InsideFurniture

CLUSTER FLUX: The key factor is the availability of money, which could benefit domestic manufacturers

Subordinate the bloviating winds from the Las Vegas Market. All that hype amid unquantified attendance reports are insignificant if any written orders there cannot be financed.

Incidentally, a market is only as good as the quantity of orders written and booked, not the amount of recreational looky-loos traversing the World Market Center. Those are high-priced handshakes and backslaps.

Financing is the mother’s milk of the furniture business. It requires smart factoring.

Due to the subprime cancer metastasizing through the remaining sclerotic money channels, who knows how much of any order writing in Las Vegas is bankable and, if so, how much will be shipped?

The way of the money world is obvious: Wary factors have pulled in their financial reigns, likely to choke a few factories. In some instances, as much as 80 percent of previously available credit lines have disappeared.

In a frightening mercantile Darwinism scenario, only the strong survive. This means some offshore suppliers could be in trouble.

Even with orders in hand, some manufacturers may be unable to finance production. That means the hot market specials of low priced goods may not be worth the paper they’re written on.

Contrast that against stronger vendors, even amidst the wash of over capacity and high inventory of goods.

But all hope isn’t lost. Savvy retailers may get a break from those remaining, strong and flexible domestic sources. Why? The merchants place smaller, more frequent orders, allowing those suppliers to benefit from the important financial wiggle room needed to stay in business.

With offshore sourcing, factors are scrutinizing the strength of the orders within the constraints of long supply chains and reduced lines of credit.

We are in an era of small is big, less is more and in the black on the bootom line is beautiful.

SUBSTANTIVE MARKET STARS: A quartet of High Point’s celebrated performers will capture the most important attention at the Las Vegas regional trade show

This week the real bright stars shining at the regional Las Vegas Market will be the committed and accomplished business performers from the High Point Market: Brian Casey, High Point Market Authority, Marion Kelly, Showplace, Tim McGee, Merchandise Mart Properties, and Tom Mitchell, International Home Furnishings Center.

Jointly and severely, the business celebrities possess the enduring mercantile star status, quality and gravitas that generates and sustains more influence, status and business to the global industry. Their proven on-stage business performances dramatically eclipse the all-glitz-all-the-time Las Vegas show.

While aging rocker Rod Stewart ushers in another expensive, high rent and rough-cut hulking structure, the presence of High Point’s leading quartet will be singing the strength of real opportunity, not aggrandizing puppy love promises of magnificent platforms.

Messers. Casey, Kelly, Mitchell and McGee benefit from the proximate power of a global industry’s most entrenched creative class of executives, designers, logistical nucleus, warehouse capacity, marketing specialists and more in the North Carolina's dynamic Piedmont Triad, as well as the entire Tar Heel State and neighboring Virginia, the bedrock of the industry.

A new sense of formidable cooperation is enveloping the High Point Market, as outlined in the Business Journal’s current story about Tom Mitchell leading the International Home Furnishings Center. The fresh cooperation will yield greater gains in buyer opportunity, experience and success. Together, and with fellow exhibition buildings in and around High Point, they are working with the Market Authority to smooth rough edges and finding ways to overcome challenges for a lasting transition unlikely in Las Vegas.

Wherever congregated this week at the World Market Center, I can only imagine the magnetic attraction of this quartet standing tall together, conveying the sense of relaxed institutional wisdom, confident cooperation and important cohesion.

The long reach of the Casey-Kelly-McGee-Mitchell authority and credibility grants them an earned right to harmonize about the reality of the most glamorous, rich and accomplished merchandise assortment around, the High Point Market.

Fun and play at regional trade shows pales insignificantly compared to retailers and designers’ overriding need to get the biggest return on their investment in attending strong home furnishings market. Serious retailers attend markets to work.

In the world of home furnishings, the High Point Market with its product abundance and variety always entertains and sustains more retailers than the incomplete in-the-regional-wings Las Vegas Market.

