NE regionals upscale RTA mix: chains feature eye-catching displays, stylish product - northeastern regional discount chains; ready-to-assemble furniture

Discount Store News, Oct 17, 1994 by Teresa Andreoli

REGIONAL DSN REPORT -- Northeastern regional discount chains are attempting to differentiate their RTA furniture department from the national discounters by carrying a more upscale, stylish product mix.

Recent merchandise expansions in a Long Island, N.Y., Caldor store include endcaps of sleep sofas and $129 futons. All items, ranging from CD storage racks to at least six varieties of entertainment units, are set diagonally, one piece behind the other, with fairly decent precision. There is a marked absence of shoulder-to-shoulder bookcase walls that characterized discount store RTA departments a few years ago.

Chairs, 36-in. diameter tables, rockers and stools had a separate run at this Caldor unit. As seen in other stores, the merchandise reaches the consumers' eye level, while flat boxes are stacked underneath. Artificial plants surround the mission-chair selection of the back wall.

"Caldor has done it's homework," said Kurt Gelke, vp marketing and strategic planning for Bush Industries, Jamestown, N.Y., a leading furniture supplier to the mass market. "They are the most progressive discount RTA seller in their market. They know if they don't meet the needs of the urban Northeast [market], customers will go elsewhere."

Another leading mass vendor, Pilot, is impressed with Caldor's marketing and product mix strategies. "Caldor tries to stay ahead of everyone in RTA. They are well-informed in market research, circular driven, and what they advertise, they sell," said Bob Schneider, vp national sales for the Edison, N.J. company.

As an example of Caldor's progressive furniture assortment, the discounter carries the Visions line, one of Bush's most contemporary home theater designs, Gelke said.

"The fact that our pedestal home entertainment center [where the base is about half as big as the top] is one of our best sellers at Caldor, proves how willing they are to test the envelope on merchandising," Gelke added.

The retailer has expanded its selection beyond oak to appeal to urban Northeast markets, Gelke commented. The designs of the items are what can set Caldor apart from its competition. "The designs are more contemporary--they're sleek, clean and stylish."

Wood finishes and color (usually black) are some ways Caldor distinguishes itself, but by no means has it abandoned the medium wood furniture. In fact, Caldor maintains a strong selection of basic RTA selections.

"Much of what we ship to Caldor is opening price point oak, but it tends to be on the contemporary side," said Kevin Sauder, vp marketing and sales for Sauder Wood-working, the Archbold, Ohio-based furniture maker. "Our Worthington bedroom line has a little higher price point, but it's somewhat similar to the four pine den furniture pieces we sell to Wal-Mart."

In fact, the highest priced item in Caldor's selection was a $299 Worthington chifferobe, 53 1/2-in. deep by 20 3/8-in. wide by 60-in. high. The two-door storage wardrobe, stylized with wooden handles and brass trim, can also be used as an entertainment center and accommodate a 27-in. TV and VCR. The lowest price point was a Pilot $14.99 promotional storage tower.

But even more furniture options are due at Caldor. Without disclosing any company strategies, Caldor hinted that bigger RTA plans are on the way. "It's going to be a key business," said Scott Howard, operating vp, dmm.

National discounters, due to the nature of their diverse markets, tend to cater to the general tastes and needs of middle America. But even the top chains have spruced up displays and have begun to widen their home theater and home office mixes.

A Kmart located within walking distance of the Long Island Caldor displays its three aisles of furniture flush on the shelf, stacked shoulder-to-shoulder. The No. 2 discounter has the ability to push a great deal more of lower price point selection, such as a single drawer Sauder desk for $25.99, and several Cosco and USA RTA "Stak-N Stor" items.

But the chain has dressed up the look of its display by using fake plants and cardboard props, such as faux printers, PCs, TVs and books, to add the lived-in look. All wood tends to remain in the medium color range, with the exception of white Cosco dressers and storage goods.

No couches were offered in this suburban store, but gun cabinets, of both steel and wood construction, earned a separate run. A Morton Booth Wooden Cabinet retailed for $109.97.

"Kmart is probably in the top two discounters when it comes to merchandising RTA," said Bush's Gelke, who mentioned Target as a sleek, IKEA-like merchandiser of its Furio PL line, and Caldor as the most progressive in its market.

"Like Caldor, Kmart has taken similar upgrade steps in the past year or so--but I'm not saying they're following in Caldor's footsteps. Kmart goes for more of a mass culture appeal, toward middle America, and justifiably so," he said.

A similar comparison of regional/national approaches in RTA is found in rural Western New York. At an Ames store in Geneseo, N.Y., 30 miles from Rochester, the furniture department is the aesthetic highlight of the hard lines offerings. Similar to a case goods showroom, the display models are arranged in living room fashion. A $199 sleep sofa is set on the floor at a right angle to an Armstrong bookcase and across from a Worthington entertainment center. Plants, lamps and area rugs complete the at-home feel.