By Jennifer Alexis
Casual furniture vendors say a combination of value-oriented offerings, great pricing and their ability to ship product quickly will be key to helping dealers succeed in 2009.
Although there are certainly many economic factors that are well out of seemingly anyone’s control, vendors have identified several ways they can help retailers—and themselves—outlast current economic conditions. They’ve honed in on what they believe their dealers will need in terms of vendor support, as well as product and assortment.
Among the most critical of these needs, according to industry insiders, is the call for value-oriented product.
Casual furniture manufacturer Lloyd/Flanders is emphasizing value in its line this year, said Lou Rosebrock, senior vice president of sales and marketing.
“We’re working with retailers to give them products they need,” he said, and “the bulk of those dealers are looking for ‘back-to-basics’ products—basic furniture.”
Much of the focus this year in casual furniture will also be on identifying and offering the right price points. As Americans have grown more cautious about how they spend disposable income—at least in the case of those who have disposable dollars—manufacturers have become increasingly sensitive to retailers’ need to have budget-friendly product on the floor.
Doug Peppler, vice president of sales for Agio, said the company is focusing on offering specific price points and helping dealers show extreme value on the floor.
“People are going to look for time-honored bread-and-butter sets—the ones that always perform,” Peppler said. “No one is taking any chances to speak of. People are looking for value.”
For manufacturers and vendors, hitting the right price points will be about making consumers feel they are getting a deal on high-ticket items that they might have been on the fence about if this were the year 2007. Consumers, now more than at any other time in recent history, want to feel they’re making a wise buying decision and one they can live with for a long time.
In response, companies are restructuring somewhat to offer value pricing. Peppler said, for example, that Agio product that fell into the $3,000 range at retail a year or two ago may now be offered for around $2,000.
No matter how attractive the price points get this year, however, many retailers are reducing inventory, as they are hard pressed to invest in product they fear consumers won’t buy. This hesitancy to buy presents a mighty challenge for retailers’ vendor partners.
“There are an awful lot of dealers out there whose warehouses are half full or less—they’re usually packed to the gills at this time of year,” Peppler said. “They’re going into this year with half a load. They’re trying to get their inventory turned around as quickly as they can and catch those sales, but they don’t want to put half a million dollars in inventory when things are so up in the air.”
One solution, said vendors, is to be as quick and nimble as possible.
“Retailers are looking for inventory that is stocked or provided in a short time frame,” said Rory Rehmert, vice president of sales and marketing for Pride Family Brands. “Our stock programs provide quick availability for retailers to provide product in an economy of time between sale and delivery to customers.”
Pride Family’s program includes four complete collections, including its newest, the Rialto Collection, and each ships within seven-to-10 working days, Rehmert said.
Rosebrock said Lloyd/Flanders is also making the most of its ability to be fast on its feet. The company, he said, has invested a lot of resources into boosting its ability to ship product quickly. Giving retailers the opportunity to place special orders, Rosebrock added, alleviates the pressure for them to have inventory on hand.
“We have very quick shipment for customized product—something we started about a year ago,” he said. “If the dealer can turn those dollars more rapidly, that is a big part of helping our retailers right now, and [that ability] is going to make us stronger in their eyes.”
Extending credit and being flexible with orders are a couple of other ways companies are stimulating the market and helping out cashed-strapped retailers.
“Credit will be key,” Peppler said. “Credit is very tight for dealers, and open-to-buy dollars are at an all-time low. We’ve been trying to be as open on the credit side of things as possible and are willing to work with our dealers.”