To compete with well-financed and sophisticated retail marketers for the attention of millennial HENRYs, it takes more than great design, discount prices, social media and newspaper ads.
To paraphrase Charles Dickens, “It is the best of times, it is the worst of times.” It’s the best of times for furniture retail from a macro-perspective, in terms of both sales and demand. Through September 2018, furniture store sales grew at 7.9 percent year-over-year, out-pacing robust 5.9 percent retail growth overall.
This growth rate put furniture stores in sixth place as the fastest-growing retail segment, and way ahead of the closely aligned, but more general home furnishings store category, which tracked at only .6 percent growth.
On the demand side, the millennial generation is just now hitting its stride in terms of income and spending power. Delayed by the recession and resulting high unemployment as they graduated from college, the most highly-educated millennials with the greatest lifetime earning capacity have finally landed jobs, started to marry, have children and buy houses, which should spark a furniture buying spree.
But the opportunity to meet millennials in their time of furniture need is not going unnoticed by many retailers that are ready, willing and increasingly able to attract their attention and spending.
The growing list of millennial-focused retailers include digitally-native brands like Wayfair, which doesn’t seem to worry about making profits as it focuses all its efforts on customer acquisition. The same goes for West Elm and CB2, which are rapidly growing youth-skewing nameplates of companies that were founded on their baby boomer parents, Williams Sonoma and Crate & Barrel.
Then there is Ikea which is stepping up in quality and design at still very affordable prices, not to mention RH, the renamed Restoration Hardware, at the high end, which is opening massive flagship stores complete with restaurants to make a visit to a furniture store an experience.
To grow your furniture retail business in this rapidly evolving market, retailers and furniture brands must capture the imagination and spending power ofthe next generation millennial customers with money, consumers I call HENRYs (high-earners-not-rich-yet). HENRYs make up fewer than 25 percent of all U.S. households, yet they account for some 40 percent of all consumer spending. These are the customers that the future of furniture retailing depends upon.
Make Shoppers Happy,
Don’t Just Make A Sale
finds that retailers need to activate people’s emotions both before
and after the purchase experience, not just during the interaction.”
Competing with the well-financed and sophisticated retail marketers for the attention of millennial HENRYs takes more than great furniture design, discount prices, social media and newspaper advertising. It takes understanding what HENRYs want. It also requires the use of psychological insights and strategies, not just marketing and sales tactics. That's the way to draw them in to your store, deliver what they want, then leave them with an afterglow so that they look forward to shopping with you again.
It requires focusing on making shoppers truly happy. Fortunately, Lippincott, a creative consultancy, provides scientifically-informed and tested ideas about using psychology to make shoppers happy in a study called the “Happiness Halo.”
While omnichannel national chains like RH and West Elm, and ecommerce retailers like Wayfair and Amazon, focus primarily on driving the actual purchase interaction, happiness research finds that retailers need to activate people’s emotions as well, both before and after the purchase experience.
“Happiness researchers find that upwards of half of someone’s happiness is built in moments of anticipation and remembering,” the report authors write. “Radiant brands [and radiant retailers] exude the joy of anticipation and the warmth of remembering, making them glow in the hearts of customers.”
Engage Shoppers Four Ways
Here are four ways furniture retailers can engage shoppers throughout their purchase journey – before, during and after the shopping experience – to delight them in order to drive more sales and create a happiness halo for the next time.
- The Anticipation Phase: Tease, tempt and treat customers in anticipation of shopping.
The anticipation phase along customers’ purchase journey sets the stage for greater satisfaction following an actual purchase. University College London researchers found that positive expectations influence a person’s overall happiness as much as actual experiences do.
But people also gain happiness by simply anticipating a purchase. “Most consumers get more pleasure during the ‘anticipation’ phase of a purchase than during the ‘acquisition’ phase,” the Lippincott study reports. Furniture retailers have plenty of opportunity to enhance this anticipation phase by helping customers dream about and envision the wonderful home environment that they can help them create.
To activate anticipation in advance of shopping, specialty furniture retailers need to tease them with compelling street-side window (location permitting) and welcoming door displays that invite people in. But even more important today is an online presence purposely designed to tempt people to visit the store.
Pictures of people in the store, engaged in shopping, will be more tempting than simply displaying product-as-hero shots. The “About Us” page is critically important to tell the story and to make the store engaging and relevant to what shoppers can anticipate regarding the in-store experience.
