With the economy continuing its rebound early this year, many specialty outdoor retailers enjoyed a strong start to 2014. But several factors temper their enthusiasm for the rest of the year.
The competitive landscape is more crowded than it was before the recession hit in 2007. Specialty dealers say catalog and online retailers, furniture dealers and mass merchants now offer patio furniture that is more comparable design-wise to what they sell.
Meanwhile, they had an unseasonably cold spring to deal with.
Barry Troll, president of Extension Patio in Trenton, N.J., said May 8 in the Mid-Atlantic region felt more like March 8. He said snow in April and freezing temperatures as late as early May prevented the locals from getting outside to clean off their decks and patios and evaluate their furniture needs.
He doesn’t think he’ll get all that business back over the summer, either.
“It’s pretty simple,” Troll said. “If you have a four-month season, it’s good. If you have a three-month season, it’s not as good.”
The spring weather wasn’t much better in the Northeast.
“It was depressing,” said Andre Pimentel of Dartmouth Casual Furniture in Dartmouth, Mass., near Cape Cod. “One customer said it was the worst winter and spring he could remember in 30 years.”
But to Pimentel’s surprise, his business in March and April was up over the same months last year. He said he wasn’t sure why.
“I know there were a lot of big ticket sales, in the $5,000 to $10,000 range, so that helped to bring the numbers up,” he said. “We definitely saw everything loosen up economically, starting a couple of years ago, to the point where I don’t think the economy is an issue at all.”
Pimentel said his biggest challenge this spring was keeping up with demand. He said he hired additional warehouse help to make sure all his orders were delivered on time.
Kelli Gehman of Bowman’s Stove and Patio said bad weather didn’t hurt her sales, either. In fact, she said she thinks it helped. The inability to do spring cleaning projects meant her customers had more time to shop early, and that’s what they did.
“We started delivering furniture when there was still snow out,” Gehman said. “It was a very long winter, and I think it made people realize that they wanted to have their outdoor spaces set up as soon as possible.”
Bowman’s gambled and stocked up on core furniture lines so there would be plenty available for immediate delivery. It paid off. Gehman said the store had a major advantage being a specialty outdoor store with outdoor furniture on display year-round. Many competitors, she said, were much slower to set up for the spring selling season. Bowman’s got that business.
In the Myrtle Beach area in South Carolina, Custom Outdoor Furniture President Gregg Holshouser said temperatures remained in the 40s and 50s through mid-April and kept business equally cool at first.
“But once it started getting warmer closer to Easter, we got crazy busy,” he said. “The weather just delayed people getting things done and packed it into a month’s worth of time. If we’d have had nicer weather early, the business would have been more spread out.”
Ashleigh Kosin of Bell Tower Outdoor Living Company in Richland, Mich., said her region endured record-low temperatures on multiple days in March and April. The area also had its second-highest snowfall since records started to be consistently kept in 1905.
Custom orders, however, saved the day, as many customers made their furniture purchases in the frigid days of March so they’d have their furniture by June at the latest.
“You just market that to customers – ‘Give yourself enough time to get what you want,’” she said.
David Schweig said custom orders also were up at Sunnyland Patio in Dallas, helping the retailer enjoy a dramatic year-over-year sales increase despite roller coaster spring weather in Texas.
“It was still very cold here in March, which is very strange,” Schweig said. “April was also bizarre. We did a TV shoot with the ABC affiliate in mid-April and had to have the heaters on. It’s just been very up and down.”
COMPETITIVE EDGES
As specialty retailers deal with unpredictable weather, they’re feeling the competitive landscape shift beneath their feet.
Troll, for instance, said major retailers in New Jersey are advertising more heavily this year than they usually do. Catalogs from companies such as Restoration Hardware and Frontgate are also expanding their reach.
Bell Tower encourages customers to bring in those catalogs so the staff can help them find a similar set or piece with a better price point or warranty, Kosin said.
“We try to embrace the catalogs and use them as a selling tool,” she said. “We try to take a catalog photo they’re looking at and line it up with the manufacturers we have. And we tell them if they need replacement cushions later on, they’ll be able to get them here.”
Pimentel said he also sees a benefit from the catalog retailers.
