How can retailers prepare for 2023? Here are ideas from HFA honorees

HIGH POINT — While many experts believe the next six months might be rocky, there are things retailers can do to prepare and succeed.

Leaders from the Home Furnishings Assn.’s most recent Retailer of the Year winners shared their thoughts on opportunities and strategies during a webinar hosted by HFA CEO Mark Schumacher.

So knowing that shakier days might be ahead, how can retailers prepare? Lisa Hawkins, owner of Tupelo, Miss.-based Room To Room, said she’s doing what she can to make her store a destination. She said a sunny outlook helps, too.

“I want to keep focused on what I know are the good things. We’re more event-driven right now,” Hawkins said. “We’re trying to do things where we’re not a ‘boring furniture store.’ We want to have excitement in our store. We’re doing some free things and some educational things that bring people into the store and invite the community in in different ways.

“We had an art student from the high school to paint our windows with fall motifs,” she continued. “I was amazed at how much interest there was in us investing in these young people in different ways. I think you have to stay focused on the positive and not wear yourself out worrying about what’s going to happen.”

Andrew Koenig, CEO of Tamarac, Fla.-based Top 100 retailer City Furniture, said when it looks like times are getting tough, it’s important to sharpen one’s focus. He said there are positives on the horizon such as freight costs dropping and shipping rates returning to more normal levels, but there are also challenging metrics to contend with as well.

“We have to be careful, but what are those vital things we have to execute on? When you’re in a good, growing economy with consumer confidence, you can be more aggressive,” Koenig said. “This year, we want to be strategic with every second of the day, working on the right problems to solve and getting more short-term focused to navigate the next six months of uncertainty.

“We’re going to be very strategic. Rather than knocking out four or five things, let’s knock one out really well,” he continued.

Schumacher asked the retailers what some strategies are for taking care of inventory levels without hurting margins. Koenig said he’s focusing on terms with vendors, getting a little more regularity. “We’re focusing more on our terms. The past couple of years have been pretty crazy. We got a little loose with our terms with our suppliers,” he said.

Hawkins said prior to the pandemic, Room To Room was mostly special-order business but had to shift its model and rely on in-stock programs. Now that the supply chain isn’t as strained, she said the store is reverting back to its custom business.

“We have had decreases in margin, but we’re turning merchandise we stocked up on pre-pandemic. Now we’re reducing and getting rid of that; we had an offsite warehouse sale — we didn’t make as much — but we’re getting that reduced and going back to our model,” she said. “We’re seeing the times come back down to more normal four-to-six-week terms.”

So how are these retailers drawing customers when walk-in traffic is slowing? Hawkins said Room to Room is meeting them where they are.

“A couple of weeks back, we did a senior citizen fair. We took our lift chairs and adjustable beds. We went to things like children’s consignment sales where they have huge numbers of people,” she said. “Data is hugely important for us. Having (customers) fill out forms to win something, then we can market to them.

“I’ve probably lost my mind, but we have a large parking lot, and we’re going to have a large festival in the parking lot (I’m going to be at market). Invited craftsmen, vendors, church groups and we’ll put that on in our parking lot. I think it’s going to generate a lot of traffic. They may not come into the store and buy then, but we stay top-of-mind with the crazy things we do.”

Koenig said now is the time to push prospecting. “That’s an area of opportunity for us. We’re going to get more aggressive there, making sure we have buttoned down processes there and they’re being followed,” he said. “Showcase the success stories when it’s being done correctly and highlight the associates who are driving their own traffic.”

City Furniture also does a lot of giving back and outreach in the community, and Koenig said an unintentional benefit of that is it drives more traffic as people have good experiences with the brand outside the store.

“The more we do for the community, I think it comes back stronger, whether it’s more foot traffic in store or more sales,” Koenig said. “It’s not intended to be a foot-traffic strategy; we’re doing it because it’s the right thing to do.”

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