Leading Texas Retailer Talks Covid-19, Strategies, Survival and Common Sense
In his 32 years as CEO and owner of Sherman-Texas based Knight Furniture, David Gunn has seen it all—good times, bad times and everything in between.
During that time, his business savvy has been recognized both locally and nationally. In 2016, Gunn was awarded the Home Furnishings Association’s coveted Retailer of the Year Award. Proving that he is no one-trick pony, Gunn recently took Sherman Texas’s Triple Crown of sorts, being awarded the President’s Award, Small Business of the Year and the Community Leader of the Year.
With credentials such as those, IHFRA could not think of a better voice of reason to speak to about the Covid-19 virus, its impact on home furnishings and his outlook for the future.
What follows are the key points from that interview.
Q:
With the arrival of the coronavirus, we all seem to be swimming in unchartered waters. In your time in retail, do you ever remember anything having the disruptive qualities of this virus? If as, what was it and how do you respond?
DG:
Our industry and our country are indeed in uncharted waters. We’ve seen smaller and different versions of this, post 9-11 and the 2008/2009 downturn, however nothing with the magnitude of uncertainty that we are experiencing now. My priorities have been rather simple in approaching this problem. First, stay calm. You won’t think clearly if you panic and your staff and family may negatively react to your fears. Second, don’t forget who you are. Adapt but don’t make radical changes, stay busy, remain trustworthy and conduct your business morally. It’s important that you not allow the current disaster to damage the image and relationships that took years to create. And third, remain positive for the future. Look for new ways to adapt your business, make plans to thrive in the Covid-19 aftermath, and use this time to make your essential business and employee relationships even stronger.
Q:
While hopefully, this virus will not be a long-term issue, it has turned the cart upside down in the near term. What impact has it had on your business so far, and what impact might it have longer term?
DG:
The impact on my business has been significant. Beginning March 16, we saw a drastic drop in traffic. A week later we decided the responsible thing to do for all concerned was to temporarily and voluntarily close our retail stores…there was simply not enough traffic to justify the risks of customer or employee illness, or of receiving bad press or social media posts for putting greed over public good. Closing the stores is never a good thing, however we believe it was consistent with who we are in our communities and we have received significant praise for taking early action. Our message has been that we will help with urgent purchases by appointment and we’ve had good business from that. The longer-term consequences are part of the uncertainty I mentioned earlier. Might consumers come rushing back in as soon as the President tells us it safe, or will they need time to recover from loss of wages and other priorities? While it is impossible to know, I have always believed that we must make sure that we ourselves are not part of the problem. So we are cautiously positioning to be there with staff, resources and merchandise when the consumer is ready again. If you have to spend time to ramp up once business improves you will be left behind.
Q:
Getting customers into the store has been a challenge for retailers even in robust times. What impact do you think the virus and subsequent mandated quarantines have on retail in general and on furniture retailers, both long- and short term?
DG:
Most of us have long held habits that influence our shopping practices, and are slow to change those habits unless there is something that stimulates the change. There is little doubt that this forced time at home will be a significant factor. People who have been uncomfortable with shopping or buying furniture online will become more engaged in our websites and many will take the chance on ecommerce who felt they had no reason to do it before. Brick and mortar stores MUST make certain that something about their in-store consumer experience is compelling or they will lose the fight. And for those of us with an ecommerce presence we must keep in mind the continuity of the experience – one must be a consistent and natural extension of the other.
Q:
Will the government bailout in response to the virus help your business—and if so—how?
DG:
Yes, without a doubt, unless the quarantine lasts too long. Rapid and ramped up unemployment compensation will keep many households liquid and ready to spend after Covid-19. The influx of cash into injured businesses will keep many open that would otherwise close, keeping people employed. Whether those things help enough is another part of the uncertainty.
Q:
Has the government done enough at this point to help small business?
