Come on Down and Meet Bob Kaufman

Marketing strategy, entrepreneurship, advertising, and business operations were all topics discussed by Bob Kaufman, CEO of Bob’s Discount Furniture Company, the 42nd largest furniture chain in the United States with $1.7 million in sales last year. Locally, he operates stores in Manchester and in the Norwichtown Mall. His visit was part of the David T. Chase Free Enterprise Institute series and was held in Webb Hall Room 110. The room was full of students; most of which are taking business, economics, or accounting courses.

A 1974 University of Connecticut graduate with a Marketing Degree, Kaufman said “every job I had prepared me for this moment,” He learned about the importance of system uniformity while he was manager of Radio Shack in Groton. Radio Shack’s business was booming in the late 1970’s as a result of the popularity of CB radios. He owned stock in the company and he would later use this money to start his own company.

A severe motorcycle accident changed Kaufman’s life in 1976. His right leg was paralyzed and almost had to be removed. As a result, his doctor advised him to buy a waterbed to help ease his pain. He liked the waterbed so much that he wanted to go into the waterbed business. In 1981, Wholesale Furniture had five locations in Connecticut and he approached the small business and asked whether he could have a waterbed concession with them. A percentage of the profits made from the waterbeds would pay for the rent and he told the owner that if it wasn’t profitable to give him 90 days notice and he would remove his products from their stores. He explained that department stores used to sell many of their products on concession from companies. He also approached Unclaimed Freight and sold waterbeds there.

In the late 1980’s, the waterbed business suffered and many businesses went out of business. Kaufman realized then that business is always changing and that he needed to change as well. In 1990, a recession year, he was offered a retail space in Newington formerly occupied by a waterbed company. He offered to open up the store as a furniture store as long as his rent would be based on the percentage of his sales. Six months later, a retail owner in Windsor suggested Kaufman expand into that market and based on the success of the furniture stores, the third store opened in Middletown and the fourth store opened in Mansfield.

The Bob’s Discount Furniture Store marketing approach is having one price by going against the concept of “sales”. The concept of “sales” is one the retail industry has trained consumers to look for. Retail businesses experience an upsurge in business during these sales and then business goes down when the sale ends.

The company’s made $164 million last year and spent $8.2 million in its advertising campaign. The company’s advertising approach is ads on television versus the furniture industry’s usual advertising medium that is the newspaper. He explains its better to advertise all the time rather than advertise only during special sale events. His strategy is to stand out in the public and he wants his face and his voice allow him to do his own commercials and for people to associate him with his stores in the same vane that people associate Frank Perdue with his chicken.

His Public Relations Director, Cathy, was added to Bob’s television ads after market research showed that the store’s biggest buyers are women ages eighteen to forty-four. Many of these ads have Cathy talking directly to women. Even though young women are his targeted audience, Kaufman knows that everybody needs furniture at some point. “I never know when the consumer is looking and the consumer looks for ads when they’re ready to buy,” explains Kaufman. He went on to say that Bob’s Discount Furniture has been successful as a result of word of mouth more than any media advertising. Unhappy customers usually tell ten to fifteen people about their experience while satisfied customers usually tell between four and five people.

Part of Kaufman’s philosophy is to develop “shoppertainment”. This is because furniture shopping is the third most stressful purchase customers make. The only purchases that are more stressful, says Bob, is buying a home and buying a car. As a result of the stress his customers will feel, he wants to make customers feel relaxed as they come into his store. Free popcorn and candy is available at all of his stores. Some stores feature chocolate chip cookies and coffee. It’s hard for people to be excited when they smell chocolate chip cookies,” he explains. His Norwichtown store, one of the biggest at 80,000 square feet, used to feature an indoor jungle gym for kids but was recently taken out because of the service aspect. Many of his stores feature fish tanks. He hopes that the free food will encourage children to drag parents into his store.

Kaufman realizes that his customers are looking for bargains and he also realizes that furniture gets returned when customers special order and then realize the furniture is too big for their home. He has clearance outlets in his Manchester and Norwich, CT stores and his West Springfield, MA store.

The future of Bob’s looks bright as he will be opening up two new stores in Massachusetts, one in Stoughton and one in Worcester. His distribution warehouse in Taftville is so packed with furniture for his stores that he plans a 200,000 square foot expansion.

Kaufman encourages others to start their own business like he has done. The hardest part of creating your own business is picking a market niche and honing in on it. He advises students to look at many businesses that have their own market niche.
“Subs were around long before the early 1980’s when Doctor Associates, parent company of Subway, started up.” Small businesses have proven successful near the University of Connecticut. When he attended the school, there were few places to eat near the campus but today the Subway at UCONN has the highest sales of any Subway in Connecticut.

“If you love something or if it’s your interest get a job there; learn what they’re doing right and what they’re doing wrong.” He advised students to understand accounting and operations and warned them that starting their own business can be “the hardest thing you can possibly do in your life”. Usually the first year in business most entrepreneurs don’t make money – many lose money.

But in the long run there can be more profit and more satisfaction in owning your own business. “It’s whether you want to work for a man or woman or be your own man or woman,” Kaufman said.

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