Ashley Furniture HomeStore: Using tools to improve business

Aggie and Richard Choi with Ashley Furniture founder Ron Wanek. The Chois attribute much of their success to being part of the AFHS family.

The furniture business wasn’t quite where they saw themselves ending up, as is true with many retailers.

“I wanted to be a lawyer because I felt that was the only field, at the time, where women could win and get congratulated,” Aggie said. “My father and mother thought I would make a perfect lawyer because I always justified my wrongdoing to them when I talked back.”

Richard had other ideas. He wanted to be a taxi driver.

“When I was little living in South Korea in the 60s, the only time I got to ride in a taxi was on New Year’s Day when we visited relatives,” he said. “Back then riding in a taxi was a thing of luxury and was very comfortable. I thought taxis would take me places I imagined.”

The Chois were introduced to the furniture business by a good friend in the industry. Aggie says they got into retailing because “interacting with guests and confirming their needs are being met makes me feel I have contributed to my community; as an immigrant that is important to me. We’re continuously striving to provide a better shopping experience for our customers.”

The AFHS Lubbock store opened three years ago, followed by stores in Amarillo and Midland. Two New Mexico stores are in the works.

The Ashley Furniture HomeStore side of the business includes one store each in Lubbock and Amarillo and a third in Midland, Texas. Aggie and Richard broke ground in May on a fourth AFHS in Hobbs, N.M.; it should open in eight to 10 months. A fifth store in Roswell, N.M., is slated for a year from now.

Though the retailer doesn’t disclose its average annual sales, they are up 2.8% from last year and youth represents roughly 9% of the overall business. The stores range in size from 40,500 to 42,000 square feet and 12% to 15% of that floor space is youth, devoted to an average of 15 vignettes per store.

“This will grow as the offerings from Ashley continue to become more robust,” Richard said. “Youth is an under-marketed category as a whole and we look to capitalize on it.”

AFHS carries Ashley Furniture exclusively as well as lighting, bedding, wall decor and rugs from various vendors. Right now they’re expanding into the tween market, something Aggie is very excited about, saying “it’s an important market segment that shouldn’t be overlooked.” Full beds are a key offering in this segment.

AFHS floors about 15 youth vignettes per store; youth accounts for about 9% of the overall business.

“We believe the best way to shop for furniture is to create usable room settings and decorate to enhance the beauty of the furniture,” Richard said. “Customers want to be inspired by their surroundings, hence the enormous success of decorating shows; we want to be a similar resource.”

While they reach their customers with traditional integrated marketing like broadcast, print, Web and direct mail, Aggie says “it’s not enough to just get a message out. People today are smarter and need to feel a genuine trust. That’s the intangible part of our business and what we do better than anyone else.”

Richard says with traditional newspaper advertising on the decline because of falling readership, they “must work smarter to evangelize our message.” The couple embraces what they call “innovative guerilla marketing techniques.” They may offer special customer spiffs, private events or employ more grass-roots marketing efforts and strategic local partnerships.

The couple’s philosophy on sales or markdowns is that they carry products at “every day low prices” and when they receive a discount they pass the savings on to their customers.

Something obviously is working since they’ve not only seen sales increases over last year but are adding stores. Richard attributes their success to the overall HomeStore experience. The stores are user-friendly, the vignettes not only show off the product but also give design inspiration, consumers know and appreciate the Ashley Furniture brand and he says “we hire the best so our customers are treated to friendly, knowledgeable, but not overly assertive, sales consultants.”

The Chois use recruiting-specific media, not just classified ads, and careful screening to find good employees. Training is important but they also look for “the individual’s willingness to adopt our customer-focused philosophy.”

They offer “excellent compensation,” health insurance, paid vacation, employee discounts and more, as well as on-going training. The training consists of updating associates on product information, sales techniques and customer service. There are monthly managers meetings with all store and sales managers as well.

Technology also plays an important roll in AFHS. “It allows us to work smarter and offer advantages that we could not just five years ago,” Richard said. “Ordering, tracking, delivery, etc. — all of this is reliant on technology and as it advances, so do our opportunities to increase the overall experience.”

These advantages include improving and streamlining one of the biggest frustrations retailers have — order and delivery. As an AFHS retailer the stores use the “Just In Time” method so they’re able to reduce their warehouse space and costs and the savings are passed on to the customer.

“Also, with Ashley’s proprietary delivery fleet (the largest private fleet in the industry), they’re able to deliver goods to all points in the U.S. within 2-3 days,” Richard said. “This efficiency is why our model works so well.”

Another benefit to being part of the AFHS group is the product itself, Aggie says. “Much of the hard work is done by Ashley Industries, including furniture design, market research, product knowledge, advertising and many other retails tools. Ashley decreases our learning curve, allowing us to focus on being retailers.”

The Chois optimism and excitement about their business is a breath of fresh air, but they concede there are challenges.

“The biggest circle of concern today is the economy because it is out of our circle of influence,” Richard said. “We challenge ourselves to overcome through teamwork and constant improvement on a daily basis.”

Vibrant, accessorized vignettes enhance the furniture and offer design inspiration. Tech-friendly features add excitement.

“Being longtime independent dealers having a very rigid style of managing, conducting business the way it was conducted (retailer focused vs. customer focused) was a bad business move,” Richard said. “We overcame that with a paradigm shift. We went from a micro management style to a teamwork-based style. We hired more capable people to delegate duties, too, resulting in our guests experiencing an improved shopping experience.”

Moving forward, the Chois see their business growing in several ways. First, the communities in which they do business are growing; second, with Ashley’s expansion into the tween niche, they can pursue new market segments; and third, by looking to non-traditional means of advertising, they hope to reach new customers.

The couple’s goals for the next 10 years are to keep “our repeat customers while growing market share,” be known as the best AFHS store, “operate our company in a matter in which our employees’ children would love to work here,” and add a program in which employees own a percentage of the company or be able to offer profit sharing.