Investing in America
Marc Barnes -- Casual Living, September 14, 2011
THEY'RE BACK. SPECIALTY RETAILERS OF OUTDOOR furnishings are noticing more customers this season, all with something in common. They're looking for the same things, even if their selections are different.
They want value. They're willing to pay more if their outdoor furniture will last longer and can be repaired locally. They don't necessarily want it all today; they're willing to wait and add more pieces in years to come.
They're finding that what they want is best found by investing in goods that are made in America - and retailers are capitalizing on it.
Brian Lawrence, co-owner of Emigh's Casual Living in Sacramento, Calif., said he has seen the trend shifting to demand for American goods, in part because the gap in pricing between American goods and those imported from overseas is starting to close.
"The price really was the issue for the past two or three years for stuff offshore," Lawrence said. "We've had vendors here in the U.S. find it harder and harder to get support and customer service."
Chad Scheinerman, CEO of Today's Patio in Scottsdale, Ariz., said consumers want American, but not all are willing to pay the price.
"Not all customers are willing to spend 20-30% more for a chair made in America," said Scheinerman. "The consumer wants the price they can get from overseas but they want to say they bought it in America."
He said there are two kinds of customers: Those who will always buy cheap goods every couple of years and those who might be convinced to buy from a specialty store. For the latter, he said, sales training is the key.
Karen Galindo, general manager of the Greenhouse Mall in Austin, Texas, agreed, but said it needs to go farther. Galindo said consumers need to be educated that the value is in the brand, not in the materials; manufacturers should make "Made in the USA" prominent in their packaging because it can only help; and merchants should tailor their sales message to their audience.
For the boomers, the story is about jobs and quality, Galindo said. For the millennials, it's about buying products made where the government has labor and environmental regulations.
"My philosophy has always been that Americans are a consumer culture and we love to shop and buy and consume," said Galindo. "When we are not, it is unnatural for us."
Petey Fleischut, owner at Casual Marketplace in Hockessin, Del., said she, too, is seeing more shoppers. "They are willing to invest at a greater dollar amount because they want something that will last, and we can offer them a favorable warranty," she said.
Fleischut said customers want to know where - and how - the furniture was made, more so than ever before. She said she visits factories and learns how it's made so she can pass that along to customers - and they are responsive to furniture either Made in the USA or made in plants closely controlled by American firms in such places as Costa Rica and Mexico.
Mary Fruehauf, owner of Fruehauf's Patio and Garden Center in Boulder, Colo., said she's noticed that customers are paying more attention to where goods are made.
Many domestic manufacturers have taken to advertising that their products are made in the U.S. through hangtags and signs, and her sales associates make it a point to reinforce the message by mentioning it to customers.
Carl Vice, general manager of Casual Living and Patio Center in Lexington, Ky., said he is seeing customers who are running out of furniture.
"Slowly but surely, we are beginning to see it - a piece breaks and they have to throw it away and all of a sudden, they have a chopped-up table and three chairs," said Vice. "And they're beginning to complain about import products, about how they can get someone involved when they have an issue."
Vice said that over the past four or five years, mass-market retailers have been looking at only the price point - and to get there, they often have to take something out of the product. Chairs and tables are made out of cheaper materials, or the whole set comes in a box that the customer has to assemble.
Barbara McMillen, one of the owners of Leland's in Indianapolis, said she has seen the same thing. She said one of her customers opened the box to put his new furniture together, found that not all the parts were there and dropped it off at the big-box store before coming to Leland's.
"We are also seeing some pent-up demand, and we're also seeing people in the state of this economy who want to purchase things, but it doesn't fit into their budget so they decide to wait," McMillen said. "And then they surprise you by coming back - people will come back a month or so later. It takes them longer to decide but they do come back."
Arlene Stachel, owner of Mountain Lake Pool and Patio in Bucks County, Pa., said customers are looking both for goods that are made in America, but are also looking for pricing.
Stachel said that this year, many of their customers are spending more of their time at home and are searching for outdoor furnishings that will help them entertain, especially umbrellas, grills and dining groups.
"We are, right now, where people have four or five children in their teens and up toward 20, staying home and staying together and they have to have a place to have friends come over," said Stachel.
David Schweig, president of Sunnyland Furniture in Dallas, said his season has been marked by more interest, somewhat restrained from where it was several years ago, but still active. Schweig compared it to the sales of luxury cars.
"Two, three years ago, it was booming and we were selling a lot of ‘BMW 7s'," said Schweig. "Now, we are selling ‘BMW 5s'. They still want better goods but they are not going all out in your face in the high-end, better goods."
Schweig said he regularly appears on the Good Morning Texas show and this spring, he did one segment on the hottest products Made in the USA. He said the response was immediate.
"I really do think it is a ‘feel-good' kind of thing when they see it," said Schweig. "It's one of the things in your tool belt. You try not to knock imports because we have imports, but it is an added benefit when you show your product."
Jim Schultz, president and co-owner of Patios Plus in Rancho Mirage, Calif., said he carries several products that are Made in the USA.
"I don't know if customers ask about that as much as we tell them, sometimes," said Schultz. "It's just another item where we can enhance the value of what they are buying. That's the whole point of a specialty retailer: We're enhancing the value where they can custom design their furniture as far as fabrics and colors and finishes. You can't do that at Costco."
Doug Wheat, owner of Hauser's Patio in San Diego, said that value enhancement is also key to his business.
He said his store used the Fourth of July holiday to first label everything that was made in America, then offered additional discounts on it.
"There are hiccups with companies from China and their all-year warehouse docking program. In eight to 10 weeks you can get delivery, but no wants to wait for two or three months," said Wheat. "People are very seasonal in their thinking - you got, with the younger generation especially, the idea of instant gratification."
Susan Granholm, who works in sales in the Woodberry, Minn. showroom of HOM Furniture, said that her customers don't start out looking for U.S.-made goods, but they usually end up with them.
"The main thing now is quality," said Granholm. "They are tired of the bigbox quality and they want something that they can custom-match to their house, something that not everybody else has."
Granholm said she often finds herself explaining the difference in quality to something a customer might see at Home Depot.
"If you buy domestically you can buy some of it down the road. Like next year, you can add a chaise and accessory pieces," said Granholm. "If you buy imports, you have to buy everything you see because next year, they might not have it."
Greg Martin, co-owner of the Kolo Collection in Atlanta, said that customers have become more decisive about what they want.
Martin said he senses upper middle-income customers won't be back until the economy is. He said that most don't want to resort to furniture from a big-box store but aren't ready yet to turn loose and make an investment.
"A lot of our customers come in and say they are used to buying quality," said Martin. "Why they come here for a higher price tag is that they are going to get something that has a good life, a good warranty to back it up and if something goes wrong, we're going to take care of it."
Hauser’s Patio in San Diego added labels to every product in the store that was Made in the USA to capitalize on the Fourth of July holiday.
Consumers are looking for quality, so retailers like Hauser’s focus on value enhancement.