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Merchandising Covers Swatches, Books, Rings.

Futon Covers - Hot Topic
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Part 3

Merchandising Futon Covers

Inventively displaying, inventorying, and pricing futon covers allows retailers to differentiate themselves, gain a competitive advantage, and increase their business.
With regard to displaying samples, sample books, swatch rings, and sample racks are the stock of the trade. According to Bernie Berch, Arise Futon, the sample racks are quite effective. “People gravitate towards them and, at a glance, realize that they have many beautiful options to choose.” The racks and swatch books also offer the added benefit of being easy to move. “We like to change the look of our showroom frequently,” explains Allen Jackson of Futon Furniture Company in Metuchen, NJ. “We primarily use the sample books because we can easily rearrange them.”
But there are some obvious liabilities to the racks. They take up valuable floor space - the only place for the futon frames. “You can get great racks from the vendors - but clearly there’s not enough room to put out all of these racks.” said a Mid-western retailer. “You need a way to display more samples in less space.”

So where does one put all those samples? A number of ingenious retailers shared their creative solutions with us. One retailer who keeps 200 futon covers on hand folds the covers lengthwise and hangs them on children’s pants hangers that hang on a chrome closet pole. The poles are in a dedicated cover room. Chet Stoler, owner of Futon Gallery, Roseville, MN, explains. “We have a futon cover room in each store that we made ourselves. Based on our experience, what the customer sees, he buys. And the larger the sample, the easier it is for him or her to feel comfortable with their selection.” A number of retailers solved the space problem by hanging the racks or sample books on the wall. Kyle Cherek of Innovative Spaces designed his own racks to more efficiently display samples - and to differentiate his store from other retailers’. “We hinged three oak doors together like a large screen. We then attached poles to the doors and hung the swatch books from them. It’s a lot better looking than the dealers’ racks and, unlike those racks, it allows consumers to look at many samples at one time. We find that the rack itself attracts customers.”
Another merchandising issue arises when the customer wants to take swatches home to see them in the context of their existing decor. Letting the samples out isn’t the issue. It’s getting the customer to return the swatch that’s sometimes tricky. Store policies range from taking the customer’s telephone number, to taking a deposit of five dollars, to taking a credit card impression for $25. “We do not take a deposit, but we always ask for the customer’s name and phone number,” comments Dale Dean, owner of Dean’s Sleep in Lei, New Hampshire. “It’s not that we have to call (the customer) in order to get the sample back. It’s just that we’ve found it’s a good way to get the customer’s mailing information. Then we can follow up on the sale - and send them promotional mailings.” Other suggestions included offering customers the option of taking any on-hand futon cover they liked home with an open invitation to just return the ones they didn’t want. The retailer charges all the futon covers with a credit card and just issues a credit when the customer returns the selections they decided not to keep.
What about after the custom futon cover is purchased? Does the retailer ask the vendor to drop ship directly to the customer or does the customer come back to the store to pick it up? We found futon retailers who did both. It’s really a question of whether the retailer wants to offer the convenience of the drop ship and give up the advantage of having the customer come back into the store to pick it up, and possibly gain the opportunity of making another sale.

How much to have in on-hand inventory is reportedly the trickiest merchandising issue.
The futon retailers we spoke to had a wide range of full futon covers on hand - from 10 to 1500. On average, retailers keep 200 futon covers in inventory. David Smith, owner of Celestial Futons in Ann Arbor, MI, explains. “We keep about 500 factory selects and custom futon covers on hand. We have to. So many of our customers want that immediate gratification. Or they have an immediate need. People come in saying ‘Company’s coming. We need something today.’ If we didn’t have what they wanted in stock, we’d lose the sale.” Allen Jackson of Futon Furniture Company, agrees. “A lot of the business we have is cash and carry. Without a doubt, keeping a lot on hand is a competitive advantage.”
Kyle Cherek, of Innovative Spaces, disagrees. He keeps about 10 full futon covers on hand and doesn’t carry factory selects. “Why tie up inventory and money? My customers can get anything they want in five to seven days.” Dave Maserjian, owner of The Rare Bird in Wappingers Falls, NY, doesn’t think he’s missing any sales either. “The fact is, most people are willing to wait for something they really like.” Minimally, most retailers keep the patterns they have on the floor on hand. Statistically, our research said retailers who had the made the largest commitment to futon covers with on-hand inventory and swatch programs sold the most futon covers.
Nationwide, the price for a full size futon cover also varies widely. When asked to categorize their average selling price, 41 percent of respondents selected $59 - $89. 40 percent of respondents selected $90-129! In general, the higher the percentage of factory selects in a store’s futon cover sales, the lower the average price, since the majority of retailers offer factory selects at a lower price.

Continues on next page

Summer 1998
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