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Know Thyself! by Tom Halvorsen

By Tom Halvorsen, Vice President, Sales & Marketing, West Bros Furniture

How To Regain Focus, Reclaim Market Share And Lay The Groundwork For Future Success.

Did you hear the one about the Federal stimulus package for the furniture industry? Me neither.

While there’s little chance of a furniture bailout gaining traction in Washington, even amidst all the unrest in our economy, and more specifically our industry today, there is still hope for the furniture business. We can regain focus, reclaim market share and lay the groundwork for future success.

For too long, the word of the day has been “struggle.” Across the industry, furniture sources (manufacturers, vendors, marketing companies or whatever they’re called today) struggle to fill capacity in their factories and/or to empty their warehouses. Indeed, for the majority of manufacturers, it’s difficult to figure out what the term “right size” actually means. And the deflationary game is forcing sources of all descriptions to recognise that you can’t overcome lower wholesale prices simply by shipping in bigger trucks.

Meanwhile, the industry’s historically significant “brand names” struggle to identify the relevance of their “brands” to consumers. Competition for valuable retail floor slots is fierce and many of these aforementioned brands find themselves contending with “out-of-nowhere” companies that didn’t even exist as little as two years ago.

Retailers face a similar situation. Store traffic is inconsistent, floor samples don’t turn and plenty of products sit in their warehouses, oftentimes new and untested. Retailers today have to choose between being “entrepreneurs,” responsible for merchandising their own floors, or turning their businesses into “franchises” that leave key merchandising decisions to the aforementioned “brand names.” They too have played a deflationary game over the past few years. And, while some are beginning to report improvement in store traffic, the consumer still seems reluctant to buy.

Having worked in key sales and marketing positions for some of the finest furniture manufacturers in the industry over the past 20-plus years, I have been exposed to, and involved at various times with major marketing strategies and tactics, all-encompassing market analysis, as well as product development. Ultimately, I think it all boils down to good product. But, as we head toward Spring Market, I’d like to suggest three very simple, yet maybe overlooked, questions for both vendors and retailers to consider. These are:

• What is the definition of “value” today?
• Are you staying involved with your business?
• And maybe most important… Do you know who you are?

In our industry, the term “value” typically means a good product at a good price and I’d say that definition still holds true. But for those vendors and dealers interested in really defining the concept, I offer the following checklist:

• Does the quality reflect better than the price paid? Looks are one thing, but is it consistent with your company’s place (niche) in the marketplace?
• Integrity of your business relationship/sources. Simply put, do you trust your partners, whether vendor or retailer?
• Quick/consistent delivery with little or no warehousing costs. Most retailers have realized buying products as needed is better than putting dollars into inventory that just sits. Vendors must also build relationships with manufacturers who provide timely deliveries.
• Responsive customer care/relations for orders and service. Do you get “taken care of?” Quickly? Day-to-day, as well in times of crisis?
• Dependable and knowledgeable sales/marketing representation for product training. Communicating the “story” is invaluable. This is clearly more of a retail need, but it’s critical for sources to provide to retailers.
• Great “point-of-purchase” materials available for use in the store that educate both the sales/design person and consumer and even complement your “Internet efforts.”

Now for the next question: Are you involved with your business? Sure. But are you working with a thorough understanding of today’s dynamics?

In order to answer the question if you’re a manufacturer, I’d suggest getting in front of a wide cross section of your dealers and listening to what they are saying. I still believe in the undeniable power of “relationship selling”. Even as business stagnates and travel budgets are ratcheted back, you can’t lose track of your customer, and there’s plenty of ways to stay connected today. Pick up the phone and offer an “ear” to learn what’s going on. Ask what’s working and what is not. Your customers are also always a good source of information about your competition. Email, though not as personal, is less intrusive and offers a powerful way to communicate information and solicit input; either directly to your retailer or through your sales/marketing representative.

If you’re a retailer, answering this question may mean spending more time on the retail floor, both as a manager and a “salesperson.” Listen to and watch the consumer. I’ve found that some retailers think it’s better to wait until business improves to decide what to add or change in their assortment. There may also be a reluctance to add new suppliers even when their products seem compelling. I would suggest that it’s better to remain “active” in the buying process. Meet with your sales reps, review new product introductions and weed out the worst producing slots on your floors. Put together a “pecking order” that lists the next thing to be dropped from your floor and what will replace it. You may find that a current resource is just not carrying their weight.

Next, I would encourage all retailers to attend the High Point Market this Spring. Even if you’re convinced you have no open-to-buy, staying home to “mind the store” doesn’t send the right message to your staff, your resources or your competitors. If the budget is tight, consider a shorter visit. Maybe visit only your major resources or focus on finding a few new vendors that provide better distribution and stronger value. The bottom line here is that the cost of inaction is likely a lot higher than the price of consistently refining your floor. Rather than casting about attempting to be all things to all people in pursuit of the sale, decide what products and price points you need to focus on and then own your niche.

“Know thy self” is an old adage that has never held more relevance. Survival in this ever-changing marketplace requires constant strategizing and realignment and the key to success now for vendors and retailers alike, is in really understanding who you are, and expressing what you stand for concisely and consistently, both within your organization and to your customers.

* Tom Halvorsen wrote this article for the High Point Market Authority (www.highpointmarket.org) as part of its Industry Insights series.

ABOUT THE AUTHOR

Tom Halvorsen is currently vice president of sales and marketing with West Bros. Furniture, an Ontario, Canada-based resource for high-quality solid wood bedroom, dining room and entertainment furniture and a High Point Market exhibitor. An industry veteran, Halvorsen has held sales and marketing management positions with Action/Lane, Stanley Furniture, Bernhardt Furniture and Pennsylvania House Furniture.