A vision and compelling story can only take you so far. You must also create a process that can be used to translate your ideas into great buying decisions. Here's how.
In the competitive world of home furnishings marketing, organizing merchandising efforts around trends and colors will help you to optimize your buying resources. It will also help you to create powerful and compelling stories on the visual display and merchandising sides of your retail business.
Our goal at Norwalk is to provide on-trend, beautiful and productive fabric and product collections which allow designers and retailers to create inspiring yet functional environments for their customers’ homes. As a retailer, you should rise above the competition by also having a unique vision for your store that inspires customers to buy.
Great Vision Is Not Enough
A vision and a compelling story can only take you so far. You must also create a process that can be used to translate your ideas into buying decisions for the products you choose to display and sell. Robust financial analysis combined with a solid trend discernment process will allow you to do just that! With such a process in place you can engineer in risk so that you are confident, that when you come to Market, you will buy from lines that offer colorful and up to the minute choices; plus make room for the counter point - price sensitive, affordable, neutral options.
A Simple 3-Step Process
A “Good, Better, Best” strategy can help you to make room for depth and breadth in both your product and fabric choices, from basic to inventive.
Step #1: Create an original working hypothesis: This step incorporates who you are as a retailer, and how you want your customers to view your brand and the story that informs your brand.
It is important to do basic inventory planning based on sales data calculations of GMROI to get rid of slow moving items and identify best selling products and categories. But, this is not enough to effectively compete with the many high growth companies that are experts at telling powerful visual stories to create brand identities. Using the trend analysis process we call the “Magic Funnel” is an effective and organized way to find your competitive mojo.
Step #2: Use The Magic Funnel: Every six months organize a “magic funnel” to create a buying plan that will define the coming season. This process combines both art and science. The art portion is the trend, color and design work. The science part consists of data analysis, including sales and gross margin calculations, sales by SKU, sales by collection, and sales by square foot of floor space. The goal of this ongoing analysis is to arrive at the most powerful seasonal assortment of efficient and productive products. You can see which products, trends and colors are progressing or receding, trending up or down in sales. Gross margin contribution per square foot is the most critical measurement. How do you create layers of product that together sell the fastest with the highest margin? That is the goal!
Create a "good, better, best" assortment to make that happen. The GOOD allows you to have products that are compelling from a price position. The BETTER represents the bulk of what you sell and profit from. The BEST is a category that allows you to experiment with goods that are more expensive or adventurous from a design standpoint. By including adventurous products in your mix, you engineer in risk that helps your assortment stay fresh, interesting and relevant to your target customers.
At Norwalk, we review at least 3000 fabrics to get down to an edited number of 125. So, how do we possibly refine the number from 3,000 to 125? Since you probably face a similar challenge when shopping lines and collections, how can you use this process to make the best buying choices for your stores?
- Prior to shopping at furniture shows and meeting with talented resources, do your homework. Shop the retail capitals of the world, attend the leading trade shows, and subscribe to trend and color services. All this will give you visual cues that inform your working hypothesis.
- Review social media, shelter magazines, catalogs and movies. Look at what trending retailers are doing, and notice set designs on popular television programs. Listen for cues your customers are receiving about colors and themes.
- Combine all this imagery in a story board format, a “Magic Funnel” that will hopefully result in strong ideas to inform your product purchases.
- Meet with your teams in a consistent space, a "war room" or "play room" designated for assortment planning meetings. Hold quarterly assortment planning meetings, where the sales and productivity of each category and associated, coordinated floor vignettes are analyzed. It's good to make this room as visual as it can be. Display images of products, vignettes and display zones.
- The best assortments are realized when retailers bring their financial and creative teams together in a regular, organized process to plan seasonal buys. Have your buyers speak to your financial and creative teams about the sales and gross margin contributions of their respective categories. Identify the best performers and the worst. Make it your mantra to celebrate the best, adjust the middle and eliminate the worst. Also, it can be helpful to have an outside TREND advisor lead the creative team to help determine the next seasons trends by color and theme. Having your buyers present helps insure that the moods and styles of your selections remain consistent across product categories. Having the financial folks present helps give your creative people an appreciation for the success of a good better best assortment plan. When you hold these meetings monthly or quarterly, it creates excitement and anticipation, energizing the whole team. Each participant should be assigned a topic to present to build their analytic and presentation skills.
Step #3: Shop! One outcome of these meetings will be the development of a market shopping plan that identifies strengths you can continue to build on, weaknesses that need to be corrected, and products to replace.
