The Furniture Industry46 Stores
The Australian furniture industry has seen fluctuating fortunes over recent years, with the volatile housing industry being a major contributor to uncertainty in the market. The industry generates revenue of approximately $12 billion per year and employs almost 100,000 people. Furniture sales have been affected by changes in consumer sentiment and shrinking disposable income from a traditionally very strong domestic customer base.
In addition, many Global players have entered the Australian market, chasing what is considered to be a very lucrative opportunity in one of the stronger economies in the world. The impact of increased success by online retailers has also affected physical store based sales revenue. Department stores have pushed aggressively into the furniture market to prop up flagging sales in their traditional products, putting even greater pressure on furniture specialists to match promotional and one-off pricing by these larger retailers.
Furniture specialists have been forced to adapt their stores, their sales process and promotional activity to counter this growing competitive activity, while at the same time adapting their businesses to be more competitive and cost efficient.
About Vast Interior
Vast Interior stores offer customers an eclectic mix of Eastern inspired cultural designs for the home, with furniture that it is created by hand, eye and heart. There is an emphasis on using sustainable, renewable and recycled materials for 90% of the product range on offer. Products are sourced globally with the philosophy that furniture should be unique and make a statement in the home.
Each store is given the freedom to stock whichever products they feel passionate about and those which they believe their loyal customers will appreciate. The group offers a diverse and extensive product range with hundreds of products to choose from in any given store.
The business began in 1999 and has since grown to over 40 stores across Australia and New Zealand with plans to continue to grow by adding more franchisees over the coming years. Queensland franchisee Chad Sawtell operates 8 stores and a warehouse on the East Coast and he has been using Retail Express since the beginning of 2009.
Challenges faced by Vast Interior
High Cost Of Managing Inventory For Multiple Store Locations
For Chad, the growth of his Queensland franchise to 8 stores plus a warehouse brought with it many inventory management and order fulfilment challenges. “The biggest problem we found was how we could manage inventory across multiple locations,” said Chad. There was significant pressure on the business to become more competitive, given that the furniture industry was hit very hard by currency fluctuations, a decline in housing construction and dwindling consumer spending.
The success of Chad’s growing store network was hinging on his ability to optimise the stock within his stores, a process made even more difficult by the fact he was stocking large bulky goods, which are expensive to purchase, store and transport. “We needed to make our inventory work smarter,” said Chad. Previously, the business had been delivering shipping containers of stock to each of the 8 stores in the group, based on orders placed by the local store Purchasing Manager. This created issues with over stocking in some locations and not enough in others, as stock was sold at different rates in each store. Valuable cash was tied up in slow moving stock, causing cash flow issues and impeding business growth.
Each of the Vast Interior stores was also faced with a growing mountain of paperwork to manage, generated from purchase orders and internal transfer orders. Chad estimates this was costing him the equivalent of two full-time staff on this function alone, a figure he knew would get worse with the opening of additional stores.
Inaccurate Stock Reports
Chad knew the solution to this issue was to deliver containers to a central warehouse and distribute stock to stores as pieces were sold. This solution was not possible using the inventory management system Chad was using in his local stores, as the inventory data was not available ‘live’, rather it was polled using out of date technology, which often lead to instances of data corruption. Chad could not rely on this technology to solve his problem.
Chad knew that if the growth in the business was to continue, a decision had to be made to centralise stock into a warehouse and fulfil customer orders from there, in addition to store based fulfilment.
Losing Sales To Competitors
The furniture industry is a competitive environment, with success often dependant on having the right stock available for a customer when they request it. With Chad’s previous Point of Sale system, Sales staff in each Vast Interior store were unable to see if an item of stock was available at another location. If the requested item was not available, sales were often lost to a competitor, where they could have been shipped directly to the customer from another location in the Vast Interior store network. The only option for Sales staff was to contact the other Vast Interior stores by phone to manually check stock availability, which lead to wasted time for Sales staff and unhappy customers across all store locations.
