Retailer confronts the challenges of doing business in a global marketplace while being true to her local suppliers.
Canadian Scene by Janet Holt-Johnstone
Debbie Crepeau, proud owner of Royal Oak Home Furnishings, is one of Edmonton, Alberta’s up-and-coming young entrepreneurs. Based on both geography and extraordinary natural resources, Alberta is Canada’s richest province, and Edmonton a big city in the area with a population that hovers around one million. Called “the Gateway to the North”, Edmonton is easily accessible to the people of the “busy oil towns of Fort McMurray and Grande Prairie... and neither town has any place to shop! We’re well positioned on the north side of Edmonton. It works out nicely for everyone concerned.”
Her challenges are by no means confined to marketing in Canada’s great North. In 2005, Debbie’s strengths have extended to international vision, to competing in an ever-expanding, rapidly moving global marketplace. She’s found key answers, all addressing and emphasizing the age old, vital elements in home furnishings retailing of top quality product lines, superb service and building strong customer relationships.
Early last year, Debbie and her trusty right hand, Trudy Callaghan, of odvodmedia, a local firm that describes itself as “marketing outfitters”, conceptualized and produced an extraordinary newsletter that will continue to appear three times a year. Colourful and chatty, it packs a hefty educational wallop they’ve managed to make entirely palatable. In between well written supplier profiles, news items about local arts events, fashion oriented introductions, tips on care of fine wood furniture, interior decorating advice and fun promotions, there are editorials that address the top quality of Canadian made goods and their suitability to the northern climate. Also discussed are potential problems present in some lower cost off shore casegoods, such as hazardous adhesives and preservatives and lack of proper kiln drying. Debbie compares Alberta’s humidity levels with those of the Sahara Desert, an environment in which many imports easily “crack, warp or break”.
She assures her customers, “When you purchase furnishings for your home from Royal Oak, you know you are getting finely crafted furniture that is safely manufactured for our dry northern environment”.
Supplier profiles are enlightening, too. Candace Vogel of Vogel of Canada, a well regarded chair manufacturer, offers tips to help the consumer evaluate quality, and adds that not only do Canadian suppliers adhere to accepted standards, but offer more variety and options for customization as well as full warranties. Also on Debbie’s hit parade are Durham Furniture, Ferretti Interiors, Valco, Windsor Workshop and Le Meuble Villageois. In fact, it was Paul Veilleux, Senior Vice-President, who suggested we talk with Debbie. He feels she’s on the right track. It’s a case of mutual admiration. Say Debbie, “I love Villageois! I have their complete collection on my floor.”
Her latest addition is Allwood Solutions, custom builders. “They build with passion, very high quality, using only the best materials including glacial hardwoods from forests in cold regions. The frigid winter climate produces hardwoods with very tight growth rings, creating lumber with outstanding colour and fine texture.
“Also, we’re now dealing with Holly Woods, my hero! She was St. Albert’s Entrepreneur of the Year, a craftsperson who manufactures wonderful huge, heavy tables and takes a really serious interest in producing quality pieces.”
Debbie uses her computerized preferred customer list of 6,000 as a base for the newsletter’s distribution, then makes forays into new postal codes in the Edmonton community and at Fort McMurray and Grande Prairie. “We always make extra copies to place around the showroom, and hand them out at the big Home Show at the coliseum in the fair grounds every fall.”
Debbie talks at length about the proper care of fine furnishings in a “Did You Know?” column. Such factors as humidity, sun exposure and dusting and cleaning basics are thoroughly covered.
Her second great weapon? Formidable service. “When we deliver furniture to a customer’s home, we use our own skilled people and they set the furniture up wherever the customer wants it to be placed. The ‘Royal Treatment’!
“We encourage customers to bring in floor plans, paint chips, wallpaper samples, swatches of fabrics and leather and carpeting and become involved in the adventure of creating new looks or enhancing the ambience they’ve already created. Or we’ll happily visit them at home to discuss their décor opportunities first-hand.”
Another vital element in Royal Oak’s success is price. “Our prices are genuine, all the time. We have a price guarantee. If a customer finds the same product elsewhere at a cheaper price, we will refund the difference, plus 10 percent of the difference. We make a fair profit margin. You will never see a 70 percent or even a 30 percent discount at Royal Oak. We don’t inflate our prices.”
