The furniture industry needs to learn and evolve.
"How are we going to work together for tomorrow?" asks Dennis Novosel. He directs the question not only to the 60-plus staff of his pride and joy, Stoney Creek Furniture, but to the entire residential furniture industry, retailers, manufacturers, suppliers, labor.
Stoney Creek's President and founder, Dennis also serves as Co-Chair of the Residential Furniture Sector Advisory Council, a gathering of all these people, plus representatives of the Ontario Ministry of Economic Development and Trade. MEDT's winning concept of the Sector Partnership Fund, established to provide industry with needed seed financing, initiated "A great couple of years of analyzing industry problems, and putting them in perspective," said Dennis. The industry's Strategic Plan, under the supervision of RFSAC, targets increased shipments over the next five years and the creation of 6,200 new jobs.
"RFSAC will draw people together on the right track, thinking, learning, planning, meeting, sharing ideas. We'll need to follow-up, pay attention to what they're saying. We'll have to change and evolve."
For 26 years Dennis has been "learning, changing and evolving, following up and paying attention," most likely the top secret of his considerable success.
Stoney Creek is a destination store, his market area the entire Niagara Peninsula, Stoney Creek, Hamilton, Burlington and "Probably Mississauga from Highway 10 this way". Customers also come from Pickering, Whitby, and as far away as North Bay, Ottawa and the USA.
"When I was a kid in the '5Os and '60s, my father was in the moving business and also, automatically in those days, in the used furniture business. When I finished high school, my father sold everything out and retired, and I went to work as a draughtsman at Otis Elevator. I had my own delivery business since I was 16. I'd asked for a car but my father said a truck was better since I could make money with it. After nine months at Otis I quit and worked my own business full time. But my father had kept this property (right at the heart of the Golden Horseshoe between Toronto and Niagara Falls) and he talked me into opening a 5,000 square foot store. I borrowed $1,000 from my sister and brother-in-law, and that was the beginning,
"It was a five man business. For the first 18 years we worked 16/18 hour days. One of my employees, Jim Ordowich, kept going to home shows. He was sure home show attendees would buy. Generally speaking they're mid to higher end people who take great pride in their homes and lifestyles, and they want to find the best and most innovative products. I was skeptical at first. We did a little one that didn't work, but then he convinced me to try the National Home Show in Toronto, a big one. It did work, and it worked so well for us that at one point in time we were exhibiting at 33 shows annually.
"He also talked me into buying a major line, and business built dramatically. But we were just a few people in a little space with a chance to become a big independent.
"We had to expand, so we decided to improve our skills base and find a beancounter. Jim Carruthers is our COO/General Manager; he's just become a partner.
"Jim Fee, our Sales Manager, has also just been made a partner. He's been working with me since he was 15 years old. He has great people skills and I encouraged him to go back to school. Jim now has a business degree."
Jim told us the team no longer attends 33 shows. "We do go to four or five of the big ones, seven bridal shows and about six mall shows, about 18 a year now. They are still beneficial, but the recent recession has changed buying habits somewhat."
Dennis continued, "Education permeates the entire company. The more professional we've got, the more professional we want to be! We pay for our people to go to school; we continue to suggest skills to update and enhance their jobs.
"People who drive the trucks, who work in the warehouse, take supervisory courses. We do a lot of cross-training. Everyone who works in the showrooms goes out on the trucks once a year and vice versa. It's a good learning experience. It makes them all buddies.
"At the old store everyone was on salary and commission. We've done away with that.
"Commission sales in our industry is the worst possible way to remunerate people. When we moved here we put everyone on salary, with a bonus structure based on hours worked. We came up with a package that gives people more than anyone else in the industry, based on team goals, store goals and individual goals. Employees think of this company as their own. They are empowered to treat the customer as if they own the company. They have more real say with manufacturers' representatives than I do. The only time I'd ever chew them out is if they begin working with a customer and don't follow through to a proper conclusion.
