News of Norway, issue 3, 1998
The Stressless chair is the flagship of the Norwegian furniture company Ekornes. Established in 1934 by J. E. Ekornes, this company has risen to become the largest furniture manufacturer in Scandinavia.
The representatives of the American subsidiary of Ekornes know that their flagship product isn't the prettiest chair on the market. Nor is it the cheapest. But it sells. Currently, Stressless sales are responsible for 90 percent of the 200 million Norwegian kroner sales made by Ekornes USA last year.
Why does it sell? The answer is simple, according to Kevin McGuinness, who has been the president of the U.S. subsidiary of Ekornes since 1986. His favorite story is one of an old couple arguing in a store over what recliner to get. The husband, sitting in an Ekornes' Stressless he had come across in the store, said, "This is very comfortable." His wife argued that she did not like the chair, and he kept on telling her how comfortable it was. On route to the store, the wife had her heart set on a La-Z-Boy. While they were arguing, one of the store's sales people walked over and asked,
"Well, ma'am, what is the problem?"
"This chair is ugly," she replied.
The woman was dressed in the traditional jogging suit and was overloaded with chains and other jewelry. On her feet she wore huge clunky jogging shoes.
"Well ma'am, that is a very nice outfit," the sales woman commented.
"Thank you."
"But what are those shoes?" the sales woman continued.
"These are my leisure shoes," answered the wife.
"Ma'am, those are ugly."
"But," replied the wife, "they are comfortable.
At which point the husband started crowing,
"You see! You see!"
The couple happily walked out the door with a Stressless chair.
That is what wins people over, McGuinness said, "if you make something which is good, furnishings which are comfortable and work right, no matter what the value, they will buy it."
Ekornes puts a lot of money and effort into training sales representatives. Part of the training, which even company president McGuinness went through, is getting to know the product from the inside out, to make sure the customer understands the features and benefits of what they are buying. How to go about this? Make the sales representative sit in the chair, feel the comfort and functionality, and go from there. The first Stressless was introduced to the American market in the early 1970s. People who had opened Scandinavian style furniture businesses in the U.S. discovered the product. The first marketing strategy mostly existed of one dealer having success with the product, bragging about it to another dealer, who then came to Ekornes looking for the product, McGuinness said. By the mid- and late 70s, Ekornes had close to 100 dealers in the U.S. In 1985, the American Ekornes, a subsidiary of its Norwegian mother company, was organized after McGuinness on his first trip to the factory in Norway told the sales manger they needed a local representation in the U.S. to keep their business. For years, Ekornes' only U.S. marketing strategy was to send a sales representative on a national tour once or twice a year.
Ekornes USA is a New York company located in Somerset, New Jersey, from where 70 percent of the U.S. distribution is administered. The remaining distributors get their products directly from the manufacturer in Norway.
The Stressless chair can be bought in more than 900 U.S. locations. McGuinness said that they try to target distribution based on population and other demographics. In most major areas, Ekornes tries to have at least two dealers to keep the prices competitive.
Ekornes USA is responsible for about 20 percent of Ekornes' total business, passing the 200 million Norwegian kroner mark last year. Annually, Ekornes, as a whole, grosses over a billion Norwegian kroner. McGuinness explained that Ekornes is a unique furniture company in that it is having tremendous growth in the home market, Norway. "This is astounding when you realize that there are about 4.5 million Norwegians and Ekornes is selling for over 400 million Norwegian kroner in the home market," McGuinness said. "It is incredible."
A combination of product and consumer is the secret to success. "I sometimes tell people we're not really in the furniture business, we sell personal luxury items," he said. This makes for a more stable market since the consumers are willing to buy no matter what shape the national economy is in at the moment.
In surveys conducted in 1994 and 1995, McGuinness discovered something interesting about his customers. Instead of being the very elite, the majority of Ekornes customers fell in what McGuinness calls the upper middle class. They were teachers, bankers, accountants, lawyers and some physicians. Instead of driving BMWs and Lexuses, they were predominantly driving Honda Accords, Dodge Caravans and Jeeps.
We found that regular Americans liked the product and were buying, McGuinness said. He added that overwhelmingly the comments were: "It's a comfortable chair. I have always wanted something comfortable to sit in."
He compares selling Stressless chairs in the U.S. with a religious exercise. It is about winning people over. "We're just slowly out there slugging along, growing 12-15 percent a year, getting more converts," he said.
According to McGuinness, the problem with American consumers is that they equate size with value. Americans have a need to show off that they are successful through big things, he explained. This doesn't apply just to palacious residencies and big sports utility vehicles, which have replaced the '57 Cadillac. In their home furnishings, they equate the same thing, McGuinness said. "We bring the Norwegians over and they laugh," he said. For Scandinavians, function is the determining factor. The five year goal for Ekornes is to double their sales on the U.S. market.
McGuinness said that at the rate they are going, it will take them six years to fulfill that goal. "There is no reason for us to consider that business is going to slow down or stop," he said. "We've got a good dealer base, well trained sales staff, and we're a healthy company."
To patriotic Norwegians, McGuinness has one thing to say. With the success of Norwegian niche businesses like Ekornes, Norwegians should come forward. "I tell you, Norwegians as a group of people, they sure are shy about bragging," he said. "It is time to brag about something other than skiers and ice skaters. They have an incredibly well-educated people that can do some amazing things…so go ahead and brag a little."