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LETS GET DOWN TO BUSINESS.

Question :
Hi there,We are a small bespoke manufacturing business in the Bay or Islands that make quality wooden children’s furniture primarily for the Early Childhood sector but also primary schools and private homes.Our products have always been in the higher price bracket due to them being made well, with care with good quality materials.  Thankfully our products are known and loved but those that have purchased them but we have found gaining new business slow, especially tapping into the new build market for ECE centres to do full fit outs.We are in really competitive market and have found business a struggle even before Covid-19.  Now we are more concerned that the education sector, especially the many privately owned businesses, will be very stretched financially and that choosing NZ made quality products will be a hard choice over other needs in the business.  We would be very grateful to hear any advice, business strategies to keep up interest, promoting sales and generally how keep our business afloat in these tough times.Many thanks,SianHebe Natural Children’s Furniture(09) 4025020   info@hebe.kiwi.nz    hebe.kiwi.nz

Question submitted 06/05/20 @ 02:49pm
Industry: Brand & Marketing
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  • Thanks for the inquiry. I took a look through your website and the furniture looks incredible and the testimonials were great – something I am sure you are all very proud of.

    I am sure there will be some great feedback here on keeping interest and promoting sales. My thoughts below are more brainstorms after reading through your website.

    My thoughts in reading your note was trying to dig deeper in to what was happening before COVID. Were you finding it hard to convert sales or was it an issue of getting leads? Depending on the answer the solution could be different to tackle a post-COVID world where people may not have as much money to spend or will be more judicious in how they spend it. One thing that might be good for you to do is to interview current customers on how they view your product in today’s world and maybe go back to some business you came close to winning (if you haven’t already) to find out what happened in the tender process that would be helpful for you to know about in thinking about your business.

    My other thought was about China. You had a recommendation for a childcare center from Auckland back in to Shanghai. Was that positive and maybe that is a focus area for you going forward? Adapting to that market may require you to think about your designs differently, etc. but depending on how the NZ dollar does you may be competitive on an export basis.

    You have some fantastic looking kids products which look beautifully made. The testimonials are very good and speak to your quality and high level of service. It would be great to see some video on your social media accounts of kids using your products at play.

    As you point out, operating solely in a niche market like early childhood is likely to be challenging in the constrained environment we now find ourselves. Ideally you don’t want to have all of your eggs in one basket. One strategic option open to you is to pivot slightly into an adjacent market. An example might be the aged care area.I’m no expert on this sector but there may be an opportunity to broaden out your product offering and thereby enlarge your market potential. Tea trays, magazine and book holders, foot rests, and coffee tables are potential products you could look at. Aged care is just one example, but it is a growing industry, and I am sure there are others. Think of ways in which you can take your core value proposition (hand made, quality timber furniture) and broaden the offering. The craftmanship and quality of your products would seem to be a great point of differentiation.
    I wish you all the best.

    Sian, wow, your furniture is amazing.

    On looking at your website, it is clear you have a very high quality product, with corresponding price tag. Have you ever spoken to your “lost” customers to understand why they didn’t purchase? Is there a way to adjust the price point to meet the market, particularly given the current environment.

    Wondering if there is an opportunity for the furniture for families with children, particularly those with high disposable income. Both Facebook and Google allow quite a lot of targeting in their ads. On Facebook, you can get down to families with young children in demographic areas. This mind find favour, particularly as we spend more time at home! There are a number of targeted publications at families, and also home shows that target families (at least pre-covid).

    Have you considered adding an online ordering facility on your website, so that individuals can directly order? Also, wondering if you do target more of the consumer, whether your URL and domain name can include natural children’s furniture. This will really help with SEO and targeting so that people who search and don’t know of you may be able to find your website.

    There is a great Facebook page for NZ products, https://www.facebook.com/groups/519618962054849. Has nearly 400,000 people on the page. A great free way to increase reach.

    Hopefully, a few useful ideas. If my children were younger, I would definitely be interested!

    Thanks for your reply John!
    We have trouble with converting sales at times to be honest, I do usually ask if I can for feedback and it is often down to pricing. There are competitors that are cheaper and are a much lesser quality but the sector is feeling the pinch, even before covid-19. We do push that a quality item is better economically in the long run but understand this isn’t always a viable option in the now for businesses.
    Freight around NZ is a killer also which makes it often uneconomical for people interested in the South Islands where we are in the Far North.
    Also finding information about new builds at the right time is difficult for us. There are paid subscriptions for this information but we often found the information out of date or lacking proper contact info while being a high cost subscription for a small business like ours to shoulder. There is a definite bubble of architects, consultancies and suppliers working well together to tackle this market, we have tried to make allegiances but people are pretty loyal and I don’t blame them as they are good providers.
    One other aspect we are seeing more with new builds, where we used to get offered to do most of the furniture is that businesses are getting very savvy around cherry-picking different products and brands, the furniture market sees new suppliers to appear regularly and again I can’t find fault in people looking for bargains and variety.
    That said we are immensely proud of our products and will keep going.
    Just looking for ways to find information at key times for upcoming new builds. How to encourage more sales. And how to convert quotes to sales where price is a factor. And how to promote ourselves in such a competitive market better.

