Tuesday, July 14, 2015

The Ignored Generation

Today most marketing is targeted at Millennials, those aged 18-34, after all they are America's largest consumer group having surpassed the Baby Boomers, ages 51-69.  However, as marketers are starting to shift away from the Boomers and towards the Millennials, they have completely forgotten about Generation X, ages 35-50.  While Generation X may be the smallest of the three groups, there are still 66 million of them out there, and more importantly they are spending a lot of money!

According to a recent report by Furniture Today, Generation X accounts for 33% of all money spent on furniture, which came out to almost $32 billion in 2014.  Their furniture buying increased by a whopping 43% from 2012 to 2014.  And when it comes to outdoor conversation groups, area rugs, motion sofas, mattresses, and stationary chairs, they are spending more money than any other generation.  A lot of this may be due to some of their desires they have in their house.  According to a survey done by Apartment Therapy the number one must have for a Generation Xer in their home is hardwood floors, this could easily explain why they account for 40% of all money spent on area rugs.  After hardwood floors, they also want lots of light, outdoor spaces, open floor plans with large rooms, and closet space.  That need for outdoor space could easily explain why Generation X spends 42% of all the money that is spent on outdoor conversation groups.

The survey also looked at how Generation Xers redecorate their homes.  In the last two years, 71% of all Gen Xers have painted walls in their home, this is followed by 66% who bought decorative accessories, 65% who bought wall decor, 64% who bought lamps, 63% who bought window treatments, and 59% who bought light fixtures.  Those last three make sense when you consider lots of light being one of the must-haves in a home.  When it comes to rugs, 55% of Gen X has bought a new one in the last two years, easily explaining how they spend 40% of all the money on rugs.  With mattresses, 36% of Generation X has bought a new mattress in the last two years which is why they account for 37% of all the money spent on bedding.

Certainly these are numbers that are hard to overlook, but just in case you've overlooked Generation X to focus on Millennials, you probably are still in pretty decent shape.  Gen Xers are about just as tech savvy as Millennials, and the money you spend on online marketing won't be lost on them.  On average, Gen Xers will visit five different web sites when buying furniture, and six different web sites when buying accessories.  These are shoppers that are well informed and know exactly what they want before they even walk into a store.  In other words, you better have a pretty good web presence if you want to sell to these younger generations.

If you need spend some more time rethinking your marketing, why not let DSA Factors help out.  We will do all of your credit checking, handle your collections, and speed up your cash flow so that you can pay those marketing guys to sell your products.  We've been specializing in the furniture, accessories, and giftware industries for over 25 years, so leave it to us to manage your receivables so you can focus on the more important stuff.

Friday, July 10, 2015

From Red to Blue - Color is Popping Up All Around

More and more people these days are looking for color in their homes, and this is affecting everything from paint to upholstery.  While red has always been a very popular color in the home, blue is starting to pick up steam and quickly becoming the most popular color for upholstery, especially in the US.

It has become more and more important recently for manufacturers to not just get your attention, but to get your attention in a split second.  With so many choices, and better informed shoppers, consumer's attention spans are getting shorter and shorter.  One of the best ways that a furniture manufacturer can grab someone's attention these days is with a strong, vibrant color.  Traditionally the color of choice has always been red, and red is still a very good choice of color even today.  But blue, a color that didn't use to be very popular, has been picking up a lot of steam recently and has become America's most popular color in the home.  Especially blues that have bit of green in them and teals.

A recent survey in Furniture Today shows that blue has become America's favorite color for upholstery.  33% of Millennials (age 18-34) call blue their favorite color in the home, as do 26% of Generation X (age 35-50) and 28% of Baby Boomers (age 51-69).  That is nearly one third of the market that prefers blue today, and many color experts believe that blues popularity is only going to continue to grow.  However, it isn't all blues that are doing great, lighter blues still aren't all that popular in the home.  It is the darker blues, such as navy, that are really becoming popular.

Of course blue's gains are coming at the expensive of other popular colors, particularly red, which had long been America's most popular color.  While 30% of Baby Boomers prefer red, that percentage drops to only 23% of Generation X and 12% of Millennials that call red their favorite color.  Despite losing some ground to blue, red is still America's second most popular color

What is a bit more surprising than blues recent popularity, are the other colors that are starting to become more popular than red.  Yellows and Greens which were never very popular with Generation X or Baby Boomers, have surpassed red when it comes to Millennials.  15% of Millennials call yellow their favorite, while 14% call green their favorite.

The other big color, orange, however is losing some steam.  Orange is most popular among Generation X with 20% of them considering it their favorite color, but it drops to 13% with Baby Boomers and only 10% with Millennials.

If you are having trouble keeping up with the latest color trends, give DSA Factors a call today at 773-248-9000.  While we can't help you pick out colors, we can help you with credit checks and collections so that you have more time to focus on your product line, and can make sure you choose the right colors.

