How Jim McIngvale makes money on Web.

Navigation: Main page

Author: Allegrezza, Ray

GREENSBORO, N.C. -- While acknowledging differences between selling furniture online and selling it in a traditional store, Gallery Furniture's owner and President Jim McIngvale believes there are also important similarities.

"One of them is that in furniture, success is measured by results," he told industry executives at the American Furniture Manufacturers Assn. Marketing Division meeting here.

"The second similarity is that consumers want it better, faster and cheaper," McIngvale said. "It is a Wal-Mart world," he added, referring to the giant retailer's ability to satisfy those consumer demands.

But based on Gallery's track record, both in its Houston store and online, it's also a Gallery world. Sales are $120 million or $1,100 per square foot, according to McIngvale, and he said Gallery turns its stock a remarkable 35 times a year.

"If you are going to be a world-class operation, you have to deliver world-class service," he said.

He told several stories about Gallery's service, including one about a couple who finalized an instore sale of $32,000 worth of furniture at 10 o'clock one evening and wanted the furniture "delivered immediately," he said. Gallery had it in their home at 45 minutes after midnight.

"Most remarkable of all is that nobody told our delivery guys they had to do it. They took the initiative," McIngvale said.

When Gallery decided to broaden its reach by selling via the Internet, McIngvale wanted to do something that many e-retailers had been unable to do: make money. "And we were, right from March 25, 1999, the first day we went online with the site," he said.

He thought most Internet sites looked too static and his strategy was to have Gallery's site look "like a live television station." He installed 20 TV cameras that allow consumers to log on to the site and take a virtual tour of the store.

"The live cameras gave us instant credibility in that the customer could see that we were for real," McIngvale said.

They also "allowed us to establish a level of intimacy with the customer," he added. "Now, if a wife and the kids are shopping, we can have her call her husband and have him go to our site and see exactly what she is considering."

Despite the company's success on the Web, McIngvale is quick to stress that he has no interest in using it to sell furniture nationally. "I think people who want to use the Internet to do that are having pipe dreams; it just is not going to happen," he said. Internet sales represent about 2% of Gallery's total, a percentage he does not see spiking anytime soon.

"More than anything, I see the Internet for us as another form to advertise what we are all about," he said.

PHOTO (COLOR): McIngvale

PHOTO (COLOR): AFMA division socializes. Richard McGaughey, left, Flexsteel; Dennis Novosel, Stoney Creek Furniture, Stoney Creek, Ontario; and Keith Feuerhaken, Flexsteel.

PHOTO (COLOR): Ellen Gefen, left, Gefen Productions; Andy Thornton, La Difference, Richmond, Va.; and David Nelson, D-Scan.

PHOTO (COLOR): Andy Counts, left, and Russ Batson, American Furniture Manufacturers Assn.; Robert Cribbs, Kimball Home Furniture; and Sonny Roseman, C.R. Laine Furniture.

PHOTO (COLOR): Don Belgrad, left, Schnadig; Dennis Valkanoff, England; and John Labarowski, Hammary.

PHOTO (COLOR): Jeff Schwall, left, Southern Furniture Reproductions; Don Wright, Wright Table; and Scott Armstrong, Keller.

~~~~~~~~

By Ray Allegrezza