From Home Furnishing Business
One of the most discussed issues in the industry today is the internet and the impact this new distribution channel is having on traditional ‘brick and mortar’ retailing. The reason for this concern is obvious when we look at the graphic below.
Without a doubt, a significant percent of furniture revenue is moving through e-commerce. The saving grace is that of this total, 49% is sold through furniture retailers with a ‘brick and mortar’ presence.
The growth of internet sales is still more than twice the rate of store sales growth. However, in the last two years, e-commerce growth has slowed down as the table below illustrates.
This finding is the same as was found in the Fourth Annual Major Purchase Consumer Study (June 2015) conducted by Synchrony Financial that concluded a 2% drop in purchases online from 2014 to 2015. While the total number of purchases has decreased, the total sales volume through e-commerce has grown.
However, it still remains a significant portion of the industry volume. To raise another point, other alternative channels are capturing almost the same level of sales as e-commerce. In some cases, such as mass merchants, the sales levels are higher than those seen with e-commerce. The question must be raised, “Should the industry not be as concerned with these channels? The graphic, a repeat from the April issue on distribution channels, explores the impact.
An historical perspective can sometimes be viewed as a negative. However, when the catalog showrooms, such as Blackwelders, Roses, and Furnitureland South, threatened the status quo of the industry, the discussion was the same. Furnitureland South alone remains, but only by adapting its strategy. Likewise, when Costco debuted its “furniture only” store in Washington State, many proclaimed the end of furniture retailing as we knew it.
The traditional industry has weathered the storm of other alternative channels and survived, but each new channel has taken a portion of sales until the traditional channel now represents less than 40% of the market. Maybe we need to change instead of surrendering a portion of our sales.
Mention furniture and home furnishings sales sold via the internet, and the focus immediately turns to B2C retailing (business-to-consumer). So it may be surprising to learn that it’s the e-commerce (e-shipments) B2B platform (business-to-business) that has been exploding and generating buzz in the furniture industry.
A recently released report from the Census Bureau shows B2B e-shipments within the furniture and related products manufacturing segment (NAICS code 337) is now approaching 51 percent of the value of total shipments or $35.2 billion dollars in 2014. (Source: U.S. Census Bureau E-Commerce Report 2002 to 2014, June 7, 2016). The Census Bureau defines manufacturers’ shipments to include “orders accepted for manufactured products from customers, including shipments to other domestic plants”. While this appears to be double counting in some instances, it does little to diminish e-commerce’s impact on the wholesale furniture industry. (See Methodology and Definitions box for additional information). B2B e-commerce is changing the way manufacturers market and sell their products to both retail brick and mortar customers and online furniture retailers creating increased sales on one hand and distribution channel crises on the other.
E-Commerce across Vertical Furniture Industry Segments
The product categories included in data published by the Census Bureau may differ somewhat between furniture manufacturing shipments, merchant wholesaler shipments, and retail sales; however, the trend in e-commerce is the same. (See Methodology and Definitions box.) As of 2014, e-commerce accounts for over half (50.6 percent) of all furniture and related product shipments – up from 14.4 percent in 2004 (Table A). During the same time period, e-commerce sales of furniture and home furnishings within the retail trade sector increased 503 percent – representing 15.3 percent of total retail dollars. While e-commerce among the merchant wholesale trade of furniture and home furnishings increased steadily since 2004, the share of overall sales have remained stagnant since 2009 – increasing from 14.3 to 14.4 percent.
As Table B shows, the total value of manufacturing shipments in the furniture industry took a downturn alongside the economy during the recession. The 2014 value at $69.6 is still 9.9 percent below 2002. E-commerce shipments on the other hand kept an upward trajectory through the recession – increasing a total of 335.9 percent over 12 years. While total furniture and related products manufacturing increased by 15.4 percent since 2009, e-commerce shipments jumped another 70.3 percent to finish 2014 at $35.2 billion.
