Striving to make a difference at Treehouse Kids

Prime location an advantage for Cincinnati retailer

By Lisa Casinger -- Kids Today, 11/1/2007 12:00:00 AM

Samantha (Sam) and Scott Jasper both were mid-level managers in the manufacturing industry when they decided to go into business for themselves in 2003.

Sam was working for the U.S. Department of Energy on a project that was ending and had the option of relocating or taking an early layoff and Scott was working in the chemical industry. Since the couple had two small boys at home, Sam took the early layoff and worked out of the home as a software consultant. Scott continued working in the chemical industry as they started working on their idea to market life-sized murals.

During their due diligence for that project, the Jaspers came across the opportunity to buy an existing brick-and-mortar kids store, Kids Classics.

"Initially we thought we'd start out as a one-stop shop for decorating," Scott said. "Then we found out furniture was the bread and butter."

The Jaspers bought Kids Classics and ran the strip mall location for about a year before they closed it and opened Treehouse Kids in the Cincinnati Mills Mall.

They didn't see baby as being a big part of the business because two of their neighbors were Babies "R" Us and Burlington Coat Factory. However, since their product offering ran to the higher end, they realized there was room for their store in the mix.

"Now we're doing baby and youth, bedding and decorating in an industry where a lot of the people are second or third generation," Scott said. "It started out as 50% baby and 50% youth, now it's more like 70% baby and 30% youth."

While most retailers would cringe at the idea of being so close to big box stores, the Jaspers saw it as a benefit. Scott actually sees moving closer to them as one of their best business decisions. Treehouse Kids shares the same target audience, and while the national chains have the budgets for national advertising and name recognition, Treehouse Kids enjoys the cross traffic it creates. It also benefits by being able to meet the needs of the consumers who get frustrated with the service or product offerings at the other stores.

"We have one-stop shopping for decorating for baby and youth," Sam said. "We keep it fun and fresh with the product and the merchandising and we're a step up in quality, craftsmanship and service. When moms get frustrated in one of the big boxes, we're right here to help."

While the cross traffic is great, Scott and Sam agree that one of their better ideas was moving more promotional product to the front of the store.

"People have the misconception that specialty stores are more expensive and they can't afford anything in here," Sam said. "We moved lower price points up front so people walking by or walking in would see right off the bat that we do carry affordable products as well as the higher-end products."

The million-dollar business offers everything from infant and youth furniture to accessories, textiles, gear and some safety products. The best selling categories are baby and youth furniture and textiles.

Because of their central location near Big Ten conference schools, sports-themed products have always been part of the mix and top sellers. The mall is in the corridor between Kentucky and Indiana.

This year business has been flat, as it has with many retailers and manufacturers, but up to this point Treehouse Kids had experienced about 30% growth each year.

Treehouse Kids offers delivery and set up, custom bedding services, baby/gift registry, custom mural painting and access to an extensive list of preferred vendors for other services, which Sam has compiled over the years.

Delivery and set up, Scott said, are a major undertaking in our industry. The store started out offering in-house delivery and when there were personnel issues they moved it to a contracted service.

"We went with an outside contractor that came with great references from some of the furniture stores in town," Sam said. "But they didn't know the first thing about delivering baby furniture and setting it up. We reached our breaking point when the delivery guys would just leave the job unfinished if they didn't understand the directions."

After about a month of Scott having to backtrack on deliveries, they hired the right people and brought the delivery service back in house.

Though the cross traffic in the mall and word of mouth have been great, the Jaspers spend about 3% of their budget on advertising. They started out doing newspaper ads but soon discovered it wasn't as effective for them.

"Newspaper ads are expensive," Sam said. "We had done some smaller black and white ads but in 2004 we spent $4,000 for a color insert in a large local paper over July 4th and didn't get a lot of response. I think unless you can continue to do that on a regular basis, it's just not effective because you get lost among the other ads, plus I think more and more people are getting their news online."

The couple switched to TV and radio ads, which are working much better for them, and the local baby guides. The baby guides go to a targeted audience in higher-income homes. Treehouse has one 30-second and two 15-second TV ads that they run in early time slots as well as occasionally as a Saturday movie sponsorship or as cable rotators. For radio, which is less frequent than TV, they partner with the stations to sponsor traffic and weather reports as well as mom-centered contests the stations run.

