Responding to slower sales, wall decor vendors are playing to their strengths while exploring new distribution channels, pricing models and inventory management strategies.

CAS owner Lisa Choate said 2009 is going to be a year of hard work, with rewards going to those who “take risks, show creativity and stay attuned to their customers' needs.” CAS fell short of its sales goal for 2008, one that was aggressive to begin with, she said. “Overall, I think we were satisfied that we held our own in a tough market,” Choate said.

Wall decor is considered a high ticket item for many of CAS's retail customers, but the company is buoyed by more stability in the design sector. “The performance varies by retailer, and where the category fits into their product mix,” Choate said. “Some are selling it as an alternative to furniture, others are emphasizing their more giftable/lower price points and not focusing on the category as much. New product seems to spike the turn ratio in either scenario.”

CEO Mac Cooper of Uttermost, a company that benefits from having a large furniture retail base where wall decor is one of the lower ticket items, said sales had been up “nicely” until mid-year 2008, but then began to slide.

Artisan House President John Shilling said the decrease in his company's sales numbers are “manageable.” Last year, Artisan House launched a lower-price division, Artisan Studio, aimed at promotional furniture stores. “We think we were in the right place at the right time with this value-priced line,” Shilling said. But he also notes that stores' inventory levels are much lower now, further impacted by credit issues and an unwillingness to commit in the slow economic environment.

The observation is echoed by Brian Berk, president of Howard Elliott, where 2008 sales were boosted by new hospitality business and finished slightly ahead of 2007. “While we believe that the industry is recession-proof, nothing is disaster-proof,” Elliott said. “Nevertheless, we are finding while our average orders have decreased in size a bit, the number of incoming orders has remained stable. We believe this means that consumers are still purchasing decorative mirrors and wall decor but the retailers are unwilling to hold any significant inventory.”

And less inventory translates into fewer sales. “Wall decor is a business of consumer choice, and if there isn't a breadth of selection, the sales in the category will start to decline,” Choate said. “It just isn't a category in which more volume can be done with less. The more that is stocked, the more that will sell.”

Hence, the wall decor vendors' biggest challenge – managing inventories in this economic climate. “Now, more than ever, we strive to earn a customer's business and set ourselves apart from our competition,” Berk said. “It is a daily challenge to ensure that you have sufficient inventory levels to satisfy our customers' need to have immediate deliveries for mirrors and accessories pre-sold by our dealers.”

Uttermost's Cooper said it's also a matter of too much product that looks alike, in an industry that tends to copy itself rather than make unique design statements. “The other major problem is when companies get too conservative with their products rather than go for exciting and unique product,” Cooper added. “Going for the 'safe' products might not give customers a reason to buy.”

Lower demand, along with customer attrition and credit “unworthiness” has led all of the vendors to develop closer relationships with good customers and consider new channels of distribution.

“We are trying to be realistic but cautiously optimistic,” Berk said. “We believe that our volume with traditional channels of distribution, i.e. retail furniture stores and lighting centers, will be down this year, but we have already discovered new channels and are optimistic that this out-of-the-box thinking will yield slightly higher sales in 2009.”

CAS, which develops a large percentage of its line around proprietary imagery and framing, is also feeding its design base. “Designers love us as we work off of current trend studies and try to offer a broad choice for them in any color palette, theme, or driving element,” Choate said. “Also, we do fairly large releases of new products, 600 to 800 units every six months. There is always something new on the horizon and a wide variety to choose from – our customers seem to really appreciate and recognize that effort.”

“There are plenty of opportunities to increase sales performance,” Berk said. “However, it takes some creativity and thought to determine which channels can work and how to adapt. Howard Elliott employs that ideology and promotes this thought process to our independent sales representatives. Everything is worth exploring and all reasonable requests will be entertained.”

At the same time, Berk said his company is not eschewing the basics. “We are ensuring that we get back to what we are great at. We have repositioned ourselves as the mirror specialists. We are flexible and strive to accommodate customers in order to earn their business or just to increase our business with our existing relationships.”

Unique product designs, Shilling said, is what sets Artisan House apart. “We design all our pieces internally – we don't use designs from China. All our products are built in our two captive factories, so the quality of the workmanship and the quality of the designs is superior.”

And although Cooper said the economy has made it more difficult for Uttermost to continue its large product introductions, new products are “the key to supporting retailers through this tough time” and he's pushing ahead with all of the company's product development efforts. For now, the company is doing well with large hand-painted panels featuring warm earth tones and Italian landscapes, mirrors with carved frames, three-dimensional wall art, photo frames and abstract art.

Choate said CAS is seeing favor in two extremes: classical renaissance and the modern movement. “It's really interesting watching how many customers are buying and putting together their merchandise mix,” she said. “Very few are locked into one look or style direction.”

Howard Elliott is continuing to develop new finishes, integrating multiple raw materials into its mirror frames and alternative wall art. “While our glossy black, white and red finishes that we are applying to some traditional frames create truly exquisite mirrors, we are getting a lot of compliments and orders on our natural tree bark and cut acacia mirror frames and wall clocks,” Berk said.

Howard Elliott is also working to increase its international presence, an area in which Artisan House also remains focused.

“Our company does a lot of business internationally – we sell on every continent in the world – and for the past couple of years, our international business has been fantastic,” Shilling said. Artisan House recently opened a European office, exhibited this winter in Frankfurt and Cologne, Germany, and plans to exhibit in more European markets this year. “This is probably not the best of years to start a European office, but we are starting at zero, so everything is new and incremental to the bottom line.”

At CAS, negotiations are currently under way for a major license introduction, one that Choate estimates will be announced to the trade in early April. “Our category crosses over to a number of markets and those are always under development,” she said. “We are introducing some additional substrates and product more closely akin to the artist's original than we have in the past – we're excited about that. It's more tactile, interesting to touch.”

Cooper said Uttermost will continue to expand its offerings this year. “In wall decor, we are doing more landscapes and more sets of six and sets of eight art series, as well as sets of small mirrors. While it's important to be conservative and operate lean, it's just as important to show your customer a reason to buy. Product that is too good and too cool to resist might just be the key to getting through this recession.”

For an extended version of this story and the retailer survey, visit HomeAccentsToday.com