Home Express: a real crowd pleaser - home furnishings store - Home Market Trends Supplement - company profile

Home Express: A Real Crowd Pleaser

Carrying the same merchandise as most discount and department stores, Home Express' innovative approach to home accessories has allowed the company to successfully compete head to head with area retailers.

By Michael Hartnett

It wasn't so long ago that retailers would go out of their way to visit the then-new Crate & Barrel concept when attending a show in Chicago. Now, when retailers visit Southern California and the San Francisco Bay Area they can't keep up to date on the latest trends in the stylish presentation of home furnishings, housewares, leisure furniture and consumer electronics, without taking an hour to walk through a Home Express store.

The six existing stores resist easy definition because they have taken such a strong position in several merchandise categories -- home textiles, housewares, tabletop, consumer electronics, ready-to-assemble and leisure furniture, and much more.

Home Express describes itself as a "retail home accessories store," but that hardly does justice to this innovative concept.

Clearly, it is the ability of Home Express to deliver a winning combination of low prices, solid assortment and personal service in a shopping environment that is distinctive, exciting and fun, that sets it apart from the crowd.

Merchandise displays put heavy emphasis on bright seasonal colors. It's spring selection features aqua, shocking pink, turquoise and orange, along with the high-tech look of black and white in both furniture and soft goods, and some striking gold and silver table settings. Displays of towels, comforters and tabletop are positioned for impact at angles guaranteed to be eye catching without sacrificing the feeling of spaciousness.

About 25 percent of store space is allocated to bed and bath, 30 percent to housewares and tabletop, 18 percent to consumer electronics, and the rest is split between RTA and an "organization" department centered around kitchen needs.

In the chain's prototype store, in Buena Park, California, just outside Los Angeles, which was built to the chain's specifications, practically all the merchandise in the 50,000-square-foot selling area can be seen from the store's entry.

The store achieves this high visibility despite the use of hitech, black grids suspended from the ceiling. Similarly, most fixtures at store level are also black, with the result that virtually all colors of merchandise are accented. Even basic, white pillows are made to seem more interesting because of the contrast.

Store interiors feature terra-cotta floors, granite checkout counters and black and turquoise shopping carts.

And the store front is just as interesting. Compared to other retail operations in the typical strip mall setting preferred by Home Express, it's outside signage is colorful and distinctive.

The brands are roughly the same as those carried by mass merchants and department stores -- Cannon, Pepperell, Braun, Bush, O'Sullivan, Croscill, Stevens, Rubbermaid, Black & Decker, Sharp, Sony and ClosetMaid to name a few. On certain items, prices are as sharp as nearby K mart and Target stores, yet store design and display are as interesting and well-thought-out as Mervyn's and The Broadway.

The upscale presentation and low price strategy create the impression that the chain is working with more stringent margin requirements than other retailers who have opted for discount prices or department store presentation, but Home Express president and chief executive officer Gary Foss, denies it. He claims that every retailer operates within highly structured margin requirements but says Home Express' retail formula is not more stringent than competitors.

Rather than have long counter runs of merchandise throughout the store, Home Express uses smaller focus areas and vignettes that highlight groups of coordinated products and their uses. The store is packed with merchandise, but these focus areas create shopper interest and prove Home Express is willing to be different.

A special section in the cookware area, for example, offers a collection of cookware, utensils and some food items arranged by food speciality. In six-foot displays, shoppers can browse through the merchandise they will need for cooking Cajun style, pizza and pasta, Mexican food and Chinese.

Home Express has created categories other stores don't have yet. The "Comfort Clinic" has the same merchandise that can be found throughout most mass merchants -- shower massagers, whirlpool baths, foot spas and humidifiers -- but this chain has pulled together all this merchandise in one department. The highlight of this section is two reclining easy chairs that offer a powerful back massage.

Another specialty department is called the "Kids Corner." It, too, features familiar merchandise like plush, bedding and children's clocks, yet it has been pulled together into a kind of boutique emphasizing Walt Disney licenses, and is a magnet for youngsters shopping with mom and dad.

In the rear of the store, where consumer electronics products have been arranged into, first a television wall with heavy emphasis on big screen models, then a separate audio department. There is also a separate, free-standing room that has been installed to house a top-of-the-line video/audio system priced up near $5,000.

For the shopper who would like to muse about the fun of owning such a state-of-the-art system, Home Express has put a comfortable couch in this room and provides visitors with a remote control to sample all the features.

Heavy cross-merchandising strategies are most apparent in the home office category, a category enjoying explosive growth in Home Express. Presented with coordinated desks, chairs, file cabinets and office lighting are consumer electronics products like typewriters, telephones, copiers and fax machines. Another, smaller area adopts an approach utilized by Sharper Image with a series of unusual consumer electronics and adult games.

Home Express' low price strategy is crucial to the stores' concept, yet top management has apparently decided no to hit shoppers over the head with a low price message. Unobstrusive green signage invites comparisons between Home Express prices and "theirs," which means almost everyone else in each store's market area.

Store managers check ads by Mervyn's, The Broadway, Sears, J.C. Penney, Montgomery Ward, Circuit City, Target and K mart, among others, on a daily basis.

In addition, each of these stores is shopped on a regular basis to determine their everyday prices on the same merchandise carried by Home Express. The "theirs" price is seldom more than a few weeks old and Home Express tries to make certain it is always higher, sometimes just 10 percent to 15 percent higher, and at other times, more than double on selected items.

