Canadian Editor Janet Holt-Johnstone looks at how retail giant Home Furniture boosts traffic with cross marketing and innovative advertising.
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Focused Advertising And Aggressive Expansion.
Innovative Retailing by Janet Holt-Johnstone
We’re all looking for the magic bullet, the secret of content. The way to our customers’/clients’ hearts and pocketbooks, the mechanism that binds them to us through loyalty and friendship. The Home corporate group struck gold when they adopted their now famous slogan. It embodies everything anyone ever needed to say about customer service in just five evocative words, “Help is close to home”. Reassuring, comforting, yet action oriented!
Since 1900, when Henry Gilles converted his Main Street blacksmith shop to a hardware store in Elmira, Ontario, “Home” has been approachable, warm, nurturing, even today with its huge annual purchasing power of $3.5 billion, and growing.
Bruce Hammer, Operations Manager, has been with Home for 21 years, and his is a voice with considerable authority and knowledge. “We now have 1,018 retail outlets in total, building centres, hardware and furniture stores. And there’s a new breed, the combination store. The concept is one-stop shopping, a diversification under one roof. We can sell you lumber to build your home, tools to use in the construction and home furnishings to fill it. It’s synergy, making the various divisions work together.
“Furniture stores need traffic and hardware stores have it. A win-win situation. And average sales in the hardware stores have gone up. We’ve discovered that women customers shop longer with this mix. It’s a tremendous cross-promotional opportunity. Consider ‘Buy a sofa, get your first gallon of paint free!’ And, of course, you can’t paint a room with just one gallon, so up go your paint sales.”
The seventeenth “combination store” opened its doors in mid-September in St. Thomas, Ontario, a stunning 60,000 square feet, 12,000 of that devoted to home furnishings. A city of about 34,000, St. Thomas is the seat of Elgin County and part of the greater London urban area. Brothers Frank and Harry Geerlinks are the proud dealer-owners. And two more combination entrepreneurs have just climbed on the Home bandwagon, Paul Schnittker of Almonte, Ontario and Jeremy Cox of Welland, Ontario.
There are 70 stand-alone stores, also adding numbers. Out west, Casual Elegance Home Furniture, Vernon, British Columbia, “a gorgeous store”, is owned by designers Tanis Lobe and June Prichard, and Tim Tanner, Timothy Fred’s Home Furniture, took a unique approach to the transformation of a mall. “Tim was previously manager of a Sears outlet store. He is using the entire mall, eight to 10 stores, and he’s retained their individual integrity, even to the box signs over the entrances where he’s installed interesting texts describing the history of the area in sepia tones. There’s a meandering common area and everything is unified by a warm, birch laminate flooring.” Bruce smiled, “Our Home store people are not cookie-cutters!”
In the Maritime provinces, Jacques Gallant converted his independently owned 20,000 square foot store to Home, and Richibucto, New Brunswick, has become a centre of attraction for consumers from miles around. And down the way in Grand Falls, New Brunswick, Cheryl Toner, featured on the cover of the corporate catalogue publication, “The Home of Great Interiors”, opened last May and is doing a land-office business. “Cheryl is in her late twenties and had been working for McCain’s (a prominent food processing and distribution corporation) as a marketing manager; she wanted her own business.”
The catalogue is also a “recruitment” vehicle. The inside back cover lists store locations across Canada and a sidebar says, “If you are interested in receiving more information about becoming a member of Home Furniture’s network of Dealer-Owners, please contact: Georgette Carrier, Dealer Development Manager.”
Georgette joined the team in spring, 2004, and Bruce told us with some pride that “she has handled 29 applications, and 23 new locations through six ownership changes”. She spent some years in corporate finance “looking after dealers in trouble”, and became Area Manager in Toronto, one of the toughest markets. Bruce hired her to take on the management of the corporate furniture store in St. Jacob’s, a few miles down the way from Elmira. After a year, she told him she wanted a change of pace, that she felt she was beginning to understand the furniture industry. She’s not looked back.
“We’ve added ten stores each year for three years. Just recently we hired a new Western Canada Dealer Development Facilitator, Jill Goetz, to service our existing western dealers and to help develop new business opportunities.” Jill is originally from Ontario but has lived in Calgary, Alberta, for a number of years, managing retail operations. “She’ll be our on-the-spot support to Georgette.”
Home knows where it needs more locations, “We already have target areas in mind. New dealers are coming to us constantly. They’ve been visiting our stores and are inspired to own their own. They are turnkey operations, we do everything from training to looking at properties for them, then negotiating leases. We send people in to merchandise the stores and to do training.
“Our discussions begin with the costs that are associated with the dealership, the number of dollars required to invest and ensure they are financially able. Then we talk generally about the industry, help them with a five-year forecast.
“Very important in the whole picture is working with our existing dealers, helping growth from within.” Amongst them are two stars, Grand Pappy’s Home Furniture in Chilliwack, British Columbia, and Kelly’s in Huntsville, Ontario. “Grand Pappy’s owners are Jim Grant and Brandy Schmidt, it’s a two generation store. And Ken Kelly was previously a Leon’s manager.”
