Retail Observer

RETAILOBSERVER.COM MAY 2018 52 Mike Allen Furniture Trends WINNING THE HEARTS AND MINDS OF TODAY'S RETAIL CUSTOMER O n paper, things should be looking good for the furniture, mattress, and appliance and electronics sectors. In fact, all six indicators all appear to confirm that assumption. For example, the country recently added 313,000 jobs in February, which far exceeded expectations. Another indicator, GDP (Gross Domestic Product) came in at 2.6%, also a healthy sign. Orders for durable goods were also up some 2.9%. Year-over-year inflation was 1.8, % and below target. The stock market, while volatile, is seen as healthy and has recently posted numerous record daily highs. Interest rates are gradually rising, also a healthy sign. And yet, many seasoned industry observers acknowledge that business of late is anything but a slam-dunk. According to Mike Root (a multi-line rep) and president of Omaha, Nebraska-based Furniture Sales of Mid-America, "The last several months have been challenging for lots of retailers, with some of the smaller stores facing the biggest challenges." Root, whose customers run the gamut from the largest of the Top 100, to Mom and Pop stores, cited multiple factors for setting the stage for uphill battles at retail. "A major shift is that door swings are down—brick and mortar retailers are simply not getting the same foot traffic that they used to," he said. The reason, Root suggests, is the ongoing impact online retailing continues to have. "I believe people are pre-shopping on online websites and my sense is that a lot of brick and mortar retailers don't have a compelling 'front door' on their websites. As a result, consumers wander off in search of better, more compelling sources of information." And even if the consumer does come into the store, there is no guarantee that the sale will be made there. "Many times, a shopper looking for a sofa, for example, comes into the store, finds a sofa they like, then goes home to measure. Once home, that shopper may decide to go online and take one last look and often may end up buying it online," Root said. And when that happens, in addition to missing that sale, the brick and mortar retailer also misses the opportunity to cross-sell and or upsell, Root added. Root's solution is simple. Brick and mortar retailers, regardless of size, need to have compelling 'front doors' — in terms of the physical store as well as online. "If they don't, they are likely to lose sales, especially with younger, millennial shoppers. BrandSource member, James Smith, president of Sleep Fit Corporation / Mattress Land Stores, shared a similar take on the current state of business in the home furnishings sector. After returning from BrandSource's recent convention, Smith, who operates successful stores throughout the states of California, Nevada, Idaho and Washington, said, "The sentiment during the convention seemed to be that a lot of the people there were not knocking it out of the park." And while Smith's business is solid, he, like Root, believes that e-commerce has taken a bite out of traditional brick and mortar retailers. "Just because the economic indicators are strong and consumer sentiment is good doesn't mean traditional retail is going to flourish like before. There has been a drain on traditional retail and it has come in the form of e-commerce," he said. Smith said the real question shouldn't center on why business isn't better. He believes the better questions, especially in light of the impact from e-commerce, is what retailers can do to create more confidence with shoppers and what can be done to give customers more compelling reasons to come into the store. While admitting that traditional advertising can still attract shoppers into brick and mortar stores, Smith believes those tactics "will die a slow death." He explained that while the costs of print, radio and TV ads has not lessened, their effectiveness has. "Couple that with the fact that so many parts of the country are very overstored and you can see the challenges that poses," Smith explained, adding, "And you can never forget that thanks to the Internet, many shoppers are better educated on products than many of RSA's in the store." Despite these challenges, Smith's business continues to grow. When asked for specifics, Smith shared a number of key strategies. "But mostly, it all comes back to what kind of value you add to the shopping experience," he explained "For openers, we worked very hard to look for legitimate ways we could differentiate ourselves from our competitors. In our case, that meant not just in one or two areas, but in every aspect of our operations." Smith also pushed his team to offer products that were exclusive to his store. "You simply have to offer your customers things that they can't get elsewhere." Smith also said that efforts to create a superior and unique customer experience shouldn't ever be minimized. "You have to wow them from start to finish. It is that simple," he explained. As part of that, the chain

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