After Rod’s singing and strutting is just a desert memory, the industry again will turn its attention to the High Point Market for substantive leadership and sustainability, and realize the difference between glitzy trade shows and real show business — the High Point Market.

PLAYING SMART OR SAFE: There’s a right and wrong way to be conservative in challenging economic times

In tough economic times, smart conservative business methods trump safe conservative non-approaches that become self-inflicted reproaches.

Smart means identifying ways to differentiate for an advantage. Safe means wait and see or retrenchment, and that’s problematic.

Retrenchment is stagnation in the bright shadow of ordered, risk-taking growth rules, and that requires the courage to challenge vendor representatives to work smarter.

If they want your business, challenge the commission-minded reps to be your enterprising eyes and ears in the market, not your compliant order takers.

Especially now, hungry reps need insight and a powerful stimulus — a real kick in the ask — to be smart intelligence gathers.

What’s trendy or attractive in one place may not in another. If it’s hot in Portland, Oregon, it may be cool in Portland, Maine. Believing hot is hot everywhere can be not, and the wrong state of mind to predict a favorable mercantile weather report.

If vendor reps want more business, give them an ongoing assignment: Ask, make that, request of them to find discernable ways to identify market trends and detail how they can help you benefit from those trends with a merchandising approach excitedly different from others.

The operative word is merchandising, and that means the difference between a peddler retailer and a market connected merchant!

Merchants are keenly aware, discovering all ways to fulfill the needs of people wanting to live comfortably and maximize their disposal income. That’s not selling, that’s marketing!

One way I shared recently with engaging and insightful Susan Dickenson of Home Accents Today is the home fuel of accessories, a cost-effective way to initiate delightful change while preserving capital.

Who’s fueling whom? Merchants drive more business, going the extra mile with trendy ways to add zest without being a costly pest, and that’s with home accents and decorative accessories.

The road to transporting consumers to case goods and upholstery is lined with table top, lighting and wall décor, the high mileage elements that will fuel lasting relationships.

MYTH OF MARKET SPECIALS: The mercantile candy tastes good but leaves a bitter after taste with likely indigestion

Seemingly sweet and profitable, irresistible market specials can be profit-suckers for suckers, that is.

Market specials are dog-day ploys from manufacturers playing the same game on merchants that the merchants play on consumers: Steals and deals for quick business. Ain’t no such thing.

Attending markets to catch the illusive mercantile Moby Dick, the whale of a sale of a market special, wastes precious resources and only harpoons missed opportunity.

At market, deal-making vendors can always “sell” a deal-minded salesman. The factories are prepared with the tasty story of quick fix market specials.

Drum roll and dramatic music, please: Here comes the greatest market special story ever told, and it will be retold and replayed with cunning abandon. That will happen until retailers realize they are playing a never-win game they struggle to play with consumers.

The quest for market specials seems to be the state of mind of many merchants attending market, doesn’t it?

Merchants are vulnerable to market specials whose intoxicating price and value overpower many frustrated, anxious and desperate merchants seeking quick solutions for what ails them: Sluggish business in the midst of a damnable economy.

As in any marriage, retailers need to remember H.A.L.T., never engage any serious matter — that includes furniture markets — when you are Hungry, Angry, Lonely or Tired. If you do, you are at a disadvantage, and likely to act in regrettable ways.

More than ever the maxim of “plan to work and work the plan” is what market is all about.

The operative words are work and plan. Merchants really need to work, using a thorough plan that meets the needs of people wanting to live comfortably.

While adroit merchandising resembles a form of mercantile fishing, the process of attracting, retaining and converting (ARC marketing) demands really knowing what people want based on how they live.

Chumming the airwaves, cyberspace and print media with deals (market specials) constitutes a mad chase after the illusive whale with another sale and another sale and another sale.

Using the candy coated bait of market specials to catch the consumer fish that always gets away is a never ending ordeal to sell the deal.

Better to fish in comfort and with comfort, as the great tasting and nourishing bait that hooks consumers for life.

