The worst of times … or the best of times?
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Loreen Epp, |
I recently heard a furniture veteran admit he was tired of being on the manufacturing side of the industry. “It’s all about retail today,” he said.
With manufacturers opening stores and retailers buying directly from offshore sources, it’s easy to believe that might be true, to wonder how everything shifted so quickly and to wish we all could capture a bigger piece of consumers’ interest in home furnishing. Retailer or manufacturer, we’re tempted to ask, “Will it ever get easier again?”
For some of us, it won’t. At least not if we define “easier” as doing things the way we used to. Here are a few reasons why:
* The maker-retailer-consumer chain has shifted into reverse. Where the manufacturer used to lead, developing products they hoped retailers would want to sell, today the consumer is leading, looking for the retailer who has products they want to buy. Simply throwing product ideas at the wall to see what sticks has gotten expensive and difficult. Today, it’s critical for retailers to plan product assortments ahead of buying markets, to know which resources help you make money and which products add value to your customer’s life.
* A handful of retailers — The Gap, Starbucks, Costco, to name a few — showed us how important it is to build the retail brand and create an exciting customer experience. Today, the consumer relies on the store, not the manufacturer, for that experience. A maker’s brand in a store may be an asset or a liability. If the store doesn’t appeal to a customer, they can find that brand elsewhere.
* We used to believe that growth was synonymous with profitability. But when competitive pressure is on, market share doesn’t guarantee profits. Growing a marginally profitable company, growing a profitable company too quickly, or relying on a healthy economy for profitability are high-risk strategies. Today’s business models are built on profit growth rather than sales growth.
* Consumers are calling the shots, controlling the market simply because they have so many choices and can go where they find value. Unconventional retailers are expanding choices in furniture, and offering alternative ways to buy products we sold the same way for years. The Internet is educating consumers, who’ve become less patient with sales associates who lack product knowledge or the ability to understand them. High-pressure selling is at odds with consumers who mistrust business more than ever. Catalog and online ordering suggest a growing number of people want to shop at home.
But there’s good news in all this. A lot of opportunity exists if we’re up for challenging the status quo and thinking in new ways. Join me and a host of thought-provoking speakers for our first Retail Ideas workshop in metro Washington on March 20. Details are available from Kathy Humble at (336) 605-1066, or click here for more information. I hope to see you there. (for public comments click on "Add your Comment" below, or to email Loreen directly click here.)
Loreen Epp commented:
Bob - I couldn't agree with you more. How people 'feel' about your store is the crucial quesiton. Thank-you.
Loreen Epp commented:
Consumers calling the shots isn't new; so why is our industry still grappling with it? Even if we accept the fact that consumers call the shots, why don't we know what it means? Or how to interpret the consumer? We think she's looking for a particular bedroom set or sofa. But what the savvy consumer marketers John M. talks about probably figured out is that the consumer doesn't necessarily know what furniture she wants. She just knows she wants a product that makes her feel a certain way, or she wants to trust who she's buying from. We still think it's the actual product ... that illustrious 'winner' we're all knocking off. Thanks for your comments John.
Loreen Epp commented:
Thanks for your well wishes Ivan!
Loreen Epp commented:
Donna - thanks for your insights. We are a homegrown industry in many ways. We love what we do, we're committed to it and we've always believed that was enough. Technology offers so much opportunity but it's not what we've known. We probably even got a false sense of security a few years ago when the dot.com furniture retailers first didn't make it. It fortified our belief that 'you have to grow up in this industry to know how to do it.' A few retailers are proving us wrong today. No easy answers, but you've raised some great points about raising the bar. Thank-you.
Loreen Epp commented:
I agree with you Fred. These are the best of times. Lots of opportunity if you're willing to look for it ... or create it.
Loreen Epp commented:
Hi Eddie. You're right that retail isn't easy, and today's consumers are able to demand more and more of us. Probably a good reason to simplify what we do. My hope is that part of that industry overhaul you talk about will mean each retailer finds a more focused position in the market. Right now most of us are trying to offer something for everyone (rather than standing for something and being really good at it). It's difficult to be have a meaningful customer relationship or bottom line that way.
