It's a formula that brings customers in person and by phone from around the U.S. Most are drawn by word-of-mouth, some by occasional small ads in the back of national or Sunday magazines or direct mail, others by the outdoor boards that dot Interstate 40, promising 40% to 70% savings on quality furniture.
Customers may be happy with the bargains they find in the well-furbished showrooms in the furniture discount meccas of Hickory and High Point, but the deals have incited the wrath of competitors in other parts of the country. While the discounters benefit from their proximity to manufacturers, with 80% of all U.S.-made furniture coming from North Carolina, they deny that's the basis for their low prices.
"The differences [between North Carolina discounters and other retailers] are a sharp pencil in purchasing as well as pricing, incredible supportive sales staff and service after the sale," said Darrell Harris, president and owner of Furnitureland South in High Point, a store with an annual volume of $74 million. "Value is the operative word."
Some retailers located elsewhere say customers visit their showrooms to find what they like and then phone in their orders to North Carolina. The pressure has led to restraint of trade agreements between some discounters and manufacturers, prohibiting advertising outside an authorized trade zone if the store wants to carry a company's line.
Many discounters have bowed to the pressure and removed their 800-number phone lines. Most still take phone orders but deny they do a significant amount of business by phone.
A few manufacturers like Thomasville Furniture Industries, Leathercraft and Bernhardt Fur-niture Co. forbid the retailers from making phone sales to customers who haven't visited the showrooms within the past 60 days.
Privately, North Carolina discounters say their secret lies in being willing to accept lower profit margins in exchange for higher volume.
Advertising plays only a small part in the discounters' strategy, which relies on word-of-mouth.
Furnitureland South's only advertising is a page or two in the local Chamber of Commerce guide, with brochures mailed out on request.
Chuck Ewart, president-CEO of the Hickory Chamber of Commerce & Visitors Center, said: "About 100,000 people come through our front door every year, and we get about 125,000 phone calls. Between 60% and 65% of those are people coming here to buy furniture. So it is certainly very important to us."
In High Point, "About 75,000 people contact us every year for information on furniture shopping-and we don't go out of our way to attract them-but we do answer requests for our directory," said Gary Smith, director of the High Point Convention & Visitors bureau.
A recent spate of newspaper articles has generated a new awareness of North Carolina furniture shopping. But it's a blessing some Hickory discounters think they could do without since they're once again aggravating competitors.
Hickory Furniture Mart advertises in The Charlotte Observer and Southern Living magazine, supported by outdoor boards. Some is handled in-house, while local agency Decker & Associates puts together brochures and some ad layouts.
Tracy Bolick, the mart's marketing director, said she doesn't know the exact sales volume of the facility's 65 stores, but she said the $500,000 ad budget is far below the standard 5% ratio of advertising to volume.
Donna Hampton, owner of Wellington's Furniture in Boone, does some in-house-created advertising in the back pages of magazines like Home but calls the results mixed for the 13-year-old store specializing in high-end leather furniture.
Wellington's best marketing tool is an annual catalog sent to more than 30,000 names throughout the U.S., Ms. Hampton said.