From Home Furnishing Business
Selling WITH the Internet Instead of AGAINST It
by Tom Zollar,
At first, most of us thought the Web was just going to be a tool for exchanging ideas and information, which indeed was one of the initial reasons it was created. I remember the “Web Purists” bemoaning the commercialization of their favorite “party line” when the first marketing efforts appeared. Then email replaced the US Mail, Websites took the place of newspapers, libraries and other sources of information, blogs spread people’s opinions and Google gave us answers to all of our questions.
As a result, the Internet has become a central part of most people’s lives and many of us, particularly those that have grown up with it, would have a very hard time adjusting to life without it. We quickly learned to turn to it for all our information, entertainment and communication needs, so it was only a matter of time before it took over providing for our physical needs too.
Indeed, over the past decade or two we have watched with amazement how fast the Internet has become a leading sales channel for most products and services U.S. consumers are looking for. From cars to homes to medical care, most shopping trips begin on the Web with an ever-increasing number also ending there. As proof of the Web’s growing retail dominance, in May of this year, Forbes announced that Amazon had surpassed Walmart as the largest retailer in the world. When you consider that all the largest retailers following behind them do a substantial chunk of their volume on the internet, it becomes apparent that online purchases represent a huge share of total retail sales.
Our focus here at Home Furnishings Business of course is only the Home Furnishings industry, therefore the question we need to address is “How does this affect us and what can we do about it?” The answer as usual is not that simple, since the Web has impacted various elements and product categories of our business differently. As an example, stores that sell flat pack, ready to assemble products for the home, which are a main part of internet sales, have a much harder battle to fight than high end stores that provide design services and custom ordered goods. So, while the online monsters are a threat to everyone, the severity of danger involved differs from store to store. As a result, while click only retailers have put many brick and mortar companies in other industries out of business, they have not really done that to us – wounded us yes, but not mortally in most cases.
When we look at market share for a client, we normally do not consider them to be a “dominant” player until they get to roughly 25% or 30%. The most recent Furniture and Bedding sales share I have seen for the internet distribution channel is somewhere between 16% to 18% and its growth has slowed substantially from what it was in the first decade of this century. In fact, it is quite possible that a large part of its most recent growth was driven by one product - Mattresses. Therefore, while online business has certainly become an important, perhaps even a major channel very quickly, it cannot yet be considered a dominant one, like it is in so many other product categories for the home like Consumer Electronics, Small Appliances and Kitchen/Dining Accessories.
In my opinion, the potential share of US furniture purchases for online businesses is limited and will peak somewhere between 20% to 25%. This is only a hunch, but it might be a good one. The slowing of this channel’s growth over the past few years is a sign, but we have long discussed the fact that many consumers just do not want to buy larger ticket merchandise without seeing, feeling and touching it. This is particularly true for items whose selection is based on style, color and comfort. When the look and feel of a desired product is critical to the purchase decision, brick and mortar stores will be the winner. A recent study concluded that most consumers looking for a large furniture product began their search online, with the ultimate goal of testing out the furniture in a physical location before buying. It has also been estimated that as many as 23% of these shoppers begin their search on Amazon.
Of course, we have all heard the term “showrooming” which describes how consumers often visit a physical store to interact with a product, then go online to make the purchase. While I am certain that happens in our stores, I do not see it as being a dominant purchase method for the majority of our shoppers. If we get a chance to meet the customer in our store and help them solve their furniture problem, I think we will win most of the time.
There has also been some consumer research done that supports this conclusion. A March 2018 survey by Morning Consult, indicated that only 11% of US Internet users polled preferred to buy furniture digitally. Another report by Bizrate Insights in May of 2018 determined that only about 18% of its respondents preferred shopping for home goods via digital channels. Either way that means that somewhere between 72% and almost 90% of consumers felt they want to buy their furniture in a physical location. Interestingly, younger respondents like Millennials where more likely to choose the in-store purchase path than older ones. Given these numbers, a very large majority of people looking for furniture will visit our stores, so we still have a huge potential to do business, if we play our cards right.
Basically, the three ways the Internet has impacted our industry are: eliminated roughly 20% of our available sales; lowered our potential traffic by reducing the number of stores consumers visit; and completely changing how most people shop for and purchase furniture. We can’t do too much about the first two, but if we study the consumer’s new shopping/buying process, then adapt our marketing and selling processes to their needs, we should be able to do a much better job at pleasing those that do choose to visit our stores.
Much of what we need to do has been discussed in this and other publications over the past few years. My focus has been mainly on the selling process and what we can do to better connect with the new, better educated, more confident shoppers we are seeing in our stores. Most of our recommendations have dealt with making sure your staff is properly welcoming potential customers to the store and making a concerted, professional effort to connect with them instead of merely greeting them and letting them browse.
I strongly believe that the turning point in any sales associate interaction comes when the customer develops enough trust in the person they are talking with, to tell them what they are looking for and why they came to the store. Without reaching that point and getting that information, the relationship is that of a salesperson trying to sell something that may or may not create the desired results for a customer. With that information it becomes possible for a “salesperson” to become a “person” who is there to help the customer find what they are looking for and solve whatever problem it was that brought them to the store. Therefore, the initial goal of your selling process is to make the customer feel comfortable enough to share the reason they came in, the product they seek or the room they want to redo.
It hit me recently that we might be missing a great opportunity to improve this process in our stores by creating a better connection with how our consumers are now shopping. Consider this: if most consumers are shopping and doing research on the Web before visiting our store, chances are they have seen something they are interested in testing out in our store. While it may be difficult for them to describe it to us in words, if we made it easy for them to show it to us and trained our staff how to make that happen, how many more customers could we satisfy?
My recommendation is that we need to equip our sales staff with tablets, give them easy access to Internet connected PCs on the floor and let them use their smart phones to help customers show them what they found on the Internet that brought them into your store. This sounds so simple, but it is something that I have not seen being done in the majority of stores I visited over the past few years. In fact, I have seen many that do not want salespeople or customers accessing the internet in the store, which is crazy! At the very least you need to provide quality Wi-Fi in your store so that your salespeople can have potential clients show them what they are seeking on their phones. Trust me, most customers can and will if they trust the person they are working with enough. They want to finish the process and move on; we need to be better at helping them do that.
This also means you need to adjust your selling process to include an effort to get each visitor to go online and share what they have found. As an example, instead of the widely used question “So where have you been shopping?”, I would change it to “So have you visited our Website? What did you see that interested you? Could you please show me, so I can help you find it in the store?” Most will have visited your Website and found something of interest that spurred them to visit the store. Make sure your staff is intimately aware of what is on your site and how to use it to look for goods, so they can work with the customer and guide them through the process. Obviously if they haven’t been on your site you can ask them which ones they have visited and bring them up. Chances are that Amazon and Wayfair will come up often, along with your main local competition. Keep a record of who your customers are looking at so you know who to be watching yourself.
I know this sounds so basic and if you have been doing it, congratulations to you! However, my experience has been that many furniture retailers are running from the Internet on the sales floor instead of embracing it and using it to help customers find what they are looking for. After all, that is the main reason consumers used it at home, why not make them comfortable using it in your store with your salespeople?