This disconnection with actual stock levels caused further problems around estimated delivery dates for furniture purchased by customers in advance. Sales staff were basing estimated delivery times for furniture on inaccurate and out-of-date information from the existing inventory management system. Customers faced with further delays on delivery of furniture they had paid for would often cancel their order, request a refund from Vast Interior and purchase the item from a competitor. This lead to frustrated customers, frustrated Sales staff and lost revenue for the business.
Why Vast Interior chose Retail Express
Real Time Stock Management
Chad’s goal for his business was to be able to effectively manage the growing volume of stock across all of his locations at the touch of a button. Chad’s vision of centralising his inventory into a warehouse was able to be realised using the Retail Express cloud based technology. “The number one for us was the ability to see live stock in our warehouse and across our Retail network,” said Chad.
Using Retail Express, Vast Interior can now have purchased stock delivered to a central warehouse location in Brisbane. This stock can then easily be transferred to individual stores within the network as required, dramatically reducing instances of over-stocking. This has had a significantly positive impact on cash-flow for the business.
The ever-increasing paperwork and logistics burden with Chad’s previous software system has now been virtually eliminated using Retail Express. The advanced logistics functions within Retail Express allow Vast Interior to effortlessly see which stock is arriving into the warehouse, where the stock is destined to be sent and when, all via the on-screen reporting. “We have effectively gone to a paperless business with Retail Express. It straight away took two the equivalent of two full-time staff out of our business,” said Chad.
Stock arriving at the warehouse can be quickly sorted into that which is to be despatched immediately, either directly to a customer or store location and that which is to remain at the warehouse for storage. Warehouse staff can choose from a range of methods for producing run sheets for delivery drivers including, Delivery Zones, Delivery Times, Delivery Drivers and Home Deliveries. This saves Vast Interior warehouse staff a significant amount of double handling time traditionally associated with managing bulky goods.
Accurate Stock Reports
The cloud based technology used in the Retail Express platform allows Chad to see in real-time the inventory levels and sales activity in any of his stores or warehouse. Any transaction made by the warehouse staff or any store in the network is displayed live as it occurs, with no delay and no data corruption. Chad can now trust the reporting being produced by his Retail Express system and can therefore make confident business decisions.
Making The Most Of Every Sales Opportunity
Using Retail Express, sales staff now have complete control and flexibility at the point of sale to set the fulfilment location by line item, for each customer order. Sales staff can process a transaction on one screen, with a customer taking part of their order with them and having part of their order home delivered. This functionality removes order duplication and streamlines warehouse operations. According to Chad, this has significantly reduced the number of Administration staff needed in the Head Office and at each location. “I would have no hesitation in saying we saved ourselves the equivalent of four full-time staff out of our business. Retail Express paid for itself pretty well straight away,” said Chad.
When serving a customer, Sales staff can immediately see from the POS screen if the stock is available and where the stock is available (even at another store or the warehouse). Staff can then choose several different methods for fulfilment of the customer order from the one POS screen, including:
- Cash and carry
- Store pickup
- Home delivery
- Warehouse pickup
- Any combination of the above
Therefore, the stock can be ordered, paid for and delivered from any store in the network or the warehouse, a process which is made very simple with an automatic notification being sent to the despatching location. “We can now make a sale in any store and have the stock delivered straight to the customer from our warehouse or even from another store in the group,” said Chad.
Another advantage of the live stock visibility through Retail Express is that Sales staff can now provide customers with a very accurate estimated time of arrival for any product in their range. This is the case for stock currently on hand, stock being transferred to the store or even stock which has not been received by the warehouse yet and is on its way from the supplier. Should a shipping container be still on its way from overseas, staff can sell stock from that container, knowing that it will be delivered accurately as shown in Retail Express. This high level of stock visibility and flexibility has led to higher sales volumes for Vast Interior, plus a significant reduction in cancelled orders from unhappy customers.
The future for Vast Interior
The well-known Vast Interior furniture brand is constantly looking for new pieces to add to its collections and is always on the hunt for new franchisees. If the past 13 years are anything to go by, Vast Interior will continue to stay at the forefront of unique, sustainable, affordable and quality furniture designs.
The efficiencies Chad has created using the features within Retail Express will continue to help his store network stay competitive and prosper in his multi-store environment.