Excerpt: The credit crunch’s rippling effect has touched every industry, including the furniture industry. Of the top furniture stores in the industry, Ashley furniture continues to make a strong statement. Currently furniture sales trends seem a bit disheartening, but there is hope on the horizon for the economic future of furniture sales. Ashley Furniture has been leading the pack for a while now and once again ranked #1 of 100 of the nation’s top furniture stores for the third year in a row. However, Ashley Furniture, a manufacturer and distributer of high quality furniture, hasn’t escaped the decline in sales volume. Although still ranking #1, they decreased by 15% in their sales numbers last year, topping off at 2.1 billion dollars in sales…
March ended with a 21% decline in furniture sales as layoffs in the industry as a whole continued. There have, however, been some encouraging signs of consumer confidence, causing experts to believe that the furniture sales trends of the future may be brighter… The credit crunch’s affect on the furniture industry has been significant but it appears that according to the Fed, the tide could be changing as a bottom out the economy is expected soon. The bottom out will intrinsically lead to economic growth by the end of 2009.
Source: http://blog.nctinc.net/2009/06/ashley-furniture-number-1-on-list-of-top-furniture-stores
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Excerpt: The nation's affluent consumers are also turning to different retailers to make their luxury furniture, lamps and floor covering purchases. The share of affluents who bought at specialty home furnishings or furniture stores declined from 59 percent in the first quarter of 2008 to 52 percent at the beginning of 2009. Department stores experienced even a steeper decline, from a purchase incidence of 21 percent first quarter to 12 percent. On the other hand, home improvement and hardware stores are one of the retail channels gaining patronage among affluent furniture shoppers, used by 16 percent of affluent shoppers at the beginning of 2008 and rising to 23 percent at the beginning of 2009.
Also gaining more traction with affluents are the discounters, notably warehouse clubs and outlet stores, rising from 9 percent to 11 percent. This means that furniture stores are facing stiff and growing competition for the share of the affluent shopper's wallet from stores they never had to think seriously about before. While mid to higher end independent furniture retailers have tended to focus their attention on the competing furniture store down the street or across town, they missed the growing threat presented by Home Depot and Lowes, as well as Costco, IKEA and Target. These upstarts in the furniture world are getting better, and offering up a combination of quality, style and price that represents a significant value to affluent shoppers. High-end furniture stores can't ignore them anymore.
Everybody knows, 2008 was a bad year in the furniture business and 2009 is expected to be even worse. In our survey nearly 60 percent of affluents expect to spend less on luxuries or high-end purchases this year. With so many data points in Unity Marketing's luxury tracking study showing a marked decline from the first through fourth quarter of 2008, we expect to see a continued downward slide in key market metrics until the economy starts to turn around. So in the words of Bette Davis as Margo Channing in All About Eve, "Fasten your seat belts; it’s going to be a bumpy night," but in our case, it will be a bumpy year.
Source: http://www.furninfo.com/absolutenm/templates/Article_Retailing.asp?articleid=10335&zoneid=5
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Excerpt: Consumers right now are being very cautious and very demanding. At this writing, 92% of Americans who were working a year ago are still working and earning. What is obvious is that lots of people are holding onto their money as a hedge against an uncertain future. Here’s the good news about home furnishings consumers: The demand for beautiful, comfortable, homes has not gone away. In fact, the need to provide a pleasant retreat from bad news will become more pressing in the days, weeks, and months ahead. Store traffic is down, but it’s not gone. But, I warn you that the same old ways of dealing with consumers will not work the way they have for decades… Not many consumers out of the total number of home furnishings shoppers and buyers, use the services of interior designers, but everyone wants the types of outcomes those experts create. This explains the popularity of shelter magazines, HGTV programs, and on-line room planning tools and sites. The decisions around how to create those beautiful, comfortable home environments are not easily made by consumers, and your ability to provide them with assistance is more important than ever.
That’s why retail owners, managers, and sales associates, have to add more value than ever to the things you sell. This idea of adding value means that if you can help your customers achieve their goals for beautiful rooms and homes – enhancing their quality of life in very troubling times – you may be able to deflect some of your customers’ attention from price, some of the time. Think about it. If you can’t do these things, you are nothing more than a broker of furniture, a vehicle for moving the product from the manufacturing point to the consumer’s home. If that is the case, then you have nothing to add to the product except your ability to lower the price relative to competitors, or to competing choices. I remember the words of Nathan Ancel, the founder of Ethan Allen from three decades ago when he put forth the best mission statement I’ve ever heard for our industry. Nat said; “Our industry mission has to be to help our customers understand how to use our products to enhance their quality of life – not just how to buy them.”.
Now is the time to finally integrate those important, valuable, room planning services into a complete, high-service set of website-based tools that draw people to you. If you do not have a room planning tool on your website, you should. If you have a room planning tool on your website, but, like so many retailers, don’t showcase it in your store – you are making a huge mistake. If you have the room planner in your store as an after-thought and are not making it, and the processes around using it, your central selling tool, you are out of touch with the issues that keep a high percentage of consumers from buying. Put simply, they need more help than you’ve ever provided before, and while you could survive for the past two decades without providing extra help, you can’t today.
