The Evolution of the Educated Customer

October 2013

Some recently published research indicates that smartphone users keep their devices within arm’s reach 90 percent of the day. Can you imagine? So, it should be no surprise that smartphone use has invaded every aspect of our lives, from communications to entertainment to shopping. As a retailer, we are naturally concerned and intrigued about how smartphone use is translating into the practice of “showrooming.” This is when customers bring their devices into your retail store and use either search engines or price comparison apps to determine if they are getting the best price. They can scan bar codes or just type in SKU numbers to retrieve this pricing data and make their purchasing decision. The worst-case scenario is that they buy from a competitor online while in your store.

What we as retailers must understand is that showrooming and its variations are simply a natural evolution of the educated consumer. Customers have made price comparisons since the dawn of time, when entrepreneurial cavemen sold arrowheads in primitive stalls next to each other. It is the nature of what we do. Technology has made price-shopping more immediate, and some would see this as an affront, that customers dare to price-compare in our very own store, but in fact we should be glad they are even in our store to begin with.

So, other than making customers check their phones at the door (it’s been considered!), the savvy retailer has no choice but to turn this potential pitfall into a sales advantage. After all, consider some of these other statistics:

educated-customerThe Google study from April 2013 (“Mobile In-Store Research: How in-store shoppers are using mobile devices”) goes even further, stating that the 80 percent of shoppers using mobile devices in-store are shopping for an average of 15 minutes, and amazingly, 1 in 3 use their phones for help in-store instead of asking a sales associate. While they are in the store, they are less likely to use the store’s app. Instead of going directly to the store’s site or app, 82 percent of shoppers use search engines or some kind of price-comparing application for browsing product information.

Another important aspect to showrooming is its opposite action, “webrooming.” Webrooming is when customers research products online before going to a brick-and-mortar store for a final evaluation and purchase. It’s no more than browsing online to find a good deal locally. While 73 percent of shoppers have said they have engaged in showrooming in the past six months, even more shoppers (88 percent) have engaged in webrooming. Webrooming is actually an opportunity to provide information online, while showcasing the physical store experience as the educated consumer’s final destination.

It’s not as bad as it seems, actually, as research indicates that in-store smartphone users may actually buy more (up to 50 percent more, in fact) as long as the experience is consistent between the brick-and-mortar and mobile website platforms. Smartphone shoppers who have a good mobile experience can be 14 to 15 percent more likely to convert into in-store sales. The educated consumer is looking for the mobile experience to support the expectations they have while in the store. They are looking for an omni-channel experience, of which showrooming and webrooming are obvious manifestations. Omni-channel commerce is when we deliver a cohesive shopping experience that reinforces our brand and unique value proposition to the customer. These are the benchmarks of omni-channel commerce:

  • Marketing channels or silos are indistinguishable: Brick-and-mortar to catalog to web, all channels deliver the same content and same message.
  • Device Agnostic: Device and location simply do not matter to the user due to responsive design.
  • Allows the customer to pick back up where they left off, be it store to web (showrooming) or web to store (webrooming) or mobile to PC to iPad.

To complete our picture of omni-channel retailing, we need to understand two other dynamics:

  1. MORE (Multi-Directional Omni-Channel Retail Evolution) ​Certain retailers are now recognizing the advantages of a brick-and-mortar presence and are evolving into true omni-channel players, such as Sigma Beauty (store in Mall of America), Warby Parker (store in Manhattan) and US-Mattress.com (four stores and counting). If these savvy retailers see an advantage to brick-and-mortar and are embracing showrooming and webrooming, you already have an advantage simply by having a store.
  2. Responsive Design: According to Google, 2 out of 3 smartphone shoppers start at one device and continue onto another. Responsive design (RD) is important because it further breaks down barriers for the user, not between physical locations, but across devices. There are many challenges inherent to RD, since the objective is to keep the site proportional across all screens, but rapid leaps in programming are allowing even smaller scale operations to move towards RD with relative ease.

If the educated consumer is driving omni-channel retailing, our response needs to be one of aligning the customer experience across all channels. We need to remember that even though customers use more than one channel (web, catalog, mobile, store) to make a purchase, they themselves don’t see or consider channels. What they do consider is the best solution to their need, which is to get the best total experience for their money.

Here are a few concrete steps we can take to embrace new educated consumer dynamics:

  1. Mobile is an important tool for retailers to incrementally drive traditional in-store sales. You can do this with on-site coupons, special promotions or other discounts that appear only on your mobile site. But don’t be stingy—let customers know about different cross-channel promotions if they are shopping in your store. You’ll have a customer for life.
  2. Use Google Plus and Bing Local to your advantage. If your customer is searching for reviews about your business while in your store, make sure your presentation is perfect, with updated pictures, customer reviews, and yes, in-store coupons.
  3. Use paid search that is geo-targeted and device-specific. With Google Enhanced Campaigns, you can do this easily. Bid more for mobile devices in your local area (it won’t cost much more). Make your showroom floor device-friendly. You don’t hear too much about QR codes now, but they can be used on price tags to ALLOW for price comparisons when it makes sense. Or send customers to reviews on your site for that product.
  4. Offer a Wi-Fi hotspot in your store (obviously not your company Wi-Fi network) named after your store or business, so it will register on their device.
  5. Have large-screen TVs tied to your app or website to distract in-store customers from device usage.
  6. Offer price matching where you can, but within reason. Offer other specials like financing or free expertise consultations to make up for those instances when you cannot price match.
  7. Create grouped products, such as a table and chair set, which can make price comparisons more difficult. It helps to add accessories or other items that you can cross-merchandise, which can make showrooming an impossible task.
  8. Stay locally relevant and make sure your customer notices. Display your local accomplishments, such as your BBB rating, your participation in local charities and your length of time in business. The purchasing decision is not always about price 100 percent of the time. Sometimes the “feel good” aspect of a purchase can be quite significant.
  9. Break down compartmental thinking in your organization. Sales should think of the customers’ needs and expectations, and not where the customer originated. Additionally, you must have the same high-quality customer service communicating across all channels. Consumers view all facets of your operation as one brand.
  10. In-store expertise is everything! Make sure your sales associates understand the competition across all channels. Further educate your sales staff to explain all the advantages of buying local, in-store, from you—it’s not just product expertise and the ability to show the product in-person, but also your ability to deliver and service the product if there is an issue.

Remember to keep some perspective during this turbulent time. Marketing channel silos have been disrupted across all industries and, according to Google, mobile use in stores is not category-specific. All retail verticals experience showrooming and webrooming as the natural evolution of the educated consumer. There is just as much opportunity to bring shoppers into your store through your online presence as there are challenges with in-store smartphone use. The savvy retailer will deliver a consistent value proposition across channels and across devices—wherever the customer chooses to engage us!

Richard Sexton is the founder and CEO of Carolina Rustica, a furniture and lighting store in Concord, North Carolina. To learn more about the company, visit www.carolinarustica.com

Embracing the Tech Age

October 2013

There is a vast sea of technology available to anyone and everyone. Out of that sea, there are some pieces that we, as retailers, can catch and use in our stores to help enhance sales. Some are currently must-haves, while others are the big catches and must be reeled in carefully. Did you catch all those fishing analogies? Did you re-read to find them all? Good! Let’s keep going.

By no means do I have a monopoly on the expertise of available technology, but trends have definitely emerged (and will continue to) as that technology becomes more readily available. If you’re doing these things already, great! You can now skim to the advanced section—but sorry, you don’t get to collect $200.

To some, this will seem very elementary in scope. But my aim is to make sure we cover the basics before the advanced. Walk before we can run, don’t bite off more than you can chew… I digress. Here we go!

Websites

A website is the digital front line of your store, and is a must-have if you have any hope to keep your business thriving in the next 20, 10, even 5 years! When the search engine of your choice (*cough*….Google) generates the “search engine results pages,” or SERPs, for your potential customer and you’re not on it, you can forget about being a contender for that purchase! A pair of eyes that doesn’t see you online will find another store that has a place for them to “digitally window shop.” You also want to make sure your website is mobile friendly. According to the Q1 report by Monetate, mobile and tablet traffic is up to 21 percent of overall web traffic, compared to 11 percent at the same time last year. That’s almost a 50 percent increase in just one year, and it’s expected to grow rapidly. According to Google’s Executive Chairman, Eric Schmidt, “If you don’t have a mobile strategy, you don’t have a future strategy.” #dang

Digital catalogs of available store merchandise are a great way to always keep your doors open. Customers can shop online and essentially close the deal for themselves before ever stepping foot into a store. This has been a great tool for us here at Pedigo Furniture. Since implementing accurate product catalogs and pricing on our website, we’ve noticed an overall trend of higher quality foot traffic into our store. Customers know what they want when they enter our store because they’ve already browsed our merchandise online. They can zero in on the product they have in mind and our skilled sales associates can upsell them by accessorizing the purchase. Boom! We added ecommerce to our website about a year ago because it’s important that our customers can shop however they want—an idea I outlined in the April 2013 edition of RetailerNOW.

If you’re going to have a website, make sure you’re tracking your efforts and your customers’ digital breadcrumbs. You can use Google’s free analytics tool to track how, and from where, your web traffic is landing on your site, whether organic or paid. Use that information to build a comprehensively tailored strategy to target the audience you currently have, as well as the audience you wish you had!

Be Sociable

Social media is also a must at this point in the game. Your customers are there already, and you should be also! Social media strategies will look different for each store depending on where your customers hangout online; however, you should always be engaging with your customer community and offering calls to action to drive sales. Bottom line.

Facebook has been a powerhouse of social engagement for years and offers great ways to engage and promote your social content and experience. However, it can no longer be your only outlet for social media.

Pinterest is a huge traffic driver to websites that can be harnessed as a powerful tool to help close a sale. Users know when they click on a pin, they’ll be directed to the landing page for that subject. Whether they realize it or not, when they click on your retail store’s pin, they get caught by your covert call-to-action, which should be, “Hey, look at this! Click this! Buy this!” Couple this with an overt call-to-action on your landing page, and you have a great start to social strategy that drives potential customers through your sales funnel.

