Retail Observer

RETAILOBSERVER.COM FEBRUARY 2016 52 R esidential furniture is becoming a new source of revenue for many retailers. With that in mind—and knowing that outdoor furniture is continuing to outpace sales of residential furniture—we recently spoke to Gary McCray, President at Klaussner Furniture to get his take on the viability of the category as well the opportunity the category can represent for retailers looking to get into the segment. MA: Gary, as a veteran of this segment, give us your overview of the market for outdoor/casual furniture. GM: According to a recent universe study conducted by Casual Living Magazine, the outdoor segment is a $6 billion plus segment! That is a huge opportunity, and one that we see continuing to grow as more and more consumers focus on the newest room in the home—the outdoor room. We also see wonderful opportunities with firepits and wicker furniture. MA: Why has it outpaced, and why does it continue to outpace, sales of residential furniture? GM: Consumers are putting more focus on outdoor spaces, both in existing homes and when they plan new construction. Also, thanks to many of the home improvement shows, there is a rising consumer awareness of more stylish and functional outdoor furniture. Suppliers, meanwhile continue to make tremendous strides in outdoor fabric styling as well as in overall construction. With consumer confidence up, people are investing in their homes again, in part, by creating outdoor living spaces. It seems wherever you look, you are seeing a big spike in outdoor cooking areas and even outdoor electronics such as TV's and outdoor home entertainment, which also creates a growing demand for outdoor furniture. MA: What is your outlook for the category, near and long-term? GM: Without a doubt, we will see continued growth in the short term with more focus on the deep seating/lounging aspects. Longer term, we are calling for a steady, less dramatic growth for the future. We will continue to see good growth as the Millennials' spending continues to grow. This is a generation that likes to entertain both indoors and outdoors so it's important that we market to them in a relevant and exciting way. MA: Since many retailers began selling CE and appliances, what recommendations do you have of how they should get started in the outdoor segment? GM: First, they need to shop their market to determine the opportunity. If they do get involved they need to do so in a significant way by devoting a department to it. I think the minimum floor space needed in the outdoor category is 3,000 feet. They need to offer product across multiple price points in the mid range and up and not try to compete with home improvement centers, warehouse clubs and discount department stores. Finally, they must market the category heavily in their outdoor selling season. MA: Can you share a few best practices that the retailers can use? GM: Go in strong or don't go in. Anything less than a department for the category will fail. Have at least three price points to attract a range of consumers and to offer comparisons for your better goods. Upsell as much as possible-except in the dining category most shoppers will not be happy for long with lower priced product. Show by windows if possible but not outdoors, the challenge to keep fresh and clean is more than most stores can handle. Getting the word out to your existing customer base is very important but creating awareness with new customers is also critical. This is a growth category and new and exciting categories are the keys helping retailers unlock the door to growth and profitability! RO Mike Allen Furniture Trends E. Michael Allen, BrandSource VP of home furnishings, has been with the organization for 15 years, overseeing the growth of the category as one of the largest in the country. OUTDOOR OUTPACES RESIDENTIAL An interview with Gary McCray President, Klaussner Furniture

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