Whether it is industry meetings or one of our performance groups, a key discussion is how to stem the erosion of furniture retailing to alternative distribution channels.
In previous issues we have documented the erosion by distribution channel (May 2015) and by product by distribution channel (June 2015). Now the quandary becomes figuring out what traditional furniture retailers can do about it.
Discussions of what to do often turn to the latest finance offer. No interest and no payment for an ever-increasing time frame. All of this only impacts an ever-decreasing bottom line by 3 percent to 4 percent. Next come the Rubik’s Cube of pricing—50 percent off with an additional 10 percent off if it’s Tuesday, etc., etc., etc. All of these are decreasing the gross margin at the top of the income statement while at the same time causing mistrust with the consumer.
It would be wonderful if we could read the consumer’s mind. However, since this ability remains in the world of the supernatural, we are forced to take another approach, a much easier approach—the consumer survey. We asked a national sample of consumers who had recently purchased furniture to specify the things that were most important to them when buying furniture. Our findings are shown in the accompanying graphic.
We might have expected low prices to be the predominant purchase driver. However, this was not true. It falls in second position with 14.7 percent of consumers choosing low price as the most important factor to them. However, the expectation mentioned most often at 15.9 percent is that the furniture store would provide a good product selection. If we combine this percentage with the 11.3 percent of consumers indicating a desire to see a wide selection of styles and prices, we appreciate the high degree of importance the consumer places on the product selection offered.
The third most important offering a furniture retailer can provide consumers is free delivery, which is cited by 14.5 percent. This is a factor we frequently want to ignore. However, the consumer has spoken on that issue, and he or she expects the furniture to be delivered.
As you consider this data, take a look at the other distribution channels and see how they are responding to consumers. It could be eye-opening. If you would like the next 10 things the consumer wants from retailers, drop me an e-mail, and I’ll send you those.