Gaming business finding growth outdoors
Chris Gigley -- Casual Living, March 1, 2008
Two years ago, representatives from I.M. David Furniture Company made their first trip to the International Casual Furniture and Accessories Market to explore growth opportunities. They discovered they weren’t the only ones.
“We ran into a lot of our customers who were there either for the first time or were pretty new to it,” said David Ginsberg, the “David” in I.M. David. “We saw gaming stores and billiard stores that were expanding into outdoor for the same reasons we were. They were looking to expand their product offerings because of the nature of the market.”
The nature of the gaming and billiard market can be described simply as tough. Since 1966, I.M. David has been designing and manufacturing casual dining pieces, game tables, barstools, chairs and bars from its headquarters in Southern California. It gets plenty of contract work, including custom poker and games tables it produces for resorts.
Still, with the housing and mortgage markets pinching consumer spending, I.M. David felt the aftershocks and was compelled to find new growth categories. It didn’t take long to find inspiration at the Casual Market.
“We got there and said to ourselves, 'Hey, no one has a poker table,’” recalled Doug Stambaugh, chief marketing officer for I.M. David. “'Why hasn’t anyone made a poker table in teak?’”
A year later, I.M. David returned with the first high-end outdoor poker table in the market.
“Everyone had to stop and look at it,” Stambaugh said. “We used waterproof felt, so it was obvious what is was for. We got a wonderful response from retailers.”
One retailer who stopped to take a look was Gaylon Peterson, owner of The Rec Room Plus. He had opened his first store in 1995 and focused solely on the gaming niche. He has since expanded into other categories and now has four stores in Iowa, Nebraska and Wisconsin. Peterson added outdoor furniture to his sales mix two years ago.
“[The outdoor category] was a natural addition for us from a seasonality standpoint and in terms of servicing our customers,” Peterson said.
Peterson said he bought conservatively the first year and had moderate success. More importantly, he learned about the challenges he’d face with outdoor product.
“Certainly the demand for floorspace is always something you have to balance and battle,” he said. “And warehousing is a huge issue because you’re bringing in the product before you can put it on the floor. You have to figure out how to store it all.”
He and his staff also had to learn where to source the product, how to display it and how to sell it. All their effort, however, was worthwhile.
“We got enough of an education that first year to be a little more aggressive the second year,” Peterson said. “We bought much more the second season and had to resupply in the middle of the season. And now, of course, we’ve fallen in love with the category.”
Meanwhile, big box retailers impacted sales in the indoor recreational category.
“So we’re really putting a lot of emphasis on outdoor for 2008,” Peterson said. “We think it’s a category with a tremendous amount of growth potential.”
Peterson isn’t alone with his way of thinking.
“A lot of our retailers told us that in the tough residential market, the higher-end outdoor furniture category saved their business,” Stambaugh said. “People are maintaining a presence of outdoor furniture on their floors year-round. There’s that much call for it.”
Peterson said his customers appear to be more willing to spend big money on outdoor pieces, no matter what the economic conditions.
“It’s not limited as much to new housing or a change in housing,” Peterson said. “People who are doing big landscaping projects may have been in their home for five to 10 years.”
I.M. David’s outdoor poker table is symbolic of how far consumers are willing to go with their outdoor projects. At press time, the company was catching up on orders written at last September’s Casual Market.
“We’re building the frame assemblies right now based on the commitments we got at the show,” Stambaugh said. “We’re also creating two more outdoor poker sets because the interest was strong enough.”
I.M. David will present its entire outdoor gaming line at the next Casual Market, in a space twice the size of its last booth. Stambaugh said he expects to be busy handling new accounts and more long-time customers like Peterson, who have made the jump beyond gaming to keep their businesses growing.
“A lot of our customer base has been the game room specialty stores and billiards stores that now are moving into high-end outdoor products,” he said. “They know it doesn’t do any good to butt heads with Wal-Mart.”
They also know high-end outdoor furniture is a rare growth category they can’t afford to ignore.