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September 13,
2012 by in UnCategorized 
By Home Furnishings Business in on September 2012
After years of watching from the wings, more traditional furniture stores are taking the stage in e-commerce.
Last month, for example, Gardiners Furniture, an 80-year-old, five-store Baltimore-area retailer pulled the trigger on e-commerce when it launched a shopping cart on its Web site.
The reason, according to Advertising Manager Kasee Lehrl:
We know that online sales of home furnishings is the fastest-growing segment of sales for the industry, and in order to grow our business we needed to have
e-commerce on our site.
And those growth numbers are compelling. According to an IBISWorld study released in April, Online Household Furniture Sales in the U.S., online retailers accounted for $6.3 billion in furniture sales in the United States last year, a 7.5
percent increase over 2010. Thats expected to increase in 2012 to $6.9 billion, a
9.9 percent increase.
Thats on top of a 6.3 percent rise in 2010. But hold on, one might say, 2009 was a terrible year, so any numbers are going to look good. Not so fast: Even during the depth of the recession in 2009, online furniture sales weathered the storm pretty well, falling off just 0.7 percent from 2008.
By 2017, IBISWorld predicts online furniture sales will total almost $10.8 billion.
Its not just knick-knacks selling via the Internet. The study broke down categories as follows: living room, 37 percent; dining and kitchen, 30 percent; bedroom, 23 percent; and outdoor furniture, 10 percent.
It wasnt too many years ago that many in our industry said people would never buy furniture onlinetoo much touch and feel involved. Well, consumers are touching and feeling alrightin your storeand more and more retailers have decided they want a piece of that action.
GETTING INTO THE GAME
Gardiners had a Web presence for a long time before opening for business online, with help from Internet site developer and consultant FurnitureDealer.net.
We could not have launched e-commerce without all the hard work from their team, Lehrl said, adding that the store is moving into e-commerce gradually to ensure service levels.
Currently we are limiting purchases to stock merchandise and to our delivery area, Lehrl said. We hope to expand our e-commerce merchandise selection to include some special-order case goods, accessories and area rugs in the near future.
Each night, Gardiners system updates, so the product assortment available for online sale may vary as the store sells out of certain things and receives new merchandise in the warehouse.
Looking ahead, Gardiners is tracking sales to determine which categories to add into its e-commerce mix.
Once we have enough orders to start trending our online sales we may feel the need to increase certain categories to give customers more options at the best selling price points, Lehrl said. In order to get some of those extra products on our site like accessories we need to work out direct shipping with the factories.
Rugs should be easy because manufacturers direct-ship those now to our customers; other accessories might be more challenging since they ship on pallets or require order minimums.
BORN AGAIN
The Bombay Co. brand is eschewing bricks and mortar for the time being as it returns to retail. BombayCompany.com, which launches this month, will offer a range of furniture, accents and décor, gifts, textiles, seasonal and holiday items.
Wil Hollands, president of The Bombay Co. brand parent Hermes-Otto International USA, discussed the new approach during an August interview.
So how is the new site different from online efforts in Bombays prior life?
Well be bringing a specialty-store environment online, so in that way its the same, Hollands said. Whats different is that how you sell and merchandise, how you communicate online is different. Social media, newsletters and design tips will be embedded in the site, so it will be very interactive. ¦ Bombay fans are die-hard, and we want to make sure we deliver on the brands promise.
Bombay has a furniture license with Powell Co. for accent furniture and youth furniture, but that line is mainly for independent retailers.
Our Web site would be sourcing directly through Hermes-Otto and marketing directly to the consumer, Hollands said. Eventually, we might put some of (Powells) items on the site, but thats not the focus. What we carry on the Web site will not be available anywhere else. Were taking a Best of Bombay approach.
Service and delivery are particular challenges with e-commerce, but fulfillment is an area where Hollands believes BombayCompany.com will shine.
The great thing about the site is thats the hallmark of Hermes-Otto Internationals expertise, he said. Our company is the largest logistic expert in Europe and second-largest there in e-commerce after Amazon, so theres a lot of experience. All warehousing and facilities management (for the Bombay site) is in the United States.
Social media played a role in developing the site.
We are a well-known national brand, and weve kept in touch with consumers through social media, Hollands noted. I used social media to help design and define the site.
Any chance of a bricks-and-mortar presence returning?
Its not in my immediate plans, but its not off the table, Hollands said. Consumers today are very savvy, but especially for the younger generation of shoppers, the Web is critical to growth, and growing a brand with a b-to-c Web site is a great place for our business right now.
SOCIAL IMPACT
Along with e-commerce-enabling features such as shopping carts for their Web sites, retailers are getting the hang of using social media to build their business. Theyre also figuring out how assess its quantitative value.
Through Google Analytics, Web4Retail has been tracking social medias impact on actual sales.
One client, promotional retailer Carls Furniture City in Utica, N.Y., for example, put its online shopping cart on Facebook. One month showed three sales totaling $2,100 from Facebook.
That ties the business back into social media, said Sev Ritchie, executive vice president at Atlanta-based Web4Retail. These are people who didnt even want to leave Facebook to make a purchase.
Speaking of shopping carts, Ritchie noted that retailers who commit to doing business on the Internet are giving their store more protection against getting shopped than those who dont.
What were seeing a lot these days is the safety net feature of a shopping cart, he said. In a lot of cases, a customer doesnt have time to go back to the store, or theyll default to the vendor even after youve given the feature and benefits presentation.
