Founder Interview: Keeping the ear to the ground
20. October 2020
10 questions for Kare’s joint CEOs Peter Schönhofen and Jürgen Reiter
The two Kare founders Jürgen Reiter and Peter Schönhofen have been stirring up the market for almost 40 years. They have always done their thing differently than anyone else. In the current situation, the two creators are looking even more than before for personal contact with their customers and consumers. They want to inspire and rely on the appreciation for the topic of furnishing. Here you can read the full interview that was originally published in the German trade journal “möbel kultur” in the June 2020 issue.
1. Mr Schönhofen, Mr Reiter, you are currently speaking to everyone with an unusual and personal company video. Why did you decide to do this? What’s the intention behind it?
Peter Schönhofen: With regard to the social and business reorientation which is currently taking place, we asked ourselves the question of what will remain and what will be lost. How can we navigate the future together with our partners on the market, and how can we continue to appeal to our customers and arouse emotions? What we have both learned in the many years we have spent together in the cockpit of our company is to react quickly, boldly and unconventionally. This has always given us and our customers a head start. How can we stylishly arouse desires and what will give customers pleasure and make them feel good? It’s not just since the coronavirus crisis that we have strategically attached great importance to the human factor in our communications and brand presentation. With this video we want to provide answers to the question of why consumers should buy furniture and decorations. And above all, which brand they should buy. The important thing is to make shopping enjoyable, and to strengthen trust. Appreciation for personal, direct communication and relationships has become increasingly important, and we serve this desire with enthusiasm and skill. We have chosen the more intimate situation of an interview because it stands for such direct, personal communication. We think that closeness and authenticity will become ever more important to people – and who better than us to convey this? We are personally committed to our brand, and this is a phenomenon which customers value in today’s retail world.
2. At the moment many people are saying that the world will be a different place after the coronavirus crisis. Do you share this view? What values will become more important in the future?
Jürgen Reiter: We aren’t prophets, and nobody knows what exactly the much cited “new normal” will look like. Thinking that everything will be fine and return to the way it was before is not very helpful – and seeing the world in black and white is definitely a mistake. Societies have repeatedly gone through crises: just think of 9/11 or the financial crisis, and of course nothing will last for ever. As a business, we are interested in how markets, goods flows and above all our customers are now realigning themselves and, above all, how we can help to shape this process. One of the reasons for our success is certainly the fact that we have been true to the principle of keeping our ear to the ground for almost 40 years, and have always stayed close to our customers. We have our roots in the retail trade, we are retailers and we believe in it. That was not the least of our motives in setting up our flagship store Kraftwerk. This is where we meet our customers, this is where personal relationships originate during consultations, this is where we develop a feeling for their needs. We base our entire approach on how something is received by the customer. And that brings us to the subject of true values. Who and what do we believe in during times of unfiltered opinion-forming? The answer is people and brands which can be trusted and are authentic, because people are accountable for what a company does. This applies to the social environment as well as to the market. We are personally responsible for our actions, just like every member of our team – in quality management just as much as at the point of sale in the stores.
3. How can consumer confidence be gained at present?
Peter Schönhofen: Customers need to feel free and be able to make a purchasing decision with confidence. Right now they are looking for sustainable solutions – furniture is not a disposable product, but should create value. At all touch points consumers are looking for information, advice or simply an exchange of ideas. But all this also has to be authentic. And, as we are now back with our “true values”, reliability throughout the entire process is essential. That creates trust and a relationship. People change their clothes every day, but furnishing is something relatively constant. This is where it’s important to have an inspiring and coherent concept, just what we in fact offer with our worlds of feeling and trends that protect the consumer from making mistakes. Good furniture shopping ends when you come home one week or three months later and find that you feel better, that you come home with more pleasure than before. It doesn’t always have to be a new sofa, it can simply be a picture for the wall or a new side table. Furnishing consultancy and furniture sales mean making someone happy and giving them their individuality – that’s an important experience.
4. Almost 40 years after you founded your company, where do you still get your drive to create extraordinary furnishing styles and discover new creations?
Jürgen Reiter: The driving force for us has always been the fact that we honestly enjoy what we do. It remains our passion to make affordable furniture and furnishing ideas even more irresistible and inspiring. If you are interested in our overall development, ranging from our catalogues via trade fair participations and product selection to product quality, we can safely say that there has been an enhancement every year. And we go one better every season. It really motivates us when our inspirations generate enthusiasm on the market which can be felt all the way to the end customer. And of course we work seriously hard. We’re always on the ball, working out market solutions in terms of price and quality with the aim of guaranteeing the future viability of our company. In this respect it’s an enormous advantage that there are two of us. It means that if one of us is not at his best, the other can energise him with his enthusiasm or by setting a good example.
5. Do you think that the furnishing industry can emerge stronger from the crisis? After weeks of lockdown, do consumers really want to improve the quality of their homes? Perhaps also as an escape from reality?
