Rooms with a view
Popularity of outdoor lifestyle keeps it growing
Cinde W Ingram -- Casual Living, 9/1/2012 2:00:00 AM
The growing importance of the outdoor room as a consumer lifestyle benefits both the homeowner and the casual furnishings industry, key industry players agree.
"The outdoor room and outdoor living are moving from trends to a way of life," said Walter R. Perkins III, CEO of The HammockSource. "We are seeing larger decks, bigger patios and remodeled homes that are being set up for the outdoor lifestyle. New homes are being built with all of the amenities of the indoors in the outdoor living spaces. The outdoors is becoming more than an extension of our home, but part of our home."
Jan Trinkley, VP, Gensun Casual Living, said the outdoor room "is one of the most considered rooms in renovating and building today. What I love most is that furniture sells on two fronts - a furniture product and an entertainment product. The casual furnishings industry continues to show beautiful designs in product, fabric and color. We have never had more to offer the consumer. The future looks very good."
Ajay Gupta, president of Housewarmings Outdoor, said customers are showing strong interest in outdoor rooms, outdoor kitchens, fire pits and pergolas when visiting his retail and manufacturing facilities in Lexington, Ky. "Customers enjoy sitting outside and relaxing," Gupta said. "Outdoor grilling is gaining even more popularity."
Peter Ryan, category manager for outdoor business at Wayfair, one of the nation's largest online retailers of home furnishings, was equally enthusiastic in describing consumers' response to the outdoor room. "At one point in time, outdoor kitchens and living rooms were depicted as the highest level of luxury and only a possibility in warmer climates," Ryan said. "Over the years, the rise of home makeover shows, affordable stylish outdoor furniture and people trying to make the most of their summers in four-season climates led to the outdoor room not only being an attainable feature in a home, but also a very popular one. Based on our breadth of products on Wayfair, we've seen firsthand the surge in interest in every part of the outdoor room."
HOM Furniture Merchandise Manager Kyle Johansen agreed. "The popularity is no doubt growing as consumers are becoming aware of the advancements that have been made over the past five years in the industry," he said. "I think it's been building in the southern regions and working its way up north to colder climate areas. I have family and friends who live in Florida and Arizona and they all have outdoor rooms, which are natural for that climate. However as colder climate regions like the Midwest and Northeast learn more about these rooms, those consumers are also desiring to have these great outdoor living spaces. Even though the season is shorter, people in the Midwest really want to take full advantage of the warm weather season and spend as much time outdoors as possible before hibernating in the winter."
David Barish, president and CEO, The Chair King, said growth of the outdoor room lifestyle depends on its definition. "If you're defining the outdoor living area as an extension of the inside home, yes I think the consumer is responding to that idea and absorbing it into their lifestyle," Barish said. "I think that popularity will continue. The outdoor living space will continue to be an extension of the indoor living space. At least in certain areas of the country, and in particular to where we are in Texas, people spend a lot of time outdoors. Many of the newer homes have very large windows opening onto the backyard so you can't have furniture in the backyard that is of lesser taste than what you have in the inside. There would be an incongruity that wouldn't work in someone's lifestyle or the look of the home."
"Without question it is becoming more popular," said Chris Carmicle, president of Brown Jordan. "Everyone's definition of what an outdoor room actually is may not be as clear cut as a theater room or kitchen for instance, but that is not such a bad thing in many ways. Varying opinions provide us all more tools with which to work."
Eric Parsons, president of Gloster Furniture and 2012 chairman of the International Casual Furnishings Association, said Gloster's deep seating sales volume reflects the growth of the outdoor room. "It is truly that extension of what they're used to indoors," he said. "As a general rule, folks are more active and are wanting to be outdoors. They're investing in their landscaping and in their entertaining, and with that comes a need for furniture that is a reflection of who they are and the way that they're living."
"At Lane Venture, we see the growth of the outdoor room as one of the driving forces of our business," said Gary McCray, president, Lane Venture. "We're seeing it manifested in larger tickets coming in from our dealers and more involvement by interior designers."
