Hoigaard's steps it up with new location
Kristine Ellis -- Casual Living, October 13, 2006
Sometimes what you're looking for can be found in your own backyard. That was pretty much the case for Hoigaard's executive team when, after looking for a new location for the last few years, they found the ideal spot less than a mile from where they've been for the past 46 years.
In fact, if they stand in the parking lot at the current location in the Minneapolis suburb of St. Louis Park, they can see the parking lot at the new location.
But close proximity doesn't hinder big changes, and when customers walk in the new showroom during the Grand Opening slated for Oct. 21, they will see an 18,500-sq.-ft. space designed with specialty retailing in mind.
"We've really invested a lot in making the new store a unique shopping experience," said Todd Brewer, president of Hoigaard's. "It will be a pretty bold move from where we've been."
Much of where Hoigaard's has been parallels the history of the casual furniture industry. Established in 1895, the company was a tent and awning manufacturer when it moved into its current location in 1960. At the time, the building was located on a major intersection which suited the manufacturer's plan to expand into retail.
Hoigaard's was established in 1895 as a part-time tent and awning manufacturer, and soon grew into a full-time casual furniture and sports equipment retailer.
Fewer furniture groups will be displayed at Hoigaard's new location, but the presentations will be larger and done as environments.
"Residential awnings were a huge part of the business, but with the advent of air conditioning, it became important for us to branch off into different areas," Brewer said. "That's when Conrad Hoigaard's father asked Brian O'Brien to take the lead in establishing the casual furniture department."
O'Brien would go on to become an industry pioneer, while the success of its outdoor furniture department helped transform Hoigaard's from part-time manufacturer to full-time retailer.
Hoigaard's was one of the first specialty retailers to combine outdoor furniture with sports equipment. Located on seven and a half acres, there was plenty of room for both categories, but the growing Twin Cities metro area eventually made moving inevitable. When the major thoroughfare that had provided such good access in 1960 was upgraded to a limited access highway complete with overpass, Hoigaard's ended up tucked into a corner.
"It is an awful location for retail," Brewer said. "It's worked for us only because we've been here for 46 years."
Hoigaard's new location is in the Miracle Mile Shopping Center, one of the oldest shopping mall strips in the country. Built in 1950, the center is easy to get to and well-known to people throughout the Twin Cities.
"We looked at a lot of space outside the St. Louis Park area, but when we really looked at our customer map — where our customers came from and their frequency — we saw that St. Louis Park is a good central location not only for our current customers but also our target customers," Brewer said.
At first glance, it might appear Hoigaard's is stepping back on its commitment to outdoor furniture, given it will go from a 20,000-sq.-ft. display area for furniture to 10,000 square feet. But that's far from true.
"What we're really doing is improving our presentation," Brewer said. "We are very comfortable we will be able to present our product well. And I think it will be a better shopping experience for customers."
Fewer groups will be displayed, but the presentations will be larger and done as environments enhanced by the new location's stage-like moveable fixtures that can be easily changed out to fit different scenes. "That will allow us to create real environments within the space that feel like backyards," Brewer said.
Technology also will help improve the customer's experience. In addition to a media system including five plasma screens that can operate individually or as a group, the new Hoigaard's will utilize hand-held point-of-purchase terminals to scan credit cards, read bar codes and even e-mail the customer's receipt should the customer prefer not to carry paper. These devices make it possible for salespeople to take a customer through the entire sales process while comfortably seated on the selected furniture rather than standing at a check-out counter.
The POP system is also integrated into a customer relationship management system, which will make tracking special orders and other functions easier.
Outdoor furniture accounts for about 40% of Hoigaard's business, a percentage that has remained stable for several years. Of that, about 40% of sales come from special orders. Brewer's desire to increase that percentage is a defining issue when considering new vendors.
"We want to deal with vendors that can supply us consistently in season," he said. "The shorter the lead time, the better obviously, but consistency is the key.
"Lloyd/Flanders is a great example of a company that really understands what it takes to be a good vendor to specialty dealers," Brewer added. "They are focusing on improving lead times for special orders as well as focusing on doing what they do best and what they are known for. The same is true for Summer Classics. They have done a very good job of focusing on how best to supply the specialty dealer and reducing inventories. That's the biggest thing for the specialty market, improving our financial health and helping our cash flow."
Selling the whole
Thanks to its longevity in the marketplace, Hoigaard's is a fourth-generation company with fifth-generation customers. One of its biggest challenges in adapting to its evolving customer base has been explaining its mixing of sports equipment and apparel with outdoor furniture. Traditionally, the company treated the two categories as separate businesses with separate customers, but that is changing.
"The customer who wants to buy from a specialty retailer is someone who appreciates quality and who recognizes the value of dealing with experienced people, whether they are buying a canoe or a patio set," Brewer said. "So for us, it is really about selling the concept of what the business is. We have an incredibly experienced staff and great product selection, and our goal for the last few years has been to focus on getting that message to the people who truly appreciate it."
The vehicle for that message is direct mail to the existing customer base to provide them with value offers and build referrals. As a single store, Brewer believes in putting the effort into those who have already had a positive experience with Hoigaard's.
Although Hoigaard's has dabbled in the container business, its primary focus has always been on the upper middle and high end of the market. Outdoor wicker has been its largest category for quite some time, followed by teak and cast aluminum. Although sling had dropped off sharply for the company, the newer woven sling lines sold well over the past few years. And as is the case with many of retailers, alternative tabletops fly out the door.
"Overall, the mix we had this season performed really well," Brewer said. "I don't think there was a vendor we had that didn't sell well for us."
A smattering of outdoor furniture will be displayed through the winter at the new location, "enough that people remember what we do in the summer," as Brewer put it. In the meantime, as Opening Day approaches, everything is on schedule at Miracle Mile.
"Tearing into a building built in 1950 has definitely been interesting, but we have a great contractor," Brewer said. "It's going to be a great building for us."