Growing in times of recession – Furniture manufacturer
Growing in times of recession – Furniture manufacturer
A mid-tiered furniture manufacturer was struggling to grow in a time of recession
The Challenge
Sales were declining as consumers bought less and less furniture during a recessionary period
Retailers were purchasing less product and keeping less in-store and off-premises inventory
Retailers were not reordering quickly – when three items in a five furniture display sold, they were not re-ordered leaving two orphan pieces of furniture in the floor display
Retailers were laying off salespeople providing less opportunity for consumers to get the design advice they needed
PROJECT DETAILS
INDUSTRY
Furniture retail
The Findings
We performed an exhaustive amount of research on the company and the furniture retail industry and found:
Despite the company’s furniture not having brand labels on the product, retailers were quick to note that they could always spot this company’s furniture because it was always so “fashion-forward.”
Given the dire state of affairs at retail, retailers were open to suggestions to improve sell-through
The company had an extraordinary amount of excess fabric in good condition from 30 years of operations that they never discarded
The Solution
The company’s value proposition was revised to “a fashion-forward company for home expression.”
This allowed the company to focus more upon on non-furniture options that took advantage of their recognized sense of style
The company altered its brand designs so that the three best-selling styles worked well together when mixed and matched – eliminating orphaned items when part of a style is sold off the floor
The company took all of the expensive fabric and made high profit-margin pillows that they offered to retail for free in exchange for buying more furniture
The company self-service signage that retailers had to display encouraging consumers to play with the pillows and custom design their own furniture settings and pillow adornments, encouraging customer interaction with the product
The Results
We took advantage of the challenges posed by the recession and the company’s revised core value proposition to create and produce a winning strategy
Revenues rose from $55M to over $100M in three years – during the heart of the recession.
