Prange Way targets impulse RTA - discount store markets ready-to-assemble furniture

Discount Store News, May 22, 1989 by Mary Ellen Kelly

Prange Way Targets Impulse RTA

GREEN BAY, Wis. -- Home office and the "shopping cart business" will comprise the core of Prange Way's ready-to-assemble furniture department this fall, according to buyer Kent Ropella. Same store sales of RTA are expected to be "modest" single-digit increases as competition heightens.

The "shopping cart business," as Ropella terms it, are those RTA items that can be picked up on impulse and taken to the cash registers without assistance. He estimates that about 35 percent of his RTA assortment are pick-up items; there are other non-RTA items like folding chairs which also fit into this type of merchandise.

Ropella is in the process of adjusting his 30-sku assortment of RTA to focus on these two areas which he feels "offers us the most opportunity." While the repositioning might mean eliminating a few sku's Ropella said, "Any type of item I'm in right now, I won't be getting out of."

Among the items he is likely to add before fall are videotape storage cabinets that he saw at last month's Southern Furniture Market in High Point, N.C.

"The two key qualities the videotape storage cabinets must have are: enough space to store a large quantity of tapes and they must look like a piece of [non-RTA] furniture, or my customer won't want it," he explained.

Prange Way, which consists of 22 stores in Wisconsin, Illinois and Minnesota, must contend with ShopKo, K mart, Kohls, Target and others on its home turf. In addition, competition with Wal-Mart is expected to intensify as the chain opens stores in such Wisconsin cities as Beaver Dam, Sheboygan, Sturgeon Bay, Green Bay and Oshkosh.

The Wholesale Club opened a unit last month in Appleton, Wis., where Prange Way has both its largest store and its largest furniture department--2,000 square feet. Prange Way's RTA departments range in size from 750 square feet to 2,000 square feet, with the average size about 1,000 square feet.

Prange Way's territory also has its share of office supply and furniture specialty stores, Ropella said, but each takes only a fraction of his business.

"We all have our niche. The office supply store might have one or two promotional pieces," but otherwise the assortment is above Prange Way's $99 price ceiling.

"My sales are strong, but it's promotion that drives the business. The ability to sell day-to-day because we're Prange, way is a thing of the past. I'd still like to think that there are customers that shop me for furniture simply because I'm Prange Way, but there are fewer loyal customers than in the past," he said.

Prange Way promotes RTA in a major ad once per month and with a minor ad also once per month, Ropella said. Individual pieces are promoted each week. The half dozen across-the-board ads such as home sales and President's Day sales also contain a good representations of RTA.

The furniture-like appearance of the products is also becoming increasingly important and will determine which items he chooses. "I do my best business with the upper-end products."

One exception would be wall units, Ropella said, where his No. 1 selling item is at the low end of his selection (the "good" item of his good-better-best presentation). Items that are essentially bookshelves--no doors or drawers--are less of a fashion-driven purchase.

Entertainment centers however, are a different matter. "My top selling entertainment center is the best one I sell. It's a country-look piece with wood framed glass doors and decorative molding."

Like most discounters, Prange Way has found medium oak to be "the magic finish," Ropella said. "I've tried cherry and pine. Our customers keep telling us, `Give us oak, please,' so we do." The assortment does offer a token walnut piece and three pieces with a light, natural finish. Unlike most chains, however, Prange Way continues to shy away from selling any black products--even in home office or entertainment centers--where where others are finding a wealth of sales.

"Rather than start with black, which we were unsure of, we tried white in the kitchen category last year. We felt more confident about white than black, and when the white didn't do well, we decided not to try black," he said.

Ropella was quick to add that trends take a while to take root in the "conservative Midwest," but that eventually customers might want the black finishes.

Unlike many discounters, Prange Way accessorizes the RTA department, but not to the point where it could dictate to the consumer what the product should be used for.

"I don't want it overdone. Many pieces do have a dual function. For example, microwave carts are always referred to as utility carts because consumers might decide to use it in other ways. So for something like that we might choose not to accessorize much," Ropella noted.

The same would be true of wardrobes which could also be used as cabinet storage in other rooms or even the basement or garage.

Merchandising fixtures vary somewhat depending upon the size of the Prange Way store, but each store has a back wall grid. These fixtures are visible at the end of as aisle and serve as the main draw for the department.