Subscriptions eNews Send Us Files Login

Hearth & Home December 2015

Walls of light blue, orange, lime green and soft yellow – the Stegman’s change those colors annually to properly present their new products.

Embracing Change

By Tom Lassiter

The Stegman’s moved their business from Ohio to Florida, created three new stores (with one more coming), learned (the hard way) what to buy, and are in the process of figuring out how to attract Millennials.

Photos: ©2015 Home Photo. Greg Agee Photographer. www.homephotoprorep.com.

How ya goin’ ta keep ’em, up in Ohio,
After they’ve seen Naples – and Bonita Springs – and Fort Myers?

Casual furniture retailers always leave Casual Market Chicago battling information overload. Impressions of new products, remodeled showrooms, fresh color trends, and innovations of every sort compete for their attention. Success in the season to come hinges partly on how each decision-maker grapples with the avalanche of trade show data.

That was certainly the case with Debbie Stegman as she headed home to Florida and the three Elegant Outdoor Living stores she and her husband, Tom, operate on the Sunshine State’s west coast.

But unlike most casual furniture retailers, Stegman wasn’t focused on what she had experienced at the Merchandise Mart. Stegman was captivated by Nordstrom on Michigan Avenue.

Gone was the chic, sophisticated Nordstrom of old, and by old, we mean 2014. In its place was a radical new Nordstrom. Some salespeople had purple hair, looking not so different from the throngs of Millennials who walked, texted and shopped in one fluid motion.

At midafternoon on a weekday, the bar on the second level rocked. The ladies shoe department, where a pair of fashion-forward boots sold for as much as a decent swivel rocker, was even busier.

Stegman couldn’t fully comprehend Nordstrom’s new formula, but she knew it was working, and working well.

“You know,” she says, “our industry has got to get with it a little more. We have to. We have to adjust to this new wave, whatever these kids are doing, how they’re ordering things. We’ve got to start thinking like them. Because, in our industry, we’re getting older.”

The challenge represented by Nordstrom’s evolution, and by Millennials who think and shop so differently from their Baby Boomer parents, might cause some specialty retailers to despair. After surviving the Great Recession and battling online retailers, they might not be ready to reinvent their stores to appeal to the next great demographic wave.

But Stegman, a veteran specialty dealer and Baby Boomer with grandchildren of her own, is ready. She thrives on change. Indeed, she knows how to change to thrive.

L to R: Debbie, Tom and Stephanie Stegman.

An Elegant Solution

The Stegmans opened their first Elegant Outdoor Living store five years ago in Bonita Springs, a city of about 44,000 on Florida’s southwestern coast. Now there are Elegant Outdoor Living stores in Naples, to the south, and Fort Myers, to the north, all connected by U.S. 41.

It’s an area well known to the Stegmans and so many other Midwesterners who look to Florida’s west coast to vacation, to spend the winter, and to retire.

The Stegmans did business in Ohio for nearly three decades as Patio & Hearth Shoppe. At one time they had stores in Centerville (near Dayton), Cincinnati, Columbus, and Indianapolis. The Great Recession clobbered the region, and the slow economic recovery informed the Stegmans that their business might never be as robust as it once was. The number of locations had dwindled to three and then two as the Columbus shop closed.

“Our clientele was changing in Ohio and moving here,” Stegman says. “As the population of Boomers was getting older, they weren’t spending money on their North(ern) homes; they wanted to spend it on their South(ern) homes.”

Rather than invest in a new Ohio location (which they had contemplated), the Stegmans opted to put the effort into Florida. They called the store Elegant Outdoor Living, a name inspired by a branding venture called Elegant Outdoors. The Stegmans had been involved in Elegant Outdoors, a high-end retail program initiated by Brown Jordan some years earlier, and they still own that domain name.

What began as an experiment, to try their business skills in a highly competitive market that they happened to love, has turned into a full-blown success. The Stegmans plan to open a fourth Elegant Outdoor Living store in 2016; they’re keeping the location secret for a while longer.