"I think we're still scratching the surface and the idea of an ‘outdoor room' has not been fully adopted by the bulk of Americans," said Ward Usmar, senior VP of sales, TUUCI, and incoming ICFA chairman. "There has undoubtedly been a larger focus on the outdoor room as is evidenced by the proliferation of publications dedicated to the outdoors, many of which are committed on the value of developing their outdoor space."
TENDING THE GROWTH
Consumers' desires to take it outside, combined with the ability of the casual furnishings industry to fuel this movement with products for increased comfort outside the traditional boundaries of the home, help this lifestyle to spread.
"As the features of an outdoor room continue to expand so will the tangible benefits," Brown Jordan's Carmicle predicted. "Whether it be entertaining, relaxing, cooking or even other uses we have not yet discovered, we believe the concept will maintain growth momentum.
"Awareness is increasing rapidly, which is a good thing for all of us," Carmicle said. "As consumers and buyers alike find new ideas for creating an outdoor room, our industry will grow."
When asked where he sees the outdoor living trend headed, Gupta said, "This segment will grow for us. As a manufacturer of outdoor rooms, our dealer base is growing. We are introducing several new design concepts at the Chicago market in September. Custom room sales are up!"
"Sales continue to climb and the overall trend that we are seeing is customers increasing the length of the outdoor room season by purchasing a broad range of products related to the space," Wayfair's Ryan said. "It starts with planters and garden décor in the spring, moves forward to grills, dining and seating sets in the summer, and then fire pits and patio heaters in the fall to extend and get the most out of their outdoor time as possible."
Consumers can rarely buy all components to furnish their outdoor rooms in a single season. "The outdoor room is a project customers do over a few seasons," Johansen said. A common plan may be: "Year one, patio set; year two, deep seating; year three, pergola. It just grows and grows over time. Not many customers want to or can afford to invest $20,000 in one season to do it all at once."
Gloster is among the vendors responding to consumers' demand for value at all price point levels and is seeing tremendous growth in fire elements sold in the marketplace, Parsons said. "We see many more participants in that segment of the market today than you did just two or three years ago," he said. "When there's fire there's deep seating, there's a more casual, relaxed environment that people want to live in - that's reflective of the deep seating that drives our business. One of the segments that continues to grow for us at a high rate is what we refer to as outdoor lounge, which is our outdoor upholstery. I think what's driving that is No. 1 that we use waterproof fabrics so the need for the consumer to take cushioning in and out - or the perceived need to do that - is lessened. It fits what we see as an increasing lifestyle of ‘use it when you want it and then you walk away from it when you don't need it.
" As for other lifestyle trends underway, Usmar said, "It seems like people are spending more time having friends over for meals rather than going out and will spend increased time in their outdoor spaces and around the pool."
Perkins noted a number of factors encourage people to spend more time outdoors. "We need fresh air, we enjoy the sights and sounds of the outdoors, and we feel better out in nature. The green movement and the health movement also push us outdoors. Our indoors became closer to the outdoors years ago with larger windows, open floor plans and spectacular views of the outdoors. We pay big money for homes that have a view of the ocean or rest on a mountainside overlooking a beautiful valley so why just look at the view? Get outdoors and be a part of it."
"Outdoor rooms are a natural progression from large windows," Perkins said. "We are cooking, eating and socializing outdoors. We are relaxing and entertaining outdoors. We want an outdoor room to do these activities in."
McCray expects the outdoor living trend to continue for the next few years. "The biggest factor in my opinion is that Americans have resigned themselves to staying in their current homes longer," he said. "With that has come more interest in investing in their existing homes, resulting in projects like outdoor rooms. Surveys have consistently rated outdoor rooms high on homeowners' shopping lists. Now, with the upgrades going on, they're becoming more of a reality."
