Jordan's scores big with 'Power Play'

By Clint Engel -- Furniture Today, August 31, 2009

TAUNTON, Mass. — The first question that comes to mind is: What's the catch?

This summer, Jordan's Furniture and Paul's TV teamed up to promote a deal that seems too good to be true. They call it the “Power Play” — a 13-piece living room package plus a 65-inch HDTV for $1,999. And for good measure, they throw in a Callaway Big Bertha Diablo golf club ($300 value) for free.

Power Play has turned out to be one of Jordan's best promotions in years, said Josh Tatelman, vice president of merchandising. He added that the retailer hasn't seen a consumer response like this since its first “Monster Deal” offer three years ago, when it promoted free furniture if the Boston Red Sox won the World Series (which they did).

“This promotion has exceeded all of our expectations,” Tatelman said. “Paul's is blown away by it. We're blown away by it.” He wouldn't disclose sales figures but said Jordan's and Paul's — a consumer electronics specialist based in Los Angeles — has sold thousands of the packages since the promotion began this summer. The promotion has mostly wound down now, but Jordan's continues to promote it off and on.

Even during weekdays, when Jordan's is used to traffic falling off, the retailer has enjoyed nice spikes because of Power Play. And the consumers coming in aren't just browsers. They are extremely qualified, and many are coming in for one particular reason.

When Furniture/Today first talked to Tatelman in early July, he said, “The way things are going right now, we think everyone in the Bay state area is going to have the same sofa and TV.”

“Everyone is trying to find a home for this package,” he said. “Everybody comes in and says, 'What's the catch? This can't be.' But there is no catch. It is what it is and you should find a place for it in your home.”

The closest thing to a catch may be that consumers have to buy the whole package to get the price. And there are no substitutions. The 13 pieces include a sofa and loveseat (customers can choose from four microfiber colors), three tables, a 5 by 8-foot area rug, two lamps and an accessories pack that features two vases, plate, bowl and picture frame. The rug and accessories package and tables work with all four upholstery colors.

Along with this comes a 65-inch Mitsubishi HDTV, with digital light processing technology that some consumers may consider less desirable, Tatelman said, but it's something Paul's TV does exceptionally well with and it's the “best value if you're looking for the biggest screen.”

On the home furnishings side, Jordan's used a variety of sources, including Simmons upholstery — manufactured under license by United Furniture Inds. — Ashley for the tables and accessories package and Central Oriental for the rug.

The answer to how Jordan's and Paul's TV were able to offer all this for just under $2,000 remains elusive, but both companies indicated that success hinges on add-on sales.

Tatelman wouldn't disclose the regular retail value of the package, but noted the television — a current model — has retailed in the marketplace for as much as $1,999 by itself. He said the Power Play sale involved writing two sales tickets — one for Jordan's and one for Paul's, but he wouldn't disclose the breakdown in revenues for each company.

Asked if furniture suppliers contributed in any way to help Jordan's offer the special deal, Tatelman wouldn't comment, but he did say vendors “responded well to the success of the promotion by shipping us product ASAP.”

Jordan's, part of Berkshire Hathaway's furniture division (No. 4 on Furniture/Today's Top 100), and Paul's TV kicked off their new relationship over Memorial Day weekend, when Jordan's soft-opened Paul's TV departments, ranging from about 1,500 to 4,000 square feet, in all four of its Boston-area stores.

The two companies were introduced by the owners and operators of another Top 100 retailer, Living Spaces of Rancho Cucamonga, Calif. Living Spaces has Paul's departments in four stores and has co-run promotions similar to Power Play.

Known as “The King of Big Screen,” Paul's has “been a great partner for us,” Tatelman said, giving Jordan's great depth and expertise in one of the few consumer products categories that is holding up well in this recession.

Here's how the arrangement works, according to Tatelman: “It's a store within a store. They run their own operation with their own management team, sales force, warehouse staff, etc. They are responsible for handling all the electronic transactions.

“After the furniture sale, a Jordan's sales consultant hands them off to a Paul's sales associate.”

The addition of electronics “is certainly driving traffic,” he said, adding that Jordan's saw a huge opportunity to cross-promote with a strong consumer electronics company. “Put the two together and you have a pretty strong package.”

“Just like every retailer these days, we're looking to do whatever we have to do to drive traffic,” he said.

The Power Play hasn't provided Jordan's with the best gross margins by any stretch, he said, but the promotion has been profitable and Jordan's salespeople have done an excellent job of selling fabric protection and extra pieces.

Indeed, all of Paul's 60 or so TVs in each store are shown with entertainment cabinets or walls, consoles and carts. “We try to make it impossible for customers to leave without one,” he said.

Paul's President Babak Ghaznavi offered a similar take on the promotion, declining to detail how it can offer that price and make money, but conceding that “it's very low margin,” and that the key to success is in the add-on opportunities.

“We're hoping they buy the warranty, the cable, the audio system and maybe a second television for another room, custom installation and brackets and Blue Ray players,” said Ghaznavi.

Paul's isn't just selling the TV, figuring that's all it will take to do well. “That's not going to happen,” he said. “We're hoping for additional sales.” Ghaznavi added that Power Play was very successful in that respect.

He noted that Paul's wanted to join forces and advertising with Jordan's and use each other's traffic to sell their products. The two companies will continue to work together even after the Power Play promotion ends.

“Jordan's is a big power player in Boston,” he said, 'known there for years and years. Great product. A loyal customer base.

“And with our experience on the television side and the value we create, we have really jolted the market over there and created a great, I guess, power play.”

Now Jordan's is in the enviable position of trying to figure out how to top it.

“We're never satisfied,” Tatelman said. “We've enjoyed it for a few days, but we're already looking to the next one.

“It's going to be tough. I hope there are some customers left.”