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Best Bob's Ever

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Interview with Bill Barton, CEO, Bob’s Discount Furniture

Bob’s Discount Furniture’s CEO shares his thoughts about strategic planning, team building and plans for growing the 159 store chain “coast-to-coast and border-to-border.”

Bill Barton, President and CEO of Bob’s Discount Furniture joined the fast-growing retail operation in 2020 at the height of COVID. “I showed up at the corporate office and it was just the guy at the front desk and me,” he recalled. “The next 120 days were spent visiting stores and all five distribution centers.”

Prior to joining Bob’s Discount Furniture, Barton served as CEO of California Closets. At first glance, California Closets’ model of custom manufactured and professionally installed closets seems dissimilar to the Bob’s Discount Furniture model. Bill Barton disagrees. “California Closets and Bob’s both fall into the big-ticket consumer discretionary category. Whether we look at furniture, automobiles or expensive master closets, consumers have bought into the integrated multi-channel experience which people refer to as omni. The owner of Bob’s Discount Furniture, Bain Capital, understood this when they brought me in. I had a home goods background, big-ticket and omni-channel experience. There were operational similarities as well.

“That’s why I made the leap. There’s a huge opportunity at Bob’s to reach so many more lives by providing quality furniture at everyday low prices to Bob’s customers.

“About a year ago, we engaged with a leading strategic consulting firm to help guide us through a planning exercise. First, we reaffirmed our business model: everyday low-price, great merchandise, high availability. Then, we reaffirmed our values, which are honesty, integrity and transparency. The goal was not to disrupt Bob’s successful model. It was to clarify how we think about the customer journey. Specifically, to make sure Bob’s customers are at the center of everything we do and that their transactions are transformed into relationships.

“The management team at Bob’s reexamined every stage of the customer journey including the creation of what we call ‘The Best Bob’s Ever.’ It’s a ten-year road map that includes 20 different initiatives with the intent of keeping customers for life,” said Barton.

What Customers Say About Bob’s

As one important guide, the top-10 furniture retailer used net promoter scores. “I’m a huge aficionado of using net promoter scores,” Barton continued “as a way to build long-term relationships with customers. It’s what drives great brands. Fred Reichheld, the author of ‘The Ultimate Question,’ says the score is one thing, but the most valuable feedback is what your customers tell you in the verbatims, which are the exact words used.

“The most powerful teams are built with people who deeply believe in the ‘Why?’ of an organization. Value without compromise is something everyone at Bob’s can buy into.”

“What customers say about Bob’s lets us know our strengths and opportunities. We studied customer feedback at every point along the journey to identify opportunities to ratchet up their experiences. Product as well as experience have to flow through that journey. At the end, we expect to hear customers say, ‘I’m never buying furniture from anywhere other than Bob’s.’ That was the impetus behind our strategic plan.

“Data analytics is another big part of it. One recent example is our omni-channel shopping cart. Bob’s customers can put items in their shopping cart when they visit www.mybobs.com. When they visit a local store, their carts travel with them. Any sales associate can open up a cart, then add, change or delete items to complete the customer’s room.

Maple Grove, MN, store opened in 2021

“At that point the customer can either close the transaction or, should they leave without purchasing, think about it, talk with their significant other and complete the purchase at home. It’s an omni-channel solution that travels with the customer through various channels. It’s been a huge unlock for our sales associates, helping them recognize a fuller concept of the customer journey. This is just one example of the type of technology investments we continue to make to create seamless experiences.”

Affluent Customers?

How can Bob’s keep customers for life should they, at some point, face upward mobility and seek out higher-end goods not typically found at Bob’s Discount Furniture?

“We know our niche. However, our data shows that more affluent consumers often shop at Bob’s. I’m always amazed at how many BMWs I see in our parking lots. It might be that they’re buying furniture for children who are setting up a first apartment, or for a vacation home or rental property. Whatever price point we decide to bring to the market, the one thing our customers can count on is that it’s going to be an extreme value. If you check out our website, you can find our Milan sectional. It can be configured at a five thousand dollar price point which is pretty high for Bob’s. It’s only been available for a few weeks and is already a top-ten best seller.”

Company Culture

Barton told us that before he joined the company, the values of honesty, integrity, and transparency were already deeply rooted in its corporate culture. “It wasn’t a heavy lift here at Bob’s. However, the introduction of ‘The Best Bob’s Ever’ strategy helped our people realize that even if a shopper doesn’t buy today, they are likely to become a future buyer if the right relationship is created.

“I’ll give you an example,” he continued. “We charge separately for delivery. Sometimes we have to explain this policy to customers so that they understand that we don’t hide the cost of delivery inside the cost of our products. As I mentioned before, honesty, integrity and transparency are key values here at Bob’s. We don’t mark up to mark down our everyday low prices. We’ve never had a sale and will never have one.”

Pricing

Even as just about every furniture industry observer advised retailers to hike prices during the pandemic to compensate for surcharges and wage inflation, Bob’s took the opposite approach.