CHANGING THE CASUAL INDUSTRY
"Nothing will stop the phenomenon of the outdoor room," Agio President Bob Gaylord said. "What I call the ‘modern age' of the casual furnishings industry started a little less than 30 years ago. Before that, only the top 1% of homeowners ever thought about their backyards, beyond a few folding chairs and an inflatable pool for the kids. The outdoor room bandwagon is no different than the laptop or iPhone lifestyle. Thirty years ago they were also a novelty, today a necessity. The outdoor room's future is the same thing. It is just a matter of priorities."
Barish also referred to the past when he said some casual furnishing manufacturers are missing the mark in terms of styling and materials use. His perspective as head of one of the nation's biggest specialty retailers was less rosy. "In general, I would say the casual industry is in flux and disarray," Barish said.
Carmicle described the industry as being in a state of transformation. "When I started in the industry there were three major channels of distribution. Today there are at least 16 and we expect that to continue to grow. Consumers have so many ways of being introduced to our industry today."
Usmar anticipates steady growth for the casual industry as the economy grows and as consumers place increasing value on spending time outside in a comfortable and stylish setting. "Given the soft economy the past couple seasons, I think that casual has fared extremely well and I anticipate growth in every sector this year and for the next few years," he said. "Residential real estate numbers are improving and it seems there is some pent up spending that is now flowing into the outdoor area."
While McCray described the current state of the casual furnishings industry as relatively healthy, he added the "biggest struggle continues to be getting the furniture that the industry offers in front of shoppers." McCray also noted the continuing trend toward blurred lines between homes' indoor and outdoor rooms. "Large retractable glass panel doors are getting more and more exposure in the high-end shelter magazines," he said. "The result is that consumers are looking for outdoor furniture that offers the same comfort and style as indoors.
"Restoration Hardware, Frontgate and a few others are doing a great job of marketing and making the consumers aware of today's new wave of outdoor furnishings," McCray said, "The challenge for the broader industry is to get the message out that there is much more variety and innovation available than is offered by national retailers. Our proposition has to be a high-quality offering that's not ‘one-size-fits-all.' And it has to be reflected in our showrooms, advertising and overall presence in the market both at retail and wholesale."
From Johansen's perspective, "The casual industry has been one of the shining stars in the overall furniture industry. Similar to the mattress business, I believe the growth was fueled by raising price points with improved products. Furniture retailers who have ignored the patio business are missing out as single store specialty retailers have struggled in the recession and left the door open to stronger, larger retailers carrying a wide variety of furniture. I have seen many furniture retailers enter this segment over the past few years that are big players, such as Art Van and Macy's. I personally have assisted eight furniture retailers to develop their patio furniture categories and seven out of eight have been pleased with the results. That is a pretty good ratio for a group of retailers spread out around the country."
Perkins said business is growing "in spite of the fact that we see the number of casual dealers shrinking. Some dealers and manufacturers are doing it right and they are thriving. We and they are differentiating ourselves. They are differentiating not only with service, selection and product but in other ways as well. These other ways are important. There is not a recipe for success.
"One retailer may be successful because of high traffic, another retailer may be so large and impressive that customers drive hours to shop there," Perkins said. "We as manufacturers can help the dealer to differentiate. We can offer the dealer high-quality, well-designed products for their stores. We can offer them well established and successful brands. We are seeing the power of brands at the specialty level. Brands differentiate the dealer from the big box and other powerhouses out there. There can only be one retailer that has the lowest price. The rest have to do something else."
Since Agio serves all distribution channels in the casual furnishings industry, Gaylord noted his answers may differ from vendors who serve only specialty dealers. From his wider perspective, "2012 sales appeared to be somewhat soft overall, especially on the coasts," Gaylord said. "The exception was Texas, some of the Gulf states and up through parts of the Farm Belt right into the Dakotas. A lot of this has to do with the economies of this region, with Texas and other big oil-and gas-producing states avoiding the brunt of the recession, and the fact that the Farm Belt rarely experiences either the highest of the high economic conditions or the lowest of the low. For the second year in a row, after a fairly good start to the season, things slowed down in the latter half of March and into April and May nationally and did not pick up again until the middle of June. The surprising thing is the fact that the weather was actually good in the late winter and spring, which usually makes for good sales. Many specialty dealers experienced a pickup in June and beyond, when a lot of mass retailers had finished their season, and that has allowed many accounts to hit their plan."
