Dock 86 store aims to deliver deals
HOM's new retail concept only open on weekends
Clint Engel -- Furniture Today, June 21, 2010
LITTLE CANADA, Minn. — You don't have to wander far into the new Dock 86 store here to get a good feel for what it's all about.  Showing the retailer’s playful, original approach to advertising, a Minneapolis-St. Paul Metro Transit rail car is wrapped in Dock 86 logo. |
 Workers had a tough time cutting up a rail container for display purposes at Dock 86, but the retailer is happy with the final result. |
 Large graphics over the service counter play up the bulk shipping methods and suggest lower prices for Dock 86 customers. |
 An old flatbed truck near the showroom entrance highlights that weekend’s promotions, including special pricing on recliners for Father’s Day. |
 A Stanley American Perspective pedestal dining room table is marked at 65% off. With six chairs, the set sells at $1,986. |
 Dock 86 makes room for the high end, too, including these Bradington-Young leather recliners. One tag shows a price of $1,086 and a savings of $1,114. |
 A four-piece bedroom from Coaster’s Private Reserve division retails at Dock 86 for $1,448, with tags showing a savings of $851. |
 A stacked leather upholstery display features goods from Leather Trend, HTL and Primo International. |
 The store’s bedding department is Serta-exclusive, with a Dock 86 label starting line as well as the Better Homes and Gardens and Trump bedding collections. |
 Dock 86 likes to make the product the star, even in the signage, as seen here with the area rugs department. Hom’s Kyle Johansen buys for the rug and outdoor departments as he does for both Hom and Gabberts. |
 A large home accents and gifts area near the showroom entrance gets consumers invested in the retailer’s money-saving philosophy with grab-and-go items such as candles for $2.86, pillows for $9.86 and pairs of lamps starting at $86. |
 A “strike zone” just off the showroom entrance emphasizes the weekend’s special promotion — recliners, including Lane models starting at $249. |
Just inside the doors is a sign with a motto: "Welcome to the movement. The mindset. A statement against paying ridiculous prices. A place where you can pay a good deal less and get a good deal more."
Shoppers also see countless references to 86-ing something, such as "We 86 the middle man," and sold tags on merchandise on the floor that say, "I've been 86'd."
Coon Rapids, Minn.-based Top 100 store Hom Furniture opened the 74,000-square-foot Dock 86 on Feb. 5. It's a weekends-only, off-price format pitching market-beating, often name-brand closeouts and other special values across a broad price spectrum of home furnishings.
While it gets its name from the prohibition days of the 1920s and a historic New York speakeasy at 86 Bedford St. - where the bartenders would command patrons to "86," or clear out fast, when a police raid was expected - the store has a young, playful feel to it.
To see live video footage of the store, click here.
The music is a little louder and more contemporary than you find at Hom and many other conventional furniture stores. The signage is bolder in its size, color and sheer quantity.
And the retailer has fun with display - like the bedding department signage made out of mattresses, and a dizzying giant distribution center photo near the restrooms that makes you feel like you're walking into a warehouse.
As shoppers walk past the service counter and into the wide open showroom, they see a big sign saying, "Bargain Hunters ... Welcome to Paradise."
The store - a former Levitz location in the Twin Cities metro area - is off to a good, start, said Rod Johansen, president and CEO of Hom. Traffic and customer response has been strong, he said. The company's goal was to do about $20 million in the first 12 months, and Johansen now estimates that it will come close but miss slightly.
"I feel we hit the mark pretty darn good," he said, "but (we will make) tweaks to make sure we're hitting all the customers we wanted to."
Early on, Hom was predicting that up to 30% of Dock 86's business would come at the expense of its 13-store Hom chain, but the cannibalization has been "well south of that," Johansen said. Indeed, the Hom stores closest to Dock 86 are actually doing better than those farther away.
To the average consumer, there is some awareness that Dock 86 is a Hom-owned concept, but the connection isn't as strong as with high-end retailer Gabberts, which Hom acquired in 2008.
