Move from a product orientation to a customer orientation and watch sales soar!
Probably the most important question not being asked by people in our industry, particularly retailers is, what is going to be the impact of the internet on furniture retailing? In this article I'll pose several questions that might trigger some thinking among readers, but won't offer many answers because I, like most people I meet in our industry, am somewhat confused about how this is all going to unfold. Of course, this could be due to the fact that I'm now an old codger who didn't even own a computer five years ago. I know this, though; the future will be different than the present and, at the speed of change in our times, it's probably already here.
Think about all the things we thought wouldn't work, but that did: Home shopping through television was one that I thought wouldn't make it. Who would buy jewelry that way? Or collectibles? And if people did buy, how could there be enough of them to make it work in the long run? In fact, the whole idea of selling anything consistently over the air waves or the internet seemed pretty goofy only a few years ago, but as I read through my latest purchase from Amazon.com (more on this later), I can't imagine what I was (or wasn't) thinking.
The point is that furniture selling over the internet is already here and several sites are up and running. Visit www.furniturepoint.com, www.furniture.com or www.furniturefind.com and you'll get a glimpse of the future of furniture retailing in its embryonic stages. This implies, of course, that these sites, and others to come, will develop and transform from their present state to some new, more advanced state, and as they do, what else will be forced to change in this snail-paced industry? Even as the cyber-based retailers establish themselves, some large traditional retailers are investing in more brick-and-mortar. This would seem to show that two divergent philosophies are driving our industry today.
So, I'd like to share with our readers some of the thinking and questions that have been running through our minds as we visit hundreds of stores around the nation.
High Touch Versus High Tech
Remember when you had to do all your banking inside the bank? You stood in line with, perhaps, dozens of other customers to cash a check or make a deposit and if you required any other services you waited for the one or two officers to assist you. For some type A personalities, a trip to the bank was fraught with all kinds of horrors.
Since the introduction of the ATM, things have changed dramatically for the bank and for its customers. Today when you go inside a bank (I think) there may be only one or two tellers available. At the same time, you will find many more service desks where highly trained people can help you with loans, investments, insurance, mortgages, financial planning as well as the standard banking services that have always been available. This is due to the changes in the products banks can offer as well as to the affect of freeing up bank resources (people) to provide these new services.
Here is a case where a technological innovation caused massive changes in how business was done and in the level of services offered by the companies to hold on to their customers and attract customers from competitors.
As companies enter the marketplace using high tech methods, what does the response have to be by the traditional retailers who are vested in land and buildings? Can traditional furniture retailers continue to operate as they have for the past fifty or so years? Common sense would say no, but where is the evidence that anything is changing at the fundamental level of serving customers? I believe that the response to this new competition will have to be a high-touch approach to customers and their needs. High-touch means that a new paradigm will have to replace the old one when examining the business we are all in. We are not in the furniture business, but the beautiful homes business. Understanding this should lead retailers to seek out new ways to engage and hold on to their customers. Innovative high-tech companies who have no investment in "old" ways of doing business will constantly woo these customers – who are your customers.
Important Questions to Ponder
·The more commodity-like a product is, the better it is suited to cyber-selling. Think about the commodity products you sell: bedding, recliners, and RTA furniture are some examples that come to mind, but there are others. It could be that the more "branded" a product becomes, the more it lends itself to cyber-selling because customers have more information about branded products than non-branded ones. What will the affect be if half of the customers you get for these commodity items don't show up in the stores?
·What will the affect of cyber-selling be on distribution patterns? Will manufacturers not sell to cyber-retailers to protect your distribution franchise? How can they refuse to sell to cyber-retailers if that's the way millions of customers have voted to shop? Will the websites of manufacturers really only point the customer to the nearest store, or will manufacturers eventually be tempted to sell direct to your customers?
·Is it possible that many customers who would be your customers will shift to electronic shopping when they realize that they don't have to leave their homes to get the same level of service that you provide in the store? After I made my first purchase from Amazon.com only a few weeks passed before I received an e-mail message one day offering me a new book by the same author. They used the little bit of information they had about my reading habits to keep me as a customer. Think about this in relation to the amount and quality of the follow up your sales staff does with your customers when they have (or should have) a large amount of information about their customer's needs, homes and dreams for the future.
·What would happen if a cyber-retailer were to acquire a company like Decorating Den? Now, a hit on the website could result in a visit to the customer's home. Now the on-line retailer could offer a higher level of help in achieving what we believe the customer really wants: to create a beautiful home. The local franchisee would, of course, have all the power of CD-ROM and CAD. They would also have direct, on-line contact with suppliers, plus the ability to provide ancillary design services in many areas that most traditional furniture stores don't even offer – like kitchens, bathrooms and outdoor areas.
·Everyone in the industry is familiar with market research studies that have documented the fact that customers don't relish the furniture shopping experience. This is, in my mind, directly related to the disconnection between what the customer wants to talk about and what the salesperson wants to talk about. Customers can't find any real help because the salesperson has been trained to tell customers about their store and their products. Believe it or not, this is not the most important concern for a customer trying to understand how furniture will look in her room. What will happen to your store if 20% of the traffic disappears?
