SOHO mfrs. predict upturn
By Furniture Today Staff -- Furniture Today, December 31, 2001
While faced with a variety of big-time challenges this year — the closures of several Top 100 chains, a downsizing in the ranks of the office superstores and a falloff in PC sales — small office/home office producers remain optimistic for an upturn in 2002.
Among the factors contributing to their positive outlook are the resilience of the housing market, rock-bottom-low interest rates and the growing trend toward working at home, including a renewed interest in telecommuting.
"This year has been a challenge," said John Yoder, vice president of marketing and sales for Sauder Woodworking. "I can list a half dozen major accounts that ... we're not serving this year. They've either vanished from the scene or they're in such a state that we can't afford to sell them anymore."
While the amount of retail floor space devoted to SOHO has shrunk, the sourcing side has become more competitive, as Broyhill, Pulaski and others enter the arena.
"That's putting more pressure on pricing to gain real estate," said Neil McKenzie, vice president of sales and marketing at Hekman. "It also means we need to step up the functionality of our products to differentiate ourselves."
At retail, those stores that have "really addressed the category and displayed it well, done some sales training and advertised it have seen growth," he said. "Others that have put their tails in the water and not put a good effort into it have seen their business suffer."
In the coming year, producers will be working hard to sharpen the focus for SOHO at retail. Sales training and point-of-purchase support will play particularly prominent roles.
"Salespeople need a better understanding of the category," said Jeff Grubb, president of Orman Grubb. "This is the most sophisticated consumer we have; ... he knows what the furniture does. But half the salespeople don't, and that's a big problem."
Producers also will be encouraging retailers to put more of a spotlight on the category, on their floors and in their advertising. "Every dealer knows they need SOHO," said Robert Van Farowe, vice president of sales at DMI. "But too many retailers end up giving it way too little space in the back of the store."
Home office is like youth furniture was 15 years ago, according to Kelly Cain, senior vice president and home office product manager at Stanley. "At that time, youth was the stepchild that didn't get proper display and advertising."
As a result, producers are trying to do all they can to help retailers present the category properly. "We're spending more time helping dealers to 'gallerize' their product," said Don Loewen, marketing manager for home office at Palliser. "We try to help them figure out the magic number of groups they need on the floor, which chairs go with those products and how to accessorize the line."