Wednesday, July 1, 2015

Baby Boomers Fueling Recliner Sales

In a recent report in Furniture Today it was found that Baby Boomers ages 51-69 account for 40% of all recliner sales and 49% of all money spent on recliners.  The 72 million Baby Boomers account for 30% of America's adult population and spent roughly $35 billion on furniture in 2014.

The Boomers get divided into two groups, younger boomers age 51-59 and older boomers age 60-69.  For younger boomers the top three items that they plan purchase this year are motion sofas, mattresses, and recliners, while for the older boomers they are recliners, stationary chairs, and outdoor conversation groups.

Overall, with the exception of recliners, baby boomers are buying less furniture than other generations.  However, just like with recliners, Boomers tend to be spending more money on these items than other generations are.  While Boomers only buy 27% of all lamps, they account for 41% of the money spent on lamps.  The other big categories include occasional tables, framed wall decor, entertainment furniture, and master bedrooms.  While boomers only have a 20% share of master bedroom sales, they account for 32% of all the money spent on master bedrooms.

When it comes to colors of the furniture, Boomers favorite neutral colors are grays, whites, and beiges.  Their favorite vibrant colors are reds and blues, with a little less interest in oranges, greens, and yellows.

Most importantly three quarters of all Boomers prefer to do their furniture shopping in brick and mortar stores over online stores, and great customer service is something that they look for in a furniture store.  However, this doesn't mean that they don't use the internet while shopping for furniture.  Nearly half of all Boomers will research a product online before purchasing it in a store.  The most popular form of research is Googling a particular item, something which 36% of Boomers do.  22% of Boomers will read product reviews.  Another 17% will read up on the product on the manufacturer's web site, while only 10% rely on furniture ads they've seen online.

If your struggling to stay on top of developments in the furniture, accessories, or giftware industries why not give DSA Factors a call today at 773-248-9000.  Let us handle your accounts receivables so that you have more time to do whats important to help your company grow.

Thursday, June 25, 2015

DSA in Furniture Today

Its official, we're famous!  Howard Tolsky, president of DSA Factors was interviewed for an article that appeared in the June 15, 2015 issue of Furniture Today.  You can read the article online at: Furniture factoring companies having 'very strong year'

The article is based on interviews with four different factoring companies and discusses how the furniture factoring has been doing so far this year.  Overall 2015 is shaping up to be a good year for DSA Factors and other factoring companies.  While DSA Factors has picked up several new clients which is helping with business, more importantly is that our clients are doing better as well and it is their growth that is driving our growth.

As Howard said in the article, "We do the collection work, we make the calls and collect the bills.  We also guarantee the receivables.  If we approve a company and they run into problems, it remains our responsibility to collect the receivables.  We have clients who might not need a factor, but they like the fact we perform all those services and provide some security."

If your company doesn't currently have a factor, it would be a good idea to consider DSA Factors.  Even if you don't need the improved cash flow, or the insurance DSA offers, there are so many other services that DSA can provide for you, such as credit checking and collections.  Give us a call today at 773-248-9000 and see how we can help your business grow.

Friday, June 12, 2015

Targeting Millennials, America's Largest Generation of Consumers

Millennials, those born between 1981 and 2000, have become the largest living generation in the US with 75.3 million people, surpassing the Baby Boomers who now number 74.9 million according to Kids Today.  There are 53.5 million Millennials in the workforce compared with 52.7 million Gen Xers and 45 million Baby Boomers.

As the Millennial population continues to grow, it is important to understand them so that you can market to them appropriately.  There are two major factors that need to be looked at when dealing with Millennials.  First, Millennials are waiting longer to get married and have babies than previous generations.  In the last ten years birth rates for mothers between the ages of 20-24 have dropped by 20.6% and ages 25-29 have dropped by 9%.  However, birth rates of mothers between 35-39 have increased by 13%.

Since Millennials are waiting longer to have kids, this means that they most likely will have more money to spend once they do have kids.  They also tend to be better educated as they've had more time to get their bachelor's or even master's degrees.  This is resulting in consumers who are willing to pay more for a product if they can get more out of it.  Very often these consumers might just being willing to pay more for a higher quality product, but they also may be willing to pay a little bit more for a product that can grow with their families.

An excellent example of a product that can grow with a family are convertible cribs.  75% of moms under the age of 30 have either bought or plan to buy a convertible crib, compared to 71% of moms age 30-34 and only 62% of moms age 35-39.  Of those who have bought or plan to buy a convertible crib, 71% of them are willing to pay more for a convertible crib than a standard crib, with 34% willing to spend as much as $100-$200 more for a convertible crib.

The other important factor is the internet.  61% of Millennials will rate products and services on the web, while only 46% of the older generations will do this.  In fact 35% of mothers under the age of 35 purchase their children's furniture online.  Of the 65% who still purchase their furniture at brick and mortar locations, most of them will do their research online before going into a store, with many of them buying exactly the product that they chose online.

