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The brave new world of advertising

By Marc Barnes -- Furniture Today, September 9, 2007

A major disconnect
Reaching consumers online
E-efforts form part of a mix
Choosing the best tool

High Point — Furniture retailers have long known that to get customers, you have to seek them out by directing your messages where they are, whether it's through newspapers, broadcast or direct mail.

Increasingly, potential furniture customers are online — and experts say that savvy furniture retailers are keeping themselves in front of customers through a variety of online communications, from interactive Web sites to Internet advertising to search engine optimization to e-mail blasts.

But many have been slow to join the online world, which as it turns out, is reminiscent of Yogi Berra's famous saying: It's déjà vu all over again.

"I have been in this business for 36 years and this reminds me of a time when local television was first coming into play as a major medium for retailers," said advertising veteran Leo Levinson, founder and CEO of Prescott/Levinson Advertising. "Retailers just loved to hide from it because of newspapers. With a newspaper, you could hang it on the door and be successful. TV commercials couldn't touch it. You had to hire an expert to buy the time and produce the spots."

Levinson pointed out that many retailers now have in-house advertising departments, which handle the more traditional advertising methods. With diminishing sales, many have been forced to cut back.

"Going outside and hiring an advertising agency involves additional expense, and relinquishing control from an in-house agency requires a mental leap which many people aren't willing to make," said Levinson. "Leaving the comfort of TV, newspaper and direct mail is a scary thing to people. (They think that) if you ignore the Internet, maybe it will go away."

That's not likely. What is likely is that retailers can get a return on their investments if their online marketing is done in the context of a planned strategy. Levinson said he recommends that retailers move 25% to 30% of their advertising dollars away from traditional advertising and redirect that spending to Internet marketing such as search engine optimization and online advertisements — on top of what they are already doing in Web site development.

A major disconnect

"There was a figure that I saw that 69% of retail customers visit a Web site before they visit a store," said Levinson. "Here we are talking about 69% of customers and we are spending less than 1%. Truly, there is a disconnect here."

Part of the challenge, says Levinson, is that no one is willing to be the first to try an aggressive Internet-based campaign that is successful and that others can learn from.

Mike Pierce, director of communications for the National Home Furnishings Assn., said the figures bear that out. NHFA's surveys show show that 39% of furniture retailers' ad dollars are being spent on newspaper inserts, 24.1% on television, 11.2% on direct mail, 10.4% on radio, 9% on other advertising (such as billboards), 3.6% on Yellow Pages and 2.6% on the Internet.

Pierce said he is amazed, given how important that the Internet has become, that it hasn't been more widely adopted by furniture retailers.

"Based on this report, they are moving to it fairly slowly," said Pierce. "This is an industry that has been slow sometimes to change, adapt and be futuristic. Young customers are coming in and they are more Internet savvy."

Both Pierce and Sharron Bradley, executive director of the Western Home Furnishings Assn., said that their associations have responded by launching training efforts to help retailers establish a greater presence on the Internet.

"Our role is to keep educating them on how to do it, where to do it, and what the resources are to do it right," said Bradley. "We are in the process right now of putting together an e-mail newsletter so that members can see that as another advertising avenue. We are trying to make it easier for them to put it together because for them to put it together themselves is so time-consuming."

Reaching consumers online

Those retailers who have embraced technology are seeing good results. Larry Schneiderman, who along with his brother Russell, co-owns the five-store Schneiderman's Furniture of Minnesota, said that the firm's Web site is crucial to the company's success. In fact, Web site administrator Carrie Andersen reports directly to him.

Schneiderman's current Web site, its third version since the mid-1990s, represents a quantum leap from the first site's rudimentary design. Schneiderman's still uses conventional print and broadcast media to reach consumers, but has invested additional resources beyond its conventional ad budget to beef up its online presence.

"In order to do an effective e-mail campaign, you have to have a Web site that is worthwhile for customers to go to," said Schneiderman. "It is also quite a challenge to develop an e-mail list and to keep the people on the list from opting out."

To build the list, Schneiderman's credit operation captures e-mail addresses and customers are asked if they would like to get special e-mail offers. The store also takes financing applications online.

Schneiderman said that before retailers launch a Web site they need to determine what they want to accomplish. For example, Schneiderman's goal is to get customers into its stores — not take orders online. Its site is set up to educate customers, so it includes links to each line it sells and displays both photos and prices.

And Schneiderman's is meticulous about making certain that what's on the site is in the store.

The retailer also asks certain salespeople who are comfortable with Internet surfing to take calls from potential customers who have questions about furniture they have seen online.

"You have to be prepared for customers when they do call, because if you are not competent in responding, you have undone the interest that they had in the first place," said Schneiderman.

E-efforts form part of a mix

In Florida, Dan Lubner, vice president of marketing and business development for high-end furniture retailer Robb & Stucky, which has 25 locations nationwide, said that online marketing is increasingly becoming a regular part of the firm's advertising mix.

"We are progressive in our approach and we are continuing to explore the best and most efficient ways to use our online dollars," said Lubner.

Lubner said that the firm continues to place conventional advertising in shelter publications, direct mail, television and online. In terms of online efforts, Robb & Stucky updates its Web site every two weeks and is always on the lookout for the best ways to capture and use e-mail addresses.

"Web sites are like a race car," said Lubner. "You have got to know how to drive it and respect it, otherwise it will go out of control and crash on you."

He said the company does ongoing analysis of what works best online and adjusts its strategies accordingly.

"The way we advertise today, we are learning from and not just blindly throwing dollars out there," said Lubner. "We have a resort strategy, a retail strategy and an interior design strategy. We have to be able to communicate in very different ways so that we can reach those very different markets."

Choosing the best tool

At La-Z-Boy, Doug Collier, chief marketing officer, said retailers should use a variety of online marketing tools as part of their mix. He added that the most success comes from using different types of media that complement each other.

"TV, for example, has a capability of reaching people in emotional and rational ways that no other media can," said Collier. "That message, in combination with having good visibility to the retailer or the manufacturer online, can make both sides work better. You have to look at how best to use the tools that are available to you, to move the consumer from awareness to consideration to shopping and purchase."

At Thomasville, Mark Smiley, director of national brand communication, said online advertising is one of several key marketing tools.

"We believe there is a funnel on how consumers make purchase decisions," said Smiley. "It starts out at a level where they are dreaming, where they are actively shopping and consuming media. Our target audience is magazines — and Internet users read magazines. The next phase to that core is Internet advertising, and on top of that is TV."

Theoretically, the consumer might decide she wants a sofa. Seeing a Thomasville ad in a magazine or typing in the word "sofa" in a search engine may prompt her to visit Thomasville's Web site. There, the consumer could look at a range of sofas and find a nearby store. In addition, the consumer may notice that a local Thomasville retailer is having a sale — prompting a purchase decision.

"It all has to mesh together and be the way people shop now," said Smiley. "(Each medium) is designed to complement the others, to drive people into stores and make them aware of the brand."

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