Vendors reposition to cut costs, not design quality
Laurie Rudd -- Casual Living, 7/2/2011 4:28:40 AM
From its entrance into the casual marketplace, cast aluminum has been recognized as providing unsurpassed outdoor durability and unlimited design potential. Specialty retailers have regarded this category as the go-to place for high-end consumers. Yet, despite positive perception and successes being experienced, a reality exists for the segment today that includes mounting materials costs and related challenges that are similar to those being experienced in other categories.
"Outside factors, such as metal costs, fabric, transportation and exchange rates will affect us just as they will everyone else," said Jan Trinkley, executive vice president and director of sales and marketing, Gensun Casual. "The difficulty will be in continuing to provide a product value that the consumer sees as good."
In a recent Casual Living survey, one-third of casual retailers indicated they would be decreasing inventories of cast aluminum products primarily due to rising cost. Despite the possibility of cutbacks and the contributing challenges being faced, those within the category are energized and responding with cost-conscious efforts from design alternatives to re-vamped sales messages.
"Three Coins Castings has positioned itself during these current economic times by streamlining costs while improving quality," said Susanna Powell, principal, Three Coins Castings. "Fortunately, Three Coins was prepared by initiating fundamental quality controls throughout every area of our manufacturing process."
As cast aluminum manufacturers institute cost savings, each is quick to point out that any savings are not at the expense of quality.
"Cost cutting is difficult, as we don't want to compromise on quality," said Houri Bederian, marketing manager for Beka Casting. "In a lot of ways, we are not cutting back. Our cast and actual aluminum are not compromised, but we are making other changes in the number of paint color selections and adding more extrusions and tubular (aluminum) in connection with cast to provide variety."
Pride Family Brands views the cost-cutting process similarly. "We have controlled all the costs that we can control," said Rory Rehmert, vice president of sales and marketing. "Given the nature of materials today, we still are not willing to sacrifice quality."
"We have positioned ourselves a little differently," said Jon Bennett , president, Crimson Casual. "That difference being that we source 100% of our castings in the USA. We do not have to speculate cast orders in order to fill a container and chance potential dormant inventory if a casting is not well-received."
In challenging times, ownership or a close relationship with a foundry is seen as critical to address costs, timing and quality. On-site foundries are found at several major cast aluminum manufacturers while others rely on partnering with foundries that are responsive and meet the manufacturer's standards.
"The advantage (in owning a foundry) is that we can control quality," said Eric Simonson, president, Sundrella. "I know what raw materials are going in, as that is what I am purchasing."
Whether at a company-owned foundry or not, the cast category sees its ability to create designer furnishings that are responsive to style trends as a distinct advantage.
"Cast aluminum has benefits that other categories do not," Trinkley said. "One of which is that the product design and detail can be done to such an extent that the furniture value is increased and therefore carries a higher value, a very important factor in today's market."
Fresh design direction is being seen across the category as a useful tool when facing current challenges.
"This past economy has forced us all to be leaner and more efficient," Simonson said. "We'll carry that forward and we will be a better company for it. The economic times force us to be more efficient in the design process as well. We cannot afford to take months to design a product. We no longer can afford the time and cost to get to the final result."
Retooling designs to meet the price parameters being required by consumers is a tribute to the abilities of the artisans in the category.
"Challenges continue to come that compel us to introduce collections that are built for and have features that are tailored to the current economy," Rehmert said. His point is illustrated by Pride Family Brands' introduction in 2011 of multiple wrought aluminum designs with cast features that hit favorable price points. "Using more unique designs in casting, and combining those with extrusions, can result in a high-quality product produced cost-effectively," he said. "The challenge, however, is to be unique."
Designs that incorporate cast, wrought and extruded elements are being explored by several manufacturers.
Crimson Casual, primarily an extruded aluminum manufacturer, uses castings throughout its product lines but points to the use of other elements in expediting the production process.
"There are advantages in terms of how quick we can produce the raw frame," Bennett said. "Obviously the biggest challenge for cast product is the amount of capital it requires to develop and tool the part or product. It takes a lot of volume to recoup the initial tooling investment. Going from design to fi nal tooling is an anticipated risk and depends on how confident we are the finished product will be appealing to consumers and generate sales for our dealers."
While trends that incorporate extruded and wrought elements are gaining attention and providing cost savings, Beka Casting's Bederian also sees contemporary styling as holding the ability to deliver an attractive price point. "Modern designs that we are being asked to produce actually take less aluminum, less welding and less designing. All of this can help with cost," Bederian said.
As new designs are developed, a familiar challenge for the category is piracy protection.
"Unfortunately, design protection in cast aluminum continues to be problematic," Powell said. "We have had designs and even colors knocked off ." Through education, Three Coins works to teach customers what sets their products apart and enabling them to recognize copies.
Pride, which holds more than 50 design patents, also is committed to educating its retail partners about its focus on original designs and how it benefits all. "Attaining patents and enforcing them is costly," Rehmert said. "But, there is poor-quality cast out there and we want consumers to recognize imitations and focus on the overall quality. Our 2011 marketing message of ‘Attention to Detail' was developed to aid in this education process."
From melting and pouring to the mold for a detailed table, the casting process is illustrated in these photos from Pride Family Brands' foundry.
Marketing messages across the category are being used to educate and attract current and potential customers. "We found that educating consumers on the difference between the knock-down versions and solid cast has been critical to our success," Powell said. "Because of the durability and strength of our chairs, we have been able to expand into the contract, hospitality and medical/ nursing home areas."
The contract/design market as well as full-line furnishings retailers are areas in which many in the cast category are experiencing growth. Along with marketing messages, the addition of segment representation and permanent showrooms at markets geared to the specific categories are creating results.
For Crimson Casual, a current marketing message gaining attention in the challenging economy is one that references its domestic production. "Our products are built in the USA using USA-sourced raw materials, including castings," Bennett said. "We are as dedicated to supporting the U.S. economy as we are to building quality outdoor furniture."
The cast aluminum category is singularly focused on building quality outdoor furniture despite rising costs now and challenges to be faced in the future.
We would love your feedback!
No related articles for this topic.