In bath towels, for example, Gentry Velour towels by J.P. Stevens are priced at $7, Magnificence by Jaime carried an $8 price point, Elegance bath towels by Cannon, $9.50 and Westpoint Pepperell terry bath towels are priced at $10.

In sheets, (twin sized) Westpoint Pepperell cotton sheets are $10; Colorama percale sheets by Springs, $5; Luxury Percale by Cannon, $8; 180-thread count percale sheets were priced at $5 and $10 for Cannon; $7 for Stevens and $5 for Spring Mills.

In comforters, the opening price point is $35, for a Fashion Home twin comforter. The highest price point was a Dakotah appliqued comforter (full size) priced at $140.

Home Express reinforces the low price/high value message using stylish presentation, bright colors and the result is an exciting and interesting shopping environment in which prices don't get in the way impulse purchases.

Home Express has apparently been able to attract several Mervyn's buyers to its staff and has benefited from their upscale flair for merchandise and presentation. Several in-store staffers left Target to bring their disciplined, system-oriented ways to Home Express.

"Our typical customer isn't that different from everyone else's. We are interested in the person whose domicile is important to them, someone in the acquisitive stage, the 25 to 54 age group," explained Foss. "They want the better quality, the updated looks. They may not want the avant-garde look but the right amount of fashion is important to them. We are into studies of psychographics as much as demographics."

All these fashion statements, combined with low prices and a margin structure not much higher than discount chains has created the need for volume sales.

Home Express has apparently been able to take some of the pressure off its home furnishings and housewares departments by generating much of the needed volume from its consumer electronics departments.

Although nearly half the stores' total volume comes from consumer electronics, 80 percent of the selling space is dedicated to the home furnishings, housewares and home office categories.

Initial planning for pricing, assortment and space allocation were so close to being on target that the chain has done little more than fine tune the concept since its first store opened in the fall of 1986.

The single most important change has been to expand the home office category to respond to unexpectedly high shopper interest.

The first three Home Express stores were opened in Fremont and Fresno, Calif., and Las Vegas. Next came stores in Sacramento, Buena Park and Huntington Beach, California.

Three other locations are scheduled to be open this year and one of them, in Torrance, Calif., will be in a new indoor mall presently under construction.

Since all other stores are to be in strip centers, the Torrance store will be a valuable learning experience for the chain, which will help determine the relative merits of increased shopper traffic vs. higher leasing costs.

Foss said Home Express' stated goal is to have a total of 40 to 50 stores operating in the 1990s, and he stands by that projection.

"We would like to grow the business and become an important factor in the West. There is plenty to do. We are pleased to date, but we have to learn more about our business," said Foss.

If company management is ever tempted to take the plunge into markets outside California and Nevada, merchandising executives will be put to the test matching assortments to consumer tastes in new markets.

Clearly, they know their California shoppers very well. Could they transfer that insight to stores operating in the Midwest or Northeast operations?

Based on Home Express' choice of California store locations, top management prefers to be in strip malls that are satellite shopping sites to major regional malls with tenants like Mervyn's, The Broadway, Sears, J.C. Penney and Montgomery Ward. The chain invariably finds itself near a Target or K mart, or both.

Advertising seems geared to promoting the entire store by presenting an array of merchandise from all categories through slick, four-color inserts in major newspapers.

In addition, the stores do run one-page ROP ads promoting consumer electronics (CE associates sell on commission) and occasionally will take a strong position on a top brand item like a food processor to comparing Home Express' price and "theirs."

Chewing the Fat: Promotions Pay Off in a Big Way

Assistant store manager Scott Michaelis was patrolling his Home Express store on another busy Saturday afternoon when a shopper asked, "Is he going to be on time?" "Yes, he is," said Michaelis. "He will be here in about 20 minutes."

Reassured the shopper left to browse the aisles near the center of the store, where a special promotion would soon be underway.

The "he" was Richard Simmons, and as he breezed into the store, he was quickly surrounded by curious fans waiting to hear his expert advice on keeping fit and trim.

With over 200 attentive listeners eager to share in the fun, Simmons started singling out members of his audience to ask questions about caloric intake and cholesterol, awarding prizes for right, or nearly right answers.

Two hours later, Simmons was still making friends by signing autographs. By now the crowd had thinned out, but Home Express had accomplished its goal. Hundreds of shoppers had flocked to the store in Buena Park, Calif., and they had fun listening to a showman and, shopping in an interesting and attractive store.

Home Express has had several successful promotions. Most often, stores invite local chefs to demonstrate their skills using a permanent demonstration center in the cookware section, highlighting products available in the store. A large overhead mirror is positioned allowing onlookers to see what's being cooked up.

Typically, these demonstrations are held once or twice a month and have been very successful in promoting Home Express' image as an interesting and fun store to visit -- both to shop and to watch the entertainment.

Photo: Home Express provides shoppers with a complete assortment of storage items and kitchen organizers in a separate department.

Photo: Bedding display spotlights comforter, sheets and throw pillows in bright, spring colors.

The Store Has an Exciting Shopping Environment, Where Prices Don't Get in the Way of Impulse Purchases

Photo: Home Express takes a light-hearted approach with its display of housewares and utensils used to prepare ethnic foods and desserts.

Photo: A display wall of comforters and a bedroom vignette serve as effective and colorful focal points that show off merchandise and draw customers to Home Express' domestics department. The chain bills itself as a 'retail home accessories' store.

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