Retailers and vendors adapt to weather 2009 economic storm
Cinde Ingram -- Casual Living, March 1, 2009
Retailers and manufacturers in the casual furniture industry recognize the 2009 season brings challenges, but are adapting to survive and thrive once the global economy rebounds. When that will happen is anybody’s guess.
“It’s not if the economy will turn around, it’s when,” said Tami Newton, who keeps an unusually positive perspective as manager of wholesaler Palm Springs Rattan & Garden Classics and commercial sales director of Leader’s Casual Furniture, a Florida-based retail chain that opened its 19th showroom late last year in south Naples. “We are in season and we are busy. The stores have had great traffic. When the housing boom does take off, we know there will be plenty of new developments and we can furnish their pool areas.”
Retail orders began to slow in late 2007 while wholesale and commercial sales remained high for Palm Springs Rattan until August 2008. In August, retail started to pick up while commercial sales never slowed down, Newton said. While filling those large orders, the wholesaler also was evaluating how best to use space to gain efficiencies in its expanded warehouse.
Taking advantage of discounts from the technology industry’s downturn, Palm Springs also invested $40,000 in servers and PCs to save time and increase efficiencies. Laptop computers with 12-inch screens mounted on lift trucks plus new scan guns are making pickers more productive on racks inside the warehouse. The high jobless rate provided opportunities to refresh staff by adding eager workers who are more qualified to handle automation and new technology.
“It’s a perfect time to invest and take your company to the next level,” Newton said. “In the long-term view, I’m encouraging my reps to still go out and travel. Some reps are helping retailers with training and on the weekend for events. We’ve added 16 new fabrics and 100 updated pages for their catalogs.”
Those reps also are armed with a better organized price list and can offer nine new collections for 2009, five for full outdoor use and four for indoor. Palm Springs continues to invest thousands of dollars in research and development to meet high specifications of the contract market as well as the specialty retail niche.
Innovative approaches to business are always valuable, none more so than now. Not content with an extensive and successful inventory program and in-house cushion manufacture, Gloster Furniture is taking further steps to facilitate sales for associated retailers and showrooms. Gloster Furniture hosted dealers last month for Advanced Reseller Training at its U.S. headquarters in South Boston, Va. Another session is planned.
“Especially during difficult economic times, consumers value a knowledgeable and confident sales associate while making their buying decisions,” Gloster President Eric Parsons said. “Gloster ART provided 25 of our customers with an in-depth look at the Gloster philosophy, its skilled team and details of manufacturing the finest casual furniture available.”
ART provides key information directly to the reseller to aid confident engagement and closure to the process of selling Gloster Furniture, Marketing Manager Braddan Johnson said.
Veteran sales rep Ed Brookes said manufacturer rep forces “have to become better at training and coaching the floor sales personnel. We have to work with our dealers to come up with creative ways of marketing our products. For instance, the use of the Internet as a marketing tool is going to become much more important. How can we make our brands 'top of mind’?”
While preparing to open a design center this month, Austin, Texas-based The Greenhouse Mall was also training its floor sales staff to sell in a down economy, Karen Galindo said. “If your sales staff does not close sales or follow up effectively, that has to change. There are companies that succeed no matter what. We want to make sure we are one of those companies.”
Galindo expressed optimism 2009 can be one of the best opportunities for specialty retailers in decades. “After playing catch-up to mass merchants for the last 12 years, we have a huge opportunity and responsibility to take market share back,” she said. “In the last year, we have seen many mass merchants either file bankruptcy or downsize. The problem mass merchants have is two-fold. First, they are huge and dependent on constant growth for success. They are not engineered for down economies because they cannot adjust and maneuver quickly. Secondly, mass merchants prosper when customers do not place high value on the money they spend.” She thinks stores that sell a mediocre product and offer poor to non-existent service will suffer most in a down economy.
Carl Vice, general manager and owner of Lexington, Ky.-based Casual Living & Patio Center, expects 2009 to be just as challenging as 2008 and 2007 were. “As retailers, we need to concentrate on the 90% of employed consumers in our towns, and be prepared to show, sell and service every customer that walks through our doors,” Vice said. “Gone are the days when a salesperson can say 'They were just looking’ or 'She freaked out at the first price she saw – must be a lumberyard customer.’ All of our salespeople will have to be trained to believe that all customers have an unlimited budget and want to purchase the highest quality products available.”
Mary Fruehauf, president and co-owner of Fruehauf’s Patio & Garden Center in Boulder, Colo., agreed retailers must be prepared to meet each and every opportunity in these times of economic uncertainty.
“We will concentrate even more on our training,” Fruehauf said. “Making sure employees are properly trained and offering the best possible service to our customers has become even more important.
“At Fruehauf’s, we will of course be carefully monitoring the costs of all of our purchases, closely watching our business expenses and our payroll numbers, but while being concerned with the money going out of our business we must work on ways to keeping bring money into our business,” she said. “We have been working to make our store look better than ever. (You only get one chance to make a first impression). We’re making sure our displays look updated, fresh and clean. We are doing lots of spring cleaning. We’ve been rearranging and creating fun new displays for our customers. We are making sure our items are neatly priced and presented.
“This year we are also dedicating a new department specifically for working with our contract and design business.”
Bruce Aronson, managing director of The Pool and Patio Center in Metairie, La., has taken several actions, some as a direct result of the downturn and others because business has returned to a more normal level following the spike of replacement after Hurricane Katrina’s destruction in 2005. He reevaluated and changed his marketing strategy, increasing television commercials in an attempt to create more demand throughout the week. He cut back on sales event print advertising and institutional ads in glossy print venues. He also cut two staff positions, but not in sales.
“In the past, we rarely sent out sales consultants to potential jobs,” Aronson said. “This year, I am not only encouraging my sales staff to make outside appointments, we are advertising that service in our television commercials.”
Aronson also took fewer risks with his early buy orders. “I kept our early buy purchases the same with companies with whom we had a good track record. However, I cut back or cut out early buys with companies that were 'iffy’ for us to begin with. I also made sure that our early buy orders did not exceed our cash reserves. I can sleep at night knowing that no matter how bad the economy gets, I will be able to pay my bills.”
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