If there’s a segment of the retail industry that knows how to weather a storm, it’s surely the home furnishings market. When the housing market plummeted during the economic recession, home furnishing retailers also felt the impact.
For example, Bed, Bath & Beyond’s net sales pre-recession in 2007 were 14 percent, and dropped to a mere 5 percent in 2014, according to Forbes.
In the first three months of 2015, consumer confidence in the United States has started improving to pre-recession levels, and unemployment decreased to 5.5 percent in February. The outlook for Bed, Bath & Beyond is optimistic, especially in light of falling gasoline prices, but the rate of recovery remains slow.
On one hand, consumers are now more careful about how they spend money, and during the several years the economy struggled, the way people shopped also changed.
As Forbes explained, Bed, Bath & Beyond saw 4-percent year-over-year growth in the 2014 second quarter. Comparable sales also grew by 3.4 percent and more than 50 percent of this increase came from online sales and mobile channels.
With renewed emphasis on technology, how do home furnishings businesses hope to survive in brick-and-mortar retail?
The Price is Right
We’ve discussed the importance of inspecting your retail property and creating well-lit, clean and safe shopping environments. For retailers like Bed, Bath & Beyond, Crate & Barrel, and Home Goods, correctly pricing merchandise and making sure all promotional materials are up to date is just as important as creating an inviting retail environment. It’s also important that employees excel in customer service and exceed customer expectations.
All of these factors give customers a reason to shop in brick-and-mortar stores in addition to any online shopping they may do.
Here is a sample checklist for inspecting a home furnishings store:
- The store is neatly landscaped, well-lit and has curb appeal.
- The store is organized according to various sections of a home and each section flows naturally. For instance, living room furnishings/bedding are on one side of the story, while kitchen/dining room items are on the other side.
- Store signage is clear and facilitates a customer’s movement through the floorplan.
- Shelves are clean and not holding too many heavy objects.
- Merchandise is arranged neatly on shelves.
- Products in each section are not dented, scratched, opened or otherwise damaged.
Products are priced correctly on shelf.
- Product pricing reflects current sales/promotions.
- Registers and point-of-sale systems are up to date and honor the latest coupons/promotions.
Back room is organized and orderly.
- Employees can quickly find and/or restock an item.
Employees are trained in how to reorder out-of-stocks.
- Employees engage customers in stores and ask if they need help locating items.
Imagine there’s a glass paperweight sitting on your desk. Over time, you’ve let your desk get cluttered and disorganized. One day, you’re bustling around your office looking for something. You start to shift around the binders and notebooks on your desk and (crash!) the paperweight falls to the ground and shatters. This could have been prevented had you organized your desk all along.
A home furnishings store should be viewed through the lens of organization and urgency. Retailers must approach day-to-day operations like they are fragile and can “crack” at any time from the pressure of online retail competitors. Creating a highly responsive environment of customer service can improve operations and make a positive impact on a retailer’s bottom line.