As you ponder the above questions there are some predictions to be made about what will happen in the very near future:
- The things you think will cause cyber-selling of furniture to fail (the need for customers to touch things, service and distribution) will be overcome by new innovations in information and data transmission within two years.
- Change will come faster than you ever imagined it could.
- On-line CAD for use by consumers will change the way people think about designing their home interiors and shopping for furnishings.
- Most furniture retailers will not change their traditional way of doing business in the face of these challenges to their existence.
We believe that the most important thing retailers can do to meet these new challenges is to offer customers more innovative and higher touch solutions to their home decorating problems. If this means providing in-home services to better help customers understand how to use your products, then do it. If it means establishing on-going relationships, then actively set up those kinds of systems. Your new competitors are already moving down these roads.
Furniture.com: The internet Isn't Just For Books & CDs Anymore
Senior Management at Furniture.com
Front row: L-R: Richard Clark, Chief Financial Officer; Rose Mauriello, V.P. Sales; Andrew Brooks, President and CEO; Kirsten von Hassel, V.P. Marketing; Misha Katz, Co-Founder and VP New Technologies; Row 2: L-R: Gerald S. Brown, V.P. Business Development; Lee Chaissan, V.P. Engineering; Charlie Anderson, V.P. Human Resources and Administration; Carl Prindle, Executive Producer; Peter Halunen, V.P. Merchandising.
The real winners in e-tailing will succeed if they "humanize" the online experience.
The Internet isn't just for books and CDs anymore. Now you can shop for homes, cars - even furniture. Furniture.com, the online leader revolutionizing the way people shop, clearly demonstrates that furniture, a higher-cost, high-touch, fashion-oriented product, is an e-commerce natural.
Delivering a High-Touch Experience
The real winners in e-tailing will succeed if they "humanize" the online experience through superior customer care and communications. In essence, we are looking at the next generation of e-commerce, which focuses not on selling product, but on improving the customer experience. With major new website features and enhancements, Furniture.com delivers on our visionary promise to provide the most enjoyable shopping experience.
For example, thanks to a proactive, live online assistance feature, consumers now have three ways to access expert help: e-mail, phone and real-time chat, allowing them to define exactly if, how and when to work with one Design Consultant. The new, breakthrough "chat" technology allows consumers to accept real-time, expert advice from Design Consultants while they shop. A shopper needing assistance receives a Nordstrom-like "may I help you?" prompt in a pop-up window on the computer screen. If the shopper accepts this offer, she is engaged in a private, live, one-to-one exchange with a furniture expert.
To further assist consumers during what has historically been a difficult and complex buying process, Furniture.com offers
additional shopping help and information, including a unique Personal Shopper service where Design Consultants suggest furnishings based on a shopper's preferences, styles, needs and budget.
Other key features include: an Amazon.com-powered Reading Room highlighting top-shelf books on home décor, selected and reviewed by Furniture.com; a Furniture 101 section that helps customers understand furniture and decode the language of style and design; and the Furniture.com Preferred Customer Newsletter that delivers the latest information on specials and trends in furnishing and design. Consumers also have the ability to save selections, as they shop, in a personal virtual showroom.
To complete the experience, Furniture.com offers free Red Carpet Delivery and in-home set-up, plus unconditional satisfaction guarantee programs to ensure that purchasers will love their new furnishings from the day they arrive and for years to come.
Collaborating with Manufacturers
Internet retailing breaks the world wide-open for manufacturers. It creates the opportunity to generate incremental revenue by selling far beyond traditional markets. And, an improved shopping experience and access to information will expand the pie for the entire industry.
At Furniture.com, we've introduced a flexible collection of programs enabling participation at a level that best meets the manufacturers' marketing needs, while respecting their retail channel relationships. These programs include:
Distinctive private-label collections sold exclusively at Furniture.com.
Proprietary product from selected manufacturers that can't be found in traditional retail stores.
Quick distribution of factory closeouts.
Plus, for manufacturers, there's the added value of sharing in the market data Furniture.com aggregates on consumer preferences and online shopping patterns. We've already been called "the A.C.Nielsen of the furniture industry." We will reinforce our mission of improving everyone's furniture shopping experience by sharing market trends with manufacturers to help them enhance their product design, marketing and merchandising.
Expanding the Pie
As keeper of the Furniture.com domain, we take our role as a leading industry player on the Internet seriously. We are investing millions of dollars in new technology, marketing and online as well as offline advertising to take the industry to a new level. Moving into the cyber realm creates a positive halo effect for the furniture industry overall.
By offering the most enjoyable shopping experience on the Web, Furniture.com is leading the next wave of e-commerce. While Furniture.com offers competitive value, our top priority has been and will be to invest in creating the most enjoyable shopping experience. By so doing, Furniture.com will continue to be a lead innovator in the $178 billion furniture and home furnishings industry.
Joe Capillo is a 41 year career veteran, experienced in managing and consulting with furniture retail operations. He is also a contributing editor for Furniture World Magazine. He is a contributing editor to FURNITURE WORLD and a frequent speaker at industry functions. See all of Joe’s articles on the furninfo.com website.
Read other articles by Joe Capillo