From Home Furnishing Business
Have We Lost Our Way?
2016 by in Business Strategy, Industry
By Bob George
With this issue we have focused on advertising and the challenge of bringing the consumer through the door.
The changing buying process of the consumer results in fewer store shopped. Thus the retailer’s fate is often determined in the murky world of the internet and social media.
Without a doubt retailers will continue to spend $6 out of every $100 in sales to entice the customers into the store. While television is losing its power and targeted direct mail seems to hold promise, net gain in effectiveness seems to be small. The dream of social media is still to materialize beyond antidotal stories that are hard to replicate.
Retailers have mastered the art of focusing the consumer on the buying process removing the barriers of price -“Lowest price ever”, finance – “No interest for 60 months”, and service –“ Same day delivery, no problem.” In essence, we have taught the consumer to “drink the water.” That, however, is not what marketing is. Shouldn’t the main objective of marketing be to make the consumer “thirsty”?
Where is the romance associated with furniture that is seen in other consumer durables, such as automotive, communications, and appliances? If consumers are influenced by this type of advertising they would believe that their new car or new telephone solves all of their problems and makes them a part of the “in crowd” that always has the right companion in a beautiful world. Even the new double-stacked, front-loading washer makes the working mother seem to be enjoying that mundane task. The furniture product has much greater potential to truly impact one’s life, but are we communicating the same?
We have broken the responsibility of traditional channels of distribution in the furniture industry. The designers and producers of the product must create the buzz for their new offerings. The retailer’s role is to convince the consumer that their store is the place to buy – best price, best service, most knowledgeable store personnel and so forth.
Several years ago at an industry function a senior executive of Wayfair over several glasses of wine stated that they were not in the furniture business, rather in the media business. Specifically, they were developing a more effective way to entice consumers to buy home furnishings. As the company and the internet grew to 15% of industry sales, that comment made has resonated again and again. Now Wayfair is opening their first stores and pursuing proprietary product.
It pains me to see the success of new start-ups such as Casper, formed in 2014, and now with sales over $100M. It is not their success. I commend them for that. Rather it is how they captured the imagination of the consumer. However, now they have recently announced a partnership with West Elm to sell their products via that retailer’s bricks and mortar. It causes me to reflect.
Is this a new model in which the product purveyor creates a new product and excites the consumer to seek it out? Or is it the old model that the traditional furniture industry has forgotten?