The percentage of total dollar shipments via e-commerce has climbed from 10.5 percent in 2002 to 50.6 percent in 2014 with the vast majority of growth (313 percent) occurring between 2002 and 2011 (Table C). From 2011 to 2013, increases of e-commerce as a percentage of total shipments tapered off. However, an 11 percent jump in 2014 pushed e-commerce to over half of furniture and related products shipment dollars.
E-Shipments: Furniture Manufacturing vs. Total Manufacturing
While e-shipments have grown at a rapid pace, furniture and related products manufacturers are still lagging slightly behind all manufacturing in the percentage of e-commerce shipments to total (Table D). In 2014, total e-shipments in all industries were 60.9 percent of total manufacturing compared to furniture e-shipments at 50.6 percent. Both total manufacturing e-shipment dollars and furniture e-shipment dollars increased an annual average of 14 percent from 2004 to 2014.
Merchant Wholesalers and MSBO’s
Merchant Wholesalers are wholesalers who sell goods on their own account such as distributors, jobbers, drop shippers, import/export merchants, and MSBOs. Manufacturers’ Sales Branches and Offices (MSBOs) are establishments maintained by manufacturing, refining, or mining enterprises apart from their plants or mines for the purpose of marketing their products. Sales branches will typically carry inventories, while sales offices typically do not. – U.S. Census Bureau
Since the turn of the century, e-commerce has slowly climbed its way into the furniture and home furnishings merchant wholesale trade. Merchant wholesalers weathered the recession well growing 43.8 percent in sales 2002 to 2014 to $76.9 billion while the e-commerce portion of those sales jumped 113 percent to $11.1 billion. MSBOs total shipments at $21.0 billion in 2014 grew more slowly -- 17.3 percent 2002 to 2014. E-commerce shipments from merchant wholesalers alone have increased a yearly average of 7 percent, while furniture MSBO’s have increased by 3 percent.
Although increasing just 30 percent in e-commerce sales from furniture MSBOs over 12 years, e-commerce accounts for 21 percent of furniture and home furnishings MSBOs (Table F) compared to other merchant wholesalers at 14 percent. As a percent of total shipments, e-shipment sales of both merchant wholesalers and MSBO’s have declined since 2011.
With more advanced websites and ordering portals that make it easier for a business to make purchases online, e-commerce should continue to grow as a key part of the furniture industry. Manufacturers look to e-commerce to increase sales and broaden its customer base. This approach, however, presents a challenge to manufacturers in terms of personalized customer service and maintaining that sales rep relationship.
Probably the single greatest impact on the entire retail landscape since the turn of this century has come from the introduction, growth and evolution of the Internet as both a research/educational tool and retail distribution channel. Other articles in this issue and previous ones have outlined the numbers to give you a picture of the depth and breadth of its role. How many use it and what they use it for, gives us great insight into why it has become so important to the shopping process.
This is great information to know and understand, but the main thing it tells us is that the Internet is causing a significant number of potential customers to avoid visiting our stores! That is the major negative we are experiencing at retail. It is really a double whammy for us since not only are people searching for, finding and buying our products on the internet, they are using their research to zero in on where they want to shop, thus significantly reducing the number of stores they will visit. As a result, in addition to losing sales directly to the Internet, it is also helping to reduce the total amount of traffic we have available in our markets.
Obviously the first step we need to take is to develop our own online sales capability. We must do that in order to capture some of the potential lost sales from customers that initially want to avoid visiting our stores. If this sounds to you like “joining the enemy”, then so be it. The internet is here to stay and the amount of home furnishing products sold directly over it is going to continue to grow. We are in the business of selling our products to the people in our market and it does not make sense to just let such a large percentage of them go elsewhere to buy. Especially when the end result can be that we can sell more people and then have the possibility of bringing them into your store when they make their next purchase. If we do not provide this convenience to those that want it, we will probably never see them.
While it seems that very few smaller retailers have taken this route, the numbers are growing and the initial reports indicate that many are having some success with it. The volume is not huge, but they are capturing customers that they would have missed otherwise and in the long run that will benefit them. As their client list grows, so too will their ability to reach deeper into their market and increase their market share. Therefore, find someone to partner with or hire that can put you into the online business and do it soon!