KILLER PROMOTIONS: Self-inflicted mercantile homicide murders the real opportunity of engaging consumers to live comfortably with home furnishings

The zero sum game of killer promotions murders real opportunities for sustaining growth and credibility along the entire consumer demand chain.

In the treacherous “get what you can now” killing fields, one participant’s gain occurs from another participant’s equivalent loss. The net change among the participants is zero, the incredible shape of the industry’s marketing firing squad.

Manufacturers selling cheap to drive sales may win in the short term, along with wistful retailers believing they will win with a killing in the market place. But if retailers can’t sell the cheap goods, a form of mercantile murder has occurred and all parties suffer some business death.

Selling cheap cheapens the value of home furnishings, as much as distorts consumers’ ability to assess quality. Better quality goods across the price spectrum pay the price, and are at risk because the cheap tricks at retail suppress business. They force consumers postpone their purchases out of fear, uncertainty and doubt.

Of course, the other obvious factor is many consumers will not risk their shrinking disposal income on home furnishings, especially when so much doubt oozes from the gimmick and price laden promotions.

Given the disquieting uncertainty of the marketplace, retailers would suffer the indignity of losing sales even if the goods were free. The reason is consumers have been conditioned to doubt and disregard market shenanigans.

As one frustrated, better retailer lamented, “Every home has that room needing special attention because everyone wants a beautiful home. But the problem has been we can shake any more sales out of people who have been shaken by decades of price-driven, killer promotions.”

New merchandise isn’t the answer, he said, observing, “It’s a new industry attitude as the new merchandise to help consumers focus on their homes.”

The first act of self defense is killing killer promotions to reconstruct a market place filled with the sensibilities of helping people furnish their homes to be comfortable.

That is a hard act to follow, but the show must go on.

SHIFTING GEARS: Home furnishings is in the driver’s seat as status comes home again

A cool sofa is better than a hot car. No kidding because Club Home is the hot spot now. Thanks to all the rising costs of fuel and outside entertainment, the home is home base.

The natural forces at play are favorable to home furnishings. The status shift from the car to the home is happening. This new and correct emphasis has lasting impact.

All the comforts of home really have (Hey grammarians: is it has?) potent significance. That power focus comes alive in a significant feature story in today’s New York Times, entitled, “Rooms to stop the young from Straying.”

Great minds are congruent. For the past few weeks I have been rolling around themes how our industry can put all the pieces together and seize all the mercantile comforts of home.

What pieces? My neighborhood is a perfect example. In our cul-de-sac, all 27 households are working together in new ways. We share shopping trips. We’re talking about progressive dinner parties, more in home entertaining, keeping the kids around. That’s good news for so many reasons.

H-m-m-m-m, sounds like opportunity for sofas and chairs to me. How about entertainment centers, even dining room action?

Marketing all the comforts of home instead advertising furniture is the vehicle people want to drive for better living.

A forced cocooning is wonderful. Want more proof? For all the people who can’t sell their homes and decided to stay put, home furnishings makes sense.

If we refocus properly on the home, we will see rooms for improvement.

CAVEAT RETAILER: Price deflation has become a miserable opportunity cost, even a ravenous form of furniture disease

The old yarn, the yuck-it-up, knee-slapper about how “Y’know when you’ve got furniture disease?” seems to be an old joke resonating true in the not-so-funny answer: “That’s when your chest falls into your drawers!”

A virulent strain of furniture disease is epidemic in many quarters, and the chief symptom is the extraordinary high fever, pouring sweats and jackhammer shaking from the ravages of price deflation.

“It’s a greed lesson the industry didn’t quite learn,” a manufacturer friend says. “For many suppliers, the price couldn’t be too cheap, and for many retailers those prices were thought to be a gift from furniture heaven that has become a gift from hell!”

The veteran furniture maker chuckles in cautious delight that his company didn’t go down that mercantile river, which is better known as the race to bottom.