That same inside back page of Home’s catalogue also provides “Home décor at the push of a button”. The reader is invited to surf their website at www.homefurniture.ca “for décor tips, columns, DIY projects, locations and more”.
Bruce said, “The website is an extension of everyone’s bricks and mortar. The consumer can save time and energy doing their investigative work at home. We don’t sell online, we want to drive the traffic into the stores. Ryan Van Stralen handles our website internally.
“Bev Bell is our long-standing interior design guru and she provides input for the website and for our consumer magazine, ‘Home at home’. Holly Levine is our editor and this summer’s issue introduced colour as its theme. Over $270 worth of rebates and free product offers are back page features. There are articles on accessories for the home and for the garden, outdoor kitchens, the practical aspects of how to build a cabinet, recipes, environmental issues and remedies and Mark Cullen’s popular column.”
“Home at home” is a valuable vehicle. Issued six times a year, the magazine supports all three divisions and is “yet another means of getting communications out”.
Dealer/owners tap into the 700,000 annual printing with lists of their credit card customers and additional people they feel will respond favourably to the publication; Home head office takes it from there.
Home’s partnership with Mark Cullen, Canada’s most popular garden expert in May 2005, was a real coup. Cullen is also a television personality and his name has a broad reach. He is “working with dealers to educate staff on merchandising, retailing and caring for live goods to ensure customers get expert advice and high-quality merchandise” and has developed “a line of premium lawn and garden products” exclusively for Home.
More cross-fertilization, obviously. Customers respond to Cullen’s advice, visit the stores and are exposed to Home’s other tantalizing offerings. “The partnership’s working very well indeed,” said Bruce.
“Branding is a key element. Consumers want to know their expectations will be met when they enter a store. For example, you want a cup of coffee and you consider Joe’s Coffee Bar down the street or the local Tim Horton’s. (Canada’s favourite national coffee shop!) With the latter you know what to expect. Mark Cullen is a fine gentleman and his association with Home adds another factor to our credibility and recognition. Our logos on store signs, our fleet of trucks, store clothing, stationery, signs, direct mail, magazines, everything plays its part.” The result? Home enjoys a brand recall of 82 percent, one of the strongest names in Canada today!
Marketing strategies devised at head office are pipelined across the country, ads, radio commercials, billboards, television. “We do TV regionally with groups of dealers that make the costs feasible. Seventeen stores in the Maritimes ran a campaign together last fall and now they’re sharing newspaper exposure. They can buy two or four page flyers at $45 a thousand for local distribution. Our central advertising department will create individual ads for them for a $40 fee, and we have an ad library dealers can tap into free.”
The demographic has changed over the years. Most customers fall into the 30 to 54 age bracket. “We’re targeting the younger crowd now, the 25 to 29 group in both product choice and advertising. A well educated sector, middle to upper income, and they lean towards clean, simple lines in furniture. Contemporary is now selling very well for us, powerful growth in this area.”
There’s great optimism about the future. Home acquired Beaver Lumber in August of 1999. “They had 120 stores at that time and a number of them were in conflict with our lines, so some were consolidated. Eighty locations gave us considerable volume and added expertise to our building division. It was a successful conclusion. If you don’t gobble up, you get gobbled!” Bruce smiled.
Upholstery suppliers Brentwood, Campio and Stylus are Canadian firms, “We feel we have a partnership with them. For casegoods, we shop the world, China, Vietnam, Thailand, Malaysia, Indonesia and, most recently, Brazil. Two contacts with whom we’re working propel our programme forward. We have a warehouse now in China and our average is more than a container a day coming out of Asia. We have to be where our competitors are. If you don’t compete your days will be numbered. The quality is getting better, prices are continuing to drop. Our manufacturers’ export market is down badly because of the high level of Canadian currency.
“How to continue to grow? The difference between you and the competition today is the service you provide. It’s so very important. The retailer must examine the shopping experience he/she is offering, and have on the floor the right atmosphere to fulfill the customers’ needs. The customer must feel satisfied, feel they’ve found what they wanted, obtained good value. And the follow-up service is vital. Decorating advice is part of the service, the entire package. That’s how you develop customer loyalty. People do shop around to make sure they’re not missing out, but people are also creatures of habit. They will come back to you over and over again if their level of expectation is being met. And we always send thank you cards with business cards attached to them after a purchase. The little things make the difference. We all want to feel good about the purchases we’ve made.
“Our future looks bright. I believe in the furniture industry. Our strategic plan for the corporation is a living document updated on a regular basis, constantly being revised to fit with the times.”
Aktrin Furniture Information Center’s Stefan Wille is as high on the future as Bruce Hammer. “The Canadian furniture market (at retail prices) has been plowing ahead without interruption since the third quarter of 2002. Growth stood at 6.2 percent in 2005. Indications are that growth will continue this year at a similar pace. For 2007, we predict a slowdown to a still respectable 4.4 percent. The size of the Canadian furniture market in 2005 stood at C$ 10.2 billion (evaluated at retail prices) and if our growth predictions are correct, the market valuation will reach C$ 10.8 billion this year.” Nothing to sneeze at.
Janet Holt-Johnstone is retail editor at Furniture World Magazine.
View all articles by Janet Holt-Johnstone