Google+ has made quite a splash in the social media realm since its launch in 2011. According to a study by GlobalWebIndex, Google+ boasts a staggering 343 million users, which doesn’t quite topple Facebook’s 700 million active users… yet! Using G+ will also give you a little SEO boost since Google directly indexes its own site—very nice!

Test these strategies and the ones outlined on page 32 to see which social media sites are the best avenues for your demographics, as well as for the markets you’d like to acquire. Determining which users are on each respective site (Facebook, Twitter, LinkedIn, Google+, YouTube, etc.) and adjusting the strategies within those outlets will be the key to effective social media. Coupled with a well designed, user friendly website, you should have the basic foundation of great information to help your team close more sales.

Now that the groundwork is laid, we can dive into some innovative items. 

Mobile POS

Although they have been used for some time now, mobile POS capabilities give your sales associates the freedom to close a sale anywhere in the store. I’m going to throw out some product names, but I’m not personally saying they’re the best (*cough*…Apple), just popular and easy to use. When shopping at Del Sol Furniture in Phoenix, Ariz., your sales associate will be equipped with an Android tablet to better serve you on the go. The same goes for iPads at Houston’s Gallery Furniture. With both of these, the entire sales process can be completed while standing next to the customer. The salesperson no longer has to leave the customer to get information from a stationary desktop POS (that’s Point of Sale…not the other acronym). Depending on the size of your sales floor, you’ll need a robust wireless connection to handle the bandwidth of those mobile devices, especially if you’re offering a guest Wi-Fi connection to customers.

Another piece of hardware making its way into stores is the shopping kiosk. You’ve probably seen them at department stores like Kohl’s and Macy’s, and they offer an interesting way for the store to sell to potential customers. Ever walked onto a sales floor and had a not-so-friendly sales associate borderline stalk you, asking questions you don’t want to answer, until you walk out of the store? No? Us either! (*wink*) The ecommerce kiosk allows the customer to shop anonymously like they can online, while having the product in front of them for sitting and feeling. You may think it sounds like a lot of trouble. It may be. However, for those customers who would buy from your store if they weren’t pressured by those commission-based sales associates, this is a perfect fix.

In-Store Tracking

By now, most of us are carrying one of those smartphone things everywhere we go, including retail stores. Companies like Nomi, LightHaus and Brickstream are capitalizing on it. These companies have all developed software that can track the movements of your customers on your sales floor using the Wi-Fi signals from their smartphones. Sound crazy? According to The New York Times, companies like Family Dollar, Cabela’s and Warby Parker, a specialty eyewear retailer, have been experimenting with this sort of software. It uses images captured from cameras to track the number of smartphone users that come into the store, as well as their movements, so retailers can identify hot spots and adjust displays accordingly. No witty joke here, just plain awe.

Email

Contrary to what some say, email is not dead! It’s a great tool that can help you communicate and engage customers who opt-in. It’s a fast and fairly inexpensive way to get a lot of information to a lot of people. Whether you’re sending sales coupons or DIY tips to your customers, with the right metrics, you can track overall efforts or compare individual campaigns. We use Constant Contact in our store because they offer some great templates, metrics and an easy-to-use interface. If you’re looking for a more robust set of tracking metrics, you might try the Act-On marketing automation and email services.

Website Features

There are several features you can incorporate into your website to help drive your potential customers to buy. If you offer financing to your customer base, you can try an online credit application process. By letting the customer apply for credit online, you give them the peace of mind that they don’t have to have all the cash up front before they come into the store. Pedigo’s offers a 100 percent online application as well as a download-ready PDF for our customers to print and complete. We want them to feel comfortable through the entire buying process, and a lot of the time, that starts with a credit approval process.

Renaissance Marketing has a credit approval process incorporated into the websites they build. The customer can fill out their information, submit their application and be instantly approved through a third-party finance company. That balance can then be applied to the shopping cart where the customer can spend it online immediately. Done and done! It doesn’t get any easier than that.

A Live Chat function added to your website allows potential customers to interact in real time with an in-store associate. Questions can be asked and answered before the customer ever comes into the store. As awesome and cutting-edge as some of the new automated processes can be, some customers prefer to talk to an actual person.

Seth Weisblatt from Sam’s Furniture & Appliances in Ft. Worth, Texas, says, “Customers love the convenience of chatting in real time with one of our associates to access a whole range of information. It’s another way we are working to replicate the in-store experience while our customers shop online—being there to answer their questions when they have them.”

We’ve come quite a long way from just using our electronic technology to play “Oregon Trail” on a floppy disk. There are a lot of great tools out there that can be very beneficial in helping us close the deal, if we would only take heed and ford that river. (Too much?) The technology we have available as retailers is constantly changing and evolving. New hardware and software being developed is the frontier that will directly impact the dollars in our stores and pockets. We must recognize where that’s going and be open to using what is currently available, as well as what is coming in the very near future.

