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Is Your Furniture Business Ready for Renewed Growth?

Furniture World Magazine
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Article Summary: Most retailers interviewed for this article believe business conditions have bottomed and modest growth is here or coming soon. Some are very enthusiastic. Included are their comments, plus tips on how to get your back-end operations in shape so you will be ready to grow as the economy strengthens.

View all articles by Dan Bolger


Retailers explain what they are doing to position their furniture operations to support increased sales.

Operations by Dan Bolger, P.E.


“Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with that plan.” Tom Landry

Information in this installment is based on recent interviews with furniture retailers that discuss how, at this point in the recession they are positioning their business for growth. These conversations indicate that most believe business conditions have bottomed and modest growth is here or coming soon. Some are very enthusiastic. Retailers’ candid observations of business conditions at the local level are consistent with comments Jerry Epperson, Managing Director of Mann, Armistead & Epperson, Ltd., made about national conditions at the most recent High Point show.

The consensus among survivors is that the reduction of the number of competing furniture stores in many markets has boosted the upside potential for remaining stores. Additional furniture and bedding offerings made by retailers like Kroger, Costco, Wal-Mart and Internet retailers, add another challenge for independent furniture retailers.

Regardless of where you are on the recovery curve, the Warehouse and Delivery Checkup list on page eight provides a self-help general guide to help you take the pulse of your strengths and to focus on opportunities. With that review completed, you will have identified categories where you can grasp the so-called “low hanging fruit” and then ask the next series of tougher questions. For instance, “What changes are needed to support 10% growth in sales in light of recent reductions in product cost and lower price points?” At that point, you probably will consider whether you have the time and internal expertise to achieve the desired end results.

Some of the items on the checklist are self-explanatory, so the rest of this article will comment on items that are especially relevant at the beginning of the growth cycle. Additional information can be found in previous articles posted to the Operations Management article archives on www.furninfo.com.

Getting your people to consistently do the right things to satisfy customers throughout the order process will result in attention to the details of procedures, training, measurement and analysis. The shop photos on the following page were taken in the same shop about a year apart. The before photo shows a disorganized, inefficient shop. The more recent candid photo is perfect. The difference came about through replacing the service tech with a better-organized employee. Recruiting, interviewing and hiring good back-end employees is the subject for another article, but I find that an unconventional quick test for hiring an organized person is to inquire if the candidate drove his or her own car to the interview. Assuming that the answer is yes, walk out to the car and look at the interior. The condition of the car will be a highly accurate indicator of how organized they will be once they start work.

Most employees really want to do a good job and will do so if you provide them with adequate training and a pleasant work environment. The best people will want to know about working conditions and can easily see them by looking at your rest rooms and break areas. They don’t have to be fancy but they should be well maintained and suitable for your family members to use.

To prepare for business growth, the best industry performers cross-train employees to do other assignments. Can your delivery helper move up to lead driver on peak days or move to the job permanently? Is there a team approach within the warehouse so critical functions are always accomplished?

If you use a contract warehouse and/or delivery service, it is essential to discuss your projected needs as you are partners in customer satisfaction. Many drivers have left the industry, and delivery capacity may become tight. Furniture price points have dropped for many retailers with a corresponding drop in sales per full truck delivered as well as handling costs for inbound freight, warehousing and space.

Whether you operate your own trucks or have dedicated outside delivery trucks, critically review them for appearance and reliability. Updating your truck graphics should be considered because the cost is modest in comparison to the advertising benefit’s you can accrue from fresh, clean rolling billboards. During tough times, many furniture retailers put off all but essential truck maintenance, but now, as conditions improve, it is time to consider the appearance of your trucks so that they project a reliable image that says that you are a company that will be around to serve customers’ future needs.
Following these recommendations will give you the opportunity to increase profitability, receive customer referrals, and gain market share from less well managed retailers.

What retailers say about current business...

No Pain, No Gain
“The customer wants and expects deals in order to buy. Our challenge is to stay promotional without giving away the farm. Although this has been painful it has made us better at business. As they say no pain no gain.”