As for the prospect of ending up with fewer people to sell, what could we do to minimize its impact? Perhaps the answer is for us to find ways we can use the internet to expand or enhance our selling efforts to reach and ultimately satisfy more of the consumers that are still available to us in our market. To determine that, we need to focus on what potential opportunities for help the internet could provide us with.
Basically there are only three ways you can grow a retail business: See more people (Increase your traffic), Sell more of the people you see (Increase your closing rate) and/or Sell more to the people you do sell (Increase your average sale). Any of these individually or in combination will build sales. Therefore, let’s take a look at how we might use the Internet to improve or enhance our processes to help us achieve better results in these areas.
See More People (Traffic)
For the vast majority of the people interested in buying home furnishings, the first place they go is the internet. It is where the whole decision making process either begins or at least really gets serious. They use it to get ideas for their home, plus to educate themselves about products, prices and places to buy. Consumers only shop for furniture a few times in their lives so they generally know very little about it and the WEB is where most go to begin their learning process. It is the library they go to study at before the big test, which in this case is the actual shopping and buying experience.
As a result, your web site is absolutely critical! It provides your first impression to as many as 85% of the people who could potentially visit you. You only get one chance at that, so make it the absolute best it can be.
To these potential customers, your site IS your showroom and it needs to make the viewer want to come see it. We know they are looking for product ideas, pricing, specifications and other information. The ease they have finding what they are looking for on your site and the excitement you help them experience will go a long way towards establishing your place in their “Stores to Visit” pecking order. Do all you can to provide visual stimulation through exciting graphics, videos and other tools. Obviously most information they seek must be delivered in text format, but make that the last resort. How do you figure this out? Visit the pros that do this for a living and study what they do! We can’t all be Amazon or Wayfair or other major players, but we can learn from them!
Where you differ is that your main goal is not necessarily to make the sale then and there online, it is to get them to talk with you and ultimately to visit your store! Setting up chats, connecting to design advisors, moving from an online entity to a personal connection is what you want to do. We recommend that you have a dedicated person or team that creates and maintains your online marketing and sales effort.
Sell More of the People You See (Close Rate)
We have always maintained that If you can get a customer to tell you what they want, you have a much better chance of helping them find it. We also know that if you can show them what they are looking for (or something pretty close), even on a screen, you have a better chance of selling them. Therefore, in many cases you will need to provide a continuation of their internet shopping process. Your staff can do this by understanding that process and learning how to discover what each person has learned and what they have found that they have liked or not liked. To do this they will need easy access to the Internet on the floor. Using it in the selling process must be part of your sales effort and training program. They need to become a partner in the consumer’s search and join them on their journey as opposed to leading the process or just telling them what they should get.
Often we are finding the inquiries coming in from a retailer’s site via email or phone are potentially the best Ups sales people will get each day. However, we also know that not all of your sales people believe that. We recommend that you develop an individual or team that buys in and understand how to communicate via the internet and develop relationships that result in the customer coming in for a visit. The close rate on consumers that have connected to an individual and had a positive experience that brings them into the store looking for that person is probably about 90%. Why give these opportunities to sales people that do not treasure them? Make them matter by only allowing those who have demonstrated they can connect with online customers to deal with them.
Sell More to the People You Sell (Average Sale)
We know that product knowledge and design skills both contribute greatly to average sale. If your customer is going to use the internet to educate themselves, so can you. Part of your training and coaching program should involve using the WEB to learn more about product, sales techniques and design ideas. Your vendor sites can provide a treasure trove of information to help your staff better serve your customers. There are many great design and style centered forums and pages that can raise their awareness of trends in style and colors. All of the buzz words are there, if your people go looking for them. There should be no “down” time in a retail store for sale people, if they have access to the same library their customers are studying at!
We have also found that the better a retailer is at reaching their target customers through email blasts, social media and other online tools, the higher their closing rate and average sale is with those they bring into the store through it. We have had clients that have significantly reduced and even eliminated much of their traditional advertising effort to concentrate on reaching more potential customers via social media and other internet avenues. While total traffic declined, in most cases the increases in revenue per up more than compensated for seeing fewer people. They became much more efficient and effective with those that they did see because they were bringing in much more “qualified” customers!