Social Media Tactics to Increase Sales

October 2013

There is no doubt social media can make an impact for your store, but it takes a bit of practice and creativity to make a post go a long way. The biggest questions retailers ask are how social media is going to make me stand out among the crowd, and if tweeting, posting or pinning is going to gain me more sales for my business. As someone new to the home furnishings industry, my experience with getting people to talk about a product comes from interaction and thinking outside of the box.

A mentor of mine told me any job you take on is like trying to keep kittens in a box; sometimes the simple KISS (keep it simple, stupid) method is the way to go, and other times it’s about taking a bit of risk. Compared to other marketing platforms, social media is the best way to experiment and play with your audience. Start a conversation and see how it evolves. There are three rules I follow when using social media.

Rule #1:

Know your audience, know your product: I’ve worked with many arts organizations that, like retailers, are looking to drive people to their theatre as well as motivate an audience to tell their friends all about a production after they leave. It was especially challenging and interesting to work with an opera/ballet company; how do I get the Millennial generation excited about opera? Getting people to talk about an opera production took two things: Knowing the nuts and bolts of what I was marketing, and understanding my target audience. In order to sell a product to an audience, you need to know it backwards and forwards. From the touch of the material, to where it was made; every little bit of detail is going to bring you more content to talk about. At my company, I like to walk our in-house showroom and then meet as often as I can with my coworkers to learn about a product backwards and forwards.

Today, trends are the biggest way to start a conversation. A simple hashtag of #wool or #polyester will attract a variety of audiences—which leads to the next part of my first rule: Knowing who your audience is on your social media platforms. When I was promoting the opera productions, I was targeting people who enjoy opera, people who are on the fence and local news partners to help me spread the word about the performance weekends. Three different audiences, but all were targeted with the same goal in mind. Understand who is buying your furniture and why they should want to buy it for their apartment or home; know your competition and how your product stands out.

Rule #2:

Utilize your partners: Social media is not a one-man/woman show. It takes collaboration. Out there it is a dog-eat-dog world, but through social media, it doesn’t have to be. Reach out to the manufacturers of products you sell. First, see how they are utilizing social media to attract customers and then, see how you can team up to promote your store as well as their product at the same time. It then becomes a win-win situation on both sides of the table.

If you have licensed brand partners, the same rule applies. I enjoy speaking with the social media manager of Barclay Butera Lifestyle on a regular basis. We constantly bounce ideas off each other and come up with ways we can promote the Barclay Butera line. For example, I posted a whole nautical theme one #TrendingTuesday to showcase Barclay’s Oxford collection; Barclay Butera personally loves using classic stripes of blue and white to make things “a little happier.” You’ll be surprised on some of the material you come up with collaborating with people.

Rule #3:

Don’t be afraid to start the conversation: It’s the worst feeling in the world seeing bigger named brands have more followers than you do when they are putting out “simple” content, like a room scene here and there. Face it, their name and image is what got them this far. Social media to them is just about keeping up with the trends. Rather than get discouraged, take action and be heard. Coming up with original content can be daunting. Don’t think about coming up with something original every day. Post about things that are related to you and the industry you are a part of; engage with followers, post things happening in the news, show you are present. A way to work with your partners and start a conversation is through markets. Be present and open to meeting with others in person through social media. Be a part of what is going on and comment. A stagnant social media account is just wasting space.

Lastly, follow through with your audience.

It’s good to remain interactive with your followers on social media. I always say thank you to any new follower, or hello when I meet someone at a market. It adds a touch of warmth and personality. You don’t want to be a robot on social media. You have feelings too!

So how do you keep the kittens in the box? Well, you try your best that’s how. Social media may seem daunting, but it really isn’t. Know your product, develop an understanding of your audiences, collaborate and start talking.

Brooke Feldman is the Digital Marketing Coordinator for Nourison Industries. She recently completed a Masters degree from the School of Environmental and Public Affairs of Indiana University. She operates the blog ArtSeed (artseed.typepad.com) focusing on growing and grooming the next generation of arts appreciators. Follow her on Twitter @BEFeld13

Word of Mouth 2.0

October 2013

As much as I hate to say it, the furniture industry is known for loud, over-the-top, obnoxious advertising. Furniture retailers large and small have adopted the Monster Truck Rally-style ads screaming, “This weekend only! We’ve slashed prices below our cost! Don’t miss this once in a lifetime opportunity!” Then we hear the same ad, week in and week out.

OK, wait a minute here. This week only? I heard the same ad last week! And come on, selling below cost? That has to be the worst business strategy on the planet. People are smarter than that. There is no credibility in loud claims that defy logic. Over the years, I have seen a general distrust of any advertising claim made in the furniture industry because they are inundated with information that simply does not make sense. People are skeptical, and with reason.

So what does any of this have to do with word-of-mouth? The concept is nothing new. In fact, it has become a cliché. “There’s no better form of advertising than word-of-mouth.” We’ve all heard it. We’ve all said it. Word-of-mouth is about one thing: Trust. When someone you know and trust makes a recommendation of a business, there is an inherent credibility.

Just like any form of advertising, word-of-mouth needs a well-developed plan. One of the biggest misconceptions about WOM advertising is that it is free. While it may not have a dollar cost associated with it, there is plenty of sweat equity that goes into developing a campaign.

