Keynote speaker stresses education
By Jeff Linville -- Furniture Today, May 25, 2008
La Jolla, Calif. — The keynote speaker at the Contemporary Design Group's annual conference here late last year stressed education as a way to maintain margins in these tough times.
John Egger, CEO of Profitability Consulting Group, addressed more than 100 people at the conference, representing 22 retail businesses and dozens of manufacturers.
Holding margins is tough to do when times are slow, admitted Egger, who ran a furniture store for 22 years. But instead of cutting margins, he recommended showing more original or exclusive pieces with higher profits. With proper training of retail sales associates, the consumer can be educated on the benefits of buying these better goods, he said.
"If we go after the price-shoppers, we'll go broke," he said. "You can't match Furnitureland South on price."
"You've really been the smart retailers," he told members of the CDG, a group of retailers that focus on the niche of contemporary style. "You're putting something out there that is a little bit different."
Specialty stores do a good job of catching high-end consumers interested in "status" furnishings they can show to friends and family. However, he said, "The toughest ones to catch are the big middle. We're losing them."
Too many stores aren't doing enough to keep value-driven consumers from focusing on price, he said.
Who is the big middle? Egger said these people tend to be college-educated and love to research on the Internet. Their budget is being squeezed by gas prices, and they are worried about declining home values.
When they shop, these consumers respond well to features and benefits, considering the overall value instead of just price. The may earn a good income, but be carrying a very high credit-card debt.
In order to sell these shoppers, one must have the best and brightest salespeople on the floor. The consumers are savvy, but still human and fearful of making a mistake, he said. A good sales associate will offer reassurance every step of the way, said Egger.
"Price is temporary, but service is forever," he said. Word of mouth can be a potent benefit or a poison to any retailer.
Egger also recommended that in advertising, retailers should emphasize their product and assortment. Appeal to consumers' emotions — play up satisfaction and downplay price.
He praised the CDG for playing up to its strengths and for working with manufacturers to develop a line of exclusive products.
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