To organize your shopping, each buying category should have an inspiration book filled with product images to find, colors/trends/textures to include, and target manufacturers to shop. The best shopping plans include a notebook listing SKUs to replace and suggestions for vignettes or displays to create. Fabric swatches, Pantone chips, materials, etc., will be useful as well. Breaking up the shopping by category; accessories, casegoods, upholstery, rugs, etc. This will help to focus your market shopping, be more efficient and result in a tighter assortment.
Once at market, look for the sweet spot where your working hypothesis (Step #1) and Magic Funnel work (Step #2) meet the work of the talented designers, manufacturers and thought leaders in our industry. When your vision merges with theirs, you will know that you have found the most marketable products, colors and trends that will work for your clients.
This process can be adapted for either retail or manufacturing businesses. For retail it becomes a central organizing principle to manage both “open to buys” and beautiful displays with confidence.
Trends For Summer Buying
So what’s up for spring and summer 2017 for our industry? Based on our research, we believe that there is both a trend and a counter trend retailers should look at… from ubiquitous neutrals to bold and bright layers of color.
1. There is a strong trend direction that will bring natural colors inspired by the Earth into the home. Giving these neutral hues an edge and energy, is the juxtaposition of charcoal and ebony. While still neutral, sand, vicuña and caramel colors lend a warmer tone, which allow them to pair perfectly with burnished brass and golden hues. With patterns that are decidedly tribal and ethnic in their inspiration, look for geometric Kuba patterns and mud cloths as well as raffia weaves and animal skin patterns.
2.Also on the natural side of the design, 100 percent linen and cotton patterns that feature a soft hand and color variations of wheat, sky, maize, blossom and pear in natural fibers will appeal to the environmentally yet aesthetically sensitive consumer.
3.The artisanal fabrics of the American southwest have long been popular in Arizona, New Mexico and Nevada. The inherent warmth of the rich mix of Indian, Mexican and European heritage that defines is being redefined into a far more sophisticated palette that will appeal to a wider range of customers.
4.Chinese Influenced design will re-emerge in a new form. First made popular in the 13th century with the import of Chinese ceramics into Europe, the color celadon, used as a pottery glaze has always connoted calm, tradition, sophistication and worldly elegance. Ranging from the softest grey-blue green hues to deep jade, celadon pairs beautifully with deep burnished gold tones and traditional wood finishes. And it offers another way to warm up omnipresent grey hued upholstery. Add a touch of raspberry to the mix and you have quite a punch.
5.The counter trend to the ubiquitous linen neutrals may take the form of vivid blues, greens, oranges, fuchsias and yellows married expertly together with rugs, sofas, pillows and chairs. Color is clearly a way to attract customer attention as a counterpoint to a sea of linens and greys in your stores, and those of your competitors.
About Caroline Hipple: Caroline Hipple is the President of Ohio-based Norwalk Furniture. She is an industry strategist, adventurous merchant, culture advocate and fearless problem solver.
Prior to her role as President of Norwalk Furniture, Caroline served as the Chief Energy Officer for HB2 Resources, a consulting resource for the home furnishings and retail industry. She also served as president and chief operating officer of the home furnishings retailer Storehouse. In the seven years that Hipple served as president, store sales increased from $89 million to $148 million. She also held a number of management positions with This End Up Furniture Co.
As one of the few women who has led a major home furnishings retail chain, she is known for combining solid business strategy and positive workplace culture with an innate sense of style and insight into consumer home decorating needs. Hipple has received numerous awards and is the author of "A Pathway to Profit", a book about how to set up a process to energize employees.
About Dixon Bartlett: Dixon Bartlett is the Chief Creative Officer of Norwalk Furniture, a furniture industry veteran who has held diverse management positions requiring innovation, initiative, creativity, team building, honest communications and unimpeachable ethics. Joining the newly formed This End Up Furniture Company as a delivery driver’s helper, he rose to vice president of new ventures. He was instrumental in the company’s phenomenal growth from a few stores to over 230 stores becoming the 19th largest furniture retailer in the country.
He took over the merchandising and marketing responsibilities for contemporary lifestyle retailer Storehouse in 2000, helping to create the aesthetic for the “soft modern” look that the whole furniture industry has emulated.
About Norwalk Furniture: Norwalk Furniture provides trend right custom upholstery to retailers and designers throughout the US. Known for its service and quality standards, it delivers exciting looks at affordable prices, all within 35 days. Norwalk can be seen at its showrooms in High Point and Las Vegas or online at norwalkfurniture.com.
Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada. In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact firstname.lastname@example.org.