This Texas-based furniture store found a way to incorporate speed into its process without adding pressure to the customer. The most amazing part of the story behind Gallery Furniture isn’t just that the $100 million company was founded with only $5,000. It’s also not the fact that when the company’s main warehouse burnt down, its employees had the business up and running from a secondary location by morning. It’s that Jim McIngvale’s success is based on the fact that when he was younger, he was fired after college.
“We started in 1981 with $5,000, no borrowed money, and learned the business from the ground up,” said McIngvale, who is founder, CEO, and president. “It was myself, my wife, and one other employee, and from day one, my focus was to deliver the furniture the same day a customer buys it.”
Initially, Gallery Furniture saw tremendous success as families in the oil, auto, and steel industries migrated to Houston for jobs after the oil boom. After a while, though, as the boom turned to bust, sales began to decline. McIngvale, who is affectionately referred to as Mack, decided to take marketing matters into his own hands.
Having read about a man who, 50 years earlier, walked around with a tire around his waist to illustrate his passion for the tire industry, Mack took to calling himself Mattress Mack, bought some ad time on TV, and developed the company’s slogan: Save You Money. “The rest,” said Mack, “is marketing history.”
That’s not to say that the May 21st fire at Gallery Furniture’s warehouse wasn’t a significant event in the company’s history. The fire burned from 8:30 p.m. until midnight and caused approximately $30 million worth of damage.
“It was our main store, and we knew we had to go and open the other store the next day,” said Mack. “By one o’clock that same morning, we were on cell phones ordering furniture from my suppliers across the country.”
By seven o’clock that morning, Gallery Furniture was doing business at its second location. None of the 280 employees were laid off, and no processes were changed despite the emergency situation, including the company’s method of delivering the furniture the same day it’s purchased.
“Sales went down 60% because it was our major warehouse that burned down,” said Mack. “But, we managed to reopen the first of three showrooms in 44 days, the second and third showroom about a month later, and we’re still going strong.”
In the meantime, Mack is building up a team of e-commerce professionals to further develop Gallery Furniture’s website and online presence. The hope is to expand the company’s reach beyond the immediate Houston area, but it’s also to give customers a chance to browse the company’s selection before heading out to make a purchase.
“Most customers shop on a website before they go buy, so it’s important to have a virtual presence as well as a physical presence,” said Mack.
Make it easy
Mack admits the past few months have been difficult, but because of his dedicated employees and their ability to work together, the company is rebuilding without a hitch. He credits this ability, in part, to lessons he’s learned from the late W. Edwards Deming, an American statistician, professor, author, lecturer, and consultant who is credited with improving production in the US during the Cold War.
“He taught me that cooperation, everyone working together for the good of the customer, does something for the company’s profitability and is the best way to work,” said Mack.
“We have followed his philosophy since 1991, and it’s now ingrained into our work culture.”
Another life lesson, and one that he saw during the fire crisis in May, is that adversity does not build character—it reveals it. Mack said he saw a lot of character in his employees as they worked to get the second showroom stocked and even volunteered to clean up the incinerated warehouse.
“Everyone is hands on and out in the sun all day taking care of customers,” he said. “It was amazing the way they rose up in the midst of adversity.”
When rebuilding the new warehouse, Mack installed new walls, floors, vignettes, and types of furniture. After 27 years, starting over wasn’t what he wanted, but he said it was an exciting journey.
Gallery Furniture is currently in the midst of another redo to get the warehouse where it needs to be in terms of making it easier and more exciting for customers to shop while making it more profitable for the company. What won’t change, however, is the vignette layout Mack said has been so successful for his company over the years.
“We have vignettes that let customers see the furniture in context,” he said. “We want to be transparent with our customers so they feel safe and secure. Our concept is to make it easy for the customers to shop, easy for them to find someone to help them, and easy to get their new furniture home.”
Business litmus test
Mack believes the litmus test for any successful retail business is how much it matters to its customers. During the rebuild after the fire, Gallery Furniture received thousands of e-mails from customers telling the company to rebuild and to not give up. Clearly, Gallery Furniture passed the test.
“It was heartwarming to know our customers care about us,” said Mack. “It’s important to us to keep that feeling alive.”
The connection between Gallery Furniture and its clientele, in part, comes from the company’s ability to speed up the buying process without pressuring the customer, and it all boils down to same-day delivery.
First, Mack ensures any merchandise on the display floor is always in stock. Gallery Furniture also has an extensive computer program that projects what will sell, what’s available, and what’s needed.
Second, Gallery Furniture has a fleet of 60 delivery trucks with a dedicated staff of delivery workers ready to follow customers home after they’ve made their purchase. “It makes the process simple,” said Mack. “It’s costly, but we’re not concerned with what it costs. We’re concerned with how much it delights customers.”
The people at Gallery Furniture also differentiate the company from others in its industry. All salespeople are paid salary rather than commission, which means they’re more interested in helping the customer find the perfect piece of furniture rather than making a sale. Mack said in today’s low-trust environment, consumers need to know they won’t be pressured and that employees who know their stuff are there to help.
“If we can earn customers’ trust, be knowledgeable, employ professional salespeople and delivery people, and do what we say we’re going to, we’re way ahead,” he said.