An effective WOM strategy begins with having a strong customer appeal. If a customer likes and trusts the people they deal with, they are more likely to spread the word. There are several ways to build trust and likeability, or conversely several ways to ensure a lack thereof. A fair price is typically one of the first things a customer will look for, and recommend based on. It’s not necessarily critical to have the absolute lowest price, but if a customer finds the same item for half price elsewhere, all credibility is instantly shot. The interaction with the salesperson is possibly equally important. High-pressure sales tactics and rude or apathetic employees are an immediate turn off to most customers. Finally, once the sale is complete, providing a high level of service is critical. With furniture, there are often several interactions after the initial sale. Customers’ expectations for deliveries and assemblies should be set. Deliveries should be timely, and if any issues like delivery delays or back orders occur, customers should be communicated with. Things can and will go wrong from time to time. If handled properly, customers will typically be very forgiving. Sometimes, this can even form a stronger bond with the customer if they see the issues being handled and resolved.

Adopting this “do the right thing” policy may seem obvious, but a business that truly implements these concepts will stand out from the competition. While this is critical to an effective WOM campaign, it is only the foundation. It may lead to the occasional referral, but truly developing a WOM campaign is about taking a satisfied customer and driving specific actions from them that will lead to measurable traffic and sales. Just like any other advertising campaign, it must be adhered to on a daily basis, and the number of impressions is directly proportionate to the campaign’s success.

Many years ago, I was taught to communicate with customers after a sale. A short but personal thank you note with a few business cards tucked inside would give the then satisfied customer a reminder to pass your information on to their friends and family. I’d love to say I have stacks of thank you cards sitting on my desk and that I make my daily run to the post office to send them out. I’d be lying if I did. In 2013, there are much better ways to drive the same behaviors, more effectively and consistently, and with less effort on the part of the business and the customer.

An effective WOM campaign will never reach its potential in today’s world without the use of social media. Modern technology has created an opportunity that has never before existed. Ten years ago, a typical person might communicate with a handful of people on a daily basis. Now, through Facebook, Twitter and other forms of social media, most of us communicate with literally hundreds, and sometimes thousands of people every single day!

Harnessing the power of social media is truly as simple as asking. Modern phones allow users to access their social media accounts any time, anywhere. Often, during a transaction, customers will ask for a discount or free delivery or assembly. This is a perfect opportunity to respond with something like, “If I was able to give you free delivery, would you be willing to like my Facebook page and post that you got a great deal here?” Even if they don’t ask for a discount, an offer of an upgrade or free sheets can work. Offering free low-cost products or low-cost upgrades can cost as little as $10 to $20, but can provide a personalized and trusted recommendation to hundreds of people, maybe more. Even a business that has as little as three or four customers a day can reach 1,000 new potential customers daily with a consistent effort towards this strategy.

A direct recommendation from a friend is obviously very powerful, however these recommendations are typically only sent out once per customer. Online reviews can carry almost as much weight as a recommendation from a trusted friend, as the reviewer is viewed as an impartial source. Although a review may not reach as many people immediately, they are permanent testimonials that can be seen by new potential customers for years. Review sites like Yelp! and Google Pages offer an opportunity for customers to independently review a business and even tell their story. More and more shoppers will look to these sites first when considering a purchase, and many will say that these review sites are the primary decision-making tool for major purchases.

In an industry like furniture, there is so much competition out there, and such an overwhelming amount of advertising, that it’s hard for customers to know where to turn. By implementing a consistent WOM strategy to be used in conjunction with traditional advertising methods, retailers of any size can add a measurable amount of additional business to their bottom line. In today’s market, any small advantage can mean the difference between success and failure. There is a huge opportunity to take advantage of, and businesses that proactively utilize the resources that are at our fingertips will learn to thrive in any economy. 

Gates Adams, owner of GAC Furniture in Orange County, Calif., opened his first small furniture shop in the Dallas, Texas, area in 1999. His focus in the furniture business has always been to operate as efficiently as possible, keeping costs very low, and always being in control of customer service and satisfaction. With the effectiveness of traditional print advertising waning, one of Gates’ primary focus over the last several years has been harnessing the power of the internet to generate free and low cost traffic to his business.

Technology-Assisted Sales

October 2013

In an era where technology is the name of the game yet face-to-face is still an important part of the business, is there a way both can live happily ever after? Technology has become so ingrained in our culture that customers expect retailers to be on top of everything—and technology is often the tool used. We asked two experts to weigh in on how they feel technology has helped furniture retailers manage their business and, more importantly, helped deliver outstanding customer service that can be realized in their bottom line.

Meet the Experts

Martin Fischbein, president of Furniture Wizard Software, provides software and technology solutions to furniture retailers, wholesalers and manufacturers. He has been involved in the retail furniture, television and appliance industry for more than 30 years.

Charley H. Darsey is president of George E. Darsey & Co., a furniture retail operation in Grapeland, Texas, celebrating 127 years in business this year. Darsey is the fourth generation to own and operate the business his great-grandfather opened. Fittingly, Darsey spoke to us using his iPad on the sales floor.