“I think the catalogs do take some of our business, but it’s probably a wash because all the advertising they do brings greater awareness to the industry,” he said. “I just had a couple in yesterday who had been receiving all the Frontgate catalogs, but she didn’t want to buy from it because she wanted to see the furniture firsthand.”
Competition in general has given these retailers a chance to sharpen their competitive advantages.
For instance, Troll said Extension Patio earns the loyalty of its customers by responding quickly to warranty-related requests. He said his store also does repairs and offers parts and accessories, such as the little rubber nubs that protect the underside of glass tabletops and customers know they won’t find anywhere else.
“Lots of stores are only interested in selling a product now and moving on to sell the new stuff to the same customers in a few years,” Troll said. “I keep customers coming back for the replacements and repairs, but they bring their children and grandchildren in to buy from us because they’ve had such a good experience.”
Like Troll, Holshouser said service after the sale has helped him fend off the websites. Custom Outdoor Furniture began as a re-strapping business and continues to offer repair services.
“If you do have an issue later on down the road, you can come right back to our store and we’ll handle it for you,” he said. “You order it online and who knows what will happen?”
Schweig said his store’s focus on patio furniture is his main advantage over catalog retailers and full-line furniture stores. Still, he is bracing for the arrival of Nebraska Furniture Mart in 2015. Its 1.3 million-sq.-ft. distribution center and the 560,000-sq.-ft. retail showroom will become the largest home furnishings store in North America.
“But all we do is outdoor,” Schweig said. “No fireplace or grills. It’s all outdoor furniture, and we have a uniqueness about showing full vignettes that leave nothing to the imagination. That makes a big difference in the size of our tickets. Many people buy the whole thing as shown.”
Another factor helping specialty stores deal with increased competition is engaging their customers even when they’re not in the store. Social media sites such as Facebook, Pinterest and Instagram are fast becoming marketing staples, although not every specialty retailer sees the value.
Troll admitted he doesn’t grasp the value of social media and e-commerce, which is why he leaves the online marketing to his daughter, Jennifer.
“There are two generations here, and we do things differently,” Troll said. “Yes, Facebook is bringing us customers. And yes, people are looking at and shopping on our website. I don’t like it, but people are coming in and mentioning what’s on the site.”
Schweig is in the same boat as Troll. His son, Brad, is in charge of Sunnyland’s online marketing strategy, which includes presences on Facebook, Pinterest, YouTube and Twitter.
“Ask consumers where they heard about us, and most will tell you they went online,” he said. “You can’t put your head in the sand and ignore it. It’s part of our day-to-day life. I’m not into it and don’t understand why people care about my opinion, but this is a different generation.”
The trick to using social media effectively is changing it up as much or more than remerchandising a display, Kosin said.
“It’s important to just be up-to-date on all of the social media sites and have messages and photos and everything streamlined across all of them,” she said. “The more I use [social media], the more success I have. The trouble is I train, I sell, I buy; I don’t have the time.”
And as the menu of social media options expands, so does the time needed manage it. Bell Tower, for instance, has presences on Facebook, Twitter, Pinterest, Tumblr, Google+, ShutterFly, Instagram and Houzz. But many dealers, like Holshouser, are content with a Facebook page as a supplement to advertising in more mainstream media.
“We try to put something new and fresh on Facebook a few times a week,” he said. “We’re not a very big operation, so it’s kind of a group effort.”
Gehman said having a Facebook page is relatively easy, and most customers expect the store to have a presence there. But beyond that, Bowman’s lets the store itself serve as its primary marketing tool.
“We built a destination store as far as the look of it goes,” Gehman said. “It’s one of those stores people will stop into once or twice a year even if they’re not in the market for patio furniture. We’re visible from a major road, and when the people see the store they want to check it out.”
But like most specialty dealers, Gehman said the in-store experience ultimately is the foundation on which the business grows. Having a variety of high-quality merchandise ready for customers to take out the door and providing good service during and after the sale spurs the kind of word-of-mouth that keeps specialty dealers going.
It’s a strategy many have found not only sets them apart from competitors. Especially this spring, they saw that it’s weatherproof. 