said, "We have already sold out all of our initial production on all of our introductions."
In any retail channel, the multi-piece packages "definitely seem to make it easier for both the retailer and the consumer," Miller said.
With clever packaging that allows a consumer to buy the basic elements of a roomful of furniture in a single box at an affordable price, Miller said he believes that the assembled groups might have cross-channel potential.
"This is going to have application for the big-box retailers even in its assembled form, although in different sizes and prices than the furniture-store version," Miller said.
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