Their retail rebirth in Florida led to something of an exodus from their home state of Ohio.

Their son, Nate, and his wife, Stephanie, moved to Florida. Nate is general manager, and Stephanie is taking over from Debbie as lead buyer. “She will fill my shoes very well,” Stegman says. Stephanie also looks after the company’s digital marketing and social media presence. Both she and Nate have ownership stakes in Elegant Outdoor Living.

Another son, Justin, works the Florida territory as a sales representative for Patio Renaissance and Treasure Garden. Debbie Stegman’s brother works for Jerry’s Casual Patio, a multi-store retailer on Florida’s Atlantic coast. Her mother has moved to Florida as well.

Two longtime Ohio employees, Nick Colaric and Kevin Wolse, moved to Florida to join the Stegman’s new business.

“All of my friends are coming down here now,” Stegman says. Three sets of friends from her old neighborhood in Ohio now live in her Bonita Springs neighborhood.

As business ramped up for Elegant Outdoor Living, the Stegmans gradually closed out their Ohio business interests. The last Patio & Hearth Shoppe, in Centerville, closed after the 2014 summer season.

A pergola with flowing drapes is a commanding presence in the store.

A Different Market

Debbie Stegman is quick to admit that her Ohio casual furniture business expertise did not translate seamlessly to Florida. When stocking the first store, she ordered as she had in Ohio. She later realized “that was totally wrong.

“Down here, dining and sling is not as important as deep seating. Deep seating is everything here, whereas in Ohio it was a very small portion of our business. So I really did a lot of wrong things the first year, even the second year. And you know, I’m still learning. I’m still learning about this market.”

Umbrellas were a huge business for Stegman in Ohio. In Florida, where homes have screen rooms and covered lanais (three-sided rooms), she says umbrellas have less appeal.

Ohio customers bought lots of covers to protect their furniture in inclement weather and when not in use. Stegman thought her Florida customers (many of whom are from the Midwest) also would buy protective covers. That was another incorrect assumption.

Casual furniture in Florida gets used “every day, because everyone is out on their lanai all the time.” The only time furniture gets stored is when homeowners head north for the summer or when a hurricane is forecast.

Shopping habits change when Midwesterners retire to Florida. Shoppers, Stegman says, don’t like to travel far from home to shop. Her three stores, all on U.S. 41, are spread out over about 25 miles. In New York or Texas or California, one might say that the stores are too close together and cannibalizing one another’s sales.

Not so in Florida

Traffic is bad, she says, and people don’t want to drive far. Perhaps more importantly, “They don’t want to take time out from the golf course and the beach,” she says. “They don’t want to spend the whole day shopping.”

Stegman found that the business day concludes earlier than in Ohio. Shoppers keep an eye on the time in late afternoon, she says. At 5 o’clock, the store empties out. “It’s Happy Hour,” Stegman explains. Elegant Outdoor Living stores close at 6 pm, “And you know,” she says, “weekends aren’t nearly as important as they were up North. Because every day is a weekend down here.”

Feast your eyes on the accessory items, and the flowers, and the colors. The Stegmans excel at creating attractive showrooms.

Showroom Similarities

Stegman’s merchandising and presentation skills were apparent in each of her Midwestern stores. She was known for her bold use of color, the placement of an eye-popping signature group to greet customers, and the ability to set a floor that led shoppers to explore and linger.

That hasn’t changed. “I want the ‘wow factor’ in front,” she says.

Shoppers recognize the Stegman look when they see it. “One day I was in the Naples store, and this lady came in and said, ‘You know, we have a store in Ohio that looks just like this store.’ I said, Would that be Patio & Hearth? And she said yes.”

Rory Rehmert, vice president of Sales for Pride Family Brands, says Stegman excels at product presentation. “The displays are great, and they constantly change up the floors to maintain an eye-appealing environment.”