“Our pricing department,” noted Barton, “was constantly talking to our vendors about how we could reduce prices to bring even greater value to our customers. We’ve actually reduced prices this year on some articles.

“It’s no doubt that size mattered over the past couple of years and our manufacturing partners have certainly been helpful. They know that when Bob’s commits to a new item, we buy a lot of it so that they can manufacture with confidence.”

Developing Winning Teams

Furniture World asked Barton about his approach to developing winning teams and retaining exceptional talent. He let us know that the first step is to ask, “Why?”

“To answer that ‘Why?’ question for Bob’s Discount Furniture,” he explained, “we had to back that train up a few stops and ask some questions.

Question: What do we believe?

Answer: The answer that came from our people was, we believe that everyone deserves a home they love.

Question: Based on our belief, what positive role can we play in their lives?

Answer: Bob’s can help people turn the places where they live into homes they love by delivering value without compromise.

“As soon as the words ‘value-without-compromise’ were expressed,” it was a light bulb moment for everyone,” Barton recalled.

Getting back to the question of talent acquisition and retention, he noted that it has not been a problem at Bob’s. “For our corporate teams, distribution center and delivery employees, as well as associates at the store level, employment has been stable. We’ve not participated in the great resignation like many other retailers.

“I’ve been in business a long time in a number of different industries and one of the things I’ve learned is that the most powerful teams are built with people who deeply believe in the ‘Why?’ of an organization. Value without compromise is something everyone at Bob’s can buy into.

“When I visit Bob’s stores, I ask our employees what they’re hearing from customers. We’ve all experienced elongated delivery dates in this industry for the past couple of years and it’s been painful. Even so, our people feel good about the jobs they do and they’re sticking with us.

“One of the wonderful things about being a fast-growing and profitable company, opening 14-20 stores each year is that it opens up opportunities for staff to move into management. Most of our store managers are internal promotes. We pay competitive wages and benefits, provide tuition assistance, mentoring programs and diversity, equity and inclusion initiatives. It’s a great place to be, it’s a great place to work.”

Advertising

Bob’s Discount Furniture has done a lot of television advertising over the years, making Bob Kaufman, the company founder, their celebrity pitchman.

“One of the challenges of having such an iconic founder like Bob Kaufman, was the transition from featuring Bob the person in our creative to Little Bob the puppet,” said Barton. “Steve Nesle, with our marketing creative department did a masterful job creating playful messaging that continues Bob’s advertising legacy. We recently brought Bob Kaufman out of retirement for a series of TV commercials featuring celebrities that included Little Bob, Vanilla Ice (whose real name is Robert Matthew Van Winkle), Rob Schneider, the painter Bob Ross, and a few other notable Bobs. The transition to Little Bob has given us the flexibility to continue to get our messages out in a memorable way.”

Pictured above is Bill Barton, CEO, Bob’s Discount Furniture in the 622,230-square-foot Piscataway, NJ, Distribution Center opened in 2021, along with an aerial view of that DC (bottom right). Also shown is an interior shot of Bob’s Maple Grove store, one of 164 stores open by September 2022.

The Future

In a time of price inflation, increased geopolitical uncertainty and possible economic slowdown, Furniture World asked Bob’s Discount Furniture’s CEO to look into his crystal ball as we approach 2023.

“Consumers in times like this,” Barton observed, “move towards value brands. Walmart recently said that they are seeing customers move from branded products to house brands to save money. That could be good news for Bob’s because we don’t sell branded items in our stores other than our Bob-O-Pedic house mattress brand, which delivers tremendous quality and value at a fraction of the cost of our competitors.

“In every prior economic downturn, we’ve seen that offering great values at low prices is an excellent place to be.”

Barton added that customers have various attitudes toward financing. “The younger generation, for example,” he observed, “have been attracted to buy now, pay later, and four pay plans. But right now, we’re doing everything we can to enable consumers to buy what they need in these times.

“That’s why we recently launched our first ever 60-month financing program. Before that, the longest financing Bob’s offered was 30 months.

“Financing will, of course, continue to be important. One ad we ran recently, offered to ‘Furnish your home for $99 a month.’ That offer included an adult bedroom set, a dining set, sofa and loveseat. So, we’re going to continue to do what we can to bring value and make purchases at Bob’s affordable for people going forward.”

Ultimate Plan

“Our ultimate plan,” Barton concluded, “is for Bob’s to grow coast-to-coast, border to border. We are currently opening 14 to 20 stores each year with plans to double that pace as part of our longer-term strategic plan.

“We have entered choppy economic times, so we plan to be responsible operators and invest our capital wisely. Can we get this business to $10 billion? There’s no doubt about that. Could it go higher? Maybe. I do know that there are lots of consumers out there who love the value Bob’s provides.

“Going forward, we will continue to focus on omni-channel and technology while offering low prices on great products available through all the modern channels in an authentic way, with enthusiasm and transparency.”


Russell Bienenstock is Editor-in-Chief of Furniture World Magazine, founded 1870. Comments can be directed to him at editor@furninfo.com.