: How do you feel the best stores use technology (whether it’s an iPad, iPhones, etc.) to help in the overall customer experience? 

MF: Stores taking advantage of technology today are delivering a customer experience that’s unparalleled. The ability to have timely and relevant information at the sales associates’ fingertips adds to the efficiency of the furniture buying experience.

CD: I agree. We use technology in almost every aspect of our business. My salespeople have iPads that we furnish and we have an iPhone in our delivery truck that is connected to our blog. Customers love to see photos of homes on our blog with new furniture we’ve delivered that are taken by our delivery teams. On the sales floor, the iPads are used as a tool, not a crutch, for several reasons:

  1. The sales staff can easily look up all inventory stock.
  2. Sales can write up a temporary invoice and print to a wireless printer from the iPad so when the customer comes to the register to pay, all of the items are already on paper. When we are really busy, that is extremely useful. My best salespeople can keep selling and I have designated people to finish the paperwork and do the magic of collecting the money from the customer.
  3. From the iPad, we use our website to build a wish list on the sales floor for the customer when they need to “think about it.” We can send them a copy electronically and we include manufacturer model numbers because at that point, if the customer wants to shop, we are confident in our business to provide them the best product at the best price out there. Our website also includes the measurements of the item so a customer has that information to measure the space to be sure it will fit in their home.
  4. We stock around 120 different sofa sets, 30 different mattress sets and more than 35 bedroom sets, so we have a huge selection for a small town. We feed off other larger towns around us. I hope we don’t have to go to a catalog but when we do we keep them up-to-date on our Network Attached Storage (NAS) that we have connected to our iPads so we can all share those files whether it is a price sheet or a catalog.
  5. With the iPad, my salespeople can contact me directly if I am on vacation or on the sales floor with another customer and ask me any question they need to help that customer, without the customer knowing.

: What do you think retailers could do better in terms of technology and the customer experience?

CD: The furniture industry seems to be the slowest industry to move toward technology. Manufacturers that have the ability to purchase online sell more furniture (to me anyway). That does not mean you cannot sell a piece of furniture without the technology—technology just helps both the manufacturer and the retailer.

MF: Many furniture retailers we talk to are hesitant to take advantage of technology because they are under the impression that it will be too expensive. With hardware costs continuing to drop, the upfront costs of implementing technology have never been lower. If a retailer does not take the time to learn about, implement and embrace technology, they are giving their competitors a huge advantage.

: What are some easy, cost-effective ways retailers can incorporate technology into the buying experience?

CD: That’s the hard one. First, you have to appreciate technology before you can appreciate the cost and benefit. In 1994, my wife and I converted a 108-year-old family-owned business from the old huge posting machine and ledger to a computer system. In 2000, we purchased Furniture Wizard and QuickBooks and now we can say we have a great way to track our business, our customer purchases and how well a manufacturer or item sells. I can tell you exactly what our best selling day is and what the best selling hour of the week is and that’s very useful to any retailer.

: What do you feel customers appreciate the most when it comes to technology? Is it access to information, fast processing, the ability to make informed decisions or something else entirely?

MF: All of the above. Today’s younger consumers have grown up with search engines and Google. When sales associates have to abandon the customer to retrieve catalogs or call the warehouse to inquire about availability, your customers are not receiving the fast, efficient, informative experience they desire.

CD: I agree, but I also think it’s important not to let technology get in the way of talking to a customer and learning what the customer wants to buy from you. I felt so strongly about this that I took the iPads away from my salespeople for a while because I wanted them to listen to the customer. I think they like the fact that we use the latest innovation available to help them make informed decisions, but that does not replace the human factor. It has to be used as a tool, not a crutch.

: Do you feel incorporating technology helps a retailer’s bottom line, even though there may be a costly investment during the initial set-up process?

CD: Yes! Pick a program where the start up costs are not excessive and the learning curve is not that steep. At a minimum, it should offer inventory tracking, customer tracking so you can learn when you’re busy and can plan help to cover your busiest times, what sells the best and which manufacturer sells the best.

MF: The main benefit technology provides is quick access to timely information. Your inventory can work harder requiring less warehouse space, and then turn faster, generating more profit.

A final word from Darsey: “By the way, I am no expert. I just get to enjoy great customers.” Darsey may rely heavily on technology but he and Fischbein know that customer service is and always will be the best way to earn your customer’s business and loyalty. Technology is just one great way to provide exceptional customer service.

Megy Karydes is a freelance writer who is always on the hunt for great stories. Contact her at KarydesConsulting.com.

Swipe Fees and Your Business

October 2013

Flash back four years ago—the Credit Card Accountability Responsibility and Disclosure Act of 2009 was passed with the goal of amending the Truth in Lending Act and establishing fair and transparent credit card reform. Among other things, the Act called for a study on interchange or “swipe” fees—the money retailers pay each time consumers use a credit or debit card. A year later Congress passed the Dodd-Frank Consumer Protection and Wall Street Reform Act and the Durbin Amendment, which required the Federal Reserve to set regulations to reduce the debit swipe fees. Up until that point, the average fee per transaction was about 45 cents and industry estimates say the combined credit/debit swipe fees banks were raking in were triple the rates of the previous decade—a whopping $50 billion a year. Swipe fees can vary depending on the card and the retailer’s card volume. Regular, traditional cards have lower fees than premium and rewards cards. Fees are set by Visa and MasterCard and banks that issue those cards to consumers as either debit or credit cards agree to charge the same rates. Many in the retail industry have argued that this is a form of collusion to fix prices.

