Anybody wanna sell a leather recliner for $199?
Jerry Epperson -- Furniture Today, February 10, 2003
Deflation. Mention it to economists and they'll cringe. Restate it as "lower prices" and the consumer will smile. Can you name some items that have seen dramatic deflation lately? My list would include personal computers, VCRs, DVD players, cell phones and lots of other electronics. They all seem to migrate to lower prices every week.
If you happened to read Wal-Mart's Thanksgiving holiday circular, you almost certainly noticed it offered a recliner for $199.97. (That recliner also is available through its Web site, where the price last week was given as $178.83, plus shipping.) Many of us can remember when $199 recliners were a viable, popular price point. What makes Wal-Mart's recliner different is that it is covered in leather. Yes, a $199.99 leather recliner.
Holy cow! Well, we cannot swear it's cow leather. We just assume it is.
Let's pick on this particular advertised item and show why it's inferior, like we all tend to do when we encounter a particularly lowball price. Yes, it's a two-way recliner, and it's in leather-match, with leather only "where the body touches the chair."
It also lacks the necessities of the day, like a built-in telephone, beverage holder, flip-up table, magazine storage, a Japanese-sounding massage unit, a heater or a spittoon holder. It also lacks a brand name, something many recliners are blessed with. And some assembly is required.
Where did this chair come from? All Wal-Mart would say is that it's imported. For my North Carolina upholstery friends, that does not mean Mississippi.
The styling is a non-distinguished contemporary, and the recliner comes only in black or beige. It's small compared to some supersized big-man's reclining chairs, but it's still very adequate.
We have published retail price point surveys on furniture for decades and, after in reviewing our old reports, we can safely say the industry last offered $199 leather recliners in the year never. At least not in the last 30 years. Back when that recliner price point was popular, they were either in a bulletproof fabric or in creative colors of vinyl.
Our 2002 retail price point survey indicates the lowest leather recliner price point was $399 (suggested retail), and the largest volume was done in the $799 to $999 range. Some leather recliners sell for as much as $3,000, more than I paid for my first new car.
Perhaps Wal-Mart's recliner is an extreme example of deflation, and the bigger question might be: Is Wal-Mart getting into fully assembled furniture in a major way? Sister retailer Sam's Club has been extremely successful with its furniture offerings.
Bottom line? You had better learn to sell on some other basis than price, price, price. If you can't, you likely will be gone, gone, gone. Oh, no, no, no!
