Changes coming, speakers say
By Furniture Today Staff -- Furniture Today, April 30, 2007
Scottsdale, Ariz. — Playing off the Myriad conference theme of "Transitions," a panel of industry experts discussed how change is affecting the home furnishings arena.
Speakers included Caroline Hipple, former president of the defunct Storehouse retail chain and now with Hipple & Co. consultants; Bill Colgrove, CEO of Aspenhome distributor Furniture Values International; and Lance Hanish, president of media consultant Lance Benefield & Co.
"I see three key changes affecting us," Hipple told panel moderator Ray Allegrezza, Furniture/Today editor in chief. "Aging baby boomers, who aren't spending as much on furniture as they used to; offshore pricing, which resulted in price deflation; and bifurcation of the providers — low-price players such as Wal-Mart and Ashley are doing great, but so are high-end retailers like Robb & Stucky."
Colgrove noted that he has been in the home furnishings business less than five years. Previously, he was a financial executive and turnaround consultant.
"My entire career has been spent building businesses by building people," he said. "This industry appeared to me to be back on its heels with a possible leadership vacuum. I could see that transitions were needed and could either be a perilous or a priceless opportunity to change the business through the power of product, the power of process and the power of people."
He said successful companies are winning "with equal measure, on all three of those fronts."
For media guru Lance Hanish, whose clients include retail majors from Rooms To Go to R.C. Willey to Robb & Stucky, a major change has centered on how winning retailers advertise to the consumer.
"When we started with Robb & Stucky in 1979, 80% of most retailers' ad budgets were in newspapers. We changed our clients' media mix to 80% television. The 21st century is about reaching people via screens, not print," he said.
The group also discussed other drivers affecting home furnishings. Some highlights:
Alternative Channels
Hipple: "As an industry, we are all selling more furniture, but each of us is getting a smaller share because non-traditional channels are growing faster than traditional furniture stores."
Colgrove: "It has been mentioned that there are 77 channels of distribution for furniture. However, 77 channels is like Baskin-Robbins with their 44 flavors. You still probably just eat two or three flavors. It's good to know all these channels are out there, but we still pick and choose which ones to deal with."
Hanish: "Our industry has done a terrible job. We have 77 channels and we will find 78 if we can. The tail is now wagging the dog. As an industry, we need to stop shouting the word price every time we open our mouth."
Sales training
Colgrove: "It's a shared responsibility between retailer and supplier. It should not be 50% me and 50% you. It needs to be 100% me and 100% you."
Hanish: "There are a number of must-haves for retailers. They must have sales training videos (and) sales trainers and should also focus on employment recruiting, particularly using television."
Hipple: "As an industry, we need to rewrite our sales training manuals from the perspective of what I call 'the customer road' — that is, in a way that asks what goes on in the customer's mind when they are considering the purchase of furniture."
Gen-X shoppers
Colgrove: "Today's Gen-X shopper plans to keep his or her furniture for a far shorter period of time."
Hipple: "I think that, on average, she spends around $643 (on home furnishings in a year), which is actually slightly higher than the baby boomer spends."
Hanish: "I don't see this as an issue of demographics. I see it more as an issue of sociographics. I see it more by ZIP code and by lifestyle, which means age is not absolutely relative. We have to look at how people are living today, and then go after them by price point."
Listing retail prices online
Hipple: "You have to have a robust Web site, and that includes product and price. Price has to be regarded as information."
Hanish: "Today's shopper is exactly like her mother: She shops in five or six stores, but doesn't have the time to visit each one physically, so she shops online. The theme of this venue is 'transitions' and all that really means is better communication."
Colgrove: "There's nothing more valuable than an informed end-user. I like it when they come into the store and know what they want. Do your homework — it's a responsibility and a challenge!"