Stegman says her goal is to always look fresh and unique.

“It just looks different from other people’s stores,” she says, “and I hope I can keep it that way.”

Unlike her Ohio shops, Elegant Outdoor Living does not sell hearth products. Yet she has an electric fireplace on the wall of one showroom. The dancing blue flames create an ambiance, catch the eye, and introduce one more element of color.

She constantly looks for ways to inject color into her stores. Otherwise, a showroom could become just another expanse of beige and brown furniture.

Stegman learned long ago that color doesn’t necessarily sell itself. It helps sell everything else.

“You know, we never sold the really bright colors a lot,” she says, but brights “made the store look better, and I’m still a believer in that.”

Stegman upped her color game in Florida. She buys brighter fabric colors and regularly freshens store walls by repainting with bright accents. “We changed colors again this year,” she says. “I try to do that at least every other year.”

The extra emphasis on color also was partly to differentiate Elegant Outdoor Living from the competition. “When I went in the stores down here,” she ways, “everybody was all brown and beige.”

Stegman found that accessories are more important to her Florida business than they had been in Ohio. “People buy a lot of accessories here,” she says, “lots, lots, lots.”

Rugs, decorative wall art, vases and plants liven up the stores and generate sales. Many of her accessories, including lamps, are not outdoor products. “A lot of it is indoor stuff,” she says. “We are getting really known for that.”

Important Vendors

Stegman long ago oriented her business to serve higher-end clientele, and she chose to focus on a small range of manufacturers. “I don’t do a lot of vendors, and I never did in Ohio, either. I keep it smaller,” she explains, “and seem more important to them, and they are more important to me.”

Among her vendors are Patio Renaissance, Winston, Gloster, Pride Family Brands, Seaside Casual, Tommy Bahama and Klaussner Outdoor.

Eric Parsons, president of Gloster America, says Stegman plays “to the strengths of the manufacturers and doesn’t pigeon-hole them. She sees us for the breadth of the line that we have.”

Even so, “she’s only going to put (a group) on the floor if she believes it’s going to sell,” he says. “Her showrooms are cheery and fashion-forward. She definitely has an eye for being on-trend.”

Shoppers won’t find redundant looks in her showrooms, says Pride Family Brands’ Rehmert. “The product mix is well thought-out and not repetitious,” he says.

Equally important to Stegman’s success, says Rehmert, are Elegant Outdoor Living’s personnel. “The team is comprised of professional salespeople that know their products and know how to sell them,” he says.

Being in a year-round outdoor living environment allows the business to focus. There are no counter-seasonal products, no need to depend on a Christmas mini-season.

The final months of the calendar year actually are very important for casual furniture sales, Stegman says. Late fall is when Midwestern snowbirds begin to flock to Florida’s west coast and settle into their homes for the winter. The first-timers and remodelers are ready for new outdoor furniture while residents of higher latitudes are moving indoors for the winter.

Florida’s casual furniture sales season is out of sync with most of the nation. New introductions at the September Casual Market usually aren’t available for her fall and winter customers. “I always say Florida is the ugly stepchild,” Stegman says. Most furniture manufacturers “aren’t ready for Florida business.”

“I have learned never to order brand new product in September,” she explains. “You don’t order it, because you won’t get it until February or March, and I’m out of season then.”

Some manufacturers do understand Florida’s unique situation and can push new product out in time for the snowbirds, she says. Pride delivered her September order in October. Winston also came through. “They get it,” she says, “but there are some that don’t.”

Serving customers who spend part of the year in Florida and part of the year elsewhere places extra pressure on Elegant Outdoor Living’s warehouse.

Labor Day often brings vacationing customers who place orders that must be held until they return later in the year to spend the winter. Those products go into the warehouse and wait.

Similarly, another wave of orders comes in March and April as departing snowbirds plan to redecorate when they return in the fall.

