A Changing Marketplace

Agio has been described as the company that took the mass retailer from offering primarily lower-end imports to providing collections that now rival the designs and quality of domestic specialty manufacturers. How much truth is there to this story, and how would you describe Agio’s vision?

Agio entered the market with its own factories in the early 1990s, when the only set of furniture selling at mass was a $199.99 steel cushion dining set from a leaderless industry. The mass market, five years earlier, was actually selling dining sets priced all the way up to $999.99. The recession in the early 1990s and lack of innovation in the industry led to the drastic reduction in set pricing at mass. Agio’s mission was to move upmarket, with a superior, value-driven product. The first few years were slow going, but eventually consumers began to see the benefits of higher price points for casual furniture and the mass retailer provided them.

Today’s mass retailers have become more sophisticated and are working with trend specialists, and look closely at the industry as a whole. In many cases, they will come to us and their other vendors to help them achieve a certain look. Agio has always been about producing better goods that show good value, but we are also the best at delivering quality product, on time.

The majority of Agio’s sales are to big-box retailers. How is Agio able to address the interests and needs of the specialty segment of our industry?

Sales to the specialty side of the business are a completely separate division for our company. We have a management team whose sole focus is on the specialty market. We also have two dedicated and talented designers whose sole focus is on specialty. Fred Doughty has designed for Brown Jordan and others for years, and Carsten Oversen’s wicker designs have set trends in the European markets for over a decade. We have a 600,000-square-foot factory that solely manufactures specialty products. We have plenty of flexibility in our remaining 7 million square feet of manufacturing space, when needed. We also have a growing group of manufacturer’s reps who only work with our specialty retailers.

Most important, for the past two years, we have dedicated our efforts to bringing collections to the specialty market that rival the highest-end sets from any domestic specialty manufacturer. We will continue to push the retails up as far as the specialty retailer wants to go. Given consumer satisfaction and increased response from our specialty retailers, we will continue upward with our charge.

Can specialty retailers compete against the big-box mass retailers?

Absolutely, but not if you are waiting for only consumers who don’t care about how much they spend when they come in your store. In today’s global market, that type of consumer is fast disappearing. All consumers are much better educated on the category. They research the Internet. They see what the competition is carrying, including the big-box retailers. Everyone wants a value. No one wants to throw money away.

Agio is all about reducing sticker shock when consumers walk into your store. Consumers, of course, will always move themselves up if it makes sense, and specialty offerings should always be higher end, but they don’t have to be priced like a Rolls Royce, compared with a Buick at the mass level. In addition to better selection and deeper offerings, the specialty market offers many things that, in the long run, give its retailers a distinct edge over mass retailers. They can offer a bigger selection of collections with more product extensions. They’re willing and prepared to offer better service. The specialty retailer’s sales staff is typically more knowledgeable. The specialty dealer is able to cater to a more discerning customer: one who wants the newest, the coolest and the best, and one who is often very loyal. Specialty imports can help you increase your price points, your sales and your margins, while you maintain the most important business tool, a relationship with your customer.

What do you see as the greatest challenges or opportunities for the outdoor specialty retailer in today's market?

The best-kept secret in retailing outdoor casual furniture is no longer a secret. Real outdoor casual furniture, up until 25 years ago, was a product only purchased and enjoyed by the highest-income groups in the country, and the only place you could buy it was at specialty stores. The consuming public wanted it, too, and the big-box retailers are seeing that it gets it. As long as there is marketing leadership on the manufacturing side, the big-box retailers, dot-coms, catalog retailers and specialty stores will enjoy continued growth with continually higher price points.

You announced a unique, large consumer advertising program at the recent Casual Show. Can you explain this?

Agio has always taken a very aggressive stance when it comes to consumer advertising and continues to pioneer new directions, especially with regard to the specialty retailer. That is why we have begun channeling significant funds and energy toward the promotion of the Agio Reserve Program and the specialty dealers who will carry it. Until this time, no manufacturer has taken the approach of focusing on the specialty retailer and their products at a national level. Our hope is that the new ad campaign will show dealers another very tangible value of the Agio Reserve Program.

In our campaign, we will advertise in 12 national consumer publications, including Better Homes and Gardens, Sunset, Southern Living, Garden Design, Coastal Living, Metropolitan Home and many others. The campaign will direct consumers to the Agio website to locate the specialty retailer in their area. With this campaign, we are reaching over 17 million subscribers monthly, ultimately leaving over 156 million impressions during the campaign.

The response to the ad program during the Casual Show was phenomenal. The interesting thing about this program is that we are seeing that customers who have not purchased from Agio are now buying, not only because of the value of the product, but because of the opportunity to reach new customers with this program.

You seem to be very excited about your Agio Reserve Program. Can you explain how it works?

There are two common misconceptions that small and mid-sized dealers have about direct importing. Number one: If I import, I’ll have to buy 50 sets of one collection in one color, with an accessory minimum. Number two: Are the look and quality of the collections what I want on my floor? Let’s look at the Agio Reserve Program and talk about how it works.

The Agio Reserve Program gives retailers 14 different collections to choose from: woven, cast, sling, cushion-in dining and deep seating with lots of different accessories. Dealers can mix up to four different collections in one container, so there’s no buying too much of one set. These are exceptional-quality, high-end sets that will rival those offered by domestic suppliers. Specialty retailers, then, are able to offer a great product at a great value, and an unbelievable margin. This, in turn, leads to increased selection and increased sales. In addition, we stock all of these collections in China so, in about 6 weeks' time, we are able to provide more goods to our dealers anywhere in the United States.

I have to say, our best sales people for the Reserve Program are the dealers who have participated in prior years. I hear, over and over, that these collections usually make the top-ten bestseller lists at the higher margins in the store. The revelation for retailers is that this is an easy-to-buy program with no minimums, except filling one container. All they have to do is tell us what they’d like to buy from any four collections, and we offer 14 collections to choose from. Most times, when dealers do this, they find they have filled three containers, not just one. We think our Agio Reserve Program may be the lifesaver of the small- to mid-sized specialty retailer in the United States.

Current Issue | About Us |Advertising Info | Contact us |Subscribe