So the answer is to sell who you can online and then get better at using the internet to reach and connect with more customers that you can get into your store. That is how you can offset the potential negative impact of the Internet and turn it into a positive. No matter what you do, you must tie it all together with your selling process and use it all on the floor consistently.
By Richard Sexton
With online sales continuing to be the primary driver of growth within the home furnishing sector (and all other sectors, for that matter), it's a natural inclination for single or multi-store retailers to aggressively expand into e-commerce or, if they are already online (and who isn't?), to contemplate a significant capital investment in upgrading their virtual presence.
The purpose of this article is not to discourage anyone from e-commerce. Like a well-balanced portfolio, online sales of your home furnishings business should be an important part of your overall growth strategy, especially considering the downside risk of not being in this channel.
However, far too many businesses rush to enter this channel, operating in panic mode, and wind up investing hard-earned capital for negative returns. Even more common is the decision to pull the plug on an e-commerce venture when it is not profitable within the first few months of operation, the most critical time for reinvesting in a new e-commerce launch.
In my 20-year experience as a home furnishings independent retailer, which evolved into a healthy e-commerce business, and in my role as a consultant to other businesses across retail and professional services sectors, some very clear and consistent metrics regularly manifest themselves. I will review some of these critical components of e-commerce and their impact on net margin. Importantly, none of these metrics are specific to a particular business that I've been involved with, which is why the numbers are so compelling. You see them across businesses using different strategies and different capital expenditure plans, yet most arrive at the same conclusion: "We had no idea.” Following are some areas for consideration.
Are You Prepared To Make 5% at Best Over the Long Run?
If you are pressed for time and cannot read this article in full, then simply answer the above question. If the answer is "No", then you are finished reading. If the answer is "Yes," then understand that getting to 5% will take a concerted, disciplined approach that requires nerves of steel during downturns and champagne for the upturns!
The Talent You'll Need For Success
For a long-term, viable e-commerce business, here are the functional roles you will need filled:
• Platform development team: This technical team includes integrations with third party platforms, user experience (U/X), navigation, taxonomy (how the categories are arranged) and platform optimization.
• Content team: Using your manufacturers’ images and text will get you nowhere fast, since you will get dinged by Google for duplicate content and you will be offering nothing new to the consumer. You'll need to have a team to customize product descriptions, take new photos if possible, and add unique product attributes.
• Search Engine Optimization (SEO) expert: Google is doing its best to eliminate organic "free" search results. The value of organic traffic is questionable, but its appearance high in the available non-paid space of the search page is still important. I recommend this is done in-house since nobody knows your business like you do. Write in a natural language for SEO and the chips will fall where they may.
• Search Engine Marketing (SEM) expert: Paid search is your best channel for online visibility, but you can burn through your budget in a day if you have not strategically chosen keywords and key phrases to describe your business, products, or services. This is a functional area that can be outsourced to third parties or agencies, but you'll need to be very specific about your budget, your conversion objectives, and your business strategy (brand awareness, defensive positions, campaign enhancement, product sell-through)
• Social media integration: While this is often relegated to a non-critical path, remember that as many e-commerce searches collectively occur on social channels as on the search engines themselves (if you include YouTube as social, which is the second-most popular search property). Social is not just about Facebook posts, it's about usable content such as videos, instructions, reviews, gamification, loyalty programs, and other digital touch points. Social channels are usually the most neglected in the home furnishings sector. This is regrettable since there is so much rich content to be pushed out to potential stakeholders.
• Analytics team: The one engagement discipline more neglected than social media is analytics. This is ironic since your e-commerce business needs to have established metrics and benchmarks for success (otherwise, you are flying blind). You wouldn't have started your brick-and-mortar business without establishing your objectives early on. You had a target revenue/square foot, a target gross/net profit margin and ROI, etc. The digital world allows us to measure all these metrics and many more. With the proper tracking code and tags, every interaction can be tracked, reported, and improved upon. Finding and building on that analytics expertise is challenging (even for a company such as AAA, where I work now). Fortunately, there is a plethora of online training available from Google, Bing, and many other third parties, and this training can be accessed in a sequential learning process.
