Ruminations on the future of furniture retail and the internet. Continued from August/September FURNITURE WORLD.
by Janet Holt-Johnstone
Jerod Lazan, a principal of the internet site Your Furniture Link sees big changes in the way furniture is marketed and sold. As a home furnishings manufacturer and retailer, he and his partner Vicki Semke looked long and hard at how these changes will affect home furnishings retailers.
We asked Jerod his opinion on factors that will mark future profitability for home furnishings retailers. And, how the increasing use of the Internet and the blurring of distribution channels might affect brick and mortar retailers, especially at the high-end.
“Shopping carts on all websites will be the major profitability booster for manufacturers, retailers and some designers’ sites,” he noted. “The trend I’m seeing is manufacturers selling overstock and wholesale products on the same site that a retailer like myself uses to access product information.
“In L.A., a principle of ABC in New York, moved here and set up
a store, HD Buttercup, that featured 50 wholesale manufacturers, many of whom were supplying our store with product. At first, we thought this would be a disaster for us as a retailer, having to compete with our suppliers. Fortunately, I think the experiment worked for some of the vendors and not others. I think this is basically what’s going to happen within the next few years throughout our industry. There are no sacred cows left, the survival of all industries will rely on all these different outlets of selling to the end user.
I know that some of our friends in manufacturing have fewer retailers to sell to. They have no choice but to seek other outlets to generate revenue. Those that will flourish in the future will integrate all these channels into their business model and this will be the norm. Future business will only know this way of retailing. Those that don’t adapt will go away and others will flourish, kind of the Darwinian evolution of retail.”
We asked Jerod how he felt about direct sales to the consumer on the Internet. “I think we’ll all be doing this to some degree or another. We are a higher-end store and many of our clients are designers. They require a place to actually see the product they are putting in their client’s home. Remember, clients are paying for the experience and detail designers offer, so there will always be different requirements for different groups. This is the future, so why even try to fight it? It is kind of like explaining to a 16 year old that there was a time without cell phones and I-pods; they look at you like you’re from Mars! I learned the best way to tell how old someone is, is to just ask them what a double feature is; if they’re younger than 25, you’ll get this blank look most of the time!
“One last thing about direct sales; it’s not as easy as one might think. There’s still the problem of returns that will destroy not only the profit of that one item but require many additional sales to make up the loss. You could research it. I believe Restoration Hardware has big warehouses full of damaged and returned items. This I heard from someone that worked as a warehouse foreman. Small business might not have the ability to absorb these costs, so they will have to stay local with their on-line sales.”
The August/September issue of FURNITURE WORLD featured a story about the four active entrepreneurs from Mig & Tig and Mortise & Tenon. Jerod and Maite Garcia (Jerod’s partner in life and business), are owners of Mortise & Tenon, Los Angeles. Vicki Semke and her husband Kirk Schlupp, own Mig and Tig, Chicago. While operating as retailers, designers and manufacturers of wood and iron products in their own factories, they conceptualized YourFurnitureLink as a way to help keep manufacturers in business while generating “outside the box” revenue for themselves.
Jerod told us how his years of experience in the industry led him to YFL. “The website was a natural outgrowth of our experience of building our own store’s website. Once Maite and I put large product galleries on our site, we started getting lots of product requests. One of the first problems that arose was that many of these requests were out of our markets and neither of us wanted to get into shipping out of state. At the same time, lots of friends were going out of business and we thought, ‘what happens to all these leads that we let go, they are wasted!
This is how the idea of YFL was born, to capture these leads and send the consumer or designer to that company’s website.” (Read more of Maite and Jerod’s story in Part One!). Said Jerod, “our website, YourFurnitureLink.com was created as a way to showcase manufacturers’ mid to high end, boutique quality products in a unique, simple format, a lifesaver, where retailers, designers and consumers can find each other. It is a fast and zero cost way for retailers to locate new vendors. Manufacturers can have a free listing on YourFurnitureLink, and advertisers can get great rates on a site that’s growing daily. The more exposure products get the better the opportunity to keep busy and thrive!”
