The American economy continues in a slide and we don't know yet where it will end, but it is clear that the furniture industry is in a classic "rollup." I have seen some of the steepest declines and most startling failures within the furniture industry, since I graduated from college in 1964. I began working in my father's advertising agency with clients such as Steelcase and Baker Furniture, later adding Howard Miller, The Merchandise Mart, Woodard, Tropitone, Sligh, Herman Miller and several others.
My experience suggests three important steps will improve the odds of survival.
The survivors and thrivers will continue to deliver a clear and consistent message to their dealers and customers. I suggest that the top executives should take this opportunity to visit dealers, designers and consumers. We need to cut through the clutter and meet our customers' customers. Don't wait for a regional salesman to arrange a meeting; go alone. Don't hire a research firm; go yourself.
A clue to the importance of gaining clarity is apparent in the success of America's largest furniture company, Ashley. This new industry leader has set up and established the criteria for all of its branded stores, which gives the company a clear and consistent "voice" and also gives it clear and consistent feedback. The management team at Ashley's headquarters receives information from the field through a dedicated and unbroken channel, carrying the unvarnished truth about their products and service from thousands of customers.
This provides Ashley's top management with a degree of clarity that few in our industry can match. Other leaders who have this advantage are Ethan Allen, Ikea, Williams-Sonoma, and Crate and Barrel. They are among the most successfully managed companies in our industry. What they all have in common is a clear channel of communication to the consumer and back from the consumer.
Many important decisions in our industry are made by isolated company executives and even more isolated designers. In the "good old days" we could attach a name like Mario Buatta or John Saladino to a new design collection, ensuring acceptance and awareness. But today's customer is better informed and not so easily led by glamorous images.
Today's up-and-coming customer knows more about design and is more critical about construction and environmentally sustainable materials. The Internet provides massive amounts of raw product information and images, diluting the impact of our industry "shelter" magazines. The net effect is a level playing field where anyone can kick a goal. But, unlike soccer, the teams are not evenly matched. A few companies maintain an unbroken pipeline of information and a consumer-centered attitude that flows upstream from the retail floor to the management suite.
The equal and opposite advantage is, of course, their ability to send information to their consumer customers through a well-trained and focused army of retail designers. It is a much tidier process than trying to train independent representatives to take notes and send back complete "intelligence" on the retail battlefield.
This is clarity: a clear view of what the customer wants and a clear line back to the customer with detailed information on design, material and craftsmanship. This quality of clear two-way communications can also be achieved by smaller companies.
What is your salesman doing today? How many are at home? One of the most successful people in the furniture industry I have ever known would call his salesmen at 5 p.m. every day. If they were already home, they were in trouble!
From my own experience as a marketing manager and as a buyer, I know that too many salesmen are at home right now. Many old hands call on people they already know, and they present products that are similar to those they have sold before. They don't ask many questions, and almost never take notes. This is where fog rolls in for the manufacturer. Manufacturing managers often don't get the information they need to improve their product development process.
The ultimate "fog buster" is education. Cabinetmakers and furniture manufacturers all face a complex sales process. A small idea by a good kitchen designer can re-orient a floor plan to feature a window with a view, and thereby transform the entire design-build process from basic utility to a "must have" alternative that transforms the budget and moves the project to a higher level of excellence. Clarity is having the best intelligence at the factory and the showroom connected with the customer.
Because design in our industry has much more to do with aesthetics than with function, we are always awash in design options and competing alternatives. The great brands in our industry have generally focused on a market segment or a design category. For example, Baker Furniture built its reputation on authentic antique reproductions. Herman Miller built its on ground-breaking functional modern design. Ethan Allen carved a position in early American style and La-Z-Boy staked an early claim on affordable comfort. Merillat has positioned itself in the mainstream of the kitchen cabinet business while a few others have executed a successful strategy in the higher priced cabinet market. There are dozens more at all points on the continuum from affordable favorites to priceless collectibles.
When the recession has ended, new leaders may emerge in the furniture industry. There will be changes in consumer behavior because our underlying economics and social evolution is more dynamic today than at any time since the end of World War II. The pace of change has been accelerated by the Internet, cell phones and cable TV that shower consumers with stimulating information every minute of every day.
Today, clarity of purpose, clarity and consistency of quality standards in design and craftsmanship, along with environmentally responsible materials and clarity of distribution practices are essential for survival and growth.