Room For Growth

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As a casual furniture retailer, you do your best each season to make sure your customers have a good selection of outdoor dining sets, sofas, settees, etc., at a variety of price points. High-end stuff will set you apart from the mass merchants, while a less-expensive line will keep you in the running for sales that would otherwise be rung up at a Target or any of the growing number of discount retailers in the crowded category.

Each year you roll out these lines, following your instincts about what will sell, but also trusting the furniture-makers and their research about what customers will be buying in the coming season and beyond. But how do manufacturers make those decisions? And perhaps more importantly, what decisions are they making?

Most manufacturers are hopping aboard the bigger-is-better bandwagon, with deep-seating pieces and complementary tables or even firepits intended to serve as conversation areas separate from the dining areas. Colors, they say, seem to be going back to more-muted earth tones, with color provided by accessories such as pillows and outdoor carpets. (We're not talking Astro Turf, folks.)

Just Do The Research

Furniture manufacturers get a lot of help from trade associations, which conduct consumer research and share it with their members. One such group is the American Home Furnishings Alliance, formerly known as the American Furniture Manufacturers Association. Pat Bowling, director of communications, says anecdotal accounts about the growing outdoor living room trend are supported by solid numbers.

"Last September we did this research — 600 phone interviews — and the results of that were presented at the Casual Furniture Market last year," Bowling says. "The findings: outdoor space contributes to the value of a home and is a big factor in buying decisions. Consumers are looking at it as outdoor living space. There are several functions and there are different areas for each activity. Then we went to market and saw all of these gazebos and other types of products designed to help consumers create all this personal space."

Scott Coogan, vice president of design and product development for Carter Grandle, Sarasota, Fla., also spots a trend toward not only outdoor living rooms, but outdoor "rooms" of all sorts to fulfill all sorts of separate functions.

"The shopper today is coordinating their outdoor purchases to achieve a total cohesive outdoor entertaining environment," he explains. "Yes, the outdoor room is very much alive and a priority in decorating a newly moved-into home, and at times this will be the second or third area that the dollars are spent on, even before the [indoor] living room."

In addition, both Coogan and Bowling note, consumers are looking for ways to both entertain guests and to spend time alone or with the family. The former has been the market driver since the dawn of the backyard patio, while the emphasis on the latter is an emerging trend, according to Bowling. She calls the more-personal spaces "sanctuaries," and says the influx of gazebos this season are an example of the trend's stickiness.

"Think about your recent trips to Home Depot, Target, wherever," Bowling says. "I'm guessing you've seen a gazebo in all of those stores. Last year you saw a few cabanas, but nothing like this year.

"By 2005 it had trickled down to all price points, so consequently everywhere where outdoor furniture is on display, you're going to see a gazebo."

That democratization has led to a couple of different outcomes. Firstly, it's opened the category up to families who in the past wouldn't have considered anything beyond the ordinary for their backyards. But there's another consequence, says Ken Burrows, president of Terra Furniture and a vice president for the Summer Casual Furniture Manufacturers Association.

"There's a lot more exposure to designs that weren't available in years past," he says. "That's because there are many designs that weren't available before at big-box stores.

"We all go to Home Depot — I went there yesterday. But whether it's Home Depot, Costco or wherever, the variety of designs is much greater. Where there used to be three or four, there's now 12 or 15 styles, whether it's in sling, cushioned, teak, woven resin or a combination. It's everywhere at all price levels.

"It's a threat because every time somebody buys something there it's a potential sale that the specialty retailers have lost."

Of course, many spa and pool retailers have some furniture that's at least in the general ballpark of what such consumers are looking to spend, but often they're not considered.

"Some of those shoppers would never go to a specialty retailer anyway, and you've got to understand that," Burrows says. "And even if they do know about specialty retailers, they think they can't afford it."

He points to an upscale retailer in Southern California as evidence. Roger's Gardens is a stylish and upto-the-minute garden center that sells antiques, casual furniture, holiday items and more. Burrows says it's even considered a tourist destination locally.

"A lot of people in Southern California know what it is but wouldn't even think of shopping there because they think it's too expensive," he explains. But this weekend they're selling a table and four chairs for around $1,095, but one wouldn't think that, so they don't even give them a chance."

The trick for specialty retailers in similar situations, he says, is to strike a balance and offer some more-affordable options without changing your image.

"On the premium side, retailers are not trying to compete head-to-head [with mass merchandisers]," says Eric Parsons, national retail sales manager for Gloster Furniture in South Boston, Va. "They can't. They're trying to separate in selection, but mostly in the necessary service and education that encompass this buying decision."

