(Lauretta Converse begins a series looking into the opportunities and barriers to futon expansion into the mainstream furniture market.)
Specialists and dabblers. In a recent Futon Life article, Joe Tatulli noted that our category has matured into two distinct groups, those that specialize in futon sofa sleepers and those that dabble in futons (“Industry at the Crossroads”, Autumn 2002). Specialty stores are typically the ones that offer futon expertise in selection and service. And, typically, full line furniture stores offer a more limited product selection and knowledge base.
Here, we offer a fresh examination of the way in which traditional, full line furniture stores market, merchandise and sell futon sofa sleepers in their larger furniture setting. Futon sofa sleepers offer higher margins than other categories in these large showrooms and here we will look into how traditional stores are taking advantage of these higher margins.
Finding Futon Sofa Sleepers at Full Line Furniture Stores
Full line furniture stores vary considerably in their commitment to the futon category. While the typical specialty store offers fifteen all the way up to thirty futon frames on its sales floor, a full line store may offer only six to twelve futon frames. Full line furniture stores tend to offer futon frames in the low to mid price range. It was most common to find futon frame price points running from seventy-five to four hundred dollars. Customers looking for a futon mattress at traditional furniture stores generally are offered about six choices.
Futon frames, mattresses and covers are most likely to be found in the bedding department of large furniture stores. Futon buyers at these stores are typically responsible for buying futon mattresses and daybeds as well, and these three products are often shown together on the sales floor. Most stores show at least a few futon frames in groupings with matching tables and accessories.
Though larger furniture stores carry many categories of furniture under one roof, they recognize the special needs of futon customers. “Futons have their own language,” acknowledges Tim Sommer, Bedding Department Coordinator for Hom Furniture, a Minneapolis company with six stores, the largest measuring in at 170 thousand square feet. In response to futon’s unique language, Hom Furniture puts a tremendous amount of training into salespeople that present futon sofa sleepers to customers and even gives them a written test as part of the sales training.
Though guarded when discussing their futon sales figures, most futon buyers report strong margins. Futon margins are “better than most,” “in line with, if not more than, the rest of my categories” and “strong”. However, not all traditional furniture stores experience such robust profit margins on the futon furniture they sell. Some buyers report less optimistic margins: “a little less than average.”
A Strategic Category
While full line stores carry futon sofa sleepers because they are profitable merchandise and add to their bottom line, many also carry futons because they represent a strategic category. Mark Garrison buys futon sofa sleepers for R.C. Willey Home Furnishings, an upscale full line furniture store based in Salt Lake City. He says “we use futons to attract a certain part of our customer base.”
R.C. Willey carries futon sofa sleepers in order to intentionally drive a certain type of traffic to the store. Garrison hopes to attract young couples who are setting up perhaps their first home. Selling futon furniture to them is an effective first step in establishing a long term relationship with people who will become repeat futon customers. “Baby furniture is the only other category we carry solely to establish a customer base,” Garrison adds, “We want people to start out with us.” Futon furniture represents one of the best ways to ensure this will happen.
Beside better than average margins and driving store traffic, there is another reason that traditional furniture stores like to sell futon sofa sleepers. “It’s a clean business,” remarks Peter Parker of American Furniture Warehouse. There are “no touch-ups, nothing to go wrong. It’s seamless... It’s rare that we get them back. That’s pretty amazing considering the volume we do. ”
Full Line Store versus Specialty Futon Store
Retail customers are certainly better off buying a futon at a full line furniture store than at a specialty store. At least the big stores are convinced of this. Selection, price and immediate delivery, they cite, are some advantages they hold over specialty stores. Because of the sheer volume of futons that these big players sell, many of them are able to buy entire containers of futon sofa sleepers and pass the savings onto customers in the form of lower prices. This is the way that they are able to undersell specialty stores and assure customers that they will always have every futon in stock.
Traditional stores also believe that they are able to build a stronger, more lasting image with futon buyer. The size of their business, when compared to the typical specialty ‘mom and pop’ stature, speaks to consumers of quality and value. Their size and reputation say to customers, “we’ll be here for you if anything goes wrong.” They doubt specialty stores can boast the same advantage.
Larry Cohen, however, maintains that specialty stores, like his own Fells Point Futon and Bedding Company, will always have the upper hand in selling futon sofa sleepers. “Do (large furniture stores) really care about making two or three hundred dollars on a futon? No. What they are really interested in is how many thousand dollar bedroom sets they can sell, how many two thousand dollar dining room sets they can sell,” says Cohen.
Because they are able to track many product lines from many futon manufacturers, specialty stores are able to choose the best products for the customers. They are also able to offer exclusive products from futon manufacturers that are unavailable to full line furniture stores. Specialty stores are, well, specialists, Cohen insists. They know more than furniture store buyers and are therefore able to offer better quality and value at every price point.
A Piece of the Futon Market
Specialty store or full line furniture store, it doesn’t matter as long as people are looking to futons in order to add value and beauty to their homes, and as long as the category is growing. Right? Well, maybe it’s not that simple.
It has been noted that futon sofa sleepers have an image and a reputation. The futon category, concludes Joe Tatulli, has taken on the characteristics of a brand, a brand that is not always positive in mind of many consumers. Futon Life consumer surveys have also demonstrated the fact that to many people, “futon” means dorm furniture, starter furniture or just low quality.
The way in which large, full line furniture stores carry futon sofa sleepers can either confirm or challenge these existing consumer perceptions of futons. Full line stores can help customers see that futons can be quality, high end, front room furniture. Or they can confirm some of the negative images that consumers may hold toward the futon category. How could they do this? Consider this.
Where and how futon sofa sleepers are placed on the sales floor in a full line furniture store influences customers. It shapes how consumers will perceive and use futons. Are futon sofa sleepers sold in the bedding department? “Oh,” a customer thinks, “it’s a bed. It belongs in the bedroom and should cost about three hundred dollars.” Are futons sold along with the sofas? Customers conclude, “Oh, it’s a sofa. It belongs in the living room. It must sell for about seven hundred dollars.”
The Futon Sleeper’s True Rival
In this way, traditional stores are not competing with specialty stores for futon sales. This is not a “specialty store” versus “full line furniture store” battle, according to Akim Azad of Zad. “There’s lots of room for more people to get into this market,” he believes. It’s not a matter of “cutting into our piece of the pie. Futon’s true rival is the sofa bed.”
To expand the category, futon sofa sleepers need to capture a share of the market away from sofa beds. If full line stores want to realize more of the higher, healthy margins that come from selling futons, and the even healthier margins that come from selling high end futon sofa sleepers, they need to let futons compete with sofa beds.
How do they do this? Stay tuned for the next article in this series, when futon manufacturers, retailers and customers all weigh in with their perspectives, thoughts and ideas on how futon sofa sleepers can compete more effectively in the sofa bed market.