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Her Name is HENRY!

Furniture World Magazine
Volume 150 No. 6 November/December


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Arizona Leather

 


In 2021, retailers need to really lean in on their most valuable prospects, HENRY women!

 

The COVID-19 retail shutdowns earlier this year did incalculable damage to many sectors in retail. When the government determined which retailers could stay open for the duration—and which had to close—the scales of retail commerce were weighted to favor e-commerce. It's not news to any Furniture World reader that furniture and home furnishings stores were notably absent from the “essential” retailer lists, resulting in a large year-over-year sales decline in the sector.

That led to massive store closures of home retailers this year, according to UBS, which called out this sector as one of the hardest hit in retail. The UBS analysis identified 820 stores permanently shuttered through June, including 200 Art Van stores, 450 Pier 1, and 56 Sur La Table home furnishing stores. Bed Bath & Beyond just announced another 200 will be added to that list, as will the remaining ~500 Pier 1 stores after its bankruptcy filing.

After being closed—with people spending more time in their homes—a largely unexpected surge in orders for furniture resulted.

IBM’s Karl Haller, who leads its Consumer Center of Competency, an internal consultancy group made up of retail and CPG industry experts, was encouraged at the relatively quick recovery as consumers adopted new ways of shopping for home furnishings online via Wayfair, Amazon, Walmart, Target and others that were prepared.

Haller went on to explain that the retail trade data reported by the Census Bureau on home furnishings and furniture retail diverged from the personal consumption data from the Bureau of Economic Analysis. Specifically, personal consumption of home furnishings, which largely measures consumer demand, didn't drop, but sales of home goods through home furnishings and furniture stores did.

Longer Term Trends

“Traditional retail," he said, "in this and any other sector, has less and less value to consumers and less and less economic value if traditional retail is buying something for X and selling it for Y. The ability to generate sustained economic value doing that is declining, especially when dealing with discretionary purchases. You have to create demand. You have to provide more than a product and a place to buy it,” he said.

Corporate Darwinism

Don’t apologize for carrying product lines that cost more, but translate that extra cost into the extraordinary value she gets.

In the home furnishings retail sector, Haller foresees “accelerated corporate Darwinism,” or survival of the fittest. This assessment is backed up by the UBS store closure forecast, which expects 11,280 home furnishings stores to close by 2025, making this third in total number of closures after clothing and accessories stores (-23,940) and consumer electronics stores (-12,490).

He says that becoming one of the fittest and surviving will require retailers to find their essential value to the customer—and not just be a place to buy stuff.

“For three months we were told by the government what was essential retail and what wasn’t,” he explained. “Now the only person telling you if you are essential or non-essential is the customer. The challenge for every retailer within the ‘non-essential’ space is to go out and find your essential again. And it probably won’t be the same one that it was a year ago. This is the challenge facing every retailer that depends upon emotional, discretionary purchasing.”

Find Your Essential

To find your essential coming out of this devastating pandemic means more than just establishing safety protocols in the store or adding food and beverage services, like Ikea with its meatballs or RH with its upscale dining services. It requires that first you find your essential customers and discover what is essential to them.

Research finds that the prime demographic for home furnishings buyers is between the ages of 32-45, predominantly women with a household income of $100,000 or more. It's the demographic segment called HENRYs—millennial-generation High-Earners-Not-Rich-Yet.

These HENRY women are the powerhouse customers that many home furnishings retailers need to focus on. Women overall control or influence 85 percent of all household purchasing. In the furniture and home furnishings market that is a $190.1 billion opportunity.

The essential quality that a HENRY woman is looking for in every category she buys in is value. She wants to get the most for the money she spends. While she is not always looking for cheaper, she certainly doesn’t want to spend more just for the sake of spending more. So furnishings retailers need to understand the value proposition that underlies her spending.

That’s where the role of marketing and personal communications throughout the sales process comes in. For example, if you position your store as the “luxury” or “premium” alternative in your community, you are likely to be overlooked as a place for her to shop. That positioning communicates that she can expect to pay more for whatever she buys.

Curate for HENRY Women

It's far better to lean into your store’s role as a curator of all that is best for your customers. Don’t apologize for carrying product lines that cost more, but translate that extra cost into the extraordinary value she gets from the artistry, superior fabrication, materials and design that means outstanding quality.

The prime demographic for home furnishings buyers is between the ages of 32-45, predominantly women with a household income of $100,000 or more.

The HENRY woman is information hungry. If you don’t give her reasons why she should shop with you, then her shopping and purchase decision will inevitably revert to the common denominator of price.

On the floor, sales staff need to be experts in every product line that is offered and be able to answer why that line is worthy to be carried in your store, specifically what makes it so special that it earns a valuable place on the sales floor.

In my experience, furniture retailers tend to carry too much product, hoping that by having something for everyone, they won’t lose sales. But that is wrong thinking. By having too much stuff on the sales floor, she can’t find that special something she is looking for.

