Do you still buy furniture by the truckload because it’s a “good deal”?

Larry Furiani, Coaster Company of America

For more information, contact Larry Furiani at 800-221-9699, ext 1149 - lfuriani@coasteramer.com - www.coasteramer.com.

It’s no secret for those of us in the furniture business that times have changed. Everybody sees it. Everybody says it. Everybody knows it. But have you embraced changing times in your store? Or do you hold on to outdated methods of operations because it’s the way it’s always been done?



For instance, do you still buy furniture by the truckload because it’s a “good deal”?



Showroom Gridlock



The preferred method of moving inventory for some manufacturers is to sell a dealer an entire truckload of goods at once. Occasionally, this truckload contains a slight mix of product. Often, it contains at least a quadruple set of the same sofa and loveseat combination. It might seem at the time to be a good situation for both parties. The manufacturer moves his goods, and the rental dealer gets a reduced delivery cost, not to mention plenty of plastic-wrapped inventory for the backroom. And it must work - just think – how many times have you seen a furniture store advertise a “Truckload Sale”?



But what happens when your RTO showroom’s merchandise mix starts looking tired? When business slows down a bit and customers are faced each visit with the same vignettes on your floor? How much potential business is lost because what you display is not new, fresh, or engaging for the customer? And we haven’t even discussed the carrying costs associated with all that merchandise in the back room.



What I’ll call ‘showroom gridlock’ is a situation that occurs not just in the rental industry, but also in retail. Economic circumstances have caused the retail furniture business to slow down. Retail showrooms are bloated with furniture that becomes more dated each week it goes unpurchased. Until dealers find a way to move the old merchandise into customers’ homes, the situation is unlikely to change. And customers will continue to shop until they find a showroom that merchandises a fresh and exciting mix of product.



Younger Customers Want Instant Gratification



Changing demographics have an impact on the furniture business, as well. The first post-World War II Baby Boomer (of 77 million) will turn 62 and begin collecting social security on January 1, 2008. As Boomers continue to age out of the rental market demographic, the next group, Generation X (born 1965 – 1977), becomes more important for both furniture companies and rental dealers.



Generation X’ers lean toward instant gratification. They tend not to save for major purchases, but will instead find ways to finance what they need so they don’t have to wait. They also view furniture as a more disposable, fashionable item for their home, and not as a long-term investment.



The way to attract the business of this powerful demographic is to provide an ever-changing assortment of trendy furniture and offer them a way to get it quickly and easily - the very hallmarks of the rent-to-own transaction.



So how can you ensure your showroom carries the type of stylish furniture designs that will move quickly and appeal to a demographic that appreciates change? The simple answer is to eliminate inventory from your business model.



Eliminate Inventory?



It’s possible and also profitable to partner with a furniture company that will act as your personal warehouse. Imagine being able to eliminate the inventory equation and instead, focus on what you do best as a rental dealer.



Partnering with the right furniture manufacturer can allow a dealer to quickly purchase and economically merchandise a wide range of styles on the showroom floor. Plus, a furniture partner should also provide input on the best-sellers and newest-looks for different categories of furniture. They should be vested in helping you rent as much product as possible. Not to mention, they should have a pulse on the emerging demographic tastes and trends in the marketplace.



Coaster Company of America, for instance, offers rental dealers next-day delivery on the latest styles of living rooms, bedrooms and dining rooms plus occasional tables and decorative accents like mirrors and lamps. The company’s on-hand inventory is made up of about 3,200 different items, including everything rental dealers need to keep a showroom looking fresh.



So which backroom would you rather rent from…the one with the identical plastic-wrapped sofas or the one with 3,200 different items operating out of multiple logistics centers across the United States?



It wasn’t always possible to conduct business this way in the rental industry. But like I said earlier, times have changed. If you haven’t considered new ways of merchandising your showroom floor beyond the tired “Truckload” approach, the coast is clear to go down a new road. Just make sure you’ve got the right furniture partner along for the ride.



For more information, contact Larry Furiani at 800-221-9699, ext 1149 - lfuriani@coasteramer.com - www.coasteramer.com.

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RTO Magazine is the leading rent to own industry print publication.