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Game changers PDF Print E-mail
Written by Joe Carroll   

ImageMomentous events have changed the course of history. When asked to list the most significant in recent years, most of us would immediately think of the World Trade Center on September 11, 2001; the recent tsunami in Japan; the ‘Great Recession' that began in late 2008 and doesn't seem quite over; or, the global influence of the Internet. These examples are ‘game changers'. Once they occurred neither business nor life in general was ever quite the same.

I was recently asked to list the major changes I've seen during the 40-plus years I've been involved in the furniture industry. The more I thought, the more it occurred to me that I have, indeed, witnessed numerous game changers which have definitely influenced or significantly changed the course of our industry. There are lessons to be learned from these examples and they continue to inspire innovation throughout our industry. That's why they're the subject of this column.  HGO readers should feel free to add any other event they feel should be included - in fact, I would appreciate an e-mail that shares those thoughts.

Levitz Furniture

The advent of the Levitz Furniture warehouse showroom in the 1960's marked the transition from the local, full-service independent furniture store or department store where most people went to buy furniture. The Levitz warehouse concept was new to the furniture industry but may have been influenced by a chain of clothing stores popular in the 1950s and 60s called Robert Hall.

Robert Hall was a pioneer of the low-overhead, large warehouse-type facility where one could buy well-made clothing, hung on pipe racks, at discount prices. As a child I remember their radio jingle:

"When the Value goes up, up, up
And the prices go down, down, down,
Robert Hall this season will show you the reason:
Low Overhead, Low Overhead."

The American public liked the idea of no-frills shopping. Levitz sold furniture at discount prices in large, warehouse-type structures with concrete floors stacked in metal racks several stories high. Although not as catchy as Robert Hall's, Levitz also had a popular radio and TV jingle called You'll love it at Levitz.

In Canada, Leon's Furniture continues to build its own version of the Levitz warehouse-showroom store. Meanwhile, discounted no-frills furniture is the norm for many retailers on both sides of the border. Stores like Costco, Wal-Mart, BJ's and Sam's Club are direct descendants of the concept Levitz launched almost 50 years ago.

Quick Ship

In 1980, I had only been selling advertising for Furniture/Today for a couple of years and was meeting with a North Carolina upholstery manufacturer called Fairfield Chair. All of a sudden the president says to me: "What would you say if I told you that I could ship my dealers custom upholstery in 10 days or less?"  I replied: "It would be a miracle. It currently takes dealers 12 to 14 weeks to get their shipments." (Case goods took even longer: 12 to 16 weeks).

He said: "Here's how I can do it. I give the dealer a choice of five different fabrics on any one of three different frames. I can manufacture and ship him any one of those combinations in 10 days or less."

I was so excited by this news that I forgot I was trying to sell him advertising and phoned our editor, the late Bill Peterson, to report what I felt was a major breakthrough in manufacturing.

Bill was like most editors. It was hard to tell him anything he hadn't already heard. He dampened my enthusiasm by saying, "Hell, Carroll, when a guy tells you he can ship in 10 days or less it just means he hasn't got any G---D business. You'll see that when business gets better he won't be able to keep those delivery schedules."

Although Bill was right about most things, he called this one wrong. Fairfield Chair was not the only manufacturer to use Quick Ship as a way to do business in tough economic times. Retailers loved the concept and quickly learned they could greatly reduce their inventory and warehousing expenses by letting the manufacture bear the costs of shipping to them from their inventory.

Not too many years went by before this became the normal way to do business. Most manufacturers, except those at the very high end, would have to bear these costs or lose business to a competitor who had the capital to manufacture, inventory and ship before being paid by his customer. From the mid-1980s on Quick Ship was here to stay.

Fast Delivery - Ashley Furniture

Soon afterward, I think it was around 1988, I was visiting Ashley Furniture in Arcadia, Wisconsin. Sitting in the president's office looking out the window at hundreds of Ashley trucks in the parking lot, I jokingly asked Ron Wanek if he was going in to the trucking business. He then told me that he had long realized that the manufacturer who could lower a dealer's inventory costs by getting his order quickly to him would win out over a competitor with slower delivery.

He told me his goal was to be able to deliver 85% of his line in 10 days or less. He planned to eventually have 1,000 tractors, 2,000 trailers and seven distribution centers around the U.S. to accomplish this.

Later that year, I tested his theory by asking an Ashley dealer in Arizona if he actually received his deliveries in 10 days or less.

"Better than that," he replied, "I usually get my shipments in a week or less. Am I happy with Ashley Furniture? You bet I am. Last year I saved over $90,000 from not having to warehouse Ashley's furniture. Sure, I've had a few quality problems but am I going to give them more business this year? You bet I am!"

Ashley heavily marketed the fact that whereas the national average number of retail turns per year was 2.5, Ashley customers could expect 14 turns or more because they would have furniture to replace that which was sold in a week or so. He ran ads everywhere he could think of explaining GMROI (the acronym for ‘gross margin return on investment') for a couple of years until every dealer in the U.S. was aware of the profit potential in carrying the Ashley line.

There are many more examples and I would welcome hearing your stories of game changers. If there is sufficient interest, I will relate them to you in a future column.

Joe Carroll, former publisher of Furniture/Today, is now president of McNeill Communications, a High Point-based agency specializing in marketing, advertising and public relations. He can be reached at .

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