A market researcher delivered the message to Freight Liquidators that the furniture retailer’s executives had suspected for some time: The name had to go.
“What flipped it over was we were going into the Wheeling market and we had him do a survey down there, and his strong recommendation was to not go into that market as Freight Liquidators,” says Jack McGowan, CEO of R.H. Kuhn Co. Inc., owner of Roomful Express Furniture, the name the company adopted in 2000.
Management had wrestled for years with the notion of changing the name. While it had accrued a considerable measure of name recognition in the Pittsburgh market, by the late 1990s, the name Freight Liquidators didn’t fit what the company had evolved into since its founding in the 1950s. Nonetheless, making the change wasn’t easy.
“We certainly grappled with changing the name for many, many years,” says Michael Kuhn, president of R.H. Kuhn Co.
The company now operates 12 Roomful Express stores, employs 350 people and expects to post $50 million in sales this year.
It wasn’t that Freight Liquidators hadn’t changed with the times. The chain had grown from operating primarily as a wholesaler to become a competitive retailer, taken on higher quality product lines and adopted a marketing scheme that was more in tune with the busy lifestyles its target customers were leading and the growing affluence they were enjoying.
Freight Liquidators had graduated to selling entire rooms of furniture, matched so the busy customer wouldn’t have to employ a decorator or agonize over what goes with what, and promised to deliver in it days rather than weeks. Freight Liquidators, although it had demonstrated high name recognition in the marketplace, carried some negative connotations for customers: bargain basement, seconds, even distressed merchandise were what customers were likely to find.
The name no longer accurately described what the business did or the customers it was trying to reach.
“It’s one of those issues you have with any business that’s been around for a long time,” says Robert Adam, chairman of Adam Filippo & Associates, an Uptown firm that specializes in brand identity and marketing.
As a business changes over time, it’s not unusual, says Adam, to find that its name no longer accurately describe what it does.
At that point, it has to decide whether to change the name and risk losing the brand equity it has accumulated or use other tactics to restate its purpose and identity without changing its name.
“It just kind of evolved”
Founded in 1958 by Kuhn’s father, Robert, who died in 1996, Freight Liquidators started as an importer and distributor of Necchi sewing machines, made by an Italian company, and as a wholesaler of home electronics products. It operated concessions selling the sewing machines in three Gimbel’s department stores.
The company wholesaled to small furniture dealers and bought up inventory from failed or closed furniture stores and began retailing some of it out of its North Side warehouse. It opened its first standalone retail location in 1973, and within a decade, was operating 10 retail locations.
“It just kind of evolved,” McGowan says. “We became successful at it and continued to grow and look for opportunities in locations, and of course at that time, we’d look for a 15,000- or 20,000-square-foot box, open the doors and throw some furniture down and we were in business. It wasn’t a matter of any decorating issues or anything else. We just lined it up and sold it.”
The marketplace was shifting to favor larger retailers, and several other local chains, including Hahn Furniture, May-Stern’s and a number of independent dealers closed their doors. Freight Liquidators kept pace with the trend, consolidating some smaller stores into larger locations in high-traffic corridors.
Two North Hills stores were shuttered in favor of one larger one in the bustling McKnight Road retail corridor. Likewise, a Monroeville and an East Liberty store were shut down and replaced with a bigger storefront on busy Route 22 in Monroeville.
Changing the image
Because a name change is a huge undertaking with no small degree of risk, Freight Liquidators first tried to leverage its brand recognition by attempting to revamp its image. It revised its advertising, shifting from busy, crammed print ads to a more streamlined presentation and more television advertising.
“There were many years that we tried to upgrade the name Freight Liquidators with merchandising, advertising and marketing, but that didn’t work,” McGowan says.
Despite its efforts, sales remained flat. While they had changed practically everything about the business, the public perception remained ingrained.
Working the room
By the late 1990s, it was clear that a change of name was in order. Kuhn favored one that clearly described what the company did and how it tried to serve its customers.
“I thought it was important that we had a theme instead of ‘Smith’s Furniture’ or ‘Michael’s Furniture,'” says Kuhn. “I was kind of adamant that we work toward a name that said something.”
Those elements are critical, says Adam.
“It needs to be distinctive,” he says. “At the same time, it needs to be relevant and true, or made true by the product or service. And it needs to be relevant to the marketplace.”
The new name came out of a concept that the company had been employing in its stores since the early 1990s. As part of its merchandising, some furniture was grouped and sold as a package, with the message to customers that there was no need for them to pull together a room arrangement that may or may not work, and that buying the “roomful” was less expensive than picking out individual pieces.
“It was working as a department, per se, and the reception was good,” McGowan says.
Management kicked around ideas and, consistent with Kuhn’s contention that the name should be descriptive of what the company did, they came up with Roomful Express.
The company did market research to gauge consumers’ perceptions and how they would respond to the name. Potential customers, they found, liked the name and quickly understood the roomful concept.
Accumulating reliable data, according to Kuhn, was critical in making the right decision about a new name.
“We had some criteria, some statistics to sink our teeth into, that let us make a logical decision based on numbers,” says Kuhn, rather than on hunches or speculation.
And while the company had to complete all of the changes involved with a name change, from store signage to letterhead to delivery truck logos, most of the operational changes had already been completed. The stores were already merchandising the roomful concept, and the company was geared to deliver merchandise quickly to its customers.
The advertising and marketing campaign would be more like a steady rain than a thunderstorm, they decided. Ads emphasized wide choice and higher quality products, and more money was poured into television, where some spots showed the old Freight Liquidators logo peeled away to reveal the Roomful Express identity.
“In this case, we wanted a nice, slow transition,” says Jim Calderone, president of the Pittsburgh office of Ten/United, the ad agency that handles Roomful Express.
The company’s brass met with all of its employees and explained the rationale for changing the name, how it was going to affect the company and its goals.
“We’re still building the brand,” says McGowan. “We dropped market share when we changed the name because people were still thinking about ‘Freight.’ Now it’s going back up and exceeding where we were, but it’s taken a couple of years to turn the bend, you might say.”
While store traffic remained flat when the company scuttled the old name, sales per customer increased, indicating that although unfamiliarity with the name might have kept a few traditional customers away, those who were coming in liked what they found and were willing to spend their money.
With the success of the Roomful Express concept to date, executives are confident they can reach their goal of doubling sales in existing stores. A new store opened in Monaca this year, and a 60,000 square-foot store is slated for Robinson Township later this year, which should push the chain past the $60 million sales mark.
One challenge will be securing enough distribution capacity to support growth. Expanding its 270,000-square-foot warehouse in Lawrenceville is an option, but no decision has been made, Kuhn says.
For McGowan, the company’s strong performance in a sluggish economy bodes well for its future.
Says McGowan: “If we can grow in a bad economy, when things get back to normal, we can really fly.” How to reach: Roomful Express Furniture, www.RoomfulExpress.com; Adam Filippo & Associates, www.adamfilippo.com; Ten/United, www.tenunited.com
