Retail Rx: Who's surviving, and how?
Retail Update
Susan Dickenson, Retail Editor -- Home Accents Today, 2/1/2009
When one of my Google Alerts delivered a headline about Retail Health Clinics to my desktop the other day, I thought, "Oh, great — walk-in consulting clinics for failing retailers!"
Nope. Wrong kind of clinic. This was about a couple of companies that have come up with a business model for placing walk-in medical clinics inside retail chains. As appealing as the idea of a fast fix or easy prescription for sluggish retail sounds, it still doesn't exist.
It might help, though, to hear what some retailers are doing to stay healthy during this sickly economic downturn.
Looking back on the past few months, my notes and e-mails reveal the obvious: Everyone admits that operating a retail business right now is a challenge.
Of course, times are tough, and you don't need me to tell you that. But there are some home furnishings retailers, mostly independents, who are reporting that they're not just holding their own, their sales are actually (drumroll) up. A larger number acknowledge that business is bad, but they insist they will remain positive.
And then there are those who respond to the results of my at-market reports of "higher sales" and "positive outlooks" with comments like, "that Dickenson woman must be completely out of touch." Actually, it's more like, the buyers who are still going to the markets are the retailers who are still in business and are doing well enough to justify the cost of traveling.
Over the past several months, I've quizzed a lot of retailers and manufacturers on the state of their business, both at market and from my desk here in North Carolina, and will continue to do so. It's also the question we chose to launch Retailer Insight, appearing in this month's issue for the first time on page 61.
Most of what retailers are telling me doesn't surprise me. What does surprise me, though, is the consistency of their survival strategies: More advertising, more Internet, looking to vendors for deals on pricing and freight, trying new categories, redefining themselves, building customer loyalty, putting fresh merchandise out there.
They say their customers have become much more discretionary, think harder about their purchases, and are buying smaller ticket items. A Utah retailer in Atlanta told me that as a result, she was "buying more cautiously and not buying as deep ... inventory management is huge now. We're still making money, it's just not easy money."
For some furniture stores, inventory management means adding more accessories. "Maybe the consumer has the chair in her home, but we want to keep her coming back, looking for that one new piece," La-Z-Boy Retail Division Buyer Gail Michel told me. "If we also become known as an accessory destination we have a customer that's loyal to our brand."
John August Weiss, buying for Lillian August in Atlanta, said he was stocking more accessories. "People don't want to change out their whole home but are still looking to improve the look of their interior, so accessories have become very important ... designers need them to finish the rooms."
Prior to the holiday season, Richard Cable Interiors added more accents, decorations, jewelry, gift items, "something they can just walk out the door with," in its high foot-traffic shopping location in Huntsville, Ala. By the first week of November, they'd already sold half of their Christmas merchandise.
Some retailers say they're playing it safe — buying the same things, the "proven winners" but in smaller quantities, and that vendors are accommodating with lower minimums and freight options. "Everybody wants a sale. Vendors are giving show specials, incentives for the retailer to buy," a Savannah retailer told me.
A retailer from Key West said he was concentrating on lower-priced items but looking for the highest markup. "We recently placed a large order with a company we've loved forever because they capped the freight."
But many shops, especially those selling via catalogs and Internet, say it's still all about uniqueness. Ann Fox of Dallas-based Room Service Home, for example, has found success with a whole new category, women's home offices. Quite a few have told me that e-commerce only works if you're offering product the consumer can't get anywhere else and that, in their stores, "unique and different" is what gives the customers a reason to keep coming back.
They also talk about the effectiveness of combining low-end with high-end in product vignettes, how their design services are paying the bills, and how important it is right now to advertise — on billboards, in print, via e-mail and through participation (and publicizing that participation) in charitable events, design houses and fund-raisers.
They're also getting more creative and tech-savvy online, evidenced by things like the sleek viral video Pittsburgh's Weisshouse produced for its Web site, or the furniture store "comedians" fueling You Tube's video commercial wars.
Multichannel retailerBallard Designs has added a Style Studio to its Web site, with answers to Decorating Dilemmas, scouting journals and "how to buy" advice. Ballard has also given its catalog a new look beginning with a fresher, more design-oriented book in January, to be followed by the March/April catalog's unveiling of the merchandising team's partnership with Beverly Hills-based interior designer James Swan. In this collaboration, the first of its kind for the company, Swan is producing full room layouts and decorating vignettes featuring Ballard Designs products, both old and new. In addition, the company is creating a micro site to give customers a behind-the-scenes look at the design process and catalog shoot.
Ballard's fresh focus is echoed by many retailers who agree that this is a good time to reassess operations, redefine concepts, hone in on niches and do whatever it takes to bring in customers and build loyalty.
Kathy and Bob Deniken, owners of Unique Interiors in Cherry Hill, N.J., say, "It's not about 'when is it going to turn around?' but 'who's buying now?'"
The Denikens are among the retailers who are still buying, but modifying those buys to fit a changing consumer. Buyers for a discount home center in Alabama told me they were going after a "new look" — expanding their rug selection and focusing on program rugs vs. deals and closeouts so there would be "something for everyone."
Or as Mark Crumpler, owner of N.C.-based The Brass Exchange Inc., put it, "Put nice things out there and you have a lot better chance of selling nice things."
At this month's Las Vegas Market, we'll be talking with retailers who are well into their first quarter — so stay tuned. In the meantime, let us know how you're holding up.
Share your retail news, comments, announcements and remedies with us, on the Retail Update blog at homeaccentstoday.com or e-mail susan.dickenson@reedbusiness.com.
























