Retailers Rethink Promotions Amid Supply Shortages

While promotions are an annual part of any furniture retailer’s calendar, supply chain problems and the resulting shortages have store executives re-examining how they go about selecting their deals and attention grabbers.

Shane Spiller, president of Spiller Furniture & Mattress, a 14-store operation with stores in Alabama and Mississippi, said these days, his stores are focusing on selling what’s readily available.

“This month, we’re running something called the ‘In the House’ sale,” Spiller said. “We’ve got discounts on things that we’ve got in stock to promote and highlight what we do have so we’re not disappointing customers or setting expectations we can’t meet.”

Spiller said products are discounted based on how long they’ve been in stock. “The promotion is based on last receipt date. If we received something two years ago, it’s a certain discount. If it’s older than that, it’s a deeper discount. That’s worked well for us in the past. It highlights what we’ve got, and it gets rid of older product.”

He said with shortages and kinks in the supply chain being what they are, creating a promotion around existing inventory is one way of creating assurances.

Mandy Jeffries, president of Greensboro, N.C.-based Colfax Furniture, is taking a similar tack as Spiller, focusing on what’s in store or warehoused at any given time. She said that’s leading the way in just about any conversation, even ahead of financing options.

“We are truly trying to just focus on the inventory we do have. We aren’t able to plan far in advance because these days you truly do not know what merchandise we will actually get or how the market is doing,” Jeffries said. “We try to always offer a financing special, but it hasn’t been as important recently.”

Retooling Promotions

While the promotions themselves have changed, the way retailers plan for promotions has also been disrupted. Mark Mueller, owner of Mueller Furniture, said his St. Louis-area stores typically have 13 or 14 sales planned per year, and that number has been reasonably consistent since around 2016. However, the uncertainty around product availability has been cause for some retooling.

“The biggest thing you want to do in your advertising is have an offer that’s appealing to customers right now,” Mueller said. “I think right now the answer to that question is availability. We’ve talked about the great selection of custom orders to instant gratification and quality.”

Custom furniture has been a big piece of his stores’ business for years, but Mueller noted that it’s changed from 80% to 85% custom orders between two stores to now around 55% to 60% custom orders among three stores.

“On upholstery, that percentage is even lower. We’re having to carry more stock because the customer wants fast delivery and frankly, a lot of stores don’t have fast delivery and we do,” he said.

Mueller said additional strains on promotions include the ongoing workforce shortage. Underscoring that point, he had been driving one of the company’s delivery trucks prior to speaking to Furniture Today.

The workforce impact is also being felt in Corvallis, Ore., according to Blackledge Furniture owner Eric Blackledge, and it’s affecting the way it plans its promotions and sales.

“We’re promoting less, but we’re doing it more uniformly. We’re short staffed, so we’re downplaying promotions,” Blackledge said. “We’re doing more consistent advertising to smooth out the customer flow so we can manage it.”

Additionally, Blackledge said promotional plans include focusing on product categories vs. specific SKUs, creating a broader sale. “We’ve tried to be more flexible.”

Coincide with Lead Times

Yetzer Homestore in Waconia, Minn., has been fortunate, according to CEO Thomas Wiest. The store typically plans its promotions six to nine months ahead, which has largely coincided with today’s lead times.

“We have been doing the promotion (standard operating procedure) for a couple of years, so we really have not changed all that much,” Wiest said. “We were originally six-to-nine months out anyway, which in the furniture world right now is about the average ship time. Plus we do so many custom orders, we get the timeframe discussion out of the way early with customers so there are no surprises.”

Wiest said last year as the pandemic began affecting the supply chain, Yetzer also began going deeper into orders, which is paying off.

“When the pandemic first hit, we started ordering and stockpiling merchandise for the floor. We have kept on top of ordering from vendors monthly to keep stocked,” he said.

So how long will it be before the supply chain begins to normalize? The retailers agree that it’s going to be a while.

“It’s not going to get unkinked anytime soon and will never be back to 100% the way it was,” Wiest predicted. “There are too many variables in the marketplace:, shortages of product, shortages of labor, shortages of logistics trucks and containers; too many still unemployed; variants of COVID entering; and there will most likely be more.”

Added Blackledge, “Sadly, a lot longer than I had hoped, even 30 days ago. I don’t think it will clear up until next year.”

Mueller noted that he doesn’t see it getting right until deeper into 2022. “I’ll be thrilled if they’re back to somewhat normal in six months. I’m planning for eight to 12 (months).”