Marc Barnes
\nFinance still an important selling tool, but many prefer to stress selection, value<\/p>\n
HIGH POINT \u00e2\u20ac\u201d No money down. No interest. No payments.<\/p>\n
<\/p>\n
For years now, furniture retailers have promoted \u00e2\u20ac\u0153no, no, no\u00e2\u20ac\u009d financing programs as a way to get customers in the door and move product out. Some still actively promote these plans, while others have backed away from them in favor of new marketing strategies.
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\nRetailers say that a number of factors figure into the decision on what kinds of financing to offer. They include the types of customers that retailers are targeting, relationships with financing sources, and the overall competitive environment that retailers operate in, especially any fear they may have of losing market share to competitors who are more aggressive with financing.<\/p>\n
Clarence Smith, president and CEO of Havertys, a 119-store chain headquartered in Atlanta, said he uses financing to keep his stores in the game, not to drive business.<\/p>\n
\u00e2\u20ac\u0153Less than half of our business is credit, so it\u00e2\u20ac\u2122s not the main thing that it is with some other companies,\u00e2\u20ac\u009d he said. \u00e2\u20ac\u0153The furniture is the star, and we try to provide the fashion and the quality level that is right for our customer.<\/p>\n
\u00e2\u20ac\u0153Credit is part of (the equation), but for our customer, it\u00e2\u20ac\u2122s not the most important part.\u00e2\u20ac\u009d<\/p>\n
Smith points to Havertys\u00e2\u20ac\u2122 advertising, in which price and financing terms stay in the background while the furniture is positioned front and center.<\/p>\n
\u00e2\u20ac\u0153That\u00e2\u20ac\u2122s what we believe in, and that\u00e2\u20ac\u2122s what our customers are telling us that they want,\u00e2\u20ac\u009d he said.<\/p>\n
Robert Capo, chief marketing officer at El Dorado Furniture in Miami, said that finance companies generally have backed away from the aggressive financing approaches of the past to a model in which customers now are required to make at least a minimum payment each month.<\/p>\n
\u00e2\u20ac\u0153They are finding out that customers do not have (funds) two years from now when they are making their first payment,\u00e2\u20ac\u009d and often end up defaulting, he said.<\/p>\n
With the new approach, \u00e2\u20ac\u0153If they have bad credit, even if it has been approved, they discover that in the first couple of months and they don\u00e2\u20ac\u2122t have to wait a year or whatever the term is.\u00e2\u20ac\u009d<\/p>\n
The advantage to the retailer is that with a minimum payment, the rate is more attractive, Capo said.
\n\u00e2\u20ac\u0153We are saving some money because customers are paying less of the finance charge and that is making the deal more attractive,\u00e2\u20ac\u009d he said.<\/p>\n
To drive customer traffic, El Dorado has switched away from stressing financing.<\/p>\n
And it doesn\u00e2\u20ac\u2122t run sales with percentages off the retail price. Instead, the advertising appeals to the status of owning furniture that is both fashionable and a good value.<\/p>\n
\u00e2\u20ac\u0153The first thing is that they have to like it,\u00e2\u20ac\u009d he said. \u00e2\u20ac\u0153If they don\u00e2\u20ac\u2122t like it, they won\u00e2\u20ac\u2122t look at the price. Nobody buys a price tag.<\/p>\n
\u00e2\u20ac\u0153You show the furniture first, and then give them the price. You don\u00e2\u20ac\u2122t barter with price first and then try to sell the furniture.\u00e2\u20ac\u009d<\/p>\n
Ann Navarra, vice president of Jerome\u00e2\u20ac\u2122s in San Diego, said that market pressure in her area has meant that the \u00e2\u20ac\u0153no, no, no\u00e2\u20ac\u009d model is still in place. But she fears that the effectiveness of that pitch as a sales lure is becoming diluted.<\/p>\n
\u00e2\u20ac\u0153The person who is in the market to buy furniture is going to pay attention, otherwise no one is going to pay attention,\u00e2\u20ac\u009d she said. \u00e2\u20ac\u0153We have been doing this for years. We advertise heavily on television and in the local newspaper.<\/p>\n
\u00e2\u20ac\u0153Everybody is using the same promotions. It is (for) that customer out there who does not listen to commercials until they are ready to buy furniture.\u00e2\u20ac\u009d<\/p>\n
Some retailers, Navarra said, are running aggressive promotions beyond financing, which include no sales tax.
