Gallery's McIngvale meets challenges with innovations
By Joan Gunin -- Furniture Today, December 9, 2007
Palm Beach, Fla. — Jim McIngvale, owner of Houston's Gallery Furniture, told a Furniture/Today Leadership Conference audience that he is confronting current retail challenges head-on with innovative, diverse methods.
"To avoid evaporation and meet the challenge, we must innovate to survive," he said. "We're not in the furniture business, we're in the customer service business. Our priority is, 'What's best for the customer?'...
"Salespeople are key to the whole operation," he said. "They must connect with the customer. When they make better connections with the customer, they are able to look for new opportunities. The brand will be built by the stories customers tell about us."
Challenges are all around, he said, including having to deal with Chinese imports and with increased competition from the likes of big-box retailers, national chains and specialty retailers, including those in bedding.
"People find a sofa, knock it off, find a sofa, knock it off and sell it cheap. No one innovates; no one has new products. They just run to China and make it for less," he said.
He sells imports too, of course, saying, "You can't be in the furniture business and not be into Chinese products, but that does not mean you have to embrace the tactic."
Borrowing a line from former General Electric CEO Jack Welch, McIngvale said the furniture industry must "decommoditize," selling distinct, high-value products that command a premium and aren't interchangeable.
To that end, Gallery is going beyond its promotional to midpriced roots to add some higher-end products, including designer furniture from Kreiss and high-end mattresses from Hastens. (The retailer has spent $3 million in showroom renovations to present the new prouducts.)
Gallery also claims to be the world's largest single-store seller of Tempur-Pedic, a high-end mattress and sleep products line, at $6.4 million wholesale in 2007.
Fast delivery is another selling point, McIngvale said. The store has offered same-day delivery on in-stock merchandise since day 1, and now offers custom orders from Texas-based upholstery producers Mayo and United Leather within seven days — or the merchandise is free.
In other innovations, he said, Gallery has moved aggressively from selling rooms to decorating the whole house, driving the average ticket from $8,000 to $10,000 up to $40,000 or $50,000.
McIngvale also sticks by his policy of paying sales staff by salary rather than commissions, which he adopted in 1990.
Gallery has a "pecking order" whereby junior sales employees turn bigger ticket customers over to more seasoned, orange-shirted senior associates.
McIngvale and his wife, Linda, opened the store on the city's North Freeway in 1981. It is Houston's largest single-store furniture retailer with a 100,000-square-foot showroom and 400 employees.
"Having one store is not only our greatest strength but also our greatest weakness," he said. Unlike some big chains, he said, Gallery doesn't have stores in every neighborhood. "We have to spend money on advertising so people will drive to come to see us."
Ranked 58th on Furniture/ Today's listing of Top 100 U.S. Furniture Stores with 2006 sales of promotional to mid-priced furniture, bedding and accessories of $129.1 million, Gallery Furniture's outrageous TV spots featuring McIngvale in his "Mattress Mack" persona have been voted the city's worst for the past 10 years, he said.
McIngvale says he has the last laugh, because those obnoxious commercials are terrific traffic builders.
He said Gallery's total sales were flat from 2005 ($133.9 million) to 2006 ($133.2 million) and he expects 2007 to come in at about $130 million. In this business climate, McIngvale is working to reposition the retailer with innovation and better quality merchandise.
-
Raymour: Big growth through great service
Aug 19, 2007 -
New book offers sales tips
Feb 10, 2010 -
Independents overcoming obstacles
Jul 9, 2008
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
