Creating consumer-focused juggernauts
Clint Engel -- Furniture Today, February 13, 2005
High Point — For Ethan Allen, the pioneer of gallery store networks, the future isn't so much about increasing its store count as it is improving an already solid base.
The Danbury, Conn.-based company ended the year with 313 dealer- and company-owned stores doing well over $1 billion in annual sales. It will open about 15 stores this year, but grow only by a net six units.
"Our focus is on making sure our stores are in the right place," said Farooq Kathwari, president, chairman and CEO of Ethan Allen Interiors. When a store relocates, the size grows by an average 15% and traffic and sales increase by a minimum of 20%, he added.
The focus on larger stores and better locations is nothing new and not a reaction to increased dedicated-store competition, Kathwari said. Over the past five years, Ethan Allen has opened about 70 stores, but the majority have been relocations. Its store count in 2000 was 310.
Significantly, Ethan Allen doesn't refer to its "dedicated network." That term puts the emphasis on the manufacturer, and the company doesn't see itself that way.
"For us, sourcing is the back end," Kathwari said. "We're running a retail network that first has to work for the consumer, with a brand that is well trusted and a focus that is on decorating solutions for the consumer. Everything else, as far as we're concerned, is to support that."
But Ethan Allen isn't the only one with its eye on the consumer. Other store program leaders agree that a consumer-centric focus is critical. "We think all the way through to the consumer," said Eric Easter, executive vice president of sales and marketing for Thomasville Furniture Inds. "We count on our retailers giving us feedback, (and) we're engaged in more consumer research than we ever have been before."
Thomasville, among other things, is in the midst of conducting exit surveys at stores in six markets across the country, asking consumers what they like and dislike about stores.
"We're just trying to better understand who our consumer is," Easter said.
Not only is Thomasville analyzing its transactions for patterns, it also is studying shoppers psychographically and demographically, then sharing that information with its dealer base.
For Bassett Furniture Direct, the proliferation of competing store programs "has made us do a lot more homework on who our consumers are, where are the biggest segments and how (we) reach those segments," said Michael Satterfield, vice president of marketing.
"We're not trying to be everything to everybody, but really narrowing our focus," he said.
Satterfield said Bassett was known for some time as a source for very inexpensive furniture. But it has worked hard to update its quality and look, and now it's refining its strategy for reaching consumers who are looking for better goods, he said.
Today, the target consumer for BFD has a household income of greater than $75,000 a year," Satterfield said. In some markets, it's even higher.
"Now it's a matter of refining that further and making sure we're calling on the core customer who associates with Bassett and Bassett Furniture Direct stores," he said.
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Creating consumer-focused juggernauts
Feb 18, 2005
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