Monthly Issue
From Home Furnishing Business
The Silent Invaders
April 11,
2018 by HFBusiness Staff in Business Strategy, Industry 
By Bob George,
The focus of this issue has been the impact of traditional retailers expanding into adjacent markets. Along with retailers with whom we are familiar, there are other distribution channels with different business models selling in the furniture industry. We should stress that it is not what we think, but what the consumer perceives. While we may question the selection or the value — not the price — if the consumer purchases in these other channels, then it is our failure to communicate that lead them there.
We will forget for the moment, these brick and mortar retailers that have a physical presence that we can drive by and consider the silent invaders of the Internet. Okay, this is not a new story. Depending upon what product categories are included, 15-20% of all furniture and bedding is sold on the internet.
The initial invasion of the internet was facilitated by the traditional retailers. While the industry was slow in establishing a web presence, often treating the new media as just an electronic “yellow pages,” they created a placeholder with address, and store hours, and brands sold.
With the help of pioneers such as FurnitureDealer.net and Micro D, many retailers have an outstanding web presence — a necessity in that 70%+/- of all purchasers visit the web to research price prior to shopping. The result is less stores shopped (UPS) but a better informed, ready-to-buy customer.
In the research process, the consumer stumbled across the early internet pioneers and was enticed by price and to some extent, selection. They defied industry assumptions that a consumer would buy without seeing/touching the product. We should have learned from the decades earlier experience of the 1-800 number invaders. Traditional retailers drove consumers to the e-tailer sites through advertising, giving the internet players an opportunity to cash in on the traditional retailer’s advertising.
The e-tailers grew from small renegades to behemoths like Wayfair and Amazon. They launched their own advertising with messages such as, “big items ship free” that are changing the basic business model of the industry.
Many traditional retailers have started to fight back by executing their own internet strategy. Today, the results have been minimal with their internet strategy producing less than 3% of total sales. However, the overall contribution could be more when the internet/brick and mortar strategy is combined. A physical presence should be a strategic advantage.
The latest battle tactic that is emerging from the digital invaders is online decorating assistance. Companies such as Laurel and Wolf should cause the traditional concern. The industry has long embraced the fact that if a sales associate secures a visit to the home, the close rate increases by two times and the average ticket does likewise. For years, the home plan was a standard in the Impact Consulting Training Program, and still is. However, the resistance from retailers that “my sales people will not do it” is the problem.
Before the online decorators seize the advantage, should traditional retailers create a “home plan” for the Internet?
From our historical experience, the invaders will not go away. We just need to fight back.