Pricing should be logical and have proportionality
Jerry Epperson -- Furniture Today, March 7, 2004
One of my tendencies is to think most things are still like they were when I last visited. That can be way off the mark these days. In our industry alone, radical changes are happening very quickly.
That's why you constantly have to wander through furniture stores. The changes from visit to visit tell much more than you can learn from a single visit.
We recently visited a store that is pushing its prices up to get away from what they perceive as a low-middle niche that is becoming too price focused on redundant, commodity-like furniture. Once very midpriced, this store believes it needs to become more attuned to a wealthier, older customer that no longer has children living at home.
This is a sharp reversal from a couple of years ago when I visited and was shocked then at how large their leather assortment had become. It's still large but they have moved to higher prices, exiting the $499-$899 range so they can open at $999.
Their motivation for this was the bedding department. The store successfully has added bedding sets that sell for as much as four times what their top lines sold for not too long ago. They have learned that consumers will pay more if they understand why it's worth it. No, there's nothing new here; once again, bedding is teaching the furniture industry a lesson.
But there's more involved here. It's now common to see a consumer spend more on the bedding set than on the entire bedroom furniture suite. That challenges our perception of value, and gives our customer yet another reason to distrust our industry. Is your fabric upholstery more expensive than your leather? Again, the consumer is used to paying more for leather in autos and in apparel.
Speaking of upholstery, between leather and microfibers, we are awash in bold colors. Granted, years ago our floors were probably too far the other way, but somewhere there's a more reasonable middle ground.
As a new grandfather, I recently found that some youth furnishings were more expensive then similar adult bedroom furniture. Like most American consumers, I expect adult bedroom furniture to last forever, while youth would appear to have a shorter life expectancy. Shouldn't that be a factor in pricing? Maybe not, since most grandparents love to spend money on the grandkids.
Just because prices are going down does not mean you have to go in that direction. You just as easily can increase the value at price points your customers like and respect. Approach your entire line so the pricing appears to have some logic and proportionality.
Your customers will appreciate it.
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