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When I arrived at the (Winter San Francisco Furniture) Market I knew I would be writing an update to my ongoing (fifteen years at least) survey of the state of the futon industry. I sensed something positive was happening. I didn’t know what it was then but I am confident that after this article is finished I will have clearly thought it through and will also have articulated, in the content, the reasons for my good vibrations. As things turned out this recent winter market was the busiest and most upbeat futon market of the past five years.
Here is a self realization to start things off. Since this is a quarterly and not a monthly or weekly publication we tend to continually report on where we (futon sofa sleepers and related furnishings) are and where we are going. Over the years I have found myself frustrated with the lack of a final resolution and have even been chronicled as “writing about futons once, and then writing it all over again.”1 But things change fast these days and the fact of the matter is, no matter how similar one quarter may be to another, shifts and changes in the fabric of the futon industry do occur and their subtlety is not lost on the true aficionado. My obvious desire to understand this industry is mirrored by your desire to understand it as well. I think. I write. You read. You think. We choose. Stuff is made. Stuff is sold. Perceptions are formed. And here we are.
Friday, January 18, 2003-San Francisco Winter Furniture Market-Day One
Things looked busy on Market Street in front of Mart 1. I stepped inside and saw lots of smiling faces, shaking of hands, buyers waiting for their badges, general opening day mayhem. I headed straight up to the 9th floor on the express elevator. It was packed full. My basic plan was start at the top, walk my way down and visit the ten or so futon sofa sleeper vendors in Marts 1 & 2. Things have changed at the Wolf/Lifestyle Solutions space (971M1). SIS Futon Covers is now the cover equation partner. John Christiansen (SIS) and Gary Cohen (Wolf) greet me with a warm welcome, while JC Gohlston (LS) deals with a customer. Before I can get my bearings several other buyers arrive for appointments. Things just seem busier than usual. I grab a seat as things settle down. Eventually the guys sit down and ask how things are around the market. “I just got here,” says I. It’s interview time. I have known most of these men for at least eight to ten years. They are candid. They trust me.
I usually don’t do interviews at futon shows. I typically make my own observations, ask a few random questions and move on. This time I had a different plan. I had four questions: 1. What is the secret of your success? 2. Would there be an economic recovery in 2003? Yes/No and why? 3. What would be the biggest NEW trend in the Home Furnishings industry in 2003? and 4. What could FAI do to make things better? (FAI is the Futon Association International, the industry’s trade group.) I thought the first question would be an ice breaker, but it provoked some deep thought and some surprising and substantive answers. Most satisfying was the interest and depth of thinking that went into the responses. I was flattered that people gave the questions serious consideration and their responses should give you some great food for thought.
“For as he thinks within himself, so he is.” Proverbs 23:7
Some folks responded from a personal perspective while others came from a business angle. Some combined both and their honesty was refreshing and thought provoking as well.
“Drive and adaptability,” said Gary Cohen (to the secret of your success question). Cohen (National Sales Manager for Wolf Corporation) has been around the futon mattress business for years. John Christiansen, of SIS Futon Covers answered from a business slant. “I think we are innovative and very good at image building.” SIS Futon Covers is an industry fashion leader. Several folks spoke to customer service as a theme. “We dig down and find out what our customers need,” said John Widly of Elite Products, “and we deliver it to them.” “As former futon retailers we understand the issues our dealers face and this helps us provide answers that work in their world,” said Matt Sansoe of Adonis Furniture. Mike Gallawa of Night & Day concurred. “We have the ability to innovate and present new products to the marketplace. But beyond that we can help our futon dealers via a rich retail background (thereby) shortening the learning curve.” Tony Wolf of Wolf Corporation talked about timing and providence. “We were at the right place at the right time. To get into the futon mattress business you needed to have a certain set of tools and we had every one,” said Wolf. I said, “Sort of like Divine Providence?” “Yeah, that’s it, Divine Providence. I like that.”
Bob Naboicheck’s mantra still rings true. “We are a fourth generation mattress company doing what we do best, and that’s all we do. We strive to deliver comfort by making the best hand made conventional and futon mattresses anywhere,” he said. Sean Pathiratne (of Lifestyle Solutions) talked about differentiation. “When I look back five, six years ago I see that we (Lifestyle Solutions) went the other way. While the Coasters, Powells and others went low end we went to a better unit and innovative patented technology.” “For me it is simple persistence. Just showing up every day and being there,” said Nancy Taylor of Dream On in Bellingham, WA. Joe Lujan of Pacific Manufacturing took an introspective step back. “I try not to forget the fact that I am a consumer too. Things have to look good, deliver a value, and be appealing. That’s what I look for when I go shopping, and the people I serve need to see the same in me and the products I bring to market.” “For me it’s all about persistence and drive,” said Bob Pecoraro of Big Tree. “We always try to look at things differently. That is the key to our success.”
Karen Day of Otis Bed said you need to “step outside the box.” “In a word it’s high performance. You have to be a little bit different and believe in what you are selling. People can tell. It radiates from you. Customers need to know you believe in what you are selling them.” The classic answer came from J. C. Gholston. “Be consistent, be innovative, and then deliver on what you say you will do.” Promise keeping works for me. “Stay open minded and help others accomplish their goals,” added Denis Bramwell, a futon manufacturer’s rep for over twenty years.