Barish described business as very strong at both The Chair King in Texas and Fortunoff Backyard Furniture stores in New York and New Jersey. "Texas is very fortunate in that our real estate never ballooned like many other parts of the country," he said. "So when pricing on real estate fell through the bottom, we showed a decrease in prices but not like the rest of the country. We went into a recession later and we came o ut earlier.
"The Northeast is also very strong. I don't know if the real estate market has bottomed yet in the Northeast," Barish said. "We find each market that we go into is a little different as well. What I'm learning is that you have to take each market and look at that market as an entity as its own."
Taking a national view, Gaylord said, "The casual furnishings industry has actually been fairly lucky since the start of the recession in the fact that the growth of the outdoor room concept has allowed our industry to have modest growth for much of the last five years, as opposed to indoor furniture retailing that has retracted measurably. Unfortunately, I think the lack of new home construction, and little movement in the existing real estate market, has finally caught up with us. If there is truth in the statement that new homeowners become serious about casual furniture about three years after buying a new home and furnishing the interior, then we have run out of years since the start of the recession either in 2007 or 2008. Besides an uptick in the economy, the biggest boost our industry can get will be movement in real estate and that may not happen before a lot of job growth and other sectors emerge."
"The good news is the fact that things are beginning to happen," Gaylord said. "Home contractors are selling new homes in many areas of the country right now as fast as they can build them. In some of the hardest-hit areas of the country, like Arizona and Florida, inventories are down to pre-recession levels and disappearing fast. Very soon there will not be enough new home starts to address the demand."
On the downside, Gaylord added home prices in some areas of the country are up significantly and foreclosures continue to dominate the news despite the movement of bankowned homes being snapped up by "flippers" within hours of going on the market, either to renovate and sell or rent until prices rise again.
As far as the current state of the industry, Parsons said, "We're certainly on an upswing. Most areas of the country are definitely growing but we still have some areas that are growing at a slower pace. There are still challenges, but the consumer is definitely loosening up on spending. At the same time, there is still a great deal of caution. Consequently what we and other manufacturers see are really peaks and valleys throughout the season as far as when orders are coming and when it gets a little tighter." Although the season opened early, driven by warm to moderate weather in most areas of the country, sales turned off at different times as mid-to-later-June arrived.
"Overall, Gloster saw very good retail growth - it was under 10% but over 5% so it was growth that we can count on, going forward," Parsons said. "We saw a lot of growth with retailers that are doing high-end, whether it's direct to the consumer or business that they are working with the design trade. Our design trade business certainly was way up over the prior year, and we've seen that growth for the past couple of years. Definitely you have a very affluent consumer out there. They've had money all along it's just that they've been cautious about spending it. For us, it's a combination: They are spending it again but we are more active in that channel than we have been ever in the past. We dedicated a sales manager to the design trade about four years ago and we've consistently seen our penetration in that market increase year over year. This year was a very strong year for us on the trade side. So it's a combination of that market segment opening up, but also us being a more active player in that game."
COMBINING IN-STORE AND ONLINE
Consumers are responding to good presentation both within stores and online, key players said. More efforts are being made to suit the needs and wants of younger consumers and city dwellers.
"We see more products for the outdoor room every year," Perkins said. "We have been cooking outside for years. Now we are entertaining and living outside. We want the comforts of the inside, outside. We want the décor from the inside, outside. We now see traditionally indoor products moving outside. There are outdoor rugs and outdoor curtains. The design trends on fabric continue to be amazing. We will continue to see traditionally indoor products being modified in materials and design for the outdoor room."