Jürgen Reiter: With the right concepts, yes. For years now we have been experiencing how our own home has developed into a kind of refuge into which people withdraw because it is becoming increasingly turbulent in the outside world – both at work and in their everyday lives. Here we are talking about the much-cited concept of a “feel-good oasis” and place of retreat – a factor which is likely to become even more important as time goes on. In addition, in a digital world the sense of touch is lost. On a vintage leather club chair or a velvety cocktail armchair you can feel the surface. There’s great potential for our industry here, and it’s not just a matter of making the interior more attractive. The right concept means that the emotional aspect of buying furniture is linked to solutions – the key term here is “home office”, for example. Because people have now been looking at nothing but their homes for weeks and have often had to use them in different ways than before, consumers are in search of smart ideas for the surroundings they live in, ranging from the hallway to the family dining area to the bedroom. We can offer this, for every taste and also for almost every budget.
6. How important is impulse buying at present? Or are customers being particularly rational in their decisions right now? What can you deduce from current developments at Kare?
Peter Schönhofen: Buying furniture is becoming a feel-good purchasing experience. It’s not so much about the pure desire to shop. Customers now also want to strengthen their sense of well-being at home. In addition to simply furnishing solutions, they want to replace the temporary arrangements they made during the quarantine period such as the rather impractical workstation at the kitchen table. Instead, customers now want to treat themselves to something nice. It looks as if we are all going to change our attitude on the subject of summer holidays. In this respect household budgets are being realigned, and retailers need to take advantage of this!
7. How have you managed to survive the corona crisis so far?
Peter Schönhofen: Of course it will be a challenging year for our earnings situation, but small and large successes mean that we are coping pretty well with a difficult situation. And digital communication has increased. We have done better than we dared to hope in terms of deliveries and incoming orders. We can also safeguard all jobs, as planned. This is in part because our financial policy, which has been conservative for decades, means that we have a reassuring amount of liquidity that is worth its weight in gold in these times. Sometimes traditional wisdom gets right to the heart of the matter. As the saying goes, it’s always worth saving for a rainy day! When times are tough we demonstrate that we’re a close-knit team that sticks together.
8. How important is it in the current situation that Kare invested in digitalisation early on?
Peter Schönhofen: Extremely important. For some time now the type and speed of communication have undergone massive changes. At the same time as the physical showroom, in July we can now also offer our upcoming in-house exhibition Redboxx Days at our HQ in digital form. And from the start of the lockdown until today, the possibilities of our Kare Room Designer augmented reality app and those of virtual reality have played a major role in the planning of furnishing operations. The sales department can, for example, show customers a bunk bed digitally and customise it to suit their needs. We can also use digital tools in our international network with franchisees. Our visual merchandisers are able perform a store check, for example, with our branch in Bogota or anywhere else in the world online, or provide advice via Facetime. It’s a real advantage that we’ve all been trained in the use of these tools for a long time now, so we’ve been able to establish a kind of normality over the past few weeks.
9. You source your products worldwide, with many of them coming from Asia. What delays in delivery have you had to deal with? And what is the current situation in this respect?
Jürgen Reiter: In spite of increased attempts to approach European producers with our designs, Asia remains the most important market of origin for us. There are two reasons for this: on the one hand the good value for money, but just as important is the fact that in Asia you can still find many skills in manufacturing, especially in the area of manual craftsmanship, which have unfortunately been lost in our country due to a certain degree of de-industrialisation.
Of course there have been delays, but there have also been declines in demand and postponements of arranged delivery dates on the part of our customers. Thanks to astonishing flexibility on the part of some of our Chinese producers combined with decades of close cooperation based on trust and meticulous scheduling work, we have succeeded in largely eliminating supply problems, especially in the bestseller sector. At the same time we have been able to avoid overflowing stocks – a mammoth task which our scheduling department mastered with brilliance. India remains problematic due to the fact that the pandemic has not yet peaked there and the more difficult social environment. However, there too we are making good progress, especially with our top suppliers, most of whom have received government approval to continue operations.
10. Mr Reiter, as someone who is always on the go, how does it feel not to have been able to do any travelling for such a long time?
Jürgen Reiter: Not very pleasant, to be honest. I’ve missed the travel, the hands-on work with our suppliers in product development and the personal contact with the local teams we have known for many years. This and the cosmopolitan atmosphere are like the elixir of life for me. Even after 40 years I still get a kick out of arriving in Hong Kong, Delhi, Shanghai, Hanoi or wherever, and setting off for new sources of inspiration. Every journey is connected with exciting new impressions and insights.
On the other hand the crisis has accelerated future-oriented working models, for example working just in time and online across continents via Facetime and Skype.
In addition, we benefit from the fact that we develop almost 100% in-house, in particular with our Spanish design office partners and especially in the furniture sector, and that a long-established team of quality controllers on site ensures the required standards in production operations. I’m now very curious to see how these digital working processes will be reflected in the quality of our new products during the second half of the year. If the desired standard is satisfactory, I’ll maybe think about reducing the amount of travelling I do. However, in my view, it would be neither sensible nor desirable to do without it completely.
This interview was originally published in the German trade journal “möbel kultur” in the June 2020 issue.
