Today we are talking with a special guest, Michael Nau. We will be discussing the astounding growth that City Furniture has seen throughout the pandemic.
Specifically, we will look at how they have leaned into online sales and taken advantage of the situation to give them a strong position moving forward. For article clarity, the paragraphs in which Michal Nau is speaking will have MN in the heading, and where Luis Lopez is spelling will have LL.
About Michael Nau
Michael is the VP of Merchandising at City Furniture. He is in Tamarac, FL, which is a part of Broward county. Michael has been working with City Furniture for eight years. He started as a planning assistant straight out of college. He climbed the ranks up to where he sits now.
What is a BCO
A BCO or Beneficial Cargo Owner is a company that owns the cargo being shipped and does not make use of a third party such as a Non-Vessel-Operating Common Carrier (NVOCC) or a freight forwarder. City Furniture is a BCO and, as such, has an in-house logistics team and direct relationships with steamship lines.
Why Bring Logistics Inhouse? (MN)
For us, at City Furniture, it is about building long-term relationships. We based the whole supply chain we use on that. From suppliers to carriers and trucking companies, they are all valued partners. We see that as our best opportunity to make strategic relationships that can last. Our core competencies and logistics experts are on-site and part of the City Furniture family.
Advantages of Being a BCO with Inhouse Logistics (LL)
When we look at a BCO like City Furniture that has flourished in the pandemic, several factors helped. As a BCO, that company can control on-time logistics, build manufacturer relationships, and generally exert more influence over their supply chain. That allowed City Furniture to adapt quicker to rapid changes in demand, such as the spike in furniture purchases that we saw in April 2020 and has continued to this day. The supply chain is ultimately the core of our business. That is because, without that, there is no way to get the product to consumers.
Would You Say Being a BCO Helped With the Pandemic? (MN)
It significantly helped us. Currently, we sell 95% of products directly from our warehouse. The other 5% comes off the showroom floor. In the current climate, the global supply chain has had issues due to the pandemic. That is especially true in the furnishings industry. Demand saw a giant spike much faster than supply could meet. By working directly with carriers and manufacturers, we at City Furniture were able to ramp up production quicker than the competition. We are one of the largest importers into the Port of Miami (PoM). We need to make sure that we do everything promptly, and can fulfill our promises. Being a BCO was essential to being able to do that when the supply chains were under the immense stress we saw last year.
Website vs. Retail (LL)
Having lived in Miami-Dade for 18 years, I drive by the Midtown City Furniture on I-195 all of the time. The big glass front is impressive, and you can see the furniture from the freeway. What I find remarkable is that five years ago, you were focused solely on the retail experience. Furniture is one of those things that people typically want to experience in person before they buy it. It is something that they will watch a million football games on. You have taken advantage of COVID with a stunning website redesign that makes it much easier to purchase online.
Was Redesigning the Website a Pre-COVID Priority or Was It Brought About By The Pandemic? (MN)
It was a very long journey to get the website and social media where it is now. Eight years ago, when I started, only three people were working on the website. Today we have over 30 people working on it. We were all in on revamping the website before COVID hit.
Looking At The Website (LL)
The website is great. When I look at it, it is super easy to make an account and has over 10,000 items. You have tracking, wish lists, financing, and contacts for online designs. As a millennial, I generally prefer going to the store online over in person. The only con is that you cannot touch the furniture. Other than that, online is superior because you avoid lines, parking, and the like. As the pandemic is coming to an end with vaccines, do you see the company shifting some focus back to retail, or are you planning on going all-in on eCommerce and stopping any retail expansion?
Improving Retail (MN)
We see the website as the new front door for the business. We want everyone who comes in to be pre-shopping. The percentage of our sales purely online is growing, but the retail presence is still critical. We are opening a new location in Orlando. It is one of our Gen-3 showrooms. Gen-3 is focused on getting the shopping experience to the next level. They have cafes and wine bars. There is also a home accent store within the store.
Combining Great Website and Great Retail (MN)
On the website front, we have really been focusing on content and product. We built an in-house photo studio to get quality shots for Instagram and other social media. That has been critical. We have also made major investments in product information. It is a leap of faith for the customer to buy something, site unseen. If you give the customer more detailed information about the product, it makes them much more comfortable. Our biggest sales volume, however, is customers pre-shopping and then coming in for an unbelievable in-store experience.
