HIGH POINT
— Stationary upholstery occupied 22% of furniture stores’ selling space in 2019, down 2% from last year, but still the largest share of any category.Stationary and motion upholstery account for 17% and 9%, respectively, of total sales this year. Motion chairs’ share of the sales floor and of the sales pie both dipped slightly from last year, falling from 8% to 5% in both metrics.
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Master bedroom is the second largest category in terms of selling space at 16%, but punches above its weight, comprising 19% of total salesBedding accounts for 10% of selling space and 12% of total sales.
Formal dining narrowly tops casual dining for share of selling space at 8% vs. 6%, respectively. Both categories account for 7% of total sales each.
Decorative accessories — including area rugs, lamps, mirrors, lighting fixtures and more — take up 5% of the sales floor and contribute to 6% of total sales. The other occasional category, including bar carts, drink tables, curious, accent chests, ottomans, among others, accounts for both 2% of the sales floor and total sales.
Overall, 84% of total revenue is derived from merchandise sales on average, with other services led by delivery and design accounting for the remaining 16%. Selling space also comprises 84% of total space, with the remaining 16% dedicated towards all other space, including storage, storehouse and utilities.
Sales people — pay and retention
Full-time salespeople are paid in a variety of ways by furniture stores. An hourly-plus-commission model is the most popular among responding stores, with 29% using this method. Two other compensation models — salary-plus-commission and salary-only — are each used by 28% of furniture stores.
The sales associate retention rate, a new metric gathered by Furniture Today, was 78%. The median sales associate tenure is 10 years.
Efficiency measures
Furniture stores’ gross margin percentage was up this year, from 47% in 2018 to 50% this year.
Stock turns were down from a median of four times last year to three times this year.
Social media advertising spend rockets
Advertising spending is on the rise this year, as 10% of annual sales go to the advertising budget, up from 6% last year. Within the advertising spend, the percentage spent on social media has more than tripled, from 6% last year to 19% this year, to make it the most popular advertising channel.
Direct mail is the second most-popular at 15%, while TV, the third largest advertising source, has plummeted from 42% last year to only 13% of ad dollars going towards it this year.
Radio has edged up, from 5% last year to 11% this year, and Internet and search engine ads have held steady at 10%.
Newspaper dollars account for 8% of the ad budget this year, down from last year.
Furniture stores are spending more to advertise through special events, however, as they are up from 4% last year to 7% this year.
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