The Federal Reserve was directed to set rates that were “reasonable” and “proportional” to the banks’ cost for processing transactions. Initially the proposed cap was to be 12 cents, but the Fed was persuaded by information provided by the banking community to set the cap at 21 cents for debit card swipe fees. Swipe fees are in place to cover the transaction costs, the banks’ overhead and the risk of fraud. Interestingly enough, about 80 countries, including those in the European Union, not only have lower swipe rates (.3 percent for credit cards and a proposed .2 percent for debit cards), their cards also include chips, rather than our magnetic strips, that greatly reduce the risk of fraud.

Why it matters

Swipe fees have been cited as one of the fastest growing expenses for retailers, and the second highest operating cost behind labor. Retailers either have to absorb these costs (which, given the state of the economy and low margins, is nearly impossible to do) or pass the cost on to consumers by way of higher prices. It is estimated that the average household pays about $400 a year because of high swipe fees.

For most businesses it would be suicide to refuse to accept Visa or MasterCard cards—be they debit or credit—because the majority of consumers today use plastic for their purchases. Some smaller businesses, however, have found ways to evade the swipe fee system altogether by using mounted card readers or online services. Each of these options have their own fee structure and they all transfer money through the Automated Clearing House.

What’s happening now?

This summer, U.S. District Court Judge Richard Leon declared the Fed’s 21-cent cap too high and said it didn’t follow Congress’ directive as it was intended. Leon left the existing rates in place until the Fed could come up with a new plan and new lower rates. Leon had been pressing the Fed for quick action, stating he wanted revised regulations ready by the end of October. The Fed has decided to appeal his decision, and both the Fed and retailers have asked for the 21-cent cap to remain in place until the appeal process is complete. Retailers feel having the certainty of the 21-cent cap in the interim is better than creating the possibility that card issuers could try to charge whatever interchange fees they wish during the appeal process.

By the time this issue goes to press, we may have a better idea whether the Fed will be required to revise the regulations. Watch the website for more information.

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Lisa Casinger is NAHFA’s government relations liaison.

You can reach her at lcasinger@nahfa.org or (800) 422-3778.

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New Media Best Practices

October 2013

It seems that almost every generation has talked about the old-school against new-school mentality. We have all heard our grandparents and even our parents talk about what it was like when they were kids and how easy the generation before them had it.  Come on, we all know the famous saying, “When I was a kid I had to walk five miles uphill through five feet of snow to school.” I’m sure this next generation will say, “When I was a kid I had to wait for AOL to connect through dial up.”

What does this story tell you? It says a lot. It points out the differences in the current generations and the old-school vs. new-school marketing mentality. For the first time in our nation’s history, we are proactively advertising to five unique generations.  All of these generations shop and communicate differently.

We all understand how old-school marketing works and what it entails, however, we need to understand what new-school marketing is. It can be defined as “any vehicle where the consumer controls the end message to the marketer and where the feedback can mean money and interaction.”

What media does this entail?

  • Social Media (Facebook, Twitter, Pinterest, Instagram, Google Plus)
  • Review Websites (Yelp, Google Places, InsiderPages)
  • Consumer comments and reviews on websites

Start out today with your new-school marketing with the following helpful new media best practices:

Attract social leads with offers

  • A like, tweet or pin is not free—talking to them after is free

Use social media to engage with your email subscribers

  • The single greatest way you can get fan/follower growth: Your email signature. Add your website and social media links to the end of every email.

Ask your audience anything

  • Asking taps into the human nature of people who are online and participating in social media—the urge to be heard.

Like your customers on Facebook

  • Facebook and brands are less about advertising and much more about creating, nurturing and developing a more direct relationship between individuals and the brands that serve them.

Listen 100 percent of the time

  • Talk about yourself 10 percent of the time, engage with others about what matters to them 90 percent of the time and listen 100 percent of the time.

Share content that resonates with your audience

  • Everything should resonate and strike a chord, in one way or another (usually in a positive way), with your audience.

Remember, it is not just about driving your customers to your social media it is about establishing the interaction once you get them there.

Quick-Fire Marketing is brought to you by R&A Marketing. Armed with more than 25 years of furniture retail marketing experience as a full-service traditional and digital marketing company, R&A is the industry’s premier agency for retailers in the home furnishings and appliances/electronics industries. Visit us on the web at www.ramarketing.com or email us at info@ramarketing.com.

From the President, October 2013: Crystal Ball?

October 2013

Are there changes in our industry? You bet there are! Is this the end of bricks and mortar retail as we know it today? Absolutely not!