- Kent Waldrop. Miller Waldrop Furniture, Hobbs NM

Americans Can’t Stand To Not Buy New Things For So Long!
“The past few months we've seen a pickup in both business & traffic & I feel this fall should be better than last. There are just so many customers that have been putting off buying and as we all know Americans can't stand to not to buy new things for long.”

-Randy Coconis, Coconis Furniture, Zanesville OH

I Think We Are In Recovery
“For us 2008 was very strong. 2009 is similar to 2007, we are doing fine. Housing was never stupendous, so now it’s not disastrous. New employers coming in with lots of jobs and significant capital investment. I think we are in recovery and expect it to be a long journey back to prosperity.

-Anonymous Retailer

As An Industry We Throw In A Plasma TV!
“There are home furnishings retailers advertising lifetime warranties on 1/2 price items that require no payments for years and will throw in a plasma TV! They do this instead of convincing people that their home is something to be proud of and that made in North Carolina instead of Asia is desirable.”

-Nils Gustavson, Colonial Heights Furniture, Lancaster OH 


It Is A Challenge To Get Customers To Pull The Trigger
“For next year we expect a very slow recovery or hopefully at least a leveling off. Our major challenge right now is customers pulling the trigger on their purchases.”

-Kenny Luthy 
Suburban Furniture - Succasunna, NJ 


We Tightened Our Belts
“We realized some slow times were upon us and as they say we buttoned down the hatches and tightened our belts to try to weather the storm-so far so good –but still not out of this economic storm in our area for quite awhile yet. For next year we expect more of the same, and really do not see the light until the inventory and sales in housing improves.”

-Dianne Ray – Garden City Furniture, Murrells Inlet (Myrtle Beach) SC

Offer Quality, Service & Price
“Any retailer that doesn’t think the consumer is trying to get the best of EVERYTHING (service, quality, and price), is fooling him or herself. It may be true that you cannot offer all three all the time, but if you offer enough of 2 of them, you can likely hook them.”

-Sarah Paxton - LaDIFFERENCE, Inc., Richmond VA


WAREHOUSE & DELIVERY CHECK-UP LIST

Instructions:

1. Employees from each department should rate each statement (A-M below) from 1 to 5 (5 meaning “we do an outstanding job”).

2. Tally the scores and candidly discuss the ratings. The goal is to reach concensus and specific goals. Use this information to establish improvement projects, assign responsibility and timetables.

3. The goal is for all ratings to approach 5 through continuous improvement.

_______ A. Warehouse & Delivery Procedures are documented.
_______ B. Our warehouse people understand and follow company procedures.
_______ C. Our inventory is accurate and we can find everything quickly.
_______ D. Our s hop has a very small backlog of repairs to be made.
_______ E. We do a fine job deluxing or prepping furniture before delivery.
_______ F. Our customer pickup facilities and processes are customer friendly.
_______ G. Delivery people and trucks are great advertisements for our store..
_______ H. Returns and exchange processes are timely, accurate and efficient.
_______ I. We measure the productivity and quality of our warehouse and delivery.
_______ J. Our warehouse meets our needs for space, handling methods and efficiency.
_______ K. We are proud of our employee break areas and bathrooms.
_______ L. Trash and corrugated handling/recycling is used optimally to improve the bottom line.
_______ M. Our facility and truck security is satisfactory at all times, even weekends.


Note: The one thing that would make the biggest difference would be to....

Prepared by: __________________________________ Date ___/___/___ Copyright 2009 The Bolger Group


Daniel Bolger P.E. provides operations consulting services to clients throughout North America. FURNITURE WORLD Magazine readers can contact him at bolger@furninfo.com  or phone him at 740-503-8875. For more information on transportation, logistics and furniture warehousing topics, go to FURNITURE WORLD’s website www.furninfo.com  to read all of Dan’s articles


Contributing editor Dan Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. See many other articles by Dan in the Operations Management article archives on the furninfo.com website. You can send inquiries on any aspect of transportation, warehousing or logistics issues to Dan Bolger care of Furniture World Magazine at dbolger@furninfo.com  or call him direct at  740-503-8875.

View all articles by Dan Bolger

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