Sam and Scott also sponsor youth sports teams, participate in baby and safety fairs, cross market with fellow tenants and sponsor some Stroller Fit and mall walking club events. They share the information about their sponsorships and events in the community section on their Web site, www.treehousekids.com

Some of their biggest challenges come from the business of being in retailing and trying to compete on a level playing field. Treehouse Kids doesn't meet online pricing, a lesson Scott said they learned the hard way.

"In the beginning, we had a wall paper and border section in the store and people just used us for a resource and then ordered online," he said. "We need MAP pricing (minimum advertised pricing) across the board; that would make it fair for everyone."

The couple competes by not competing. They carry product that's specifically sold to independent retailers, whether it's an exclusive fabric or product configuration, or product from vendors who employ MAP.

Though Treehouse Kids has a Web site, right now it's informational only.

"We have a Web designer working on an e-store," Sam said. "But it will be next year before we roll that out and we won't sell furniture online. We'll sell items that are easier to ship."

The biggest ongoing problem is one most retailers can relate to — backorders and the lack of communication. While the manufacturers that support the specialty market exceed in areas like cutting edge engineering and design, special pricing programs and marketing initiatives, the Jaspers feel frustrated with the lack of communication from manufacturers on back orders and see it as opportunity for improvement.

"We're committed to providing customers with some indication of when their purchase will be delivered," Sam said. "While we include verbiage in our policy for back order situations, it does not help when notification is not provided in a timely manner or not at all. The customer doesn't understand this and the manufacturers need to understand what kind of hit this is to the retailer. Customers will remember the store that didn't deliver on their order, but rarely remember the manufacturer's name."

Scott said, "With all the competition today, you have to be on your game and always a step ahead and we need the manufacturers to be more proactive with back order notifications."

Though some manufacturers do send production availability lists or production schedules, Sam says this isn't the answer because she still doesn't know if the company has enough product to meet its needs and it makes a lot of work for the retailer. In short, giving customers discounts, loaner furniture, free delivery and setup eat directly into the retailer's and manufacturer's bottom lines and reputations. These are only band-aids not solutions, Sam said.

"When the process becomes too high maintenance we usually stop working with that manufacturer," Scott said. "Some would argue to buy volume and stock, but this is not reality for most specialty stores."

Since opening their store almost five years ago, the Jaspers have learned a thing or two about retailing and the juvenile/youth industry.

One thing they've found to be very important is being listed on manufacturers' Web sites under their dealer locators.

"Everyone should check their manufacturers' sites on a regular basis to make sure their store is listed on the dealer locator," Sam said. "You have to police it. It's important to be listed on those sites."

The Jaspers also have enjoyed the benefits of being NINFRA members. Sam is the chairperson for the bedding committee and is a member of the NINFRA board while Scott is on the wood committee.

Sam and Scott keep busy. Scott still works full time in the chemical industry and Sam runs the store full time. Between their jobs and family (the Jaspers have two boys still at home, Tyler and Kyle as well as three adult children, Brandon, Amber and Elizabeth) there's always something going on, yet the couple also is working on a pet project.

"Sam and I have been working for a few years on an awareness program, The Kids Next Door," Scott said. "So much child abuse goes unreported because people are afraid to get involved. We'd like to set up a program where member specialty stores would have some sort of anonymous tip box set up so neighbors or family/friends could report abuse. Another part of the program would to provide parents with information on State Sexual Predator Web sites for their neighborhoods and how to get involved in their community to raise the level of awareness of abuse and predators to save our children."

Though there's nothing financially to gain by starting this program, the Jaspers feel strongly about giving back to their community and finding ways they, as independent retailers, can help.

The Jaspers show their team spirit — Brandon, seated; Sam and Scott, standing; Tyler, top bunk; and Kyle, standing. Brandon works with Sam and Scott in the store.

Sam Jasper makes the vignettes inviting with lots of accessories and bright colors.

Gear is grouped together in its own section and sports-themed products are shown throughout the store.

Furniture, like this from Berg, is the bread and butter of Treehouse Kids.

Infant furniture, like this group from Munire, accounts for about 70% of the business.