Overcome the obstacles to adding fixtures to your stores
Jenny Heinzen York -- Home Accents Today, 3/1/2013 2:00:00 AM
According to the 2012 home Accents Today Universe Study (published in December), lighting fixtures accounted for $3.7 billion in retail sales. It's a big number, and one that should catch the eye of the furniture stores and home accent stores in particular, because they are only accounting for 4% of that business.
Sales in this category face a disconnect - and present an opportunity - for purveyors of home furnishings. With lighting showrooms continuing to struggle, home improvement stores have taken over the category, accounting for 53% of the sales. But beyond the Lowe's and Home Depot product assortment, there's a huge range of beautifully designed fixtures that should be part of the merchandise mix at all furnishings stores.
Why to get into the category
"Look at the rugs paradigm," suggested Brownlee Currey, president of Currey & Company. "A lot of the furniture stores really have figured out the good that rugs can do for their dollars per square foot. This is another category that can be, I think, as meaningful as rugs. It is effectively square footage you have already paid for - you're just using what you've got a little more effectively."
Karen Fallon, VP of sales for AF Lighting, said she sees it all the time - retailers are afraid of the idea of fixtures.
This fear is causing retailers to leave dollars on the table, Fallon continued, and give them up to the up-and-coming online channels of distribution, in addition to the home improvement centers. "What has happened, as the lighting showrooms have shrunk in terms of distribution for the past six or seven years, the people who have gone full force on it are the internet merchants - the Amazons, the Gilts, the Wayfairs - all of those people are doing an extraordinary job at moving fixtures.
Lighting provides not only big dollars, but big margins, she said.
"Retailers need to understand that yes, it's going to increase the average ticket on your furniture in your showoom, but if you can train your sales team not to be afraid of this kind of product, it's a really good way to build up margin," Fallon said.
Currey agreed that the higher tickets fixtures carry provide a great opportunity, and consumers are not afraid of the price tags in lighting to the extent that they are in other categories.
"Consumer perception about fixtures is that they are very high value, so they tend to be a pretty high-margin transaction," he said. "And that should be the kind of stuff that typically motivates a good shopkeeper." He said that this perception is driven by the fact there are fewer retail options for buying fixtures, but perhaps more importantly, the thought that "I'm only going to do this once per house" encourages consumers to spend more on that item than on something that they will replace more often.
Fallon said the consumers aren't intimidated by buying fixtures themselves, so the furniture stores need to get over their own intimidation levels and claim a piece of the pie. "They need to have a clear understanding of what is happening with the fixture business and learn how they can go back after that business. If they have a customer that is buying a dining room, for example, they are going to buy a chandelier to go over it. But the salesperson forgets to ask the question, ‘What is the lighting like in your room?'"
The obstacles, and how to overcome them
"I think they are absolutely afraid," Fallon said, "For several reasons. They look at a fixture and they think, ‘oh my God, this is going to be hard to assemble and hard to install.' Well, the fact is our chandeliers, as well as most of our competitors - they are almost pre-assembled," she said. "Everything is shipped in one box, you pull out the chandelier and pop on the shades, then you wire it."
Snap-on A/C jacks are available for track lighting systems (which many retail stores use) to "solve the power conundrum, without having to add junction boxes," Currey said.
Chandeliers also can be difficult to sell if the only piece you have available is hanging up inside the store.
"Create a circumstance where in order to sell the piece, they don't have to take it off the ceiling," Currey suggested. "If you don't have access to stock or access to goods that can be ordered and shipped to your customer quickly, you've got to take the thing down. One piece of back stock will make it so much easier to sell that piece.
"That is probably the single biggest issue to deal with," he said, noting that the typical business model for accessories is to have everything on the floor and not in a back stock-room, but that model doesn't work when it comes to fixtures.
The inability to move a wired piece is also intimidating to stores.
"Another objection you hear is that the stores are often rearranged," Currey said. "I think that if the retailer is a little strategic, they can determine what spots will always be available for lighting fixtures," he said, adding that dining room vignettes are a natural starting spot for the designs.
"The retailer has hesitancy because fixtures aren't easily moved, and there are several things to that that are true - they are cumbersome, for the most part," Fallon said. "But they don't make a plan of how to sell it, especially when they are dealing with an exclusive type of style - not a Home Depot or Lowe's kind of look. When you look at us or our competitors at our price point, there's a sense of style there that needs to be sold. You can go to any furniture store that's been around for a while, and they all have the same look - they may have one chandelier over a dining room group."
It makes the store look outdated and out of touch with what today's consumer wants, she said.
"They haven't really quite figured out how to change that look," she said, adding that chandeliers and fixtures have much greater presence now in consumers' homes, everywhere from kitchens to bathrooms to foyers to children's rooms, in addition to the standard dining room set-ups. "The marketplace and the consumer, based on the design trends that they see, are driven that way. But where are they going to go? The lighting stores don't have full displays, and there are few furniture stores that seem to be doing this, so they go to the Internet. So what the retailer needs to do is to understand how to change that."
Fallon suggests sconces and mini chandeliers as options for stores looking to get into the category, because they are less formidable in terms of mounting and price point, so they are easier for these types of stores to sell.
"The advantage of a mini-chandelier for a furniture store - they come on a chain, they come plugged in, they come pre-assembled ... so once you pull it out of the box, you can hang it on a hook, and you can move that throughout your store, so if your vignette changes, you can move that," she said.
"For small stores, they will sometimes buy five or seven and have a few hung and a few underneath to sell. They are one of those things that will move if you know how to sell them, plus they are great for small spaces and for reaching a different age group," she said, noting that children's bedrooms are now a hot place for fixtures, and the small scale of the minis make them more friendly for apartment dwellers as well.
"Mini-chandeliers and pendants are the easiest entry into the category," Currey said, to give consumers a taste of what's available. "But in the long run, the big tickets are going to be written on a special order basis." But what's in your store doesn't have to be the big expensive pieces, he continued. As long as a store can show the quality of the finishes, materials and workmanship, he said, it can go from there with special orders.
To get started, Currey said all a store owner really needs is a decent ladder, a pair of pliers and a screwdriver, and he doesn't necessarily recommend a dedicated chandelier display. Fixtures can be merchandised into the store's regular displays and vignettes. "It provides an opportunity for a retailer do fully define the vision of their store," he said.
Fallon admits that a chandelier is likely to be a slower moving piece than a rug or an accessory, but good lighting also serves the purpose of making furniture look better, so the case goods and upholstery tend to sell better when they are displayed in vignettes that are beautifully lit.
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