Today we not only need a great showroom with professional, well-trained staff and wonderful products to appeal to our clients but we also need to utilize the latest technology. This technology will help attract new clients, draw them into the showroom and inform them once they are there.

Tools like iPads, tablets and smart phones are being used more and more to help designers communicate with their clients. Information from product catalogues, price lists, SKU options, color options and inventory availability engages our customers in the design process while they are actually sitting in a room setting in our store or in their own homes for a house call.

We also need to have a comprehensive website that has helpful information, products, room settings, blogs, design tips, room planners and lots of inspiration. People want to immerse themselves in their project and have time to digest what they are looking at, and perhaps what else you offer, in the privacy of their home. If you have a wish list button, this also helps so they can collect their ideas and share them with you later.

A user-friendly website is essential in order to stay with the times. We need to make our websites virtual showrooms and a place where our customers can be educated. For the client that has already looked at everything and tested it in our showroom, the option to order online is key to closing the sale.  Customers today want the option of browsing and buying on their time, at their convenience.

Our industry needs to perfect the fulfillment side of e-commerce and have the logistics in place to work within specific trading areas. For those of us that do not have this figured out, we had better do it. Each year statistics tell us more and more people are purchasing online and unless we want to become a statistic, we must make this service available to our clients.

So what does the future retailer look like? The best furniture retailer will have a fabulous showroom, a unique customer experience, talented designers, the latest technology and a great online presence. Their website will inform, educate and have the ability to allow the customer to both plan and purchase in a user-friendly way. Personal service will be extremely important, just like it is today. Each of us must create our future and put all the elements together. How well we do that will determine our success.

If you have not already immersed yourself in this process … start now!

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Rick Howard

From the Editor, October 2013: Showroom of the Future

October 2013

Did anyone else here ever watch “Late Night with Conan O’Brien” on NBC? I loved that show. One of my favorite skits was when Conan and Andy Richter would dress up in futuristic outfits and predict how the world would be “in the year 2000.” Here’s one of my favorite musings from the show:

“In the year 2000, it will be revealed that the U.S. Supreme Court is just a regular court with sour cream and tomatoes.”

This may all be in jest, but it illustrates a very real thing all retailers need to do: Look towards the future. Shopper habits are changing by the day. We need to anticipate what’s coming next and be ready for it. If we resist current and emerging technology, we lose our place in the industry.

So what do we do? Read articles. Look at studies. Learn about the emerging tech generation and figure out how to satisfy them. This issue is packed with tips, tricks and advice to help you along your path. Whether it’s the basics of having an effective website or social media campaign, or more intense issues like combating showrooming or moving to a completely online store, we’ve got the knowledge you need to reach the next level.

In other news, if you’ve been watching our Facebook or Twitter feeds, you’ll know that we’re currently on a “where are we now” campaign. Here’s a great shot of RetailerNOW out on display at Sofas4Less in San Francisco →

Thanks for sharing, keep those pics coming!

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(224) 627-3288

jennifer@retailerNOWmag.com

@retailerNOW

Governor Brown, Jr. Signs SB 254 Into Law

October 2013

Sacramento, Calif.—SB 254 (Hancock/Correa), which has enjoyed bipartisan support throughout the legislative process, creates a practical and efficient used mattress recycling program that will have a dedicated funding mechanism, reduce the impact of illegally dumped mattresses, harness existing infrastructure for transporting used mattresses to recyclers, create jobs, and minimize costs to both government and consumers.

In his signing message, Governor Edmund G. Brown, Jr., stated, “I applaud the efforts of the authors in creating a program to lessen impacts to California landfills, reduce costs to local governments, and remove blight in rural and inner city neighborhoods.”

This new law is supported by a broad range of groups, including industry retailers, recyclers, cities and counties, local elected officials, and waste management organizations. Per the legislations, SB 254 creates a non-profit mattress recycling organization whose duty will be to plan, implement and administer a state system to collect discarded used mattresses, dismantle them and recycle their materials for use in new products. The program will be sustained by collecting a nominal fee at retail on the sale of new mattresses and box-springs.

International Sleep Products Association President Ryan Trainer stated, “this is a great day for our industry, the environment and California consumers. All stakeholders collaborated to help refine this legislation into a used mattress recycling policy that will provide a practical and innovative solution to a serious problem. This is an effective and efficient piece of public policy legislation and ISPA is proud to be a part of the solution in dealing with properly recycled used mattresses.”

SB 254 provides Californians with a comprehensive mattress recycling solution that is consumer-friendly, cost-effective and efficient. The program authorized by SB 254 is very similar to existing recycling systems in California and other states for other consumer products. California is the third state in the country to pass a used mattress recycling law this year.

Shelly Sullivan representing Californians for Mattress Recycling stated, “We would like to thank the authors, the co-sponsors and all stakeholders who participated in the process and remained so committed to SB 254. We know Californians take pride in their recycling practices. SB 254 simply gives Californians another avenue to broaden the scope of the state’s recycling portfolio.”

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Californians for Mattress Recycling is an ad hoc group representing stakeholders united in their support for efficient and practical mattress recycling.

For more information, contact Shelly Sullivan

(916) 858-8686