"We're trying to build a separate brand here, so we're trying not to have it hindered or helped by Hom," Johansen said.
While Dock 86 has leveraged many of Hom's strengths - from its merchandise buying team to its ad buying power and accounting functions - Hom chose to do many things differently with the concept to target that extreme value shopper who has come to the forefront during this tough economic climate.
Just inside the store's entrance, consumers see a large home accents area where they can buy candles starting at $2.86, pairs of lamps starting at $86, decorative pillows (the store has sold thousands) for $9.86 and inexpensive wall art. Some of the smaller items here are loss leaders "to get customers invested in our ideas," Johansen said. But the store's gross margins aren't suffering, he said, and are in the mid to upper 40s.
Also near the entrance is a "strike zone" featuring product that Dock 86 is promoting for the weekend. A recent promotion, tied to Father's Day, included Lane recliners. The retailer said they usually sell in the market for $899, but were priced for the weekend at $449.
Another display currently features outdoor furniture, much of it upscale goods. The store recently purchased about three truckloads of fancy-top outdoor tables from Homecrest, which was switching suppliers and needed to clear out the older table tops. Dock 86 got them for about 10 cents on the dollar, Johansen said.
On the floor, they are married with matching swivel rockers and other chairs that are less of a bargain than the tables, but together the sets still sell for half their normal price of $3,000 to $5,000, Johansen said.
The store's approach to marketing is different, too. It's more playful in tone, for starters.
Although the retailer uses some of the same media channels as Hom, including television, radio and some print, it also has a new program with Minneapolis-St. Paul Metro Transit. The bold red and white Dock 86 logo and message is plastered across some 200 Metro buses. Five buses are completely wrapped in Dock 86 skins.
In addition, one of the Metro rail cars, which runs from the airport to the Mall of America, is wrapped in a Dock 86 skin. It's a real attention grabber for the store, Johansen said.
Some 80% to 90% of the Dock 86 sales team is new to Hom and it has taken a little while to bring them up to speed, Johansen said. Furniture knowledge was not a requirement to get a job at the store.
"We were primarily going after people that make us smile," said Lou Fine, general manager of the Dock 86 store and a longtime Hom employee. "We weren't so much looking for (furniture) veterans as the right personalities and the right people skills."
Hom has been pleased with early results, but continues to tweak the concept. For instance, the store is trying to ensure its weekly promotions have a "whole-home balance" rather than focusing on one or two categories, Fine said
Johansen also said the company wants to do a better job of reaching higher-end consumers.
To see live video footage of the store, click here. (There are 3 separate videos in this package.)
Dock 86 at a glance
The store: A former Levitz location owned by Hom Furniture in Little Canada, Minn., Dock 86 has a wide open 74,000-square-foot showroom with an attached 92,000-square-foot warehouse. Roughly two thirds of Dock 86 customers pick up their purchases, in contrast to Hom, where nearly two-thirds of customers take delivery.
The concept: Dock 86 is an off-price retailer selling promotional to high-end furniture, bedding and home accents, in a youthful, fun setting. It promises savings of up to 70%. Its doors are open Fridays, Saturdays and Sundays from 10 a.m. to 8 p.m.
Projected sales: Not too far shy of the $20 million that Hom had originally projected for its first 12 months, the retailer says. Gross margins are comparable to other furniture stores, said Hom President and CEO Rod Johansen, in the mid to upper 40s.
Suppliers: They change regularly, but have included Bernhardt, Lane, Vaughan-Bassett, Hekman, Dimplex, Oriental Weavers, Rowe, Palliser, Klaussner, Ashley, Sam Moore, Simmons upholstery, Momeni, GuildCraft of California, Golden Oak, Berkline, Leather Trend, Stanley, Bradington-Young and Coaster among others. Bedding, including a private label brand, is from Serta. Roughly 7% to 8% of its sales are in home accents, compared with about 4% at the stores of parent company Hom.
Sales team: Employees are hired more on personality and people skills than for industry experience and are paid an hourly wage with the opportunity for additional commission pay.
Website: www.dock86.com
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