DG:
Yes and no. I recognize the gargantuan task of quickly creating programs that treat (almost) all businesses the same and I believe there has been a good faith effort by most of our lawmakers. The expected influx of cash will help create a bridge to more prosperous times, however there are a few specific sticking points that are unfortunate and reduce the long-term benefit. The banking lobby became concerned with some of the SBA programs, which in turn caused some tightening of rules and loan terms. Plus, due to the rapid release of these programs, many of the provisions are simply not well defined enough to know if the help to small business will be permanent or cause additional hardship down the road. The situation continues to be very fluid, so I hope that our friends in Washington will allow their work to be equally fluid as this crisis matures. More will need to be done. By the way, the most essential resource for understanding the programs and staying ahead of new developments is the Home Furnishings Association website, myhfa.org. HFA maintains a lobbyist in DC, so they cut through most of the clutter and get right to what you need to know for your business.
Q:
E-commerce has been a growing challenge to many brick and mortar retailers. Now, forced to stay home, will this make e-tailing an even stronger competitor to brick and mortar retailers?
DG:
Absolutely. If you don’t have a great website, use this down time to ramp it up. Even before the crisis an overwhelming percentage of consumers were doing research at home on the internet that they used to do in stores. That number will go up further now, and the number that make the leap to buying furniture online will also rise. I’ll say it again…something about your instore experience MUST be compelling and it needs to be seamlessly integrated with your website.
Q:
What are you doing…and what will you do to be the favored choice of your current and potential customers?
DG:
Maintaining a social media dialogue, staying involved in the community, adjusting some product lines to the new reality, fostering relationships with employees and important partners, responding quickly to all calls, emails, texts and other communications from customers, prepare to reopen better than ever with improved tags, training and procedures. This is not a vacation, it’s an involuntary opportunity to work on your business.
Q:
What advice or requests to you have of your reps during this uncertain time?
DG:
In any environment furniture reps are one of the most important resources for retailers. I am always more successful with a furniture line when I have a great rep. We need one another more now than ever before, so the first focus for reps has got to be maintaining a strong relationship with your retailers even while the store or your vendor is closed. You have their cell phone numbers, call them to check on them, express concern, brainstorm and make future plans. Second, be aware and educated on things that can make a difference for your retail partners. Don’t assume your clients all have the resources of HFA, buying groups or performance groups. You could be their hero, the difference between the store living and dying, and if they die so does part of your income. No matter how long we are in this period of inactivity, stay fresh and ready. As I mentioned above, we are using this down time to adjust some merchandising. I fully expect those decisions to be made immediately in order to get the product ASAP. Reps who are disengaged will lose an opportunity. And by the way retailers, it’s a two-way street. Retailers should reach out to their important vendor reps to check on them too. The reps have a wealth of knowledge that might make a difference in weathering this storm.
Q:
What could your suppliers do help you during this time?
DG:
Our vendor partners just need to recognize that it will not be business as usual for the foreseeable future, and deal with reps and retailers accordingly. There are already problems in the supply chain, and I’m sure they are doing what they can. Product availability is paramount. Relaxed terms and accurate ETAs will also help. One thing about our industry is that what disrupts success at one level ultimately impacts everyone – vendor, rep and retailer – so we are all invested in overcoming the new challenges together.
Q:
What will the retail landscape look like when the smoke clears and how are you positioning yourself to not just stay in the game, but to grow?
DG:
My crystal ball is somewhat cloudy due to all the current uncertainty. How long will this last? Will the government efforts be enough to stimulate business in the short term? I don’t know the answers, so my focus is on mastering the basics, the core principals of being successful while staying tuned in to every development. IHFRA and HFA are mandatory resources during these times. We’re putting extra attention on staff and teambuilding to make sure everyone comes out of this in a good place. We think some consumers’ priorities might shift more to the home, so some slight adjustments to merchandising are being made. Likewise, we are ready to adapt as the circumstance warrant but committed to remaining true to the values that have made us successful before the Covid-19 challenges. One final thing, someone once told me that I could not take care of business if I didn’t take care of myself first. I have certainly found that to be true, so even though these are stressful times don’t forget to find ways to enjoy life. You, your family and your business will all be stronger and more successful.
