NHFA-HGTV alliance on hold
By Clint Engel -- Furniture Today, August 25, 2008
HIGH POINT — Plans for an HGTV and National Home Furnishing Assn. Preferred Retailer Program are off for now, after months of promoting failed to garner the commitments HGTV wanted to move forward with a launch.
But NHFA President Doug Kays sees an opportunity in the loss — to build a less-expensive and NHFA-controlled similar program that was already in the works.
About 100 retailers representing 370 stores signed letters of intent to participate in the NHFA-HGTV program, and retailers representing more than 1,000 stores had indicated serious interest, Kays said. In May, an HGTV spokesman told Furniture/Today that the program had “signed” more than 700 retailers, but the accompanying press release was vague, noting that the program had “attracted” that many stores.
The actual signed number — those willing to make a financial commitment — apparently was less than HGTV was counting on, said Steve DeHaan, NHFA executive vice president. He added that the launch date for the program, originally September, kept getting pushed back, which also made it hard to sell to retailers.
The Preferred Retailer program, announced in January, was to feature a co-branded HGTV-NHFA Web site with room planning and other tools, design ideas and information on preferred retailer members. Plans called for in-store Preferred Retailer signage and other materials as well as advertising featuring some of the top talent from various HGTV shows.
The two groups were shooting for enough interest to generate a $20 million marketing budget funded by a small fraction of participating retailers' advertising budgets, they said. NHFA's investment in pursuing the program has been “significant,” DeHaan said, but he did not disclose the amount.
“While the industry has embraced the concept of the HGTV Preferred Retailer Program, we found that the current macroeconomic climate is a barrier to the furniture retailer's deploying necessary resources to this program at this time,” said Cherie Oswald, senior vice president of business development for HGTV.
HGTV has told NHFA that the TV network's executives want to “revisit… the opportunity at a later date,” but neither DeHaan nor Lee Hall, spokesman for HGTV parent Scripps Networks, would predict when. They both said they will continue to work with each other in the meantime.
But NHFA isn't waiting around for HGTV to come back to the table. In a press release, NHFA said it “continues its commitment to develop and launch a consumer education and awareness campaign for the home furnishings industry,” with online, advertising and in-store components.
Association officials said the NHFA was working on its own program before the HGTV deal, and most of its elements still exist. While NHFA is disappointed in HGTV's decision to table the program for now, “We see this as a huge opportunity for a redirected effort,” Kays said.
“The HGTV name gave us a huge brand exposure and instant consumer creditability,” he said, but added that those benefits “were only the icing on the cake.”
The core of the program was the Web site, the related information, the preferred retailer designation and the store locator feature. NHFA still has those components in development and will be able to put them to use, he said.
“I am not so naive as to totally discount the strength of the HGTV name,” he said. “I certainly understand the loss that the program has endured. However, there were costs to the benefits HGTV was bringing to the table.”
And now those costs are less for NHFA members, he said.
HGTV, for instance, had owned the proposed Web site, but now NHFA will own it and will control the advertising revenues that it generates. Those revenues can be driven back to support a national ad campaign, he said.
“Additionally, without HGTV controlling the ad sales, NHFA can approach all components in our industry without regard to existing HGTV advertising contracts,” Kays said.
Kays couldn't say exactly what a revised cost to members would be because the NHFA board had yet to discuss pricing. But he said, “It looks like the program would cost less than one-third of the cost under the prior program.”
The minimum cost to a retailer under the co-branded program was going to be about $3,500.
“The industry needs this,” Kays said. “We've got to come together as an industry and figure out a way to provide this.”