Loreen Epp commented:
Brand management vs. product development! Interesting comment, Mark. I've experienced the same thing in our industry and believe our industry is much too "product" driven. We spend countless hours on product design, pricing and going to buying markets, but nearly no time on positioning our products or our brands in our customer's mind ... or 'real marketing' as you describe it. Thanks for your comment.
Loreen Epp commented:
"Easier" are "harder" are probably too general words for a discussion like this. But they do indicate the comparative way we look at things. When we don't look forward to new opportunities and instead look backward at how things used to be, things do appear 'harder' in the present, and easier, simpler or better in the past.
Bob Holland commented:
"Easier" and "harder" are words that are too general to have much meaning in a discussion like this. Sure, stress is up, just like it always has been in civilizations undergoing rapid change. What we should focus on is the eternal truths like the adage that says, "If you help enough people get what they want, your own future will be secure."
Mark Hart commented:
What you are describing is a: Market Driven Business. I am currently a retail store manager. But I have been a rep and was on the manufacturing side as a marketing director. I believe that it has been a market driven industry for many years and that manufacturers are waking up to the fact!! Detroit found that out years ago when the Japense gave us a run for our money and have kept us on our toes ever since. I entered the furniture business to bring some marketing to it and found out that a marketing director at a furniture company is not company brand manager as the position is for the rest of the world; it is a product development manager or product designer. We should always start with the consumer; we should keep with the consumer. Let's hope that some day, the furniture industry will add real marketing to the mix and use marketing professionals -- we can make a difference. After all, marketing know-how is the greatest export that America has to offer the world. It's time it became more valuable to all of the furniture industry.
eddiemerrell@hotmail commented:
Loren, Thank you for this artical. You are right on track. Having been a retailer for 30ys and now in manufactureing it is much easier than retail. Retail is hard. The consumer is demanding and is challenging the average retailer. This industry is a big ticket item for most and it is going to be shoped. We are in for a major overhaul in this industry.
fred preddy commented:
These are definitely the best of times. Anyone who believes otherwise does not stand a snowballs chance in a warm climate and is immeadiately relegated to the LOWER 10th percentile. Pessimisim is the #1 killer of momentum...any endeavor.If you cannot find success in this country look in the mirror for the reason. Respectfully, Fred Preddy(retired industrialist)
Ivan Saul Cutler commented:
Loreen, From a fellow blogger, here's wishing you all the best in informing, guiding and educating the industry. Ivan Saul Cutler
RentalMan commented:
Please add a function to your pages which will allow for proper printing. Good Conversation and Topics
JOHN MCNEILL commented:
What's new? The consumer has ALWAYS called the shots. We just had the slack in the industry to rely on luck rather than research to determine 'winners'. Besides, once a winner was identified (for whatever reason, including underpricing) we have always been able to come up with enough variations and copies to burn it while it was 'hot'. I'm not convinced that things have changed that much in this industry. The number of new low cost producers/sources have vastly increased the offerings, increasing the odds of finding a winner, and the down pressure on pricing can make almost anything 'hot' for a while. The most interesting time will be a bit down the road when the current circus ends and measures of consumer acceptance return to 'normal'. Then it is possible that those who have learned about consumer marketing as practiced for decades by packaged goods companies MAY prevail, no matter the source of products.
Bob Foster commented:
As I travel across the Midwest, it is interesting to see how many retailers are still unaware of the basic precepts of branding. How could they be aware? They have dozens of operational, merchandising, and HR issues to deal with. They have a business to run. Branding is a direct refelction of your comment on retail having become customer-driven. Branding is a reflection of how customers feel about doing business with you; how they connect in an emotional way. It is NOT about empty promises or financing hype. The days of the "holler about the dollar" advertiser are numbered. How people feel about you and your store is not a casual question. It is the crucial question. Make your brand-promise be what the customer is telling you about their feelings. Show it in your advertising. Fullfill that brand-promise when they come in your store. Bob Foster, ME&V, 319-352-1347
