Retailers style themselves as sources for home office - Brief Article

Discount Store News, April 3, 2000 by Mike Duff

Home office furniture is no longer the redheaded stepchild of computer sales. Style has stepped into the spotlight and is joining functionality as a critical factor in building sales.

For many RTA home office retailers, however, the traditional driving factor has been price. Value retailers, and particularly discounters, have said that the purchase of a desk, computer cart or workcenter has been basically an exercise in finding a home for a new computer.

But consumers who are looking for more than value in their purchase are less likely to settle for a product that doesn't live up to the style standards set elsewhere in the home.

Cost Plus World Market, for instance, has added desks and related non-electronic home office items to its stores. The company has discovered that its customers want home offices to reflect the lifestyle considerations and tastes evident in the rest of their homes.

"Last year, we started with home office, and that was very well received," Murray Dashe, chairman, president and ceo, told DSN. "It really plays to the lifestyle of our customers very well. Many are working out of their homes today, and even if they are not, they want some kind of home office set up. We've expanded it across the country."

Bob Segal, divisional vp for housewares and home at ShopKo, said that the RTA consumer is becoming more demanding. In terms of home office, the trend manifests itself in several ways.

On the simplest level, people want nice things, and even people of moderate means generally aspire to better lifestyles in today's economy, he noted. Given a generally positive financial outlook and the weight of interior decoration information now inundating consumers, it's hardly surprising that they want more pleasing home environments.

In home office, this has meant thinking beyond the basic need for a computer prop. While perhaps improvised until recently, home offices today are increasingly seen as environments that deserve the same kind of attention as bedrooms, living rooms and baths receive. Moreover, people are upgrading home offices. Even if they are setting one up for the first time, many have a better understanding of what a good home office requires from the experience of friends, relatives and colleagues, as well as from what they've seen in the media.

Segal said ShopKo customers have shown a tendency to be flexible in their home office furniture purchasing and aren't necessarily tied to any one styling orientation. "In many cases, home office purchasers are willing to step out," he said. "They do want to coordinate the workstation with the bookcase, file cabinet and office chair. They show a willingness to coordinate the room but don't necessarily have the look match everything else in the home. We're less successful selling contemporary looks in home entertainment and bedroom, but more so in home office."

Vendors have helped drive demand for better looks by providing better styling at lower prices. Yet, many consumers today enter the store with much higher expectations than they had even just a couple of years ago. "They are extremely demanding of value. What they can get for $140 in the way of a workstation today is much more for the money than they could before. People who want nice things are willing to spend money, but they expect a lot."

Despite the increasing relative importance of styling, Segal cautioned that functionality remains critical. RTA manufacturers have made themselves experts in developing products to fit any and every space available for a workstation.

However, computers themselves are evolving, thus increasing the importance of having products suited to what's available and popular today. When technology changes, workstations can become obsolete just as quickly as the computers they were designed to mount.

For the past couple of years, Kmart has stuck to the basics in home office. While the company recognized that its consumers were getting into computers, it treated the furniture component as a secondary purchase--determining that, after laying out big bucks on the technology, Kmart shoppers wanted something decent, basic and unburdened by a big price tag.

But that is changing.

Kmart may not make quite the space commitment to RTA as does ShopKo, which lays out RTA assembled on the floor in a furniture store-like setting, but Kmart recognizes that its consumers are looking at the category more comprehensively, which creates opportunity.

"We are incorporating lifestyle orientation as we move from single-item offerings to coordinated ensemble groupings, while still maintaining a value approach," said Jim Bufalini, Kmart's furniture buyer.

Bufalini said that Kmart has seen several components of home office gather momentum. Desks is, the best category and performing above plan, he said, while bookcase sales are strong and office chair sales are growing. In its promotions, Kmart is incorporating those three product lines into packages to create some basic groups. It has also lowered its price points so that desks now run from $49.99 to $169.99.