Warehouse management is critical, Stegman says, “because you’re trying to get containers in, and your warehouse is filled with furniture for people who haven’t come back yet.” She depends on her warehouse manager, “a great guy who knows where everything is. I never worry about him.”

The Stegmans left the hearth business when they left Ohio. The electric fireplace above Pride Family Brands’ Eclipse group is just for show.

Looking Ahead

The Gulf Coast continues to grow, and affluent Baby Boomers are retiring in droves, creating opportunities for anyone catering to their desires. Stegman predicts her business will continue to flourish, with sales picking up in her slower season (otherwise known as summer).

At least three competitors have opened stores along U.S. 41 since Elegant Outdoor Living established itself. Florida being Florida, more are sure to come. They don’t concern Stegman.

“We just do what we do,” she says. “I don’t worry about what everybody else has. We just keep our nose down and do what we do best.”

She is concerned, though, about staying relevant for Millennials. Their tastes, values and habits will become more important to the industry (and the consumer economy in general) with each passing year.

Appealing to this next generation of consumers isn’t just about marketing through social media, isn’t just about equipping salespeople with iPads, isn’t just about selling online. It’s all of that, she says, and more.

Yet, Stegman says, “People still like to sit in furniture, no matter what. So how do we get them in here? How? I don’t know yet.

“We’ve got to turn our retail store into an Apple store. We do. We have to. We have to freshen up and figure out what to do.”

Stegman says she has an idea for a concept store for Millenials. “But all my family thinks, ‘Mom, you’re too old to do this.’”

It’s true she has grandchildren, and also that a fourth Elegant Outdoor Living Store is in the works. But the challenge of understanding the next generation of casual furniture consumers still gnaws at her. “I haven’t got it figured out yet,” she says, “but I’ve got some ideas.”

Debbie Stegman understands change is in the air – and she plans to thrive.

SNAPSHOT

Store Name: Elegant Outdoor Living

Location(s): Bonita Springs, Naples & Ft. Myers, Florida

Owners: Tom & Debbie Stegman; Nate & Stephanie Stegman

Key Executives: Same as above

Year Established: 2010

Web Site: www.elegantoutdoors.com

E-mail: dds@elegantoutdoors.com

Number of Stores: 3

Number of Employees:

Full Time: 15

Part Time: 0

Gross Annual Sales: N/A

Av. Sq. Ft. of Building Space:

Showroom: 8,000 per store

Warehouse: 15,000

Outside Area: N/A

Brands Carried:

Patio: Patio Renaissance, Winston Furniture Company, Brown Jordan, Pride Family Brands, Mallin, Gloster, Century, Ancient Mosaics, Treasure Garden

Barbecue: N/A

Hearth: N/A

Advertising % of Gross Revenues: 5%

Advertising: Radio 5%, Newspapers 40%, Magazines 10%, TV 40%, Other 5%

Elegant Outdoor Living, Bonita Springs, Florida.

More Stories in this Issue

Perspective:
Commerce & Climate

It seems that, no matter the issue, there always will be a large block of people on both sides – immigration is a good example, so is abortion, the KeystoneXL pipeline, campaign finance reform and, of course, the Great Gun Debate.

» Continue

Here's Something New!

By Tom Lassiter

Erik Mueller has used his knowledge of retail (Watson’s) to find a new material (Sima) for outdoor products and to create a new company (Plank & Hide).

» Continue

2015 Retail: Past & Future

By Richard Wright

Hearth & Home talked to retailers throughout North America – hearth dealers had a Fair year, patio dealers had a Good year, and barbecue dealers had a Damn Good Year!

» Continue

Treat People Right

By Lisa Readie Mayer

Zach Watson, Rex and Crystal, are building a strong business by remembering lessons learned when they were young.

» Continue

2015 October Business Climate

In early November, Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare October 2015 sales to October 2014. The accompanying charts and selected comments are from the 203 useable returns.

» Continue