Furniture discounter POCO’s founder: “Our business will be in a state of consolidation for a few years”

Furniture discounter POCO’s founder: “Our business will be in a state of consolidation for a few years”

POCO’s large, yellow furniture stores were the very first to introduce the “discount” formula into the furniture industry back in 1989. Peter Pohlmann, founder of the German chain, will share his retail experiences at the RetailDetail Congress on 23 April.

POCO Domäne currently has 104 department stores in Germany and it will open a store in the Netherlands. What has been (and is) the key to the success of POCO?

P.P.: “Our customer focus and our focus have definitely been factors that have helped to create our success. We have always come across as dependable and we have full faith in our products. On top of that, we have also worked with a team of excellent employees.


We now have department stores all across Germany, but we still feel there is room for expansion, some 30 % according to our numbers. Once we have achieved that, we will launch our international expansion with the store in Hengelo as our stepping stone.”


The furniture market has been going through some tough times. Was this all due to the financial crisis, or are there other factors as well?

P.P.: "The number of construction activities decreased during the financial crisis and that seriously impacted our business. People are also afraid they might lose their job and that means they are more careful about possible purchases. Luckily, the situation has changed and the market is picking up again.


Nevertheless, there is room for discount, but it needs to adapt to consumer behaviour and demands. If it manages to do so, discount stores may survive the fierce cut-throat competition."


Doug Stephens, another key-note speaker at our congress, claims the era of the big boxes were the dark ages of retail and a new form of retail will rise. Do you agree with him?

P.P.: "Absolutely not! Every period gets its own type of retail format and in that period, discount was the right format. Discount will have to adapt and that is not only for the food discounters, but also for fashion discounters and eventually POCO as well.


Aside from that, our customers do not consider POCO Domäne to be a discounter. We are just the furniture company that has their ideal product range.”


How do you see the future of furniture retail evolve? What are the main challenges and opportunities in the future?

P.P.: "The continuously strong growth in sales space is a significant risk, just as the declining customer frequency in the stores due to the increasing internet trade is dangerous. The furniture branch has to consistently seize its opportunities in omnichannel retail, otherwise it will lose market share to pure players. I do not believe these ‘pure players’ will have a profitable future though. Our business will still remain in a state of consolidation for a couple more years."


How can furniture retailers like POCO Domäne keep differentiating themselves from players like IKEA?

P.P. : "IKEA first and foremost sells life stlye, then furniture and matching accessories, which is an amazing marketing performance. The company is also very good in how they handle their operations, an area we can learn from.


POCO sells furniture, refurbishment goods and decorative products that our customer, who we always call POCOwsky, likes and is willing to pay for. We follow our customer in the lifestyle he chooses and do not dictate one, which is why we are even complementary to IKEA and are even sought-after tenants in their homeparks."


The furniture market hasn’t gotten as much competition from online players as some other industries have. How do you believe this will evolve in the future?

P.P.: "Online furniture sales will always have a limited share in furniture sales I feel, but I wouldn’t be able to tell you the actual share. However, it will certainly increase. We always have to offer our customers the shopping facilities they want to use and we have to benefit from our well-known brand name and from the nationwide branch network. These things will be a great asset compared to online stores.


We have to keep our eye to the ground in order to learn how tomorrow’s consumer wants to buy furniture. We have had to do this ever since POCO was founded, but these challenges are becoming increasingly important nowadays."

What would you advise other retailers?

P.P.: “Do what you can do better than others and do what you enjoy. The furniture trade will always survive as it meets one of the basic human needs. If you cannot make it on your own, consider joining a purchase organization. One last piece of advice: sell when your company still has value."


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