So, here are some suggestions for actions you should be taking right now to improve your immediate performance. They will also help you prepare for the new retail reality into which will emerge as the economy heals from this deep recessionary funk:
1. Deliver exceptional customer experiences by developing your talent capabilities. This will be a critical initiative for all retailers as they strive to interact with more consumers on-line and in stores at a new level of customer-centricity. Human talent in one-to-one retailing is your greatest asset to create value for your customers and prospects, and develop long-term relationships targeted at customer retention.
2. Begin a customer retention program immediately. You can no longer rely on the door opening enough to drive your business ahead. Advertising in this environment can be both expensive and wasteful, but you have an enormous pool of satisfied customers who very likely have needs for things you sell.
3. Get your website up to speed! Most retailers think of their website as a “nice-to-have” extension of their store. You need to turn that thinking around so your store becomes an extension of your website where a high percentage of consumers see you first.
Source: http://www.furninfo.com/absolutenm/templates/Article_Retailing.asp?articleid=10107&zoneid=4
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Excerpt: The global economy is taking its toll on Swedish-based retailer Ikea. The company has slashed 5,000 jobs worldwide, and the company's founder Ingvar Kamprad has told Swedish business publication Dagens Insdustri that more layoffs will be necessary. “We need to reduce our personnel further, especially within manufacturing and logistics”, Kamprad said. “It’s both about adjusting to sales which are well below what we budgeted for and becoming more effective”. Kamprad said sales in Ikea’s stores are 7 percent below projections. "That corresponds to 8 billion kronor (730 million euros, $1 billion) on an annual basis which we have to adjust to," he was quoted as saying. Kamprad said the company would hire a few thousand people to work at its 14 new stores planned to open worldwide this year.
Source: http://www.hfbusiness.com/article/ikea-ponders-slashing-additional-employees-409412_1.html
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Excerpt: The economy seems to be at the forefront for consumers and retailers alike. For retailers, these challenging environments are providing room for improvement or simply time to rethink strategies regarding merchandising and survival. In our exclusive Surviving the Times Retailer Survey, outdoor retailers reveal their creativity and commitment to this industry.
outdoor retailers are providing excellent customer service and utilizing more experienced sales staff. According to one retailer, "We'll continue our commitment to demonstrate the highest level of customer service. It's what gives us such a high rate of repeat and referral business." Still, other outdoor retailers are using networking skills to build their contact lists and customer base. They are getting out into the community and even helping with school fundraisers.
Some retailers are holding seminars on outdoor entertaining and others are going to the customers' home to help design their outdoor space. Traditional marketing strategies such as advertising in newspapers, radio and television continue to help outdoor retailers, although strategies are changing a bit. For example, some retailers are advertising less in print and more online; and, instead of just direct mail, several retailers are now using targeted direct mail. Also, in lieu of traditional snail mail, some retailers are now sending e-mail messages with coupons and extra discounts attached. For those who are web-savvy, they are boosting their Web sites and are even beginning to offer online sales.
Green products are carried by more than two-fifths of casual retailers. Among those retailers who carried green in 2008, a median of 5% of total revenues came from green products. And, though 2009 may continue to be economically challenging, responding retailers are optimistic that green revenues will double this year to reach a median of 10% of total revenues. Still, there are many factors that would encourage outdoor retailers to carry even more green. Among the top three are requests from customers (61%), good designs and styles (49%) and lower prices (41%).
Eight out of 10 stores answering this survey have a Web site. And, one-quarter of stores who have one offer online ordering for customers. In 2008, online sales represented 10% or less of total revenues for three-fourths of respondents; online sales comprised 20% or more for another fifth of stores. 2009 online sales are expected to account for 20% or more for two-fifths of respondents, which will double last year's growth if the projections hold. For casual retailers who currently do not have a Web site, 44% expect to have a Web site by the end of this year and another 22% have plans to get a Web site up and running sometime in 2010.
Source: http://www.casualliving.com/article/CA6668154.html?industryid=47509
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Excerpt: McALLEN, Texas — Hill Country Furniture Partners has opened its 14th Ashley Furniture HomeStore here - the 400th store in the Ashley-dedicated network. The grand opening of the 55,000-square-foot store in the Palms Crossing Shopping Center on North Jackson Road drew a state government official as well as John Disa, president of Ashley's HomeStores division. The new location created 80 full-time jobs, the company said. Gary Seals, CEO of Hill Country Furniture Partners, which operates HomeStores in Seattle, Houston, San Antonio, Austin and now McAllen, Texas, described the new showroom as having an "open and inviting shopping environment." Among the highlights is a soothing water feature, floor-to-ceiling fireplaces, a café and room vignettes accessorized with lamps, area rugs and other home accents. There's also a "Fun Zone" where kids can check out the youth bedroom offerings as well as watch movies and play videogames. Seals said, "The direct-from-the-manufacturer model allows Ashley to present high-quality furniture at far more affordable prices.".
Source: http://www.furnituretoday.com/article/295590-Hill_Country_opens_14th_Ashley_store.php
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