With shopping carts, were seeing a lot of those people were physically in the store, Ritchie continued. And if the salesperson properly logged their customer, (their commission) is protected.
NEW TAKE ON FLASH SALES
Another creative use of social media puts a new spin on flash saleslimited time, limited-entry online sales. Some furniture retailers have tried sites specializing in the technique such as Groupon, but results have not been all that great in many cases.
With flash sales, I think of the Groupons or Living Socials of the world, said Kevin Doran, vice president and co-owner of R&A Marketing, Columbus, Ohio. We dont see that being very beneficial for furniture stores except maybe for mattresses because you have to give up so much margin and share your profits from the sale.
But you can turn what youre doing in social media into flash sales. We have an application called Share & Save. ¦ They see a call to action on Facebook: Thanks for being a fan, heres your discount. You set up a minimum number of participants and a maximum of who gets the discount. And since youre doing it yourself, you set the limit on the time the deal is available.
Customers get people they know that might want the deal to generate critical mass for the sale.
You can protect yourself doing this on social media because you set the price and the margin, Doran said. If youre not set up with you floor priced right to take that hit, you lose with something like Groupon.
Ritchie agrees. What weve been seeing is the modified version of the flash sale with social media, he said, pointing to another example from Carlsa bedroom set priced to move at $299. Put a photo out there with a price and information, and this sells within hours.
The technique also avoids paying a Groupon a hefty share of profits on merchandise you have discounted.
In this case, youve set where youre going to be on the clearance side, whether youve written down the product or youre at the point you want to move it out of the store, said Ritchie. They had five of these this week, and all five went.
SOCIAL STILL MEANS SOCIAL
Whatever its monetary contribution, social media remains an important part of some pretty smart retailers presentation to their customers and their community.
At the recent Las Vegas Market, three dealers shared how they look at social media when GE Capital hosted a seminar, Building Business with Social Media. The retail panel included Jeff Child, CEO of R.C. Willey, Salt Lake City; Nick Gates, general manager of Gates Home Furnishings, Grants Pass, Ore.; and Jim Navarra, director of marketing at Jeromes Furniture in San Diego.
They discussed how their approach to online socializing has developed, and how they believe it affects their business.
Jeromes has changed its approach to social media, making it more ... well, more social.
We went from the promotional route to doing no sales, no promotions, Navarra said. To do that, you need to have things in your business to talk about. That led us to focus on the merchandise, and explain to the consumer why the values theresocial media is a perfect vehicle for that. Value for our part includes knowledge and advice.
You have to figure out what content people want. Recently we decorated the house of a reality television star. We took photos with fans and posted them on our Facebook Page. There was a snowball effect with all the likes, comments and responses to the comments.
The biggest change social media had at R.C. Willey regards the retailers interaction with the consumer.
Five or six years ago, we started having negative reviews pop up online, Child said, noting that social media is a great way to deal with such issues. Most people will become an advocate for the business if we respond helpfully.
For years wed assumed our Internet site was a reflection of our company, when in reality the site was a reflection of the store. (With social media) consumers tell us what they want, and we tell them what they can do.
Heres an idea: R.C. Willey has started posting groups its considering at furniture Markets on Facebook and asking fans what they think.
Consumers love to give their opinions, and if you can channel that in a productive way, it can help your business, Child said. At Market we showed several groups we were thinking of buying, and the post generated 700 comments. We ended up not buying one of the groups, and for the product we did buy we included as picked by you on Facebook in the ad.
Gates Home Furnishings had a Facebook Page, but it sat there for a while. What really made it take off was when we provided the furniture for an episode of Extreme Makeover: Home Edition, he said. That began a lot of conversation on our Facebook page.
Conversations sometime takes strange turns, but that can provide personality.
One time we put a recliner on the site we wanted to get out the door, Gates said. We tried to take a good picture of it, but it was just an ugly recliner. People just ragged on us about it. At some point we had to stop responding, but if you go way back on our page, its still there. I think it adds some character to our page.
Jeromes Navarra considers consumer sites such as Yelp social media.
We have a full-time sales manager who monitors negative reviews and responds to them, he said. Seventy-five percent of people we respond to respond back, and 50 percent respond positively.
Dont forget to acknowledge praise, he added: Its important to respond to positive reviews as well as the negative ones.
COMMITMENT DEMAND
The major cost of an effective social media program, the panelists agreed, is a valuable commodity: time.
We have a 25,000-square-foot store in a town of 38,000, and we have 2,500 followers, Gates said. You have to be viewing it all the time, just knowing the status of your Facebook Page. ¦ Knowing whats on your Page is very important.
R.C. Willey has a full-time person handling social media, who seems to be on it 24-7, Child said. The more content you have, the more people are reading, the more people comment, that all takes time.
R.C. Willey has contests and giveaways on Facebook, where the store posts as many as five entries a day.
We also have a woman who puts out a blog with seven to eight thousand followers, Child added. Its not all about home furnishings; well have contests, even recipes. For us its a continually ongoing process. We have more than 85,000 followers.
The key is to have enough content and things going on to keep people interested. R.C. Willey used to promote educational seminars in the paper and would get 25 people to show up.
Now well do an e-blast and put it on Facebook and (have) 200 show up at each store, Child said. Youre reaching the people who are interested enough to know whats going on with you.
Jeromes has one full-time person
handling social media and two contributors writing blogs. Responding to comments and dealing with customer problems demands that attention at a store Jeromes size.
Look at social media like you would the telephone, Navarra said. Youd pick up the telephone if someone called your store. HFB