Merchandise: Children’s Furnishings Catch On

Kid culture is becoming the new money maker for home decor catalogers. Following on the heels of fashion retailers such as The Gap, The Limited and Talbots, which in the mid-1990s began offering children’s clothing that mirrored adult fashions, kid-sized products are now filtering into the bedroom and playroom. In the past several years, Neiman Marcus, The Company Store and Pottery Barn have all created catalogs for kids. These new catalogs are chock full of endearing offerings for kids—furniture, bedding and housewares—at adult-sized prices.

Home Furnishings: Catalog Magnet

According to data released in 1999 by Banc of America Securities, consumers spend an average of $1,215 per household annually for home furnishings; 46 percent of that figure is on furniture. Housewares comprise the largest segment of total furniture sales, 25 percent, and is among the fastest growing segments of the industry.

In addition, home furnishings and housewares are the second and third fastest growing merchandise categories in cataloging. According to The 1999 Direct Marketing Association Statistical Fact Book that charted catalog purchases by category, home furnishings accounted for 9.4 percent of total products sold through catalogs in spring 1998.

Catalogers are seeking to get their share of that $1,215 spent on home furnishings by carving a foothold in every room of the house and in every age group from infant to adult. Merchandising experts cite a variety of reasons for the bursting children’s furniture catalog business, primarily the deep pockets of the nation’s largest demographic, the baby boomers.

Whether they be parents or grandparents, this generation, merchandising experts say, is willing to spend a considerable sum on home goods. In addition to their ability to purchase pricey wares, baby boomers are also buying and building bigger homes with more rooms to fill. The furniture offered is appealing to this group because it is sophisticated, trendy and represents smaller versions of parents’ own furniture styles.

Andrea Syverson, president of catalog consulting firm IER partners, says the allure for consumers is the uniqueness of the line, which wasn’t offered when baby boomers were young.

“Theming in kids’ decor wasn’t available [when they were kids]. [The parents] have taken a designer approach to kids’ rooms like they have taken to the whole house,” says Syverson.

When shopping by catalog, filling a child’s bedroom, bathroom or playroom is easy and convenient.

“I have found that if it mirrors adult furniture, say an overstuffed club chair and loveseat, which are done very well [then it sells.] It is comfortable, sophisticated and fits in the home with what’s already there,” says Leila Griffith, a merchandiser based in Jacksonville, FL.

For catalogers, the home furnishings and decor market offers a healthy profit margin in a still underserved market. In just the past three years, at least four spin-offs have been created by major catalogers to devote selling space to children’s furniture. And on the horizon are several apparel and home furnishings catalogs that now offer a couple of pages of children’s bedding and furniture.

The 1998 DMA State of the Catalog Industry Report’s outlook for home furnishings sales predicted a 5.4-percent increase between 1998 and 2003. The increase in sales is forecast despite the hefty shipping costs passed on to the consumer—which average $100 or more for beds, chairs, tables and dressers—but are necessary to keep catalogers’ profits from eroding. Nevertheless, consumers seem impervious to the costs, as shown in the reported above-average response rate Pottery Barn Kids received on rollout.

“The same margins are [there] in kids’ furniture as there are in furniture for the home,” says Syverson. “They are passing shipping on to the customer either by burying it in the price or adding it on through shipping and handling.

“People can look at a whole theme and buy almost everything on a page. It’s one-stop shopping. For time-pressed baby boomers, it’s great because someone else has figured out all the accessory pieces. The other side is, some love the uniqueness of the piece, so it is worth the shipping cost,” she says.

As far as the longevity of the kid’s furnishings and decor market is concerned, interior decorating often follows the fashion industry’s lead, which shows no signs of slowing when it comes to creating new children’s offerings.

“You can tell the end of a trend when all of a sudden someone who was doing furniture stops or pares down their lines. But once the trend hits, everybody and their grandmother is knocking it off,” Griffith says, noting that the market is not to that point yet.

Syverson says that while the trend might not fade, it is certainly at the peak in reaching the best demographic. She says the market may never be this big again because the boomer generation won’t be there in such numbers to support it.

Kids Only

The trend in cataloging for children’s bedding seems to be to dive in. Instead of spinning off a product line when warranted by response, Neiman Marcus, Pottery Barn, Company Kids and Kid Territory all dove in.

Griffith speculates the reason behind spinning off the children’s line has to do with traditionally poor response to incorporating it into existing catalogs, and with being able to target customers more effectively with a highly focused catalog.

