New categories light fire on sales
By Clint Engel -- Furniture Today, February 1, 2010
SIOUX FALLS, S.D. —
Furniture Outlets USA entered the electric fireplace business about four years ago for several reasons, including this obvious one: “We're in the Midwest,” said Gordy Wallenstein, president of the 28-store company. “It gets cold up here.”
While they don't account for a big share of the Top 100 retailer's overall sales, electric fireplaces have provided a lift to business since their introduction, Wallenstein, said. And, surprisingly, they sell year round. “It's a nice add-on business,” he said, and it continues to grow.
The Sioux Falls, S.D.-based chain has used several vendors for the product over the years. But it currently goes exclusively with ClassicFlame brand by Twin-Star, which Wallenstein said features an attractive and realistic flame and a variety of price points for various consumer budgets.
For Furniture Outlets' consumer, the units start at $399 retail — a “basic box,” Wallenstein said. The upper end of its line runs in the neighborhood of $2,000 for ClassicFlame's Santa Monica — a multi-functional media cabinet with integrated wire management channels, adjustable shelves, media and software storage and plenty of room on top for a big-screen television.
The bulk of the retailer's sales, however, are for fireplaces priced below $1,000, and somewhere around $699 “is probably where you do most of your business,” Wallenstein said. Some of the units come ready to use as either a wall mantel or corner mantel, giving consumers added flexibility.
Wallenstein said it's important for retailers to advertise fireplaces to make consumers aware that they are in the category. Furniture Outlets, for instance, includes them in some of its newspaper ads. But a lot of sales are impulse purchases, he added. Consumers see them in the store and want them. They recognize it as an easy and efficient heating system for smaller areas.
“A lot of people come to a furniture store looking for furniture and don't expect to see (electric fireplaces),” Wallenstein said. But once they see them, they start thinking of places they can use them.
Electric fireplaces can be installed wherever there is some open wall space and an outlet, so Furniture Outlets has sold units to everyone from apartment and house renters to homeowners who already have a fireplace.
Fall and winter are the strongest selling seasons in Furniture Outlets' Midwestern markets, but the fireplaces sell year-round, Wallenstein said.
The retailer typically displays about a dozen SKUs on its floors. It shows them together rather than scattered about in the living room area or among other vignettes. That focused approach shows consumers a range of selection in the category. It also makes it easier on the salesperson and the consumer, who would rather not run around the store to whittle down her selection.
With the same impulse-buy theory in mind, Furniture Outlets recently started carrying three Tresanti-brand refrigerated wine cabinets — also from Twin-Star. They offer another add-on sales opportunity, Wallenstein said, and with the popularity of wine these days, the cabinets are becoming just “another piece of furniture” in many homes, he said.
“And anything we can do to increase business along with (enhancing) the customer's shopping experience” is a positive, he said.
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