Features of the Website (LL)
One of my favorite things about the website is the ability to do final mile tracking. I feel that this gives the customer the ability to feel like they know where they are at. You do not have to deal with buying a product and calling someone to try to figure out where it is and when it will arrive. One can see when it is pending or staging, or in transit. You make use of Dispatch, which is a great TMS, especially for your type of business. It gives the customer complete transparency from payment until it arrives. That makes total sense and is the icing on the cake that makes the experience great.
Hiring To Build A Great Team (LL)
We have talked before about how to best scale to prevent redundancies. You are only as good as the people you bring on board. It is all about the culture you build. What I want to know is how do you find the best talent to help you build that culture. We want to take a deep dive into the hiring process. That is so we can give our users the ability to understand what upper management at city furniture is looking for when it comes to talent in the Miami area.
What We Look For At City Furniture (MN)
The most important thing is finding people that fit the culture we have worked so hard to build. If you find someone who fits the culture, you can always teach them skills on the job. Thinking about the last couple of hires we have made in the logistics department, they were from very different backgrounds. One was fresh out of college, and the other was a freight forwarding veteran with 20 years of experience. We look at the entire spectrum and focus on finding the right person to work with. We need someone who can work in our environment of continuous improvement. Someone who will learn our standards and culture but who will not be afraid to point out ways we can improve. We are trying to constantly evolve as a company, and we are looking for candidates that can help.
Top 5 Critical Things To Do At Interviews (LL)
- Research the company you are going to work for
- Make eye contact with the interviewer
- Review the job description and make sure it meets your criteria
- Check out other companies on LinkedIn, look at what the competition is offering
- Prepare yourself with questions to ask while in the interview
I do not think that just having an MBA or a 4-year degree makes you the best candidate in the room. Especially when you compare it to someone who has 6-9 years of experience. They are in the trenches every day and know how to cut bills of landing, procure rates, and contact steamship lines. While a college grad may be book-smart and have tremendous proficiency in making documents, they lack real-world experience. Wherever on that spectrum you fall, make sure to follow the list of five, so you are putting your best foot forward.
Is City Furniture Currently Hiring, And If So, What Roles? (MN)
Two positions are currently open that I would like to highlight. We have a logistics coordinator role which is in the realm of what you were alluding to. Anyone can DM me on LinkedIn. If you go to the city furniture page, you can see our open requisitions, and also on cityfurniture.com, under the courier section, there are applications available to fill out.
Pandemic Growth & Growing Pains(MN)
Back in March/April of 2020, there was no way anyone could have envisioned the massive growth in the home economy. On top of that, before the pandemic, furniture was much heavier in retail than most products. People tended to go to stores, and furniture takes up a lot of space and hence, is challenging to deliver. I also understand you are currently facing significant challenges in the supply chain. Either because of the container shortage or the recently resolved Suez issue. That is at the same time that your volumes have grown significantly.
Overcoming Growing Pains (MN)
If you look at our chart here of our inbound inventory, you can see that post covid we are consistently 30-40% higher. When the lockdown started, there was immense uncertainty. Our partners stayed on high alert, and we were able to move to appointments for in-person shopping. We also built a best-in-class chat team. It is one of the best ways to buy. In the initial shutdown, there were three weeks of basically no consumer spending, and then furniture demand roared back. We were able to turn our supply chain on quicker than most. We leaned into the website, and our fantastic team in the stores took the initiative to start doing zoom calls from the showroom to get business back in swing.
Trouble In The Suez (MN)
I am glad you brought me on after the Evergiven was freed because we had major worries about the Suez, and it has been stressful. We do not move a lot through the Suez, however, it was affecting us because of ship repositionings and held-up containers. Lately, global transport has been experiencing a strong dose of Murphy’s law in that almost anything that could go wrong has.
The Freight Guru
Download the PDFs mentioned
Recommended Logistics and Trucking companies:
LTL Services – https://goltl.io
Hazmat Services – https://gohazmat.io
TMS – https://mytruckhub.com
Logistics Services – https://go-freight.io
Fulfillment – https://gosunship.io