The Inventory Story
July 21, 2014 - 8:56am

Despite the upfront cost, showrooms are largely sticking to a retail model that keeps products in stock.

Retailers that can afford to invest in inventory and warehouse space, like Robinson Lighting Ltd. in Winnipeg, MB, Canada, have an advantage in serving customers.

Hinsdale Lighting President Karen Lang was up on a ladder in her showroom pulling down merchandise for a customer when the proverbial light bulb went on in her head .  

“There was another customer in the store waiting on me to finish up,” Lang says. “He was obviously annoyed that I wasn’t able to help him immediately,  so I stopped what I was doing to find out what he wanted, and it turned out he needed a part for his lamp that I noticed right away came from Restoration Hardware.”

Lang and her team at Hinsdale had already begun rethinking the showroom’s business model. It had become increasingly hard to compete with Internet retailers. The grumpy customer carrying in “someone else’s lamp” was the straw that broke the camel’s back, Lang says.

Shortly after the ladder episode, the ARTS Award-winning retailer closed its doors to walk-in traffic so it could instead focus on its lighting design clientele, with no inventory. It was a leap of faith, but so far it’s working. While Lang attributes her store’s success to deviating from the retail norm, other showroom owners are holding fast to a traditional model.

Connecticut Lighting Centers, for example, stocks as much inventory as ever in its more than 33,000 square feet of warehouse space. They’ve just gotten smarter about it, says President and owner David Director.

“We keep a large inventory in our warehouse because we feel that is what makes us different from retail websites and home centers,” Director says. “But we do focus more on stocking our ‘A’ product (our best sellers) and less on our ‘Bs’ and ‘Cs,’” Director says. “That way, people can walk out of our showroom with a full home’s worth of lighting, and we’re not losing sales or customers.”

Passion Lighting in Grapevine, TX, also does a big cash-and-carry business.

“We have $25,000 in inventory on display and about $50,000 in boxes. Stocking inventory can be a real cost, but it has a significant impact on the retail side of the business,” Paul says. “Many of our customers want product they can walk out with and some of our customers come from far away.”

Passion Lighting routinely chooses eight to 10 of its best-selling fixture families to comprise a “Value Series,” which is guaranteed in-stock or customers receive a 5 percent discount. The team frequently reevaluates those families to make sure the group features the showroom’s best-selling SKUs. Passion also focuses its inventory on ceiling fans and the accompanying downrods, bath bars and outdoor lanterns — items that customers want to walk away with.

“We have a lot of dollars in inventory, and probably disproportionately so,” Paul says. “But having those products on hand is what helps us sell to and take care of our customers. We run a healthy business, so we can afford to do it that way.”

For Kirsten Recce, owner of Black Whale Lighting in Encinitas, CA, the question of “to inventory” comes down to the manufacturers she works with.

“We have the offsite storage space to stock product, especially those items like bath bars that customers want to walk out with, but the manufacturers I work with have to be able to supply,” Recce says. “I’m also careful to work with suppliers that I know are going to be behind me when I stock their products. I don’t want to open up a box of faulty or broken product on the 366th day and have them tell me they can’t help me. If I’m stocking their product, I’m heavily invested, and I need the manufacturer to feel the same.” — Jennifer Pinto

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