"In a recent survey in the States, people were asked about their furniture shopping experiences. Response told us that what should be the most fun was actually the worst! There is a huge population out there who want to come to us. We, the retailers, seem to be doing our best to drive them away."
Dennis' emphasis on the learning process applies equally to himself. "I attended a conference five or six years ago at the Center for Retailing Study in San Antonio, the beginning of the general recognition of the importance of customer service. It was enlightening to hear the stories of some of the big companies. The most successful were the ones that went unbelievably overboard to supply great customer service. We can't have customers believing furniture guys are trying to rip them off.
"I got an education too through working with the NHFA (he was a Director for eight years), and the CHFA." (Canadian Home Furnishings Association of which he was President). He reminisced, "We all sat together, talked about our experiences, shared our ideas about advertising, bookkeeping, warehousing. The conglomeration of a half dozen different ideas can make things happen."
For the last five years, Dennis has sent two people to each Management Development Course at High Point, other key people to Chapel Hill. Last month, he accompanied 12 staffers to the NHFA's All Industry Convention at Orlando, amongst them truckers and warehouse people. "One of our suppliers is English, so two people went to the factory there, then they had a couple of extra days in London, time off to play. It's more than money that motivates.
"We're all constantly networking at all levels, peers talk to peers, employees share ideas and retain relationships, a sideways motion."
Stoney Creek has grown from $150,000 annually to over $5 million, with from 15 to 40 percent growth each year. Presently, there are 30,000 square feet of showroom space, 8,000 square feet clearance space, and 50,000 square feet in warehousing. Dennis plans to expand 75,000 square feet this year, 45,000 showroom and 30,000 in warehousing.
"It's all been a combination of luck and perseverance," said Dennis.
The store's layout is unique, with a variety of levels and walkways. Novosel did not want to lose the warmth and intimacy of a small store, so created three concentric circles on three levels, an eight foot differential with two four foot stages.
"I've traveled all over the USA and Europe looking at stores, absorbing information. We've discovered that 90 percent of people will turn right as they enter the store. The walkways are designed to lead them through living room settings at base level, next dining rooms and then bedrooms at the highest level, just as they would be in most homes. There's fun, excitement, new things, impulse items, all the way along. And we've galleried by product to make it easiest for the customer."
The new section after expansion will be two level, "A seamless con tinuation. And we will expand to different products too.
"When customers enter the store they're greeted by a receptionist rather than a sales person. They're given the freedom to enter the store without being approached. When they do meet a salesperson they are usually coming in the opposite direction. The customer is asked if they've been in the store before. If they have not, they are told immediately that the salesperson is not on commission; this disarms the customer."
He defines Stoney Creek's product lines as medium price point. "We are country, easy, comfortable lifestyle -- country colonial, country English, country French -- soft, inviting, good to return to each evening after hectic days. We need this atmosphere for the staff as well as for the customer. When we expand, this is going to be the best, the easiest, nicest store to come to."
Novosel uses every known method of communication to reach his customers. "I don't think a furniture store can exist or grow without the creative mining of its customer list, preferably monthly. Creative is the operative word. You must be careful; you can't be seen as pushy. Develop and mail a newsletter two or three times a year that doesn't sell anything. We have two preferred customer sales that are really events. Then two warehouse clearances that preferred customers have access to before the general public. We've had coloring contests for kids with a complete children's bedroom as the prize. There are cross events with Bell Telephone and Polaroid, giving away cameras, telephones and putting the name of Stoney Creek Furniture in the same context as world class corporations.
"We're not doing any television at the moment; costs are too high to achieve reasonable market penetration. We do plenty of direct mail, catalogues and inserts. We advertise in the newspapers in conjunction with radio for events and this has proven very successful. Our ads are big and bold, directly to the point. Our trucks are traveling ads, painted with pictures of the store to entice customers to 'Come home to Stoney Creek Furniture'.
"The reason I'm so involved with the furniture industry is because I just love it! And I don't think it's too altruistic an idea that if we all get together and learn, change, and evolve, we'll make it!"