• Sales team: Fortunately, this is one area that is completely scalable and already takes advantage of in-house expertise. Your sales staff should already be adept at omni-channel sales, transitioning easily from in-store to phone. An e-commerce business will add to the volume, with a lower conversion rate due to the price-shopping nature of online selling. Therefore, you will need to account for the lower close ratio in your sales commission plan. One additional responsibility for your sales staff could be online chat. No fully fleshed e-commerce site should be without chat, especially considering all of the robust functionality that chat brings (drag and drop images, room planning, etc). Whether chat is assigned to sales staff or routed to customer service is an internal decision, but consider that you want chat to act as a value-add, not just a price quoting vehicle, which can backfire on you as a retailer.
• Customer service team: Customer service capabilities will have to ramp up with your new e-commerce business because of the more problematic nature of shipping your orders, as opposed to in-store pickup or local delivery. The margin impact of having a white-glove delivery fulfillment service is considerable, possibly a deal-killer for many, but even so, the e-trailer needs to have resources aligned to the incoming volume of calls that result from fulfillment issues, such as scheduling, shipping damage, product variances and returns. Collectively, shipping and fulfillment issues define the largest chunk of unanticipated costs in a home-furnishings e-commerce business (see "Breaking it Down", below).
• Shipping and logistics team: Most e-commerce models typically consist of a blended fulfillment process consisting of direct-from-warehouse and drop shipment. In the furniture world in particular, "drop shipping" can mean several different operations, depending on the manufacturer. Some are perfectly willing to receive and order and ship it anywhere in the country, while I have experienced others who ship only within a retailers predefined market area. At the extreme end, some manufacturers will allow dock pickup only and simply don't want to know where the order is going. The successful e-tailer needs a shipping and logistics team capable of managing inventory onsite or at a third party warehouse. This team also needs to be flexible enough to work around the vagaries of manufacturer sales and distribution policies.
• Management: In addition to the aforementioned talent, entering the hyper-competitive world of e-commerce requires an agile management team that can simultaneously deal with irate online customers, cut-throat competitors, disgruntled manufacturers, and Amazon. Of course you'll never beat Amazon, but you can sell on product expertise and leverage, other core competencies.
Breaking It Down
Let's get down to business and see how much your e-commerce venture is going to make, given the requirements above. We'll start with the assumption that the furniture e-tailer is selling online at some sort of minimum internet price structure (sometimes expressed as "MAP"). These pricing guidelines are released by the manufacturers quarterly, annually, or timed with furniture market dates. They are issued as the manufacturers’ minimum online pricing expectation, and, although there is legal language specifying the voluntary nature of the pricing, the e-commerce business should take them as fact. In our example, we'll start with an MAP of 2.0, about average for the furniture industry. (I have seen a range of 1.6 to 3.0).
Our all-wood handcrafted cocktail table has a MAP of $800 and is sold online with free shipping. To be completely realistic, products sold at MAP are not competitive unless shipping is given away free. You won't even be close to Wayfair or Amazon if this is not the case.
Analysis and Summary
In this example, I've used conservative estimates. Advertising, in the form of paid search, runs from 8% to 12% of revenue, sometimes higher. I used 8% in this scenario. Management costs are also conservative, using a managers' salary of $100k on a $5m business. Importantly, I've not included physical overhead, such as the cost of showrooms, warehouses, and office space. Given the conservative nature of this calculation, you could logically ask "why bother". It's a valid question and one that you need to carefully consider before investing hundreds of thousands of dollars into a nascent e-commerce venture. It's not all doom and gloom, however. Following are four considerations that could move the needle from red to black.