Among the ways to separate yourself from the cheaper furniture outlets, which have narrowed the gap in terms of range of designs and options, is to market your design expertise, Parsons suggests, adding that businesses like Gloster focus on their dealers and giving them advice they can't get at places where bar stools and bistro sets are stacked to the ceiling.

Dining Or Unwinding?

The AHFA's research uncovered some other ways consumers in the market for furniture are likely to want to use it. In addition to entertaining guests and escaping for a little alone, or sanctuary, time, they're also interested in dining outdoors and generally reading and relaxing.

"What we derived from our research is they have the outdoor dining thing down," Bowling says. "But as the notion of the outdoor living room has evolved, people have started furnishing separate 'rooms.' They're not buying dining sets every year. 'I've got the dining table. What I'd like this year is a place to relax and be by myself.'"

This consumer tendency toward separate outdoor areas is also supported by the association's research, in which 65 percent of respondents said the outdoor configuration would be a factor in home-buying decisions. In other words, a small paver patio or treated lumber deck for the grill and dining set simply won't do it anymore. Real estate that lends itself to separate "rooms" with dedicated functions are more likely to attract attention.

But what about the dwindling backyard space we keep hearing about. For a few years now pool builders and spa retailers have noted that new homes come with smaller backyards than they once did, prompting them to come up with creative configurations to accommodate their products. Furniture companies, on the other hand, haven't seen the same thing. Maybe it's a matter of perspective and purpose, says Parsons.

"It's really the outdoor living room space," he says. "We're looking at the patio, the covered veranda. So while it's true backyard size may be diminishing for pools, that's not the case for the area we're focused on."

This increased room for backyard furniture is frequently being filled with larger and larger pieces that compare in comfort with indoor furniture.

"The trends are toward over-scale frames, and deep seating really drives the market," Parsons says. "So the industry has really changed. Outdoor dining is still critical, but the shift has really moved toward the outdoor living as a larger concept. There's a wide variety of deep seating: double chaise lounges, oversized lounges.

"People are bringing the indoor environment outdoors. And they've come to expect the same comfort on the exterior, also."

Tradition Reigns

Despite recent attention to non-traditional backyard furnishings and configurations, it's a couple of old standbys that still rule the roost, Coogan says.

"Dining is still the leader, followed by the typical living room setup — sofa, loveseat, lounge chair and tables which include consoles, end tables and cocktail tables," he says. "But we also have the 'chat group,' consisting of four very plush lounge chairs or spring rockers that surround a 42- or 48-inch table and a 20-inch height, which for the past two years have been strong contenders for that outdoor real estate."

Of course, not every homeowner has the room to create these sanctuaries, chat groups or dining areas. Condo owners or apartment dwellers also demand a little attention from the specialty retailer. For them, smaller-scale pieces fit the bill, and it's the more-traditional sets that are likely to attract their attention.

"There are very highly styled bistro sets with unique tabletops constructed of exotic and designer-driven materials — accompanied by cafe chairs in hundreds of designs, styles and shapes, all designed for smaller spaces," Coogan says.

Will Premarket Preempt Market's Prominence?

FOR YEARS THE CASUAL FURNITURE MARKET at the Merchandise Mart in Chicago was where manufacturers rolled out their new lines for retailers both large and small to consider and, perhaps, write orders for. The show's dominance was unchallenged. But several years ago, another show, the "Premarket," arose, prompting some to predict that the traditional show in September would lose some luster. Well, that's not a concern, according to Eric Parsons, national retail sales manager for Gloster Furniture, South Boston, Va., who says those attitudes arose out of an ignorance about the show's purpose.

"The Premarket initially came about and continues to exist as a way for manufacturers to secure space on retail floors earlier in the game," he says. "It primarily is driven toward the larger retailers, although all sizes attend.

"It allows the retailers time to set a direction where they want to head, and come September they can refine that or look at some of the secondary suppliers in the industry."

Premarket, then, is primarily a spot for the big wheels to roll, Parsons says, adding that the smaller players — both on the manufacturing and retailing ends of the business — continue to do the bulk of their business in September.

"It's expensive, and the manufacturers want to have as big an impact as they can, and the Mart realizes that and doesn't want to stretch them," he ways. "And it creates more focus for the bigger horses in the industry."

Typically, those "horses" attend not only the Premarket, but also the main on in September, where they'll fine-tune buying plans. The smaller retailers, such as those in the spa and pool business, usually skip the Premarket and wait until September. That decision can be a logistical one (why go in July during the busy selling season.), as well as a practical one (why go when smaller manufacturers won't be there.).

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