Royal Oak’s target demographic is across the board, all the way from “the early ‘20s to seniors. We have a following. Customers don’t shop around any more, they come straight to us. A lot of the younger people today are telling us they want to buy quality. They’re raising a family and they want to buy things that will last.
“We’re located in an area with a lot of other furniture stores, the St. Albert Trail. Here in Edmonton everyone calls it ‘The Furniture Trail’. A great advantage. There’s lots of parking space, too.
“We are selling to customers in British Columbia and Saskatchewan as well as Alberta. Many of our customers have family in those provinces. There is a real advantage to them when they buy in Alberta. They pay PST (provincial sales tax) in their own provinces, a tax that is not exacted in Alberta.”
We asked Debbie how her entrepreneurial adventures began. Royal Oak is her own brainchild but, back in the ‘60s, her mother established Pioneer Furniture Store. Her parents were pioneers in the true sense of that word. Of Ukrainian descent (the family name is Buryniuk), they moved from Saskatchewan to Alberta for the “better opportunities” they were convinced the province offered.
There was a name change to Oak Lane, somewhere along the way. Debbie joined the family team as a teenager, part time and after school, and she knew her future was destined to be in the home furnishings business. “Eighteen years ago, I decided I needed to be on my own and, with the help of my parents, I opened an all oak furniture store. I wanted to do things differently. Mother said we (Debbie, four brothers and a sister) should not work for someone else, we should work for ourselves.”
Why oak? “It’s a beautiful wood! Over the years I found that it was important to add maple, cherry and birch, more styles, more contemporary and transitional upholstery, all with more emphasis on furniture fashion. I don’t handle any appliances or electronics.”
The showroom measures “about 8,500 square feet, just under 10,000 in total area, with a separate warehouse facility about two blocks away. It’s an older building, constructed in the ‘60s, with sturdy cinder block walls and a humidifier built into the furnace. But with the cold (winter temperatures run as low or lower than 20 below Celsius) and the dryness of the atmosphere, we have additional humidifiers in the showroom from October throughout the winter”.
Television and radio advertising, Debbie and her colleague, Trudy, believe to be overly expensive. As well as their highly successful newsletter, they create regular flyers and distribute them widely, and utilize the Internet productively on an on-going basis. And their invitations and accompanying envelopes are top-of-the-line marketing tools, beautifully executed.
The invitations, of course, are used for promotions that are the talk of the town. And, in fact, many of them involve the business and arts community. Take, for instance, Debbie’s “Royal for a Day” events, “another of Trudy’s inspirations”. Staged two or three times a year, the lucky customer won, this fall, a day’s housecleaning service, a day spa package at Avanti Hair & Sanctuary Spa and a candlelight dinner for two at La Ronde, one of Edmonton’s fine restaurants. Very popular, she assures us!
“Edmonton is a strong arts community; there are a lot of art shows. We have featured the work of Brian Morison whose painting and prints hang in private collections across Canada. We invited people to ‘Come in to our store and check out his artwork’”.
Then there are the regular wine, cheese and truffles festivities. They are held once a year in the springtime and “by invitation only. We welcome approximately 1,500 people each night,” absolutely fantastic direct mail return figures! “The store is closed for the party, so if they don’t have an invitation we don’t let them in. We offer a discount on product and give customers a small gift, a beautiful little trivet for their table, ceramic handpainted tile with a wood frame, by a Calgary artist. If people know they are going to be out of town, they’ve asked if they might come later. We still will pass the savings on to these customers, but no wine and cheese!
“We stage only one really big sale a year, our garage sale, and we hold it in January. Everyone on our customer list receives postcards with notification of the dates. We tell them to bring their cards and pay no GST (Goods and Services Tax). And there is a coupon for the ‘Royal for a Day’ contest. Our goal is to remove floor models and accessories. We have an area at the back of the store, about 400 square feet and we cram it full of accessories. We give them away at ridiculous prices. These are the items we use to beautify the store, to create settings. I shop all over, at gift shows.”