Keys To Making E-commerce Profitable
You game your online business to higher average order values (AOV): Our model doesn't look so good for an $800 sale, but for a $2,500 sale, we are profitable. Why? Because we are always going to be paying a much higher proportional freight cost on lower ticket items. Our shipping to Texas on this new theoretical order would probably be only twice as much as our $800 order, with a CGS of $1,250. That small difference is all it takes to make this sale worthwhile.
2. You leverage existing resources: Your business already has a sales team, customer service team, and delivery staff. You may even have employees with the bandwidth and skill sets to handle other tasks such as social and analytics. This may well work in the short run as you get your business launched, but long-term you'll need dedicated expertise.
3. You sell based on discounts: Another tactic is to take advantage of manufacturers' closeouts and discontinuations. These are usually sold at 25% to 50% off wholesale with no pricing restrictions. Such opportunity purchases can add to your overall margin, but may require that you purchase and warehouse the product in advance.
4. You leverage your brand: One clear advantage most furniture retailers possess is their own longevity and physical presence. If your retail business is still around after the last tumultuous decade, chances are you are an established presence with some brand equity. By leveraging your brand throughout your store and across channels, particularly social, you may substitute this visibility for paid advertising.
5. Accept lower margins: When all is said and done, in the best case scenario, expect net profit of 5% or less. Of course, the net contribution of 5% on a $20m business is significant, as opposed to the higher margins you enjoy in your smaller brick and mortar business, so it's all a matter of perspective. It's a volume-driven business that requires both patience and capital to grow.
You need to carefully consider the strategic implications of launching an online business with the opportunities it presents and the pitfalls and challenges you will encounter. The ever-changing digital retail environment has paid off big for many, but the road is strewn with remains of businesses that did not carefully plan their resources. Consider the performance of Wayfair shown in the following graphic. It’s been a long road.
By: Powell Slaughter
Consumer awareness of home furnishings’ online presence might be at its highest point ever, and retailers who haven’t done so already should take a hard look at the story they tell in the digital sphere.
Thank the huge amount of press generated by online home furnishings giant Wayfair’s initial public offering last month. Consumers already are using the Internet—via computer or smart phone—to do their homework before hitting your store; and the information you present, how well your digital presence matches your brick-and-mortar experience, and the ease of use can go a long way toward getting you on shoppers’ short list. They want to know as much as they can about your products and services before they even start a conversation.
“All of a sudden there’s a focus on furniture online” said MicroD CEO Manoj Nigam in the wake of the Wayfair IPO. “And the digital age is about being relevant to consumers. What television did in the 1950s (for retailers) the Internet is doing now.
“Your Web site has become your biggest advertising vehicle—it’s your front entrance now; and 25 percent of traffic is now mobile. People expect a consistent experience across multiple sites” no matter what device they use.
If you don’t provide the information they seek, an interactive approach to fielding questions, and an online presence friendly to multiple devices, consumers aren’t going to find your store relevant to the way they research and shop for product these days.
It’s more important than ever, for example, to make your online presence mobile-friendly.
“Mobile is overtaking desktops as the primary product-search method,” noted Jesse Akre, senior vice president for e-commerce at MicroD. (See sidebar, “Digital Responsiveness.”) “And the consumer is more and more wanting an experience online that they would get in the store. It’s not just about displaying products, digital is becoming the driver of the consumer experience.”
He suggests retailers looking to relate to consumers online adopt a “Web first” mentality. He identified four keys: pricing products online; merchandising your Web site; ease of communication with the customer; and understanding the impact of reviews.
Some retailers remain reluctant to put prices on their Web site, but Akre said that’s what consumers are demanding. You don’t need to be in e-commerce to show prices on line. The practice of “Web-rooming” practice has made it easier for shoppers to compare prices and do comprehensive research on an important purchase; and retailers must adapt to that highly informed consumer.
The majority of consumers shopping for home furnishings still go into a store to buy—but they want to be armed with as much information as possible before they cross the threshold, Akre said.
“You've been printing prices for years in your advertising,” he said. “Why won't you treat the online marketing opportunity the same?”
Those insistent on holding back on actual pricing might consider offering a range—i.e., “These sofas retail from $400-$500.”