    Thanks Thor, some valid points up for discussion.
    We appreciate everyones positivity for our products and also any comments and ideas.
    Kind regards,
    Sian

    Thanks for the great ideas Leslie!
    We have taken advantage of the Facebook page NZ Made Products, and love seeing everyone’s support for NZ businesses.
    The online ordering option is difficult for us as shipping is so prohibitively expensive around NZ and we work hard to come up with the best plan to get shipping costs as low as possible per specific order with clever packing. Having a set price for locations I fear would be hard to calculate in an algorithm and this would make the cost more prohibitive if we err on the side of caution and price per piece on individual cubic rates. Single items would be much easier but most of our sales are more than one product or custom designs, where we need to discuss the order individually.
    We definitely will look at SEO and see how we are placed (currently our website is down which is a bit of bad timing but should be back later today). We actively use google business for posts and photos but not ads so far. This is an avenue we will look into. Facebook we have previously used targetted ad for ECE as this is our biggest business, but we will look at parents further too.
    Do you have any specific targeted publications you can recommend to take a look at for the parent market you mentioned?
    I will take on board the reaching out to customers more to find out why we missed a sale. It has been a common thread between all advisors. We do ring back and check on quotes and often ask the question. Price is definitely an issue when funds are tight. This hasn’t improved over time in terms of government funding. Over recent years we have trimmed our pricing down even in the face of material costs shooting up. I doubt our customers really notice this unfortunately. We do promotional sales fairly regularyly but on some products, we barely break even at retail price due to the labour intensive nature of manufacturing the products. It’s a common discussion in our office and a tricky balance but can’t see how to meet the pricing people might like without running at a loss or losing quality, which we are not willing to compromise on.
    Thanks again for taking the time to offer your thoughts, if there is anything else that springs to mind, we would love to hear about it!
    Kind regards,
    Sian

    Sian, try Kiwi Parenting magazine. Also have a look at Parenting Place, which is an amazing non-for-profit. You could also consider distributing through some of the dedicated children’s retail outlets. In Auckland, there is Kidzspace and Kizhouse, for example. Your target market of individual parents at that price range might not be as price sensitive. A very niche market, but might help in the current environment. Feel free to reach out on LinkedIn if you want to further connect.

    Kia ora Sian,
    Some great advice so far. Just a couple of additional thoughts from me.

    Market:
    The products looks great. I’d also look into the idea of going direct to consumer (in addition to your early childhood institutions). Leslie mentioned Facebook and Google ads and ability to target parents… No reason you can’t be doing that. You’d also want to look at end-to-end eCommerce experience if you do that. No point in paying to send interested people to your site if you’re site isn’t converting. You have a great looking website – but it’s not really set-up for eCommerce. There’s some great and low cost options out there (e.g. Shopify) and you may be able to set up a front-to-back test just using a small number of products (see below). Also, as suggest by others, if you do feel like you’re losing sales (pre Covid-19) – you need to understand why, and ensure that’s not an impediment to a move to direct to market.

    Product
    You mention shipping costs. Are you shipping fully assembled pieces or flatpacks? My assumption is you’re doing flatpack product design… It seems to be the standard approach these days.
    It’s worth doing some work to segment your product lines. Can you identify products that could be hot sellers and that can be produced and shipped on a single unit basis, at a competitive price and at a decent margin? Think 80-20. Chances are 80% of your gross margin could come from 20% of a highly optimised product line.

    ‘Hope that’s useful. Feel free to reach out to me via LinkedIn. Kia kaha!

    Morena Sian – the site is nice, and I see your photo’s of Craig and you! Like it. One idea which is a bit out there and old-school and in this digital world sounds so non-digital, but have you ever had much luck with having ‘reps’ in regions who represent and sell the brand into local businesses? Another option is that you approach a national retailer and see if they wanted to represent you into their segment and they take up storage and distribution costs themselves – not sure about that one, but we should consider all options which you seem to be right now. It might just give voice? Do you make to order or do you have some stock in place that you want to move on? There are a few marketplaces where you could approach if they could collect volume.

    A lot of the advice is really focused above about ‘finding the places where your target markets are’ and then connecting with them – the idea of the Facebook Group (was on Instagram Lives last night) is that you find where there are lots of say families purchasing and then that gives you a greater chance of uptake because that is your segment for the Kids Furniture.

    All the best – Andy

    One other thing – if there are any marketplaces or national / regional retailers that you want to talk to, and don’t know them or don’t know how to approach them, I am more than happy to approach them on Linked In – and see what we can rustle up, I will just need to have a super good set of words to use and ultimately an email if we get a strike – you can get me on @manaaki.io">andy.hamilton@manaaki.io – you might just find that the retailers themselves are looking for points of difference in times like this. A

    Hi Sian, is your product available in the resource magazines that go out to daycares centres/education facilities? When I was a teacher I used to order everything from Modern Teaching Aids, even the furniture for my classroom. https://www.teaching.co.nz

    Your product is fantastic, I agree with the advice above, a complete end to end commerce website is going to capture so many more sales for you and then you can target your niche customer through FB ads. I love your work!

    Beyond what the experts above have offered, I would reinforce the point made regarding diversifying your market to appeal to more than the education sector, i.e. the home market and targeting a higher demographic. Also play up your craftsmanship and NZ made point of difference. The buy NZ made movement is surging ahead and you need to leverage that. Then think about channels to reach this wider audience – the NZ Made Products Facebook group has a very large following how, over 400k and could be a good place to start. I know a small business who sold out of their product after posting on this page. Social media marketing, using beautiful images of your products being enjoyed by children in a relatable environments for your audience (i.e in home) is the other critical area for you. Putting a small amount of money behind Facebook posts will help you target your content to the right audience too). All the best, they are beautiful products, clearly made with a lot of love.

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