As for the profit-robbing lesson: In the race to bottom pricing, everyone sells more units to remain static, if possible. More whiners than winners, as the courage to address the problem is deferred.

Although hope is not a strategy, many manufacturers and retailers are banking on hope. They are gallantly deferring, or buying time, hoping the next lowball sales event or market special drives big buckets of heaven-sent profits. That kind of self-deception would curl Sigmund Freud’s stiffest cigar.

My shy manufacturer friend delicately reminds retailers they get what they pay for. “What’s the value of a $199 (wholesale) bedroom if it’s not delivered on time or, as some retailers know, never ships?”

Despite the obvious impact of price deflation, “We can’t escape its impact completely,” he explains, saying, “All vendors are being burned by this fire of unrealistic and unsustainable low prices.”

The reality for substantially capitalized companies is the gnawing inability to price goods just to earn a reasonable profit, which seems to exist at any point in the supply chain. The lowballers have sullied the business.

So the difference is, as it always has been, the added value of assurance and dependability arriving in sustained service and exemplary performance.

If the low price is too good to be true, then it probably is.

DIPLOMATIC MARKETING: Cabot House’s Bobby Bendetson funds Iraqi reconciliation meetings, and unwittingly generates positive marketing attention to legacy retail chain

Bobby Bendetson, fourth generation leader of legacy Massachusetts-based furniture chain Cabot House, is front and center as the unlikely patron of important reconciliation talks among Iraq’s feuding religious and political sects and factions.

The positive, yet unintended consequences of his noble efforts are likely to spur consumer interest in the chain, which operates primarily in New England with eight Cabot House units, two Ethan Allen stores, six Thomasville stores and two Drexel Heritage stores.

More than community involvement to capture authority and credibility, Bendetson’s passion for peace is making news, most recently on National Public Radio.

His efforts likely will burnish a long positive family reputation as a responsible merchant-peacemaker and, presumably, attract consumers inclined to patronize a high minded merchant taking an active role in significant peace efforts.

Bendetson is Tufts University trustee and alumnus, who studied there under Padraig O’Malley, the distinguished professor of peace and reconciliation at University of Massachusetts, Boston's John W. McCormack Graduate School of Policy Studies. O'Malley is leading the current efforts which corresponds to earlier reconciliation work in Ireland and South Africa.

Credibility and community standing contribute to reputation, and are powerful marketing exponents that convey trust and responsibility, among the key virtues that consumers want and cherish, and what merchants need to establish long-standing relationships.

DECLARATION OF INDEPENDENCE: The inalienable rights of life, liberty and the pursuit of happiness . . .

furniture, retail, branding, merchandising, consumers, home furnishings,  High Pint Market, Las Vegas Market

PEDDLERS NOT MERCHANTS: The difference between selling and satisfying is telling in so many ways

The faster the American home furnishings industry moves from a peddler mentality to a merchant frame of mind, the better for all of us, espcially consumers.

Peddlers are pushers, hooked high on the crack cocaine of deal mongering and promising more than they actually deliver.

In stark contrast, merchants are dream weavers. Need more be said? Oh, yes, plenty more.

The changing economy is elevating the significance of home. We are in the midst of an enduring era of home centricity.

Thanks to rising fuel and living costs, the focus is where it needs to be, and that’s on the home, where people are inclined to invest.

Never mind the market reality, peddlers don’t care. They’re too busy pushing deals. All that does is force consumers to push back in discomfort instead of investing in living comfortably.

The heroes are the few savvy and courageous merchants honestly telling people about comfort and doing so often in ways that promote satisfaction, enjoyment and living better.

Merchants succeed because they are mentally connected to the dreams, wishes and aspirations of people wanting to live comfortably and in style.

So simple, yet so difficult.

A peddler reacts. A merchant plans to act.

Peddlers are mercantile moths attracted to the bright lights of quick solutions.

Real merchants are dream weavers, always finding ways to satisfy and transport  consumers to live better and more comfortably.