The bottom line for a Web site is getting people into the store, said Dianne Ray, owner, Garden City Furniture in Garden City, S.C.
“We're going to have to stay current with upgrading our Web site, the look, the ease of use. If they have to flounder around on the site, they're out of there and gone,” she said. “We've discussed e-commerce, and if we're going to attract that Millennial customer we're going to have to move on that. Actually, the Web site is important for all generations.”
Shoppers will likely see a store’s Web site before they see the store, and retailers should pay close attention to merchandising issues online.
“Have you walked through your store the past week sprucing things up, maybe moving product or working on a display? Sure you did,” Akre said.
A furniture store’s Web site deserves the same attention. Ensure the site gives consumers the same first impression online as they get in your store.
Shoppers entering your store see a layout that you built with your own business considerations in mind. Steer your Web visitors the same way. Think about ranking products online by perhaps best sellers, leading brands or inventory turns.
Take a seasonal approach the way you would in the store: “Company coming for the holidays? Create a dining room to remember.”
Consider the designs and trends you’re focusing on at the store, as well as products with the highest gross margins. Those are the products that you should feature online to entice consumers into the store.
Retailers know how to do this in the store; it’s a matter of translating the same techniques to an online presentation.
Take a look at in-store signage, graphics and logos to ensure they sync with your online presence.
“If a digital impression is made, it has to carry through in the store,” Akre said, pointing to Dick’s Sporting Goods Web site as a good example. “You see the same banner on the Web site that you see in the store.”
Merchandising the site the way you do the store might seem like a big task, but Akre suggested retailers start small.
“Impact one category, say your top five sellers,” he said. “Next week, do your top 10. Just starting will get the wheels spinning as to how you want to do it. Start with the products you want to lead with online.”
EASY TO ASK
How easy is it for consumers to communicate with you online? Do you use live chat, provide a contact number or e-mail? Whichever method you use, fast response is vital.
“People are not going to wait three days for you to get back to them,” Akre said, adding that some shoppers in the store would rather use their phone to ask a question rather than a store employee. If you use QR codes, make sure it goes to a site that will build expectations for the product, not just provide dimensions and such.
“QR is about driving people to information you control,” Akre said.
David Gardner, co-owner at Warrenton Furniture Exchange in Warrenton, N.C., found a way to engage customers looking at information on their mobile by installing a large screen on the sales floor where the retailer can call up products for easier viewing.
“We can do bring all this information to a larger picture so they aren’t squinting at their smartphone,” he said. “Online is bigger than my warehouse, but we’ve found a way to humanize it.”
The best thing about a good online presence is it provides a 24/7 storefront, but that can create communication problems for something like a live chat function.
If a consumer is browsing at home at 10 p.m. and has a question, it’s better to take live chat off-line during non-business hours than to have “nobody at home” to respond to a question.
A strong FAQ section on a retailer’s site can take care of many customer questions with a simple click. Store policies for issues such as credit, delivery, returns, hours of operation and such should be easily available.
Social media, of course, is an area where furniture retailers can interact with customers. But if you are on Facebook, Twitter or other social vehicles, it’s better not to be there than to not stay engaged.
“One large retailer I know hadn’t engaged on Facebook in 30 days,” Akre noted. “But guess who had? A woman was moving to town and wanted a houseful of furniture.”
THE REVIEWS ARE IN
If you were shopping for products on your own part, which would you trust more? A testimonial from a previous customer, or an advertisement? Never underestimate the power of customer reviews. Check out sites such as powerreviews.com or shopperapproved.com to get an idea of what can happen.
“Good and bad reviews are expected,” Akre said. “And they like to see volume as well as a range of comment. It doesn’t happen overnight. That log of reviews has to build one at a time.”
Retailers can solicit reviews, he added. Incentivize along the lines of a percentage off on their next ticket for an honest review, good or bad. Ask customers in the store.
And don’t forget engagement when it comes to reviews. Respond to problem reviews with an apology and a solution.
“Shoppers eat that up,” Akre said.