Chains try new ways to up fashion in KD furniture

Discount Store News, Nov 11, 1985

Chains Try New Ways to Up Fashion in KD Furniture

Discounters are testing new nerchandising strategies to inject a greater home fashion thrust into their knockdown (KD) furniture business.

Mock room displays, heavier advertising commitments which link KD with consumer electronics and other home decor items, quality and price tradeups are growing more common with discount department stores and catalogers this year.

Such efforts have discounters eying a 25% KD sales growth through 1986.

KD is one of the few housewares categories in which buyers will continue to trade up in 1986, they told DSN. And there's apparently plenty of room to do so, thanks to rapidly rising prices at furniture stores, which leave a large gap for discounters to fill.

Better-laid veneers, finer details, subtle finishes and heavier grades of furniture are helping KD expand beyond dens and dorms, and into living rooms, kitchens and bedrooms, buyers said.

Besides that, Italian and Scandinavian design influences such as rounded edges and white and primary colors are gaining acceptance in urban markets, and add visual interest to displays. Already shown at Conran's and IKEA specialty shops, such looks will probably filter down to discounters within the next year, said buyers.

Indeed, Gold Circle buyer Jerry Vetter expects to see domestic vendors offering black and white mica laminates in abundance for shipments in 1986.

Able to work toward higher prices and improved in-store taste levels, chains such as Bradlees, Caldor, Clover and S. E. Nichols have begun using carpeted mock-room settings in some stores to increase impulse sales.

In most instances, such displays front a race track aisle, and are near consumer electronics, microwaves, housewares and domestics, which buyers regard as spurs to the KD business.

Buyers noted a swing in the role played by consumer electronics during the latter half of 1985: VCR and utility carts, plus room dividers and home entertainment centers, are driving the business more now than computer furniture.

To capitalize on that, Clover, for the first time ever in its Columbus Day catabook, devoted a full page to carts, stereo racks and room dividers that hold televisions up to 25 in. Each of the six sku's were part of Clover's everyday mix, marked down 20%-25% for the ad.

"We have to be more cognizant of the space people have at home,' said Clover buyer Jan Clausing. "We used to sell 60-in.-wide room dividers; now they're 49 in. We also noted the trend toward large-size televisions, and have appropriate carts.'

Buyers such as Gee Bee's Tim Hellwig observed that "CE trends are the best barometer for KD. CE will continue to drive KD as a year-round business in 1986.'

In his markets, where home computer sales have fizzled, Hellwig continues to see computer furniture sell, though at a lesser rate and for use as a conventional workplace. Carts currently lead his business, which is done about 60% on ad.

"We've seen a snowballing effect in KD acceptance ever since we ran a full-page ad in August that showed 17 sku's and all types of KD we sell,' said Hellwig.

Gee Bee's current strategy is to advertise at least one KD item each flyer, often in a package presentation with CE. The chain also promotes Taiwanese imports such as rattan wood to "add visual interest, and stimulate traffic which will often step up to higher-ticket merchandise,' Hellwig said.

Such step-ups have to be attempted gradually, said Gold Circle buyer Jerry Vetter. "Opening price points bring traffic, but are less of a factor in total business.'

That explains discounters' selective approaches toward higher tickets, often an item at a time. Nichols has advertised a $120 sale price for a better-featured wall unit, breaking the commonly perceived $100 industrywide promotional barrier. Clover experienced a sellout of a home entertainment center at $140.

Clover has also added a step-up computer desk and hutch, to retail at $120, as part of "our home office pitch. But many people use these as furniture in children's rooms too,' said Clausing.

Fishers Big Wheel hasn't tested new higher price points than it had earlier this year, said buyer Jeff Bestic, but has weighted its overall KD mix toward its high-end.

The chain doubled sku's and nearly doubled floor space early in 1985, has added carts and computer desks up to $100.

He sells desks separately from hutches because "hutches can be a limiting sales factor. Not everyone wants both together. People use computer desks as conventional workspaces, and many just buy hutches to affix them to existing desks,' said Bestic.

"We thought we'd sell about three hutches to every four desks, but we're selling equal numbers because people buy hutches alone.'

In a similar approach to KD advertising, Bestic shies away from thematic ads. "To create theme ads, chains use items that don't sell so well only to complete a look. I question their efficiency,' Bestic said.

He noted his most effective ads have been "your choice' and item-price.

Photo: Caldor is expecting to double knockdown furniture volume in stores revamped to place the category near consumer electronics, such as at Levittown, N.Y., store.