This is the “Paradox of Choice,” which has proven time and time again to be an inhibitor, rather than a facilitator, of sales. Giving shoppers too many items to choose from stalls decision making.

Right now, after this period of disruption, is a perfect time to edit the product choices on the sales floor. Invariably 80 percent of a store’s sales are made from 20 percent of the products it carries. Furniture retailers would be well served to edit the slow-moving 80 percent and give more selling space to the 20 percent of good movers. If in doubt, throw it out. That way, you can shine a spotlight on the best product lines and sell more of those.

And in thinking about curation, consider too the vital role of decorative accessories in bringing furniture groupings to life on the sales floor. Too many furniture stores keep moving around the same dusty vases, flower arrangements, tired pictures, and pillows. Decorators know that the careful use and selection of accessories can make or break a room. Furniture retailers need to pay as much attention to selecting and merchandising their accessories as they do their upholstery and case goods.

Communicate with Her

Today virtually every shopping experience has a digital element, with online used to find a place to shop, and to learn about brands and offerings, which can translate into sales made online without ever stepping into a store.

Furniture retailers have a built-in advantage against online competitive incursion, since online penetration of the home furnishings market remains low relative to other sectors. But that is rapidly changing as Wayfair, Amazon, and even Ikea make online furniture shopping a viable alternative.

“People are re-balancing their wants and needs, with a growing emphasis on health, wellness, and comfort in the home. And we are seeing fundamentally new shopping patterns emerge. Digital customer engagement is the norm now, and the traditional home furnishings retail segment has not been the most digitally savvy,” IBM’s Haller says, and adds, “Virtually every sale has digital engagement to it.”

 

And that digital component fundamentally changes the role of the store from a hub to collect and store goods for an eventual sale to a place to generate demand. The store then becomes a place for customer acquisition and engagement, whether or not the sale is generated there.

A furniture retailer's website, social media posts, email, and text communications need to be crafted to engage the young HENRY woman’s attention and, even more, to show that the time she will spend with you, either online or in the store, will be of value to her.

Avoid the use of hot words or color in pictures, screaming headlines, upbeat music, or other marketing cues that would have been appropriate in normal times.

All marketing communication needs to be designed from her point of view, not yours. In conceptualizing a new marketing communications piece, whether a social media post, an email, an ad, or any other, the first questions to ask are, “Why is this important for my target customer to know? What’s in it for them?” rather than thinking about what you want to tell or what’s in it for you. That will get you set for creating the most effective and engaging marketing message to attract the young HENRY woman.

Further, use soft words, pictures, and music that reassure the reader, communicating comfort, safety, and security. A recent study by Thomas Lacki, Ph.D., entitled “Changes in Consumers’ Personal Values during the Coronavirus Crisis,” found that consumers’ values have shifted markedly toward security, safety, caring, and dependability. This is not unexpected given people’s heightened anxiety and it has important implications for the most effective ways to communicate post-COVID.

For example, creating tension and a certain level of anxiety is a traditional trigger used in marketing communications that is relieved by purchasing the advertised product or brand. But in today’s world, marketers should avoid the use of hot words or color in pictures, screaming headlines, upbeat music, or other marketing cues that would have been appropriate in normal times.

Be the Home Store for Her

The number of women in the prime age range for home-related purchases, aged 25-to-44 years, will reach 50 million by 2025, making this the most populous female age group. That means, your best target customer by 2025 is aged 20 to 39 years old today. For an unknown number of furniture store owners, that would be the age of their grandchildren, a generation gap that may be too wide for some to bridge to effectively capture the home style and communication preference of the younger generation.

It’s time for furniture stores to bring in new young blood, preferably female, and entrust them with more responsibility in all areas of store operations, management, marketing, and merchandising. That isn’t to say but it is infinitely easier for someone who is part of this digitally-native generation and who has internalized its values, ideals and styles.


 

About Pam Danziger:

Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992 where she leads with research to provide brands with actionable insights into the minds of their most profitable customers.

 

She is also a founding partner in Retail Rescue, a firm that provides retailers with advice, mentoring and support in Marketing, Management, Merchandising, Operations, Service and Selling.

A prolific writer, she is the author of eight books including "Shops that POP! 7 Steps to Extraordinary Retail Success," written about and for independent retailers. She is a contributor to The Robin Report and Forbes.com. Pam is frequently called on to share new insights with audiences and business leaders all over the world. You can reach her at pam@unitymarketingonline.com.

 

About Pam Danziger: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992 where she leads with research to provide brands with actionable insights into the minds of their most profitable customers.

She is also a founding partner in Retail Rescue, a firm that provides retailers with advice, mentoring and support in Marketing, Management, Merchandising, Operations, Service and Selling.

A prolific writer, she is the author of eight books including Shops that POP! 7 Steps to Extraordinary Retail Success, written about and for independent retailers. She is a contributor to The Robin Report and Forbes.com. Pam is frequently called on to share new insights with audiences and business leaders all over the world. Contact her at pam@unitymarketingonline.com.

Read other articles by Pam Danziger