Solutions for 2017
By Tom McDonald • April 19, 2017
While some of the following may be the “echo chamber” of what has been happening in the furniture industry, it’s part of what brick and mortar furniture retailers face.
There has been a consensus in our industry that furniture is “too big”, “too important”, “too high dollar”, and too “must see in person” for online sellers to impact traditional furniture stores. But there are more than signs, there is hard evidence that online furniture selling has broken out of the incubation stage, and is becoming a major force, likely “the” major force in the segment, growing rapidly as traditional home furnishings retailing stalls.
We see that furniture shopping has changed drastically in a very short time. Consumers who plan to visit stores are looking online first to make the store experience more efficient. More and more people narrow their choices online in the comfort of home, visit a store, then shop online for price. Furniture shoppers who see products for the first time in stores are taking cell phone pics in order to shop online.
1. Business Insