InsideFurniture

THE BIG QUALITY QUESTION: Have we met the enemy, and is it us?

BlogNote: My alter ego Steve Taylor (click on name to send e-mail), interim director of the Franklin Furniture Institute at Mississippi State University, argues the case for marketing and differentiation when he quotes Pogo, saying, “We’ve met the enemy and he is us.”

Is Steve correct? Do you agree? What are some solutions to the problems and issues he raises?

By G. Stephen Taylor, Ph.D.

I was sipping coffee and reading the Sunday paper when a very colorful multi-page advertising supplement slipped from between the sections and landed on the floor.

I picked it up and was bombarded by bright pictures of rooms filled with furniture. Sofas, chairs, dinner tables, bedroom sets……furniture of every kind, shape, and size. Yet every piece had one thing in common: it was cheap.

How do I know it was cheap? I know because the supplement said so – over and over and over. Every picture was covered with numbers and words telling me how cheap the product was.

I was assured – over and over and over – that this furniture was at rock bottom prices. There was no way I would ever find lower prices. I was guaranteed this – over and over and over.

Notice that I use the word “cheap,” not “inexpensive,” to describe the furniture in the newspaper insert. It had to be cheap, because that was the message repeated on every page. If it wasn’t cheap, then why would the retailer keep saying it was? And because it is cheap, price is the only thing I should be concerned about, or at least that was the message.

As I thumbed through this brochure, I was reminded of those famous words uttered by the cartoon character Pogo – “we have met the enemy, and he is us.” (click on cartoon to enlarge)

Have those of us in the furniture industry become our own enemy? By constantly emphasizing not just “low prices” but the “lowest prices,” have we conditioned the consumer to believe that nothing matters except price?

After all, how often do we talk about the quality and style of furniture? How often do we remind the consumer that furniture is part of our lives and not just something we sit on? If we don’t talk about these things, then why should the consumer see our products in this light?

NO BLAME GAME: Times are changing for retailers, who need to change or die!

(In second comment, Donna Koeneman of HomeMart Furniture near Dallas responds to my blogservation of of November 3)

I don't believe this is a blame game, I think the times are changing. Maybe the shrinking of the middle class or the reality of what cheap off price products is doing to the market. As we continue to study the realignment of the furniture industry from manufacturing to distributing the new requirements that retail will have to address to compete with a true commodity market.

Has the furniture industry always been adversarial, or is it because of the true entrepreneurial nature of the industry? Are we dealing with shattered beliefs that the industry is more professional than it truly is? Is the disparity between truly large and truly small furniture distribution a cause or effect? Has the lines blurred between, manufacturing, distribution, wholesale and retail that everyone is now selling the end user as more factory direct brand name stores come into existence?

There seems to be more questions than answers but I believe the economy, the industry, this country and the entire global world is changing. Our small sector known as the furniture industry is so drastically changing, maybe we are too close and don’t notice the paramount changes, the decline of importance of home environment to a large sector American consumer, how can anyone explain the traffic at an Ikea, the development of mega rent to own chains, home shows that are redoing rooms with used or reinvented furniture rather than buying from retailers?

Has anyone else noticed that other industries are chipping away of several furniture products, built in closets, televisions that hang on the wall, kitchen counters rather than dinette sets , built in bookcases and home office now replace our sales. I often wonder, are we innovative enough or is the design element of our product such that form and function will not allow change. I often ask associates I meet if they would encourage their children to go in this industry. I wonder if the brightest of recent college grads would consider if this is the right industry for their future.

Well change is here and we all will have to position our future and the survival of our organization on which direction we choose to take, the old way of doing business isn’t working and hasn’t for a long time. The larger of our organization have found a way with direct retail distribution, the medium and small organization need to find ways to sell product with a shrinking retail base or become extinct.

After two years in development I’ve opened what I believe is one way to compete, take away the layers of distribution, the frills of most retail stores and bring down the cost to compete with mass merchants. I don’t think I have all the answers just an alternative, another way to sell furniture and in the end isn’t that the goal.

REALITY CHECK: Is the furniture industry adrift or in tune with consumers?, a maverick retailer asks

(Donna Koeneman of HomeMart Furniture near Dallas responds to my blogservation of of November 3)

Is it time for a reality check for the furniture industry, is quality as important as price for the consumer? Is there an over kill of product selection, confusing the customer with price points from cheap to obscene? Is there a disparity in pricing from buying clubs and mass merchants to design stores with all products having such a similar look? Have we created an industry rather than innovation in look a like product at lower and lower prices, and now sourcing furniture to the cheapest of the developing country?

The cheapening of the American consumer from over 16,000 dollar stores, buying clubs, and big discount mass merchants we are creating an environment of no bottom to prices on anything. Is the future of retail bidding on eBay, or shopping at the largest discounter with stacks of product with the magic smiley face continuing to lower prices daily?

Yes, most definitely, today’s customers challenge is no longer quality but traveling from location to location for the cheapest price, utilizing there credit card for additional rewards points in form of miles or cash back, finding rebates, researching the internet to find the lost leader and pounding the retailer for even a lower price.

We as a retail industry no longer service the customer but rather offer our wares at the lowest price, as the consumer tears through the store, allowing there children to walk all over the furniture or pull cushions off upholstery and throw them on the floor and than complain about the inventory being dirty.

The consumer doesn’t care about the additional services we provide, they are not concerned about product knowledge or design expiree. Most consumers today have been trained to always be right, no accountability for the misuse of products and unrealistic demands that all service issues are the retailer’s job, the consumer demands the lowest price and than complains about not enough quality, never excepting you get what you pay for.

The inequity of the mass merchants return policy and a retailers is a major issue, defining the pricing between the two organizations. The consumer doesn’t complain when they purchase bedding from a buying club, load it into a cart, drag it to their car and tie it on, the same customer asks for free delivery and disposal of old bedding and expects no additional markup on product to achieve this.

The customers today will show no loyalty to a brand or store rather aimlessly wonder to all retail establishments scouring for the best bargain out there, your provided service, the extra effort will not assure you the consumer will return to purchase from you again, but if you make one mistake you will be chastised for it. The Department Stores with imbedded belief the consumer is always right continues to offer additional percentage off to appease the customer, only to destroy the margins of there products.

I do not feel my view point is isolated rather the norm, the consumer we have created, so many years screaming, cheaper, cheaper, cheaper, no interest, no payments, no taxes, no delivery, in sales I was taught that each side provided a agreement, provide product for services, how has it gotten so one sided.

Maybe the answer is the consumer buys too much so nothing is ever special, or there are too many distribution outlets fighting for the same dollar, or too many hands touching the product from first source off shore to the end user the consumer.

(To be continued tomorrow, November 7, 2006)

WHO’S AFRAID OF THE BIG BLUE AND YELLOW BOX?: What to do when IKEA comes to town, and even if it doesn't

Blog Note: My friend Steen Kanter has some valuable insights (tough love) about co-existing and prospering when IKEA comes to town. Or even if IKEA isn’t coming, Steen’s insights are worthwhile for retailers seeking a marketplace advantage.

Steen knows the retail culture, especially IKEA’s, where he served in as a North American executive, as well as similar top positions at Body Shop, Lechter’s Housewares. He is the enthusiastic Chief Executive Officer of Kanter International.

Steen wants to stimulate discussion. So comment on this blog, so all can participate in the shared wisdom. Incidentally, Steen will be a speaker at the forthcoming Furniture|Today Leadership Conference.

There’s been a lot of talk lately about the “threat” to traditional retailers when competitors like IKEA arrive in a local market. Maybe it’s time to find the opportunity hidden within the problem, or to recognize that the real threat comes from within.

So IKEA just announced it’s coming to your town next fall. Great, just enough time to plan your “Going Out of Business Sale”. Hey, with the soft economy and your shrinking margins, the opening of a 400,000 square-foot IKEA store should just about sound the death knell on your business future, right?

Well, if you believe that, then you might as well go back to sleep with the rest of the furniture industry. This is just a bad dream and it’ll all be gone when you wake up. Unfortunately, so will your business.

We Have Seen The Enemy, And He Is Us

There’s a lot of blame being heaped on low cost imports and the expansion of big chain retailers like IKEA as the reason for the decline of the independent retailer. Well, let’s do some root-cause analysis; it’s NOT the bigger, chain-store competitors that are putting smaller retailers out of business, it’s their customers that are doing that.

They are voting with their feet and flocking to the alternative retail models that have emerged during the last two decades; Models that embrace and engage consumers and their lifestyles.

During that same time period, the traditional retailing model has barely changed. It’s out of date, undifferentiated, often insulting, and generally unappealing to today’s more savvy consumers.

It’s true, many things change in a market when IKEA comes to town. Fortunately, most of these things can be leveraged by in-place retailers for their own benefit.

For starters, the affected market quickly becomes a destination for furniture shoppers with a commensurate increase in traffic flow.

Who doesn’t want more potential customers driving through their zip code?