“In my experience, and this has not changed in 25 years, adult catalogs that offer children’s products sell them at Christmas and that’s it,” because that’s when shoppers are most responsive to foreign merchandise, says Griffith. “You have to be very cautious; it is a toss up whether that adult has a child or grandchild. Children’s furniture is not cheap.”

Griffith says furniture is a product that might not alienate shoppers, if slowly worked into catalogs. But she says product pricing is an important factor to consider when adding new items to a catalog. She advises keeping pricing consistent with the rest of a catalog because offering a line of products that are significantly more expensive than others probably won’t be successful. Because furniture can be pricey, it is not ideal for all catalogs.

The first on the spin-off scene was Neiman Marcus Child. In September 1998, the upscale cataloger/retailer sent its first catalog to 1 million customers in its housefile. On the edge of the child-merchandise wave, Neiman Marcus’ spin-off came from identifying its customers’ desire for upscale furnishings and linens for their children.

Trying to stay ahead of the fray, next came Pottery Barn Kids, which first mailed in January 1999.

Kid Territory, a new catalog, followed swiftly on its heels in spring 1999. Unlike its counterparts, Kid Territory isn’t gift-, game- or furnishings-oriented, but is designed to meet the comprehensive needs of parents.

Company Kids is the most recent addition to the children’s furniture spin-offs. The initial 64-page mailing in spring 2000 included furniture, bedding, bath, toys and children’s clothing accessories.

“This market segment has completely evolved, with an increasingly affluent and savvy parent looking for more specialized product, making this classification stronger than ever,” states Richard Hoffmann, president and CEO for Hanover Direct.

Data showing a 3-percent increase in catalog transactions for children’s apparel and merchandise between the 1997 and 1996 holiday seasons, coupled with a 4-percent increase in home merchandise transactions, is spurring the children’s merchandise segment. Hanna Andersson, J.Jill, Garnet Hill and Sundance all have begun offering several pages of children’s bedding, decor and furniture in their catalogs.

For instance, in an eight-page insert mailed in fall 1999 called Hanna Home, Hanna Andersson offered rugs, wall decor, bath accessories and bedding for cribs and children’s beds.

As a cataloger, making headway into the home starts with providing quality products and service from the get-go. For a cataloger that has extended its lines into adult furnishings or apparel, disappointing the customer has potentially serious ramifications. Capturing a customer and encouraging him to be loyal could mean thousands of dollars per year of ROI in a sector that isn’t expected to disappear soon, say merchandisers.

“It is similar to credit cards. The earlier you can hook a guy, the more likely they are to be loyal. It is true in brand marketing to kids and true for parents,” says Syverson.

She says that if a children’s furniture catalog provides quality service and product on the first order, then the customer is likely to stay with the cataloger until the children are grown.

The Products

The children’s furniture being offered by venerable catalogers such as Pottery Barn, Neiman Marcus and The Company Store is sophisticated and typically theme oriented. Shoppers can choose from a wide range of products that touch on many stages of childhood from infancy to young adulthood.

There are tie-dyed bedrooms, flower bedrooms, trains, planes, automobiles and sports of every kind. Thematic layouts encourage buyers to order everything on a page because it eliminates the hassle of having to find coordinating lamps, bedding, shades and rugs.

Company Kids has an extensive offering of decor products. One “garden” motif spread includes bedding, rugs, blankets and string lights.

The average cost to outfit a child’s bed with sheets, pillow cases, comforter, extra shams and quilt: $297. Bunk beds cost between $799 and $1,099, thematic and wood frame beds run in the $700 to $800 range, not including the optional $400 trundle, and day bed and metal frame beds come in at $400 to $500.

The Fort Bed Comparison

Company Kids:
Fort Bed: $699 plus $175 shipping
Dog and Cat Stamp Set with Paints: $47
Wall Shelf: $89
Storage Duvet Cover: $59
Three ABC Stackable Bookshelves: $289
Car Rug: $99.99
Total: $1,457.99
Pottery Barn Kids:
Clubhouse Bed: $699 plus $150 shipping
Map Rug: $189
Full Set of Bedding: $230
Total: $1,286

Variety

Merchandise in the catalogs is typically bedding or decor. A simple change of sheets and comforter can create a whole new theme in a room, which Griffith says is an exciting prospect because it isn’t as expensive as new furniture.

Interestingly, in their short existence the furnishings-oriented catalogs have made several product additions. In Pottery Barn Kids’ Summer 2000 book, outdoor water and lawn toys were added, as well as beach towels that are tied to thematic bedroom furnishings.

Company Kids offers such luxuries as a wool mattress pad, down pillows and down comforters, and eccentricities such as raincoats, umbrellas and purses. As always, exclusives and one-of-a-kinds sell best for catalogers.