"Especially in urban spaces and smaller homes, the popularity is growing because it expands the livable space of your home and allows you to spend more time outside of the rooms you may be confined to in the winter," Ryan said. "With Wayfair, we see strong sales early in the week because people can have a grill and a dining set delivered to their home in time for the weekend, especially when the weather forecast is looking good. Spending time in your outdoor space is a change of pace from the norm."
Wayfair also recognizes a trend of people wanting to do more activities outside, Ryan said. "Related to outdoor cooking, we have seen a surge in popularity for items that allow people to do more than the standard grilling outdoor. Outdoor pizza ovens, turkey fryers and particularly smokers have had a huge surge in recent years and we see the trend continuing especially as we constantly add more options to Wayfair for ways to cook all your meals outside. Eventually we expect people to consider their outdoor space as their living and dining room for six months out of the year."
Add-on accessories sales help to boost the bottom line as well as provide convenience for consumers. "We have designed our own rugs and purchased containers of them direct in China that match up with the Sunbrella fabrics on our deep seating and dining products. This makes for great photography in advertisements," Johansen said "The fire tables have been a growing segment as well, customers love putting them with deep seating chat chairs. Two years ago we teamed up with Heikke Nelson from Designing Fire/ Oriflamme and we are doing very well with them. You only have to walk by the Treasure Garden showroom during market to know umbrella and shade products do very well everywhere. We have brought in a number of other accessory products such as wind chimes, outdoor art and seat pads. The only thing we avoid is small items such as place holders and stemware."
The outdoor display area is taking up more and more of the floor space of Gupta's Hearthwarmings store, where outdoor lighting, rugs and heating products are offered alongside fire pits, outdoor fireplaces, fountains, chimes, covers and serve ware. "Traditional designs are more popular here," Gupta said. "Contemporary designs are beginning to generate interest along with printed fabrics, fire pits and complete outdoor rooms. For consumers, this is the most exciting trend."
"We're seeing a large increase of customers in our stores who are already educated by having shopped on the Internet and knowing what they want when they come in," Barish said. "We try to use our website to educate our consumers with full shopping cart and ability to buy online." His salespeople have noticed a shift in tastes of younger shoppers, Barish added. "Younger generations are more in tune with not hard contemporary, but a soft modern."
Gaylord also noted the movement toward Soft Modern looks. "All manufacturers are seeing deep seating eat into their dining category," he said. "We are seeing some soft ness in traditional cast versus transitional sling, but we are not sure of the reason, and it depends on the retail segment. One possibility is a trend toward Soft Modern, and if this is the case, we have addressed the issue for 2013.
"Overall, we still see deep seating chat and gas fireplace chat growing the fastest," Gaylord said. "Dining is still strong for first-time buyers. Cushion dining is reemerging somewhat, but again it is primarily appealing to first-time buyers or aging Baby Boomers looking for extra comfort who don't understand the advantages of sling or cast with a pad."
Gensun Casual Living's core category, cast aluminum, continues to perform well, Tr inkley said. "We continued our excellent growth curve this past year that we have seen over the last eight years, averaging about 40% a year," he said. "We are starting to marry cast aluminum with outdoor wicker, wrought aluminum and extruded aluminum depending on the design direction. Design, quality and service are the key components in Gensun products and the reason sales through the dealer have succeeded. We will continue to proceed in manufacturing the best product in these key areas."
Trinkley agreed the deep seating market continues to fare very well, especially with motion function incorporated. "Swivel rocking lounge chairs sell extremely well and this year we have introduced them in a ‘high back' version within four of our top selling collections," he said.
"At Brown Jordan we have continued to see growth in aluminum, woven and teak which encompass all of our core categories," Carmicle said. "The mixing of materials and features continues to be warmly welcomed, as well as the intended end use of our products - outdoor and indoor.
"We have used licensing as a vehicle for diversification into categories outside of our core competencies," Carmicle added. "The Brown Jordan brand has huge consumer, trade and commercial demand, which we leverage with the right partners in certain categories."
The HammockSource continues to differentiate its branded products from the commodity products sold in the marketplace. "The comfort of the hammock is becoming even more luxurious with thick plush mattress-type beds," Perkins said. "We are creating more luxurious products and in more colors and design selections. We want to give the discerning shopper the choice in quality, fashion and function that they demand.
