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Home Furnishing Matters

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David Kain

Car dealers ‘drive’ sales; you can, too

For any home furnishings retailer, no matter how big or small, you need look no further than your local car dealer to find out how to drive your business (pun intended).

The automotive world has seen its share of challenges. Consolidation and new ways to buy started emerging in a big way around 2000. Large dealership chains like Autonation rose to prominence as they began to gobble up car dealers across the country and grow into a behemoth. At the same time, CarMax changed the buying landscape as prices were set, no haggling needed, and trade-ins were a breeze.

While these changes were underway, the economy tanked. Dealerships closed, some car manufacturers needed government bailouts, while their companies were pared down. If that wasn’t enough, along came online car shopping to disrupt car buying even more.

Sound familiar? We could be describing the home furnishings industry. Consolidation, store closings, hard economic hits and the disruption from online buying are all threats to furniture retailers.

Auto sales have changed

It makes sense to look to an industry that has been ahead of us in these challenges to see what we can glean from it. David Kain, of Kain Automotive (photo above), grew up in the car business. He later launched Ford Direct.com, which is a lead generator for Ford and Lincoln, and David is now an industry analyst. Kain says currently 95 percent of car-buying transactions start with online shopping and end up in a dealership. There are some dealers who boast of selling to one out of every four online shoppers who come in the door. What furniture retailer wouldn’t want a 25 percent conversion rate?

How do they do it? Diligence and creativity. Video “thank yous” are emailed or texted to the customer as a first personalized step from the salesperson. At Kain, they don’t use the term “follow up,” they just call it marketing. According to Kain, “We get marketing involved and stimulate price changes and incentives so that customer wants to come back.”

One car dealer in Indiana has trained its staff to shoot short smartphone videos of certain cars they know the customer who came in will like or was interested in. They send it. That personalization has translated into sales. Could you do that for customers who leave your store? I think so.

The 20 Podcast with David Kain, of Kain Automotive, and HFA’s Mark Schumacher

Get customers out of their PJ’s

The key cultural change a retailer needs, in Kain’s view, is to get your sales teams to embrace the digital customer, to meet them where they are. That is the only way, he says, “you can get them out of their pajamas, out of the house and into your store.”

My conversation with Kain went much deeper, so watch our video podcast, or listen to the podcast above, to gain more pertinent insights from a car guy who wants to help put you behind the wheel to steer more people into your store. Too many puns? Sorry! I’ll put the brakes on the puns, I promise.

Mark Schumacher is executive vice president for membership & marketing for the Home Furnishings Association and host of the video podcast The 20. Contact him at 916-757-1173 or mschumacher@myhfa.org. 

Furniture orders fall in February, survey finds

Above: Ken Smith, left, with furniture analyst Jerry Epperson at High Point Market April 8, 2019. Photo by RetailerNOW team.)

New orders for residential furniture fell 5 percent in February from the same month in 2018, according to a survey by High Point, N.C., accounting and consulting firm Smith Leonard.

“This decline reduced year-to-date new orders to an increase of 1 percent over the first two months of last year,” the Smith Leonard report released April 30 said. “Last year’s first two month orders were up 4 percent over the previous year. Approximately 56 percent of the participants reported a decline in orders for the first two months of 2019.

“Shipments fell 3 percent from February 2018 after a 14 percent increase last month. This decline reduced year-to-date shipments to a 5 percent increase. About one-half of the participants reported year-to-date increased shipments.”

Trends are still positive

Assurance Partner Ken Smith, CPA, added in the report’s “Thoughts” column: “Well, the recent conversations of slower business finally showed up in our survey results for February. And in spite of a very good (April) market from a feel-good standpoint, orders have not picked up that much since market, according to informal talks with clients and others. In fact, a few mentioned words like very slow or worse.”

Other trends are positive, Smith noted, which makes it difficult to explain why the furniture business isn’t stronger.

“Consumer confidence remains at very good levels, according to the surveys,” he said. “And the stock market has continued to perform. Housing, though, continues to be held back some due to higher prices.

“So, overall, most people we talk to do not understand why the furniture business is not better than it is.

“We know that weather in many parts of the country has been pretty bad. That, along with all the negative news on TV, is keeping people from spending on furniture products, at least the larger-ticket items. Hopefully, as it appears spring has finally sprung in some parts, consumers will feel better about their spending.”

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