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With sales of furniture and other home furnishings falling nearly nine percent last year by some industry analyst estimates, retailers in the category have turned to sponsorship to boost store traffic and sales. Much of that activity has been on behalf of national and regional value-based retailers, including purveyors of low-price products and rent-to-own chains.

Case in point: AFW, LLC's American Furniture Warehouse has signed a handful of new partnerships across its Colorado footprint over the past two years. Ties include co-presenting status of Denver's 9News Parade of Lights and sponsorship of the Colorado Garden & Home Show and National Western Stock Show.

In addition, Aaron's, Inc. has expanded its NASCAR involvement for '10 by titling a Michael Waltrip Racing NASCAR Sprint Cup Series entry for six additional races. The company will sponsor a car driven by David Reutimann for a total of 24 races.

On top of that, closeout retailer Big Lots, Inc. recently partnered with the NHL Columbus Blue Jackets.

Additional sponsorships could be in the works as sales are expected to start to rebound for all retailers. Consultancy Retail Forward expects retail sales to grow 1.5 percent to two percent in the first two quarters of '10 and three percent to four percent in the second half of the year.

"Value-focused mass retailers will hold up well," said Frank Badillio, Retail Forward’s senior economist, in a statement.

The firm projects homegoods channels will see negative-to-flat sales in the first half of the year and then hit 1.5 percent to 2.5 percent growth in the second half.

Case Study: American Furniture Warehouse

Privately held, 35-year-old American Furniture Warehouse is increasing its use of sponsorship due to the growing ineffectiveness of traditional media.

"People are inundated with media on a daily basis and they are increasingly tuning it out and difficult to reach; that will only continue to increase," said Krista Prescott, the company's advertising/PR director.

The company has reallocated money previously spent on print media to sponsorship, she added.

AFW, which operates 12 stores across Colorado's Front Range, has established partnerships with a number of properties over the past two years, including the Colorado State Fair and Denver's Cherry Creek Arts Festival and Colorado Fall Home Show.

In addition to providing access to harder-to-reach consumers, AFW also uses sponsorship to establish a conversation with consumers outside its showrooms and reach those who may be aware of the retailer but have never visited its stores, Prescott said.

"Sponsorship gives us the opportunity to place ourselves in an unexpected location and talk to consumers who normally might not give us the time of day. It lets us reintroduce our company to a new audience."

As an example, Prescott points to the Cherry Creek Arts Festival, an event that attracts affluent consumers who may not typically shop discount retailers.

AFW's on-site activation at events includes relaxation stations where attendees can lounge on couches and other furniture. The company displays low-cost pieces next to higher priced items to demonstrate its wide selection.

The retailer also typically includes a leverage element that allows it to compile a prospect database.

For example, it activated the holiday season Parade of Lights with a promotion offering consumers the chance to name the event’s penguin mascot. Consumers had to share contact information to participate, said Bruce Erley, president of Creative Strategies Group, which represents the parade on behalf of nonprofit producer Downtown Denver Events, as well as several other properties sponsored by the retailer.

AFW also distributes coupons to consumers in exchange for contact information.

The retailer promotes the partnerships through in-store signage and print and TV ads, Prescott said.

(Source: IEG Sponsorship Report, 02/01/10)