Pushing The Price Envelope, or How High Is Up?

Futon frames. Interior decoration focus for the 70’s hippies, or home-furnishing article of choice for the cash strapped college student? Price? Don’t say cheap; use the euphemistic adjective, value. Tufted, fire proofed, welted, rolled, miss-bored and miss-packaged, the misunderstood orphan of the home furnishings and bedding industries. Or not?

Well, actually not. The last few years have seen the futon industry reach out into markets usually reserved for more expensive, so called conventional products. Price points and the quality of frames, covers and mattresses have been rising steadily over the last five years. It’s not unusual for a futon, frame and cover to start at $1000 retail, and futon products are beginning to be recognized by retail customers as an acceptable choice for the front room of today’s upscale homes.

The question remains, How did we come by our old, low brow image and how are we changing it? Where are we now and what tools do we have to get some place else? What does this mean to retailers, both specialty stores and mass marketing giants?

The futon industry traces its roots to young entrepreneurs outside the conventional furniture and bedding industry. We saw a need for products that no one else saw. That’s why we call ourselves, as a group, the alternative bedding industry. We built our products in garages and converted warehouse factories. Because we lacked the financing of the big guys we made simple, inexpensive products that were easy to move around and served more than one purpose.

We’ve grown as individuals and our industry is growing with us. Conventional manufacturers no longer ask us if the futon is just a passing fad but have recognized the positive features of our products and are now developing with us. It seems that this growth is spawning the development of upscale products.

What the People Say

Recently I talked to some of the people in the industry about the importance of more upscale products and the role that they will play in the futon industry future.

Bob Glade, of Big Tree credited Chet Stoler and August Lotz for “bringing the image of this business up.” Bob feels that the future of the industry is critically tied to upscale products. “There will always be low price point products in our industry, but, if we don’t develop a high end look we will go by the wayside,” Glade said. Big Tree promotes itself directly against the conventional furniture industry as well as the futon specialty companies. The Big Tree product line includes upholstered products along with the more familiar futon and frame combos. Another unique feature that I’ve noticed about Big Tree’s program is that the frames can be purchased with a cover that hides the back slats and mechanism on their wood frames. This is especially important for chair size products that are often set up facing a couch with their back exposed to the room.

What I felt was important about what Bob had to say was that Big Tree, Big Sleep was focusing not on just the quality of the covers, frames and mattresses but their compatibility as components. All three of these elements need to be brought together to make one quality product.

Bob Naboichek, of Gold Bond also spoke of the necessity of developing high end products while showing some affection for lower cost products in our industry. “Our industry is one of the few where the retail customer can go from a Yugo to a Rolls-Royce for a hundred bucks.” My interview with Naboichek was punctuated with the usual scolding I get when I refer to the futon as a pad. “It’s not a pad, it’s a mattress,” Bob reminds me. Because I design furniture, I tend to think of the futon as a pad. Bob builds futons at his factory and justifiably wants to avoid any language that diminishes his products.

Naboichek feels that some people are primarily looking for a bed, others for a couch and will choose the product that best suits those needs. Either way the products must be of the highest quality.

Mark Schlicter, of August Lotz feels that as the futon industry becomes more recognized, price points are going to go up. Schlicter feels that his company is not alone in producing high quality products. “Every component in our industry has gotten better,” says Schlicter, who advises that we “forget about the past,” and sell the fact that we have better products.

“Customers will see the value of futon products when they see it sleeps good, looks good, is good!,” he said.

Harvey Bigelow, of ECIN Industries feels that quality is not only a good option but that it might be the only option left for domestic manufacturers. “We can’t compete with imported products on price. Quality is all that is left.”

Backed up by his history as a boat builder Bigelow stresses the importance of quality, price and service, and I agree, service is every bit as important as getting the holes drilled in the right place.

Relative newcomer Mark Crispin, of Marquis Designs (part of New Dawn, an East Coast specialty retailer) feels that he is promoting a furniture product. “When I bought New Dawn I fell in love with the wood, the smell of it,” Crispin told me. He feels that there are three important aspects to quality, high end products, “look, comfort and function.”

“We have a lot of very creative people working for us. That is why our products look so good,” Crispin says. He also said they felt that the conversion operation is important for high end products. “We spent a lot of time on our conversion mechanism so that our frames could be opened easily, from the front,” Crispin said. Predictably, I agree.

Kevin Cahill of Depth of Field stores in Minneapolis explained the role mechanisms can play in selling high end products. “The problem with mechanisms on low price point frames is that when you tell the customer this has a front operating mechanism, it can unsell every other frame on the floor that doesn’t,” said Cahill, who added, “On the more expensive frames that’s not such a problem.”

I got more advice on selling high end products from Travis Stoler, sales rep for Innovation U.S.A. “Retailers should avoid selling upscale products as a package,” Stoler advises, “Work with the customer and help them develop their choices for the frame, cover and mattress that works well together and they will have a better understanding of why it costs what it does.”

State of the Industry

Essentially, everyone I talked to in the futon industry agrees that for our products to prosper they have to be marketed as furniture with an emphasis on their special features. I think we all have an understanding of the industry’s humble beginnings. I also think that we have a grip on where to go in the future. Many long term participants can tell you how to make the best of our assets while increasing the quality and appeal of each of the three component products that customers combine as one in their homes. Are we there yet?

Well, probably not completely. The February/March issue of Elle Decor focused on “Sofa Beds” in their regular feature “Truth in Decorating.” Designers David Easton and Maxine Harrison wrote an extremely engaging article on these products which were priced from $1500 to $8500. No futons were included in this review even though we clearly fit the criteria. I wanted to ask David and Maxine (sort of author to author) why we weren’t invited to the party. I’m waiting for a call back, if I get one I’ll share it with all of you.

What about retailers, great and small?

The large retailers like Wal-Mart and Cosco are not solely focused on price. They seem to look for products that consumers recognize as a good value. For example, while I was shopping for a beach lounger I discovered that they not only stocked those products, but they had them in three different price categories. They carried quality products that they could source cheaply.

The true benefactor of these high quality products, I believe, should be the futon destination store. I tell my customers that they will never see the products that I sell them in Wal-Mart at half price. When these stores focus on co-ordinating the futon, the frame, and the cover customers are automatically getting a quality of service that they couldn’t get from the mass retailer.

Beyond that, we are beginning to see a softening of the line that once differentiated (what we call) our “alternative products” from what we saw as the rest of the furniture industry. Many of the people I talked to for this article stressed that their marketing was aimed at the main stream furniture industry in general instead of the futon industry specifically. In other words, our efforts to make our products acceptable to a more general audience is helping to change the image of our industry in the marketplace.

Chet and Kathy Stoler’s retail store in St.Paul features a mix of futon and conventional furniture products, a trend that is growing in futon destination stores all over the country. This fall, in a follow up article, I’ll focus my interviews on retail dealers and get some feedback on how their sales and marketing plans are coping with higher end products. In the meantime please write or E-mail me about your ideas on this topic. I’ve missed talking to many of you, this would help me catch up.