(Photo above: Michael Delgatti, Kevin Walker and Jeb Bassett III, left to right)
The future of furniture sales is brick-and-mortar, leading manufacturers told an industry conference June 17. But industry expectations are changing.
“If you’re doing the right things, brick and mortar is going to stay,” Michael Delgatti, president of Hooker Furniture Corp., told attendees at the American Home Furnishings Alliance Specialized Furniture Carriers Logistics Conference in Wilmington, N.C.
“You have to start with the web,” advised Jeb Bassett III, chief operations officer for Bassett Furniture. Online marketing engages customers and gives retailers the chance to tell their stories.
“Millennials, in addition to experience, they want authenticity,” Bassett said. “I don’t know if Made in America is the factor, but it’s a tie-breaker.” Bassett manufactures or assembles most of its furniture in Virginia and North Carolina.
Customers also are more likely to make buying decisions before they visit the store.
“In our retail, our traffic is down but our closing rates are up,” Bassett said.
Millennials are different
Lauri Cryan, CEO of Lea Unlimited, concurred that younger consumers are different.
“Millennials really want to save the world,” she said. “They want to know you’re doing your part. Those businesses that are successful online, they’re telling you what they’re giving back to the world.”
The in-store experience should reinforce the retailer’s social media strategy and omnichannel access, Delgatti said, citing the recent trend of online sellers investing in physical stores as evidence that brick-and-mortar matters. Many customers want to touch the product before they buy.
Danny Capo of Top 100 retailer El Dorado Furniture, speaking June 18, said that’s his own preference.
“To me, I wouldn’t buy furniture online until I sit on it, feel it, touch it, and I don’t think that’s going away,” he said.
“There’s a huge advantage to brick-and-mortar,” Kevin Walker, president of Accentrics Home, said. But taking advantage of it requires drawing customers into the store and, once they’re there, providing meaningful experiences.
Faster, faster, faster
A key concern, however, is getting furniture where it needs to go on time.
“In the end, it relates to cost and also speed,” Delgatti said, noting that Hooker’s import costs are 15 percent higher so far this year than last. “Speed is becoming such an issue,” with Amazon, Target and Wal-Mart offering next-day delivery. “We have to get faster. That’s one of our logistics challenges.”
For Hooker, getting faster means shorter manufacturing and delivery cycles. “Our goal is to get products to the retailers faster,” Delgatti said.
Bassett manufactures products in seven days or less, turns it over to carriers to deliver to retail customers and depends on them to get it into purchasers’ homes, Bassett said.
That “final mile” is tough, Cryan admitted. “We just can’t seem to get that part right.”
Bassett has major distribution centers on both coasts and in Texas. Keeping inventory closer to customers is a key strategy.
“I’m the inventory hog of my company,” Walker said, adding that “we’ve forward-positioned inventory.” Accentrics Home also is conducting a study of its warehouse strategy with a goal of making improvements.
“I’m just a small company,” Cryan said. “If I don’t have stock, I’m out of business. Nobody wants to wait anymore.”
Wanted: More truck drivers. A lot of them.
If it’s on land, most furniture moves by truck, and trucks need drivers. Currently, there aren’t enough drivers to meet the need. Hours-of-service restrictions compound that problem – in terms of speed of delivery and cost. For example, the company has to pay for an overnight stay if a driver has “run out of hours” he or she can drive in a day, Bassett said.
Richard Tucker, national sales manager for Shelba D. Johnson Trucking of Thomasville, N.C., and chairman of AHFA’s Specialized Furniture Carriers, put a number on the driver shortage: 540,000 – even though truck drivers earn more money than most college graduates, he said.
“Until we get word out to the next generation that this is a great job, we’re never going to get where we need to be,” he said.
That’s a tough assignment at a time when manufacturers, retailers and consumers are demanding more and faster.
“At some point, we’re going to need shipping seven days a week,” Walker said.
Doug Clark writes the Policy Matters blog for the Home Furnishings Association.