Everyone, to a person, had some reservations attached to their answer about an economic recovery in 2003. “If we go to war all bets are off,” said Tony Wolf. “I think there will be a recovery late in the year… third or fourth quarter if all goes well,” he said. “No,” said David Lee of Adonis, “at least not in California. Even if Bush pushes his tax cuts through, Gray Davis will absorb it all with tax hikes or some kind of tariff.” The consensus was clear. If there is no war and people receive some new found disposable income via tax cuts recovery will come in late 2003 or early in 2004. Others straddled the issue based upon the looming war effort. As I write this piece war remains an option, and few seem ready to commit to whether the war, should it come, will preclude a boom or a bust. “Interest rates are at a 41 year low, and after Iraq happens (or not) things like oil prices, and consumer confidence will fall into place,” said Bob Naboicheck. “People are buying homes and when this settles down the pent up demand for home furnishings should really push things along as we move into the third and fourth quarter,” he said. The vast majority see a general upswing starting sometime in the fourth quarter.
The new trend question (number three) got the widest breadth of responses. “I see the ethnic thing happening in furniture design and styling,” said JC Gholston of Lifestyle Solutions. “People are attracted to a wider variety of styles and they are going with what they like, not with what we think of as traditional,” he said. Joe Lujan of Pacific Manufacturing had one of the most interesting and insightful responses I heard. “The big trend, as I see it, is the change in the way futon buyers think about what their options are when buying a futon mattress. Tempur-pedic and Select Comfort have literally created a new market, and with the power of advertising (spending hundreds of millions of dollars to do it) have changed the dynamic of what the average customer views as the options they should look at when they go out shopping for a futon mattress. This fact changes everything,” he said.
“The real issue for 2003 will be the imports vs. domestic issue,” said Tony Wolf. “And the new open flame (test) standard for upholstery this year and then for futon mattresses in 2005. This is going to change what we make, how we make it, and what it will cost at retail.“ Get ready because it’s coming soon to a futon mattress near you.
Other trends as outlined by these vendors included a still growing penchant toward nesting. “People are looking for value and comfortable products in uncomfortable times,” said Mark Binkhorst of Burlington Futon, a futon cover manufacturer in Burlington, VT. “Making it easier for people to find and purchase products they want is the future, and the web will be a big part of that,” said Karen Day. Nancy Taylor focused on the comfort factor. “More comfort. Plush fabrics, plush feel, vibrant colors. That’s what I’m seeing,” she said.
When it came to the Futon Association and what it could do to make things better (question four) the rallying cry for many was perceptions. “FAI has to wake up and be the strong advocate for futon furniture it should be,” said former FAI president, Bob Naboicheck. “If it weren’t for the strong individual players in the futon mattress, futon frame, and futon cover businesses I don’t see how we could survive as a category,” he said. The Association leadership had set aside any marketing and PR efforts until only recently, and in my opinion the time has come to start blowing our own horn again. “We have to find a way to change the way people think about what we all do,” said Sean Pathiratne of Lifestyle Solutions. “We (Lifestyle Solutions) are moving away from using just the word ‘futon’ and are instead calling the furniture we make sofa bed convertibles,” he said. “I tried an experiment,” said Joe Lujan. “I advertised my product as a ‘sofa sleeper’ and I got a different kind of customer than when I advertised ‘futons.’” Trade people, and full line buyers in particular, do seem to have a perception that ‘futons’ are cheap furniture, and that sofa sleepers are better furniture and therefore cost more. “I think the Association can facilitate bringing the category to a higher level customer by enhancing the image and enhancing the meaning behind the word,” said Karen Day. Day is an Association Board Member. “The message needs to focus on ‘what it is,’” said Denis Bramwell. “This product is a sofa sleeper for the den or guest bedroom. That’s where the business is, and that’s where we need to target the message,” he said.
Another hot button was the annual show, The Futon & Specialty Sleep EXPO. “FAI has done a great job with the show. Now they have to help turn the tide and help bring more people into the fold,” said David Lee of Adonis. Mixed in with helpful hints and critiques of show location options was a strong sense (specifically from West Coast suppliers) that Las Vegas and the new World Market Complex (ground breaking is announced for March 2003) should be explored as a possible permanent show location in the future. “With the money they will spend on advertising alone during the first two years this show should be a huge success,” said John Widly of Elite Products. “FAI needs to be exploring this as an option, and look into running a concurrent show or tying directly into the World Market,” he said. Others agreed. I explained that FAI needs the show’s income to remain in business, and that just such an option has been explored and will continue to be explored as we move forward. Everyone clearly understood the dynamics and value of the Association but wanted to see more buyers or support would eventually dwindle.
The third and final response was a general consensus that the Association should find a way to compile and publish some numbers for the futon industry. “We need real numbers for this industry,” said Gary Cohen. “At the very least I would like to see the number of attendee stores at the (Futon and Specialty Sleep) show,” said John Widly. (He has the numbers now.) “And does anyone know how big the category is?,” Widly asked. I agreed and mentioned the effort three or four years ago that ended when the survey company refused to release the numbers after it was determined that not enough supply side companies had participated.
“There is a soul to this industry and we need to discover what it is,” said Denis Bramwell. “We have to find a way to bring a continual awareness of the value, utility, and all the benefits for that matter, of this category to the trade and to the consumer.” “Unity will strengthen everything,” said Mark Binkhorst. “We have to recognize that whether someone is a member of FAI or not we are all on common ground. We are all in the same futon industry and we need to have unity to promote our category. Versatility, comfort and value. It’s right there,” he said, and I couldn’t agree more.
What has kept this category alive and kicking during the last six years, during the so called post From the Source/New West era? It is this simple truth: futon sofa sleepers are comfortable, well made, fashionable, and versatile, and all that at a great price. Bottom line: consumers love a value, and that just won’t go away. I think that, along with the brisk traffic in San Francisco and the prospect of a great show in Vegas makes for bright prospects and the possibility of a great year for many in 2003.
Analysis Is Not Paralysis - It Is A Process Of Understanding Reality