"We have been distributing very luxurious outdoor rugs and will continue to do so," he added. "Outdoor curtains are becoming very popular in designing the outdoor room and we offer them in both high-end Weathersmart and Sunbrella fabrics. We have broadened our line of outdoor pillows as well. Comfort and luxury are where we are headed with our products."
Usmar said, "As a brand, TUUCI continues to be on the cutting edge of shade innovation and we expect to maintain our sales growth pattern with our new product line and improvements to our current products."
"We as a society are moving toward lower maintenance products," Perkins said. "Longer lasting, low maintenance materials will be the trend moving forward. We will continue to see beautiful designs in these long lasting materials. Fabric design options have exploded and we will continue to see beautiful designs in this category."
Carmicle agreed. "Fabrics continue to become more durable and UV resistant while texture is far richer than in recent years," he said. "These continued improvements are bridging the gap between inside the home and outside more than any other changes in materials used within our product lines. Advancements in cushion technologies will continue to speed up as well."
Lane Venture's core wicker business continues to grow with the acceptance of its new collections. "Our ongoing focus on style, comfort and long-term quality are keys to our success there and our expansions in aluminum and upholstery," McCray said. "We continue to see fabric as one of the driving forces of our industry. More than anything else I believe unique uses of outdoor fabrics will be on the leading edge."
Usmar described the forecast for changing materials as the million dollar question. "It seems the comfort and style offered by synthetic woven furniture is still the flavor of the month, but I have seen some modern designs with mixed materials in the marketplace," he said.
Although historically a teak outdoor furniture company, Gloster expanded into stainless steel and woven materials 10 to 12 years ago. "Today our focus is not so much looking at ourselves as a teak company or as a woven company, it's really on Gloster as an outdoor furniture brand. It's about design," Parsons said. "A consumer doesn't typically walk into a retail store and say I want aluminum furniture or I want woven. They walk into a retail store and they're either a classic design enthusiast or looking for contemporary appeal or they're that young urban professional looking for something different and fun. So we're really changing how we're going to market from a branding strategy and it's solely about design. As we're designing to meet design interests of consumers, it's really hard to look at a product that you design and say it falls into a product category because we're using so many mixed materials. We divided up our focus now and we're classifying design styles as either classic, pure (which is more of a contemporary design appeal) or vibe, that's that young, fun, new affluence that we need to make sure that we're capturing. As an outdoor furniture brand, we want to make sure we're appealing to a breadth of design interests but also a breath of price point interests."
"Using the materials that achieve a beautiful design that sells is what's driving the casual furnishings industry," Trinkley said. "The consumer wants and is shopping/comparing for the best value. Over the last few years people have become more educated consumers. They want their hard-earned money to be spent wisely. They are shopping, comparing and finding the best product at the best price. We see this continuing."
Gaylord said, "Agio has sold more stone and alternative top tables than any manufacturer in the industry, but we see us designing with the use of porcelain a lot more than natural stone in the future. The design opportunities are endless, and porcelain doesn't have many of the negative problems of natural stone from staining to crumbling, etc."
"I think a lot of the gains are coming from the vast product developments in alternative tables which are far superior to glass and natural stone tables of the past," Johansen said. "The materials are becoming stronger, more durable, and weather resistant or weatherproof, creating a no-maintenance story the customer is buying into and upgrading to without hesitation. The same can be said about the fabrics. Glen Raven Sunbrella won the Casual Living award for best manufacturer for a reason - they have changed the casual industry forever with their outdoor performance fabrics. The customer loves the durability, soft ness, and color Sunbrella is producing and that builds the retail tickets by hundreds of dollars. On a more broad scope I have read many articles featuring consumer polls by Furniture/Today and Casual Living that prove the outdoor room or outdoor area is one of the consumers' top priorities to improve over the next few years. This is a great opportunity for those in the casual business."
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