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> Living on the Top Line - The Book > Joe's Blog > Bad News/Good News
Bad News/Good NewsI read today that things are getting worse for some of the industry's biggest names - like La-Z-Boy, Ethan Allen, and Furniture Brands. You can find this bad news story at www.wsj.com in an online article titled "Furniture Retailers Look to Trim Costs."
Calling La-Z-Boy and Furniture Brands retailers in the usual sense of the term is just not right. Ethan Allen is different from those two companies in that they have been a totally vertically integrated manufacturer/retailer for many decades, being the first to acknowledge that they had to control their own point of contact with the consumer marketplace to optimize their `potential. The driving force behind this was Nat Ancel who put it this way: "Our mission is to help our customers understand how to use our products to enhance their quality of life, not just how to buy them." But, Nat also knew that his company could not serve multiple masters. If you want Ethan Allen products, you go to an Ethan Allen store.
La-Z-Boy and Furniture Brands are, first and foremeost, manufacturers. They have been involved in direct retailing, also for decades, but are not cellular retailers - they weren't founded to do that - they were founded to manufacture. Retailing has been a secondary effort, aimed at controlling, to some degree, the distribution and availability of their products to consumers in key markets where traditional retail distribution cannot provide them with the exposure they know they need.
Of course retailers are looking to trim costs! Who isn't? But this article misses the point that these companies, except for Ethan Allen, are primarily manufacturers and the costs they are trimming are manufacturing costs. Consumers are too, and this is different than what has been experienced over the last few decades when demand was driven largely by the housing boom that provided millions of new, empty rooms to be filled.
La-Z-Boy is on the right track with its retail philosophy of providing consumers with help using their products to enhance the comfort and beauty of their homes, and their quality of life. It may be in a much stronger position for recovery than Ethan Allen because of its position on the price scale as many consumers trade down in every aspect of their purchasing.
Every consumer who enters a furntiure store today is golden, critically important, and deserving of the highest level of servce you can provide. The whole idea of "customer service" may now undergo the transition it should have undergone a long time ago in furniture retailing. Not after-the-sale service in the traditional sense, but service in the level of help provided free to consumers around how to use the products offered to create beautiful rooms and homes. That fundamental need will not undergo a diminished level of importance to consumers as home remains a haven for families in uncertain times.
The challenge for furntiure retailers will be how you will choose to respond to this most basic human need that your customers bring through the door. Old methods, old systems, old messages, and old customer engagement strateiges will not carry you forward as consumers seek to cut costs and still attain desireable outcomes for their families. The demand is there, and will be there, but you will have to earn the right to fulfill it. Call me or email me, and I'll tell you how you can do it.
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