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Beyond Accounting In Retail Furniture Stores

Furniture World Magazine


Retailers use existing computer systems to coordinate promotions, advertising and market research

Many furniture retailers use their computer systems to track inventory and handle point of sale... but if you aren't using your computer and your accounting and database software to expand your marketing efforts, you are wasting a significant part of the investment you made in your computer system. With all the things you have to worry about in a busy day, it's easy to overlook the importance of coordinating your promotions, advertising and marketing research.

PROMOTIONS: Successful furniture stores set their stores apart from their competitors by carrying different merchandise, by specializing in unique style and decor and by offering superior quality service. Another way furniture retailers stand out is in the different marketing promotions that run throughout the year.

In-house classes, shows or exhibits increase customer traffic and provide the opportunity to attract new customers. You can use your computer to schedule classes, pre-register and register attendees and collect fees. Track schedules and attendance on your computer for home furnishing design and decorating classes. Attendance at special advertised showings of antique furnishings and accessories, unique types of children's rooms and home office displays can also be tracked by computer.

Sales are a big part of furniture retailers' marketing programs, especially around holidays. Computers are invaluable for tracking discounted prices. Furniture USA in Arkansas relies heavily on their computer system for their holiday sale prices, especially during their Presidents' Day Sale. To generate sales at what is generally a slow time of year, Furniture USA holds their annual sale the third weekend of February. Selected merchandise is 40% off when they open that morning, and the discount percentage decreases every hour until merchandise is 5% off at 5 p.m. "We need to know how many people come in and how much money is made each hour. Our system lets us quickly ring up the sales items and then know how much discounted merchandise has been sold," said Joe Roberts, store manager.

At other times of the year, computers can be used to schedule themed sales or promotions. Your computerized calendar of events can be developed in advance and distributed to employees and customers when finalized. Schedule discounts or special displays for non-holiday occasions such as 'Back to School Sales,' where you might feature desks, storage bins and organizers, bookcases and dormitory accessories.

Cross-marketing with other merchants can pay off in big profits, but it can also be a gigantic headache without computer tracking. For example, Castle Furniture Retailers of Tennessee did a June "Love Is In The Air" promotion last year to coincide with the summertime 'wedding season.' Customers who were engaged to marry could register for furniture and household accessories while registering at a local gift shop. Every time a gift was purchased at either Castle Furniture or the gift shop, the couple's name was entered into a drawing for a dining room set. While running this promotion for 6 weeks in May and June, the store was able to increase their mailing list by 20%. Plus they introduced many first-time furniture' buyers, the newlywed couples, to their stores' merchandise and services.

For regular customers, a Preferred Customer Discount Card is a nice 'thank you for your patronage' offering. Your computer system should be able to automatically deduct the percentage off for designated customers. You don't even have to have a great memory, because your software should also be able to pick out repeat customers from sales history.

Your calendar of events could also include some community service events to increase your business' recognition in the area. Donating floor models, slightly imperfect furniture or your refinishing and reupholstering talents to local nonprofit groups is a great way to make new contacts and to develop a reputation for quality work and products. If you don't know exactly how your bottom line stands, though, you could get in over your head. It is always extremely important to have your sales figures and current expense information available at your fingertips. A good computer system will let you know when you have extra inventory that can be used in giveaways or inventory that can be discounted, and by how much.

ADVERTISING: As so many advertising executives will tell you, you can build the best mouse trap ever, but if no one knows about it, what does it matter? While word-of-mouth advertising can be an important part of your marketing plan, good advertisements, direct mailings and in-house marketing can catch the attention of so many more potential customers.

Advertisements in newspapers and radio are necessary for promoting sales and special promotions. Newspaper ads are often used for coupons and for displaying special event or sales calendars. Your computerized promotional calendar should be used to coordinate advertising efforts with store displays and to ensure adequate staffing for advertised events.

It's easy to encourage repeat business with direct mail promotions. From sales histories or customer databases, many software packages can develop mailing lists and labels for different criteria. Susan Clark, owner of Affordable Furniture Designs in California, uses her customer database to produce labels for mailing monthly flyers advertising specials. They also use the mailing labels for invitations to their two annual open-house shows. "We've designated certain categories for our mailings, dividing customers by their line of business, frequency of purchases, distance from the store and several other ways. We target our guest list to try to get the best turn-out of buying customers," she said. Using a computer gives you a lot of control over your mailing lists and saves money on postage because of fewer address errors. You can also use your computer to track responses to your mailings so that you can refine your mailing list to avoid extraneous mailing costs.

At Bob's Furniture Showcase in New Jersey, president Robert Bums uses their accounts receivable software module to generate mailing labels. "By targeting our repeat customers for monthly promotional flyers with coupons, we have been getting a large return. It's worked great for us" he exclaimed.

One of the least expensive and most forgotten areas of marketing includes in-house marketing and point-of-purchase displays. You can use almost any word processing software to create description cards giving the name, care directions and history of unusual pieces. Strategically placed computer-generated signs point out sale items and prices. If you have a restroom available for customers, don't forget to place signs on the doors or walls describing specials. Many computer programs can print seasonal or thank you messages on invoices and receipts, and your store's name and phone number are a necessity!

MARKET RESEARCH: When you have gone to the trouble and expense of advertising, you need to know the profitability of your efforts. Computers are used to track a number of different marketing trends, and the most common include tracking coupons, new/repeat customers and lost sales (requests).

By tracking how many customers come in each day, the total sales volume for each day and which promotion a customer uses, your computer system can let you know if an event or sale has been profitable. Madeline Willoughby, a furniture retailer in Ohio, used her computer to track how much repeat business her "Buy One Chair, Get One Free" promotion brought in. Every customer that bought a sofa in February received a coupon good in the month of March for a free chair with the purchase of one. Willoughby's computer system calculated how many coupons had been distributed and the number of coupons redeemed. She could tell how much she made from the purchases of the discounted chairs and if additional purchases were made.

From the sales history alone, your system can let you know your percentages of new and repeat customers. As you establish rapport with your customers, you can ask how they initially heard about your business. Your customer database can quickly record that information, as well as important style and product preferences. The sales history can also give you a good idea of the types of future purchases a customer might make. One person may be the' buy one piece at a time type' while another may buy furniture for an entire room regularly for redecorating. This information can be a big help when it comes to ordering and stocking products.

Whenever a customer requests a certain type of recliner or end table that you do not regularly carry, use your computer to record these requests, or lost sales. You can track the amount the purchase would have cost so that you can tell when it would be more profitable to carry that item. Your system should be able to suggest alternate items from inventory, though.

No matter what marketing promotions or advertising you may use, good marketing requires financial accountability as well as creativity. If your business is already computerized, your computer system can easily provide that accountability. With both creativity and sound financial management, you have the materials you need to custom design a successful marketing arrangement!

Lynne Weiss is Director of Marketing Services at Armor Systems, Inc. one of the oldest, leading accounting software developers in the microcomputer industry. Questions about this article can be directed to editor@furninfo.com.