\n\u00e2\u20ac\u0153We look at our profit margins very closely,\u00e2\u20ac\u009d she said. \u00e2\u20ac\u0153We do an \u00e2\u20ac\u02dceither, or,\u00e2\u20ac\u2122 but we can\u00e2\u20ac\u2122t give it all to them with our prices.\u00e2\u20ac\u009d<\/p>\n
She added that she doesn\u00e2\u20ac\u2122t know what the next development in furniture financing will be, but that a better message would be to stress fair pricing, quality and service after the sale.<\/p>\n
\u00e2\u20ac\u0153People today are so busy, so tired of getting the runaround,\u00e2\u20ac\u009d she said. \u00e2\u20ac\u0153They have so many things on their plate every day and they want to be assured when they are going to make a purchase, that the company is going to do as agreed and give them good service.\u00e2\u20ac\u009d<\/p>\n
Sam Fishbein, CEO of Kacey Fine Furniture in Denver, said his business is in a similar situation, with other stores in the marketplace still trumpeting the \u00e2\u20ac\u0153no, no, no\u00e2\u20ac\u009d message. He agreed that this pitch isn\u00e2\u20ac\u2122t as effective as it used to be, and that it\u00e2\u20ac\u2122s time for an alternative.<\/p>\n
One proposal currently under discussion by industry leaders is a plan developed by City Furniture\u00e2\u20ac\u2122s Keith Koenig in which new homebuyers would be able to finance new furniture as part of\u00c2\u00a0 their mortgages.<\/p>\n
But Fishbein said there are some problems with this model, given the differences in how real estate and furniture are financed.<\/p>\n
Fishbein said the furniture industry is in a period of uncertainty.<\/p>\n
\u00e2\u20ac\u0153There is a disconnect with the consumer, and when there is confusion in any market, people will go to the lowest common denominator,\u00e2\u20ac\u009d he said.<\/p>\n
At American Furniture Warehouse in Colorado, Andrew Zuppa, corporate general manager and marketing director, said that the Top 100 company has built its success by keeping its financing pitches short and simple. It offers a three- to six-month financing program but doesn\u00e2\u20ac\u2122t rely on credit to build sales.<\/p>\n
\u00e2\u20ac\u0153If the only thing you have is financing, then that is the only thing they will buy,\u00e2\u20ac\u009d said Zuppa.<\/p>\n
A better tactic, he added, is to put a product before the consumer that they like, sell it at the best possible price and provide assurances that the store will be there when the customer is ready to buy.<\/p>\n
With that approach, American Furniture Warehouse grew by 10% last year, at a time when the economy in Colorado wasn\u00e2\u20ac\u2122t the best and a number of its competitors were exiting the market.<\/p>\n
\u00e2\u20ac\u0153Financing is a short-term fix,\u00e2\u20ac\u009d he said. \u00e2\u20ac\u0153Believe me, I understand the appeal. But once you head down that road, you never get off and you train customers that this is how they buy from you.\u00e2\u20ac\u009d<\/p>\n","protected":false},"excerpt":{"rendered":"
Marc Barnes Finance still an important selling tool, but many prefer to stress selection, value HIGH POINT \u00e2\u20ac\u201d No money down. No interest. No payments. For years now, furniture retailers have promoted \u00e2\u20ac\u0153no, no, no\u00e2\u20ac\u009d financing programs as a way to get customers in the door and move product out. Some still actively promote these […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-690","post","type-post","status-publish","format-standard","hentry","category-furniture-world-news"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/690","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/comments?post=690"}],"version-history":[{"count":0,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/690\/revisions"}],"wp:attachment":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/media?parent=690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/categories?post=690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/tags?post=690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}