For this reason it is very important for both manufacturers and retailers to provide lots of details about their product line on their web page.  But a static web page with features and specifications isn't enough.  Companies need to offer dynamic web pages that allow for questions, reviews, and link to social media.  Over two thirds of Millennials that use social media rely on friend's posts to influence which products they will purchase.  If your company only offers a static web page, it may be difficult to sell to this young generation of educated consumers with large incomes.

As this younger generation is quickly becoming America's largest group of consumers, it is important that you target your products and marketing towards them.  You need to offer high quality, adaptable products, and take advantage of the internet not only for online sales, but also for marketing via social medias.  This is a big change from traditional sales methods you may have used in the past.  If you find yourself short on time to adjust your products and marketing to your customer's needs, let DSA Factors help.  We can manage your receivables and collections while eliminating the need for you to run credit checks, allowing you to focus on more important issues such as product line, marketing, and sales, while at the same time improving your cash flow.

Thursday, June 11, 2015

Outdoor furniture and living trends among the wealthy

Outdoor Conversation Group
It is no surprise that the wealthier you are, the more you will spend on furniture.  But it may surprise you where that money is being spent, especially when it comes to outdoor furniture.  A recent study by Furniture Today looked at outdoor furniture sales in relation to the buyers wealth.  They paid special attention to the 22% of American households that make over $100,000 a year.

When it comes to outdoor dining sets, these affluent Americans made up 28% of the market share and accounted for 37% of the total dollars spent.  On average the wealthy spent twice as much on outdoor dining sets than the less affluent.

While the numbers for outdoor dining sets may not come as a big surprise, the money spent on outdoor conversation groups will certainly surprise you.  Wealthy Americans only accounted for 19% of the market share in this category, but accounted for 65% of total dollars spent!  While families making less than $100,000 a year spent on average $225 on conversation groups, those making between $100,000 and $150,000 spent $1500 on average, while those making over $150,000 a year spent $2325 on average, over 10 times what less affluent Americans spend.

The reason for these numbers may have to do with outdoor living space.  Nearly 75% of all families who make over $150,000 a year have an outdoor room in their house, with another 17% in the process of planning or constructing one.  For the families making between $100,000 and $150,000, 63% of them have outdoor rooms, with another 22% in the process of planning or constructing one.

For manufacturers of outdoor furniture this could be some important information to keep in mind.  While it would be wise to offer a range of price points for outdoor dining sets, you may want focus more on high end conversation groups.

As the summer heats up and sales start growing, make sure that you aren't left behind.  Let DSA Factors handle your receivables so you can focus more on sales and production.  Call Howard today at 773-248-9000 to find out how we can help you.

Wednesday, May 27, 2015

Bigger is Better - Top Furniture Retailers Seeing Higher Sales

According to a recent report in Furniture Today, the top 10 furniture retailers saw an 11% increase in sales in 2014 over 2013, while the top 100 retailers experienced sales increases of 8.3%.  This is the fifth straight year that the top 100 have experienced sales growth.  Overall furniture sales have grown from $50.5 billion in 2013 to $52.8 billion in 2014, a 4.5% increase overall.  This means that the top 100's gains has come mostly at the expense of smaller furniture retailers.

It isn't just sales that are growing, but also locations as well.  The top 100 retailers opened a combined 711 stores in 2014, a 7.4% increase in the number of locations, with the top 10 leading way with a 22% increase in new stores.  2013 saw only 321 new stores open for the top 100.  While many of these are actual new stores, many of them also came thru acquisitions.  Mattress Firm alone added over a hundred new stores thanks to acquiring two other chains that were in last years top 100 list.

The top 100 retailers were able to account for 79% of all sales for US furniture stores.  They accounted for 37% of overall furniture sales nationwide.  This takes into consideration not just furniture stores, but any other stores, whether brick and mortar or online, or catalogs that sell furniture such appliance stores, department stores, rental stores, warehouse clubs, and many more.

Leading the way in the top 100 were the specialty stores.  There are 27 specialty stores in the top 100, and they combined for net sales increases of 10.4%, while conventional furniture stores saw net sales increases of 6.5%.  Even more amazing is that these 27 stores accounted for 45% of sales for the top 100.  It was the 10 bedding specialists in the top 100 that were able to account for most of these gains.  Bedding specialists saw a net sales increase of 15.6% while they added 555 new stores, an increase of 14.2%.

The top 10 stores are as follows:
  1. Ashley Furniture HomeStore
  2. IKEA
  3. Williams-Sonoma
  4. Rooms To Go
  5. Mattress Firm
  6. RH
  7. Berkshire Hathaway [furniture division]
  8. Pier 1 Imports
  9. Raymour & Flanigan
  10. Sleep Number
With the big names taking a higher share of sales volume away from the smaller stores, it is more important than ever that you are able to get your products into their stores in order to grow your business.  To get into these stores you need to be able to give them terms on large orders.  Let DSA Factors manage your receivables and improve your cash flow so your business can grow.  With our help you no longer need to worry about cash flow or credit, and can instead focus on sales.  Give us a call today at 773-248-9000.

This data is based on furniture, bedding, and accessories sales.