Another powerful psychological mechanism working in the anticipation phase is the promise of a special treat to be found in the store. The happiness halo likens this to the opportunity to connect with a “limited resource,” something only available in the place of business or for a limited time.
For furniture shoppers, this might be the treat of offering complimentary professional-quality interior design services, or free gift-with-purchase like a lamp or decorative accessory.
Teasing, tempting and treating customers takes imagination, but it will pay off in attracting more customers, building their loyalty and support.
PHASE 1: “The
purchase journey sets
the stage for greater
satisfaction in the
- The In-Store Interaction Phase: Immerse, direct and elevate the in-store interaction.
During the in-store interaction phase shoppers gain greater happiness when they are directed and guided, rather than left to their own devices. Immersive customer experiences engage customers through all the touchpoints in the store to help shoppers achieve a greater level of happiness through a guided process. Ikea showrooms that guide shoppers throughout their visit are an excellent example of this strategy. Emotionally intelligent sales staff can also act as guides to the many products, services and experiences shoppers can find in the store.
Retailers must immerse shoppers through sight, sound, smells, tastes, signage, interactive displays and, most importantly, staff on the sales floor, who play host or hostess.
This past weekend I was surprised and delighted when a sales clerk locked up her cash register to guide me to the item I was looking for. It gave her valuable time to engage me in conversation and learn more about me. It left me feeling cared for and impressed with her willingness to help. That experience left a happiness after-glow and I am truly looking forward to visiting that store again soon.
The interaction phase is when memories are made, and the Happiness Halo stresses, “Whether a person looks back on an experience positively or negatively will be the deciding factor as to whether they return.”
- Ending Phase: End strong, surprise and reinforce after the in-store experience.
PHASE 2: “During the in-store interaction phase
shoppers gain greater happiness when they are directed and guided, rather than left to their own devices.
Sealing the in-store experience in the customers’ memory means leaving them with a favorable lasting impression. That calls for furniture retailers to train their staff to elevate the customers’ final interaction, the goodbye, with as much emphasis as they place on the opening, welcome statement. The goodbye doesn’t need to be scripted, but it needs to be honest and authentic and, most importantly, memorable.
Perhaps nothing reinforces a positive feeling more than a hand-written thank you note after the shopping visit. Admittedly furniture retailers may have to do some research to find a shopper’s street address, but the effort will be greatly rewarded by taking that extra step.
Tempting customers with anticipation of a surprise the next time they shop can reinforce the desire to shop again. Offering a surprise for customers who sign up for updates and news is one way to capture email addresses, but the tempting surprise needs to be more meaningful than just a weekly or monthly newsletter or sales offer delivered regularly to their inbox. For example, it could be an offer for an in-home decorating consultation or decorating tips.
- Make It Personal: Retailers’ secret weapon is to make retail personal.
The happiness halo defines the way to make retail personal by using psychology, not just retailing and selling tactics, to attract, engage and leave people more than satisfied.
In the “Happiness Halo,” the authors stress, “Appeal to customers’ reason and they’re yours for a day. Appeal to customers’ emotions and they’re yours for a lifetime.”
At no time is that emotional appeal more important than when people are decorating their homes. Selecting, buying and decorating a home packs a powerful emotional punch for the customer, either as a bad, stress-filled experience or one of delight and joy. Make sure your retail experience minimizes former and maximizes the latter.
“Retailers must immerse shoppers through sight, sound, smells, tastes, signage, interactive displays and, most importantly, staff on the sales floor, who
play host or hostess.”
The key to success in retail today is not just to be a place for people to buy furniture, but a destination for people to have meaningful and memorable experiences. Buying and selecting home furnishings is by its nature an emotional experience that carries more weight than just buying another thing to fill an empty space. Independent furniture retailers will win by playing to their customers’ emotions with psychology. You will make your customers happy and then you’ll be happier, too.
About Pam Danziger: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992 where she leads with research to provide brands with actionable insights into the minds of their most profitable customers.
She is also a founding partner in Retail Rescue, a firm that provides retailers with advice, mentoring and support in Marketing, Management, Merchandising, Operations, Service and Selling.
A prolific writer, she is the author of eight books including Shops that POP! 7 Steps to Extraordinary Retail Success, written about and for independent retailers. She is a contributor to The Robin Report and Forbes.com. Pam is frequently called on to share new insights with audiences and business leaders all over the world. Contact her at firstname.lastname@example.org.