It’s a narrowly developed site that provides information ranging from column advice to showcasing vendors, to listing reputable delivery services, and repair services for wood, leather and upholstery for retail customers.
“This is a blending of all the information a more high-end customer needs to find a reputable retailer via the extensive list of quality manufacturers. It will save the customer hours of pouring over the Internet with every big box, discount site popping up.
“YourFurnitureLink.com provides all the tried and true vendors in our Mig & Tig retail store with access to customers and, so vital to today’s quick action world, put them in touch with reputable dealers in their area.
“Sure times are tough, and in order to stay ahead of competition, we retailers must offer fresh and fast forward designs. YFL offers in-depth profiles on niche manufacturers with new exciting product at the click of a mouse.
“Overseas manufacturers have been very receptive to having U.S. exposure through this site since it gives them an efficient way to break into the American market.
“Advice columns from the M & T’s to fellow retailers in the trenches, along with Question and Answer columns for the consumer, plus highlights on all the new styles, and the new ‘Word a Day’ column, make YFL the site to follow as it develops and matures in the months to come!
Success in building a following on an internet site like YFL is an incremental process that has required some patience. The company has been helped by social media guru and FURNITURE WORLD contributing editor Leslie Carothers who endorsed YourFurnitureLink in her seminar “Partnering for Survival” earlier this year. Said Jerod,
“Leslie found us when we were just beginning this website, I think soon after we launched. Vicki and Leslie talked a lot about the benefits of social media. We decided to use her services to help us kick-start this aspect of our overall marketing campaign, she was there to mentor us through the process. She continues to help us, promote and create introductions to professionals in our industry. Can’t tell you how fortunate we feel to have developed this relationship with Leslie. Vicki and I have learned to be more patient with this process. It’s not like a retail store where you make a big commitment to new products, change the floor, do a big promotion and the people come streaming in. That was the way it used to be. This website and the contacts we are building take time, we can’t rush the process. Many of the people we meet on-line are busy, so if we have their ear then someone else with an existing relationship doesn’t. This is kind of the old fashioned way of doing things, lay a foundation, develop trust, prove we have the ability to create a beneficial product and show results. I think the results are there, but subtler than the immediate experience of a retail store.
“As opportunities arise we analyze together when and where to put our development finances for YFL; there is no set budget. Vicky and I have done most of the marketing. We’ve hired Dirextion, a professional marketing company, to handle the website now, and are looking at other specialty marketing companies as well.
“There is a Team. Mark Griggs of Dirextion and his partner Matt have patiently helped message us in the right direction. Most of the uploading of content is supervised by Vicki. She has assembled a small group of people including two of her employees, Margerita and Magda. And special thanks to Lin, our programmer and Jacoby, our graphic arts guy. And the students from the Harrington School of Design in Chicago. Lastly, Casey and Harry that own Hautehouse are family to us. We go over ideas and work through problems together. They are part of a collective dialogue we have before we act on our ideas.”
The future? Said Vicki; “First and foremost, YourFurnitureLink.com wants to become the primary source for clients looking for unique, medium to high end quality product. Our mode of operating is as a boutique website including both large, reputable manufacturers as well as the smaller independent artisan manufacturer, both of which must have excellent customer service as well as superior product. Within two years, we hope to gather every source, large and small to be part of an exclusive, intelligent search site.
“In 10 years our future will be highly reliant on web-based business. Technology will guide us and so will the I-phone generation. This new generation and the next economic powerhouse will shape the hybrid-internet-store. We hope to be in a position where our accomplishments will give us the freedom and ability to benefit manufacturers as much as possible, and give back to the community on a larger scale.
“We truly believe the end user shops by category today and does all research on line before setting foot into the brick and mortar. The Internet is the future. The face of how retailers and manufacturers function will be based on our economy and the demands of the end user. Ultimately, it’s the customer that directs all of us.’