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Office Furniture: Where Should You Focus?
Posted under office furniturefor years, there have been many office products dealers selling office furniture as part of their product mix to customers. It makes perfect sense; after all, if a dealer already had an established relationship with a customer, to ask them where they ordered their office furniture and to then become their vendor of choice for that area of their business as well.
Dealer participation in furniture programs has grown. Rich Aievoli, Vice President and General Manager, United Stationers’ Category Management, Furniture division, states that over 80% of USSCOs independent dealers participate in one way or another in their furniture marketing program.
“There are several elements to our furniture marketing program, which is further complimented by a variety of core furniture services, including Space Planning & Design, Delivery & Set-up, Bids & Quotes and Order Management for larger sized projects and/or special orders,” stated Aievoli.
Aievoli points out however, that the dealers who have a more focused approach to their furniture sales have more success than those that are just using scattered marketing materials. “About 25% of our customers use our stand alone Mid-Market Furniture Catalog,” explains Aievoli. “However, company data shows that, on average, dealers who distribute our stand alone Mid-Market Furniture Catalog are generating revenues at a rate equal to three times than those who only use our General Line Catalog to sell furniture.”
S.P. Richards also encourages dealers who are interested in seriously pursuing furniture to use their stand alone furniture catalog. “Dealers can really set themselves apart when they use the dedicated catalog instead of just the general one,” stated Dawn St. Peters, Furniture Training Manager at S.P. Richards. “By using the furniture catalog, consumers begin to see the dealer as able to deliver on services beyond office products niche.”
St. Peters explains that SPR works with their dealers to customize a furniture program that fits their needs. “We are here to help develop a program that works best for the dealer.” SPR also offers regional space planning services; a program called Design Made Easy, which allows dealers to show customers how new furniture would look in their space; a program which teaches dealers how to measure an office; as well as various marketing materials.
Even with interest in selling furniture growing, dealers should keep in mind that the economic downturn is being experienced in all segments of business, including furniture. BIFMA predicts a down year for 2008 and 2009-so researching the opportunities for growth in furniture will be key to a dealer’s success in this market.
The top selling areas for furniture are Education and Healthcare-and each are areas with substantial growth potential over the next 5 years and beyond.
EDUCATION
It isn’t hard to see how far the education market has come. Today’s schools offer multi-learning areas, including classrooms and libraries equipped with the lasted technological resources, and grounds to encourage physical activity. And while teachers may still use chalk, books and blackboards, they are using new and improved tools every day.
And the classroom continues to evolve. The US Department of Education expects schools to spend almost $490 billion on their facilities in the 2007-2008 school year-and in the next 13 years that figure is expected to rise over the $650 billion mark.
While that figure includes upgrades in technology and plumbing, it leaves a big chunk of money on the table for the office furniture industry-and a resourceful dealer willing to put in the necessary research and time can find themselves reaping these educational benefits.
St. Peters emphasizes that it is important for dealers to train all of their sales people on how to sell furniture in customized areas, but once everyone has a basic understanding of the unique market, dealers should chose those sales reps that seem most interested in the area to do a more in-depth training with so that they have an expert on board.
This is consistent with what other dealers say is important for success. They also suggest:
* Dedicating at least one salesperson to developing relationships in the educational market.
* Having a solid understanding of how your Individual state handles “state funded” projects.
* Being selective in which projects to bid on.
* Being patient. The rewards are there for those dealers willing to put in the time and effort.
* Taking advantage of training sessions offered by wholesalers, which will often contain pointed ways to sell to this specialized area along with up to date research.
Regardless of your size, the educational market is expanding and will continue to do so over the next 8-10 years.
HEALTHCARE
It’s hard not to recognize the healthcare craze that the country has been going through the past few years. As baby boomers grow older, there will be a growing need for healthcare. According to the U.S. Census Bureau, between 2000 and 2005 the hospital industry spent $100 billion on new buildings and renovation. And it is estimated that over $200 billion will be spent in this area over the next 6 years.
That is a lot of opportunity for dealers-especially considering that this data only includes hospital spending. There are even greater opportunities for dealers when dealing with the smaller healthcare provider situations, such as doctor offices, rehabilitation centers and hospice hotels.
StPeters says that SPR often encourages OP dealers to look to these smaller situations as their first area of focus. “Smaller healthcare operators are looking for long term relationships with their vendors-they want to find someone to put their trust in.”
As with education, the healthcare market can be specialized, so it is important that dealers establish themselves as the total provider to their clients to solidify their commitment to understanding the industry. Dealers should also consider:
* Educating everyone on the team about healthcare furnishings so anyone can answer a question when a customer calls the dealership.
* Showing your dedication to healthcare by having knowledgeable sales reps calling upon the customer and then offering furnishings that work within a health care environment.
OTHER GROWTH AREAS
New areas for furnishings continue to develop all the time. One area that has gained quickly in the marketplace is Sustainable Design. As Office World News outlined in its November/December 2007 issue, it is important for dealers to be educated about what “green” really means. Both S.P. Richards and United Stationers will be hosting educational programs throughout the year to help dealers learn more about this area.
Dealers who are willing to invest some time and resources into selling furniture will find that growing their business has become easier than ever before
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