From Home Furnishing Business
Publisher's Letter : Change
By Bob George
This is not something many of us want to do. However, this is an inevitable condition in today’s fast-paced environment. And the Internet is a big part of that environment. We cannot slow its growth or lessen its influence even if we want to. It is hard to contemplate the fact that today 17.5 percent of all furniture is sold via the Internet. What happened to the age-old maxims of “They need to sit on it or see the quality or appreciate the finish”?
Before you dismiss these statistics as not believable, understand the fact that only one-third of this 17.5 percent is sold by direct e-tailers—the balance is sold by brick-and-mortar retailers who recognize that consumers want to shop online. There was a time when no one would have envisioned the owner of a fast food restaurant would cut a hole in the wall of the restaurant and sell food through it. However, today one expects this type of restaurant to have a drive-thru window.
This is not to compare furniture to fast food. Instead, it is to help us emphasize the fact that the retailer must conform to how the consumer wants to shop. In the research focusing on this subject (see “Hot Wire” on page 16), the Ease of Shopping was as important to the consumer as Price.
We also cannot ignore the consumer’s perception of Selection when shopping on the Internet (sharing first place with Price as the most important reason for consumers to shop the Internet). To understand this perception, observe the in-store interaction between the sales associate and the consumer. Notice your sales person as he or she goes through a “needs analysis” with a customer. Then, compare that with the efficiency of the Sort capabilities on the Internet. You can begin to understand why more than 50 percent of customers leave the store believing “I couldn’t find what I wanted.”
The Internet is here to stay. Its scope spans such a wide-ranging territory that it boggles the mind. Therefore, it is important for the furniture retailer to recognize the inevitability of change, be willing to make the leap, and embrace the ‘Net.
The successful retailer must anticipate change, not wait until competitors have seized the advantage. This is true of major strategic shifts, such as the Internet. However, it is equally true of certain ongoing changes as well. Among the more important areas on which to focus are the strengthening or weakening of certain product categories, the effectiveness of advertising and the measurement of that effectiveness, and a careful consideration of price point migration. To anticipate change requires a measurement. Without a sundial, a watch, or a digital phone, you would not know what time it is. As pointed out in this issue’s section on motion upholstery, there has been significant growth in the category. However, there are still retailers with limited assortments of motion who wonder why their upholstery sales are down.
From outside the industry there is a fear that furniture retailing is destined to move in the direction of apparel and footwear retailing with the concentration of the volume being in mass merchants or very focused specialty stores. The results are declining dollar volume with stable unit volume. We don’t believe this is true. However, retailers that meet this challenge need to embrace change and adopt the current business model to meet consumers’ demands. Or they will have to create a new retail model that satisfies a need they have yet to recognize.