Embattled RTA makers thinking outside big box
Tom Edmonds, Contributing editor -- Furniture Today, November 10, 2003
If you've been keeping an eye on ready-to-assemble furniture, you know that it hasn't exactly been a picnic for the North American factories. Without giving you a blow-by-blow list of the issues confronting the flat-pack specialists, here are some of the sad stories from the recent past: Key retailers folded or abandoned furniture. The hottest category went stone cold in about a week. Imports captured market share at the low end and at the high end of the RTA price spectrum.
Given all these challenges, it's not hard to understand why sales have headed the wrong way, at least among the public companies that report figures.
Nonetheless, we can't help being impressed with the creative energy these companies are putting into merchandising. Clearly, they've been thinking outside the big box, with new product categories, new channels of distribution, new merchandising concepts and old merchandising concepts with a new twist.
Here are a few of the new concepts we saw at the recent High Point market:
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Craft carts for sewing, scrapbooking and collecting from Creative Interiors and Sauder, both of which are pursuing craft and hobby stores as new channels of distribution.
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Garage storage for auto enthusiasts from Sauder and Hot Rod magazine, a licensing tie-in that may open the door to auto-parts stores.
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Garage storage for anybody with a garage from Sauder and O'Sullivan, which already has its Coleman garage program in home improvement stores.
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Kitchen islands and storage pieces from numerous vendors, including the new Betty Crocker licensed program from Home Styles.
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Assembled case goods from Bush and its Eric Morgan label.
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A unique and convenient power/USB/Internet connector, the Digital Satallite, to go with desks from O'Sullivan.
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Multi-piece room packages in a single take-with box from Ameriwood, Carina, Creative Interiors and O'Sullivan.
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Solid-wood trim and fronts and veneer collections developed by Ameriwood, Carina and Sauder.
I'm not smart enough to tell you which of these programs will work, if any, but it's clear the RTA factories are supporting retailers with new ideas to capture the consumer's attention. At the same time, they are looking to get new categories of retailers interested in furniture. Who knew that Hobby Lobby and Pep Boys would ever be target accounts for furniture?
With fewer retail chains buying RTA, the battle for floor space is obviously hotter than ever. New ideas are being co-opted by competitors at broadband speed, as some of these factories can't afford to see sales slip further.
We suspect there may be additional industry consolidation beyond the recent Sauder acquisition of Studio RTA or the Ameriwood purchase of Carina. It could be the pie has shrunk too much to support all the players, but to their credit, the factories are making strong efforts to not just steal larger slices but to expand the entire pie.
