We must break the spiral of cheap-cheaper-cheapest
Lissa Wyman, Rug Editor -- Furniture Today, November 9, 2009
Vendors, retailers and consumers seem to have embraced the axiom that "he who gets the cheapest price, wins." It's a stupid premise that makes no sense.
The entire home furnishings industry needs to break the spiral of cheap-cheaper-cheapest. It's business suicide and the death is long and painful.
I'm also realistic. Both vendors and retailers have to draw people in. As one retailer told me in High Point, "You've got to scream and yell to get their attention."
But that doesn't mean we just throw in the towel and go for total trash and expect to live a long, happy life in this business. Retailers say they want and need fresh merchandise, but many are still looking for value-driven rugs with retail prices under $500 in a 5 by 8 size.
That's fine. But if retailers and/or vendors limit their assortment to el-cheapo rugs, they ain't long for this world, I'm afraid.
When you sell cheap, you are ipso-facto working on short margins. And you can't depend on sheer volume to keep your business afloat. When sales inevitably slow down, you are in deep-deep financial doodoo.
On the other hand, some retailers we spoke to in High Point say enough is enough when it comes to low prices and low profit margins.
"We have to hold profit margins if we expect to stay in business," said one furniture store operator. "And not everyone is looking for the cheapest price. Believe it or not, some people want quality."
What a unique thought! Some people actually want quality.
I hope both vendors and retailers hold on to that idea as we prepare for 2010.
There is nothing wrong with a good-better-best assortment of merchandise. It provides a perfectly legitimate way to trade up your customer to the best quality he or she can afford.
Of course, the seller's ability to explain the value of "better" and "best" merchandise is what defines good salesmanship. When we are dealing with a complex category like rugs, explaining the product's attributes can make or break a sale. Of course, that would mean that the salesperson might actually need to know a thing or two about the product.
Unfortunately, too many people in our business are letting the price tag do the selling. They are putting too much energy into looking for the lowest price and not enough energy into product knowledge and sales training.
Rug vendors in High Point didn't have a whole lot of new product, but they all say the Atlanta show in January will be a huge introductory event. I am hoping that at least some of the new things we are promised will be based on quality and true value rather than price alone.
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