One question that I’m asked frequently from customers is “Why are all the furniture stores selling things that are almost the same… in looks and in price? The styles change from year to year and I cannot find a store that sells the traditional looking furniture that never goes out of style.” Good question. Why do they set up similar displays, and why keep changing things out? The bottom line is profit. Corporate presidents, and board members have one thing in mind: “How can we generate more profit.” After all, it is a business, right? A company has strong fiscal health.
One study showed that the average furniture shopper will venture into a store about once every three years. Merchandising buyers tend to look at furniture as fashion; what’s in today is out tomorrow. It about what is trending. Retailers don’t want their return customer to see the very things they looked at during their last visit three years prior. This is why the average life span of any particular style is only 2 or 3 years on the showroom floor (and that is if it’s a top seller). When I worked for one retailer who focused on low priced furniture, there were some styles that only lasted a few weeks before being discontinued. We couldn’t keep track of what was current and what was history at times. Gone are the days when you could collect that entire dining room by ordering pieces over a period of years as you could afford them – but the days are here that you can finance your purchase with 24 months no interest, no payment!
I once was approached by someone at a gas station who saw my company car (it had the retailer’s logo on the doors). They expressed how upset they were because their furniture was “falling apart” before they had even made the first payment. When faced with finding a resolution for them, I found out that the style that they purchased had been discontinued which made an exchange on the damaged items out of the question. It simply wasn’t available. So they were allowed to select another style. How business practices have changed from a just a few short years ago; another sign of the times.
American companies design a product and ship the materials (like oak veneer) to a foreign nation to build it, and then import the product back to the U.S. to sell. The price is negotiated on a per piece basis with many things factored in to establish the “landed cost” of that item. No production changes will be incorporated into an item once this price has been agreed upon even if there are quality issues that are simple to resolve. If it costs 50 cents more per piece to produce with an upgrade, chances are it will not be approved. Enter the “bottom line”. I service some of the same items week after week, and all of them have the same problem that is well documented with the Customer Service Dept. If it sells and the markup is high enough to cover the cost of service, then a retailer will literally take its chances on the product… putting their reputation at risk. It’s only temporary though. Once sales begin to taper off, that item will be discontinued in order to replace it with something that will “move”.
Unfortunately, business is business. Most large retailers have distribution centers that are filled with items that were shipped in containers from somewhere in Asia. For right now, trendy promotional furniture is here to stay.
I wish the majority of the retailers were concerned foremost with the quality of the product and the service offered to their customers. Sadly, some people seem to suffer from a little buyer’s remorse when they realize how the industry has changed. Could a furniture chain survive if the focus changed from hitting a minimum 55% markup to focusing on quality and service? An executive from a major retailer in Atlanta once told me that his company had to change with the times in order to be competitive; furthermore, he thought that America would probably never again be a major force in furniture production in our lifetime.
The reality is, even though people like to think they would pay a little more for quality and service, the facts prove otherwise… just take a look at the top furniture retailers at the time of this article in 2011:
The top three retailers are exclusively promotional (low prices aimed at the high volume market) retailers. The detailed analysis from Furniture Today includes: Sales for the Top 100 were up 5.7% from 2009 to 2010. The Top 100 Stores sold through 8,536 stores in 2010 – Ashley Furniture HomeStores is still the No. 1 furniture store, with IKEA at No. 2 and Rooms To Go at No. 3. Buyer beware.
Who am I to argue with facts?