For some time now, Debbie has been working with April Trapp, founder of her own company, Design Cents. April was responsible for the design and decorating of the Big Horn Meadows Resort in British Columbia and Royal Oak supplies the furnishings, the theme “Great Canadian Comfort”. And Debbie and April collaborate to offer Royal Oak customers free in-home consultations. Next year, there’s a hotel in view, and more condos. “She designs, we furnish,” says Debbie.
The Canadian Economy & Imports
Debbie’s urge to compete with off shore imports has been stimulated by a large increase in numbers, particularly from the east. Stefan Wille, President of Aktrin Furniture Information Centre, recently undertook an in depth study of trade between China and Canada, targeting the home furnishings industry. He discussed foreign exchange rates and made assumptions for the next three years that the value of one Canadian Dollar will remain at approximately the current level. The Chinese Yuan is tied to the US$ and it is widely believed that the Yuan is greatly undervalued. The Canadian residential furniture market was valued at C$5,674 million as of 2004. It had grown at a healthy average annual rate of 11.1 percent.
Because of the strengthening of the Canadian dollar since 2002, furniture exports did not perform well. But contrary to exports, imports advanced rapidly, reaching C$ 1,784 million in 2004. Most of the growth (74 percent) came from China and that country now claims a 12.9 percent market share of the entire Canadian household furniture consumption, compared with 6.4 percent in 2000.
However, Aktrin anticipates positive, “albeit modest”, annual export growth, averaging 4.2 percent between now and 2007. As to imports, continued growth is predicted, but slightly slower. “To a large extent, the imports have been pulled-in by Canadian furniture import distributors, retailers and even manufacturers and not pushed-out by Chinese exporters.”
The study suggests North Americans should entertain additional investment in state-of-the-art and labour saving machinery and equipment, as well as training and development of higher worker skills. Larger manufacturing companies will benefit from efficiencies that modern machines bring about, and they will also benefit from other inherent economies of scale.
Dave Hanna, Executive Vice President of the Ontario Furniture Manufacturers’ Association, reported an approach to the Canadian Government by the Canadian Council of Furniture Manufacturers, asking for “time to adjust” to the surge of imports by the imposition of safeguards in the form of customs tariffs or quotas for a three year period. He feels that suppliers’ chances of survival would be dramatically enhanced if all would implement the principles of superb service, quick delivery and mass customization. “If a customer wants glass instead of wood in the doors of an armoire, for example, they should be able to have it.” That’s speaking Debbie’s language!
There has been an enormous amount of coverage during the past six months in all media, one entire section in the respected, nationally distributed Globe & Mail. A prominent subhead asks, “How can Canadian business increase its presence in the world’s fastest-growing economy”? Answers include some of the strategies, to greater or lesser degree, employed by Debbie in her Edmonton enterprise. One writer suggests that our North American manufacturers target China’s rapidly growing middle-class who are expressing great interest in our lifestyle choices in fashion home furnishings and apparel. With appropriate study of their needs, maybe one day vast quantities of our casegoods, upholstery and accessories will be in demand in Beijing, Canton and Shanghai. Why not, indeed?
CANADEXPORT, the newsletter of International Trade Canada, headlined “The Future of Canada-China Trade Relations” and talked extensively about the visit of Chinese President Hu Jintao. “Seven new bilateral agreements were announced to enhance co-operation in the fields of transportation, railways, nuclear energy research and development, food safety, plant and animal health and reproductive health. These initiatives show a strong mutual commitment to realizing bilateral trade potential, and will go a long way towards realizing Canada’s stated objective of doubling the level of its economic exchanges with China by the year 2010.” The next step would be to include home furnishings industry manufacturers in the list.
Back in Edmonton, Debbie continues in her mission to communicate with her customers on the vital topic of quality and its benefits, offered with high levels of service and warm personal relationships. “I have a great team to work with. Jamie, Edxon, Janice, Robert, Rafael, Chris, Jill and Brian. Jamie, Edxon and Rafael are our delivery personnel, Janice, Jill and Brian are the sales professionals, Robert is our super efficient office manager and Chris is our very important service person. Couldn’t succeed without them!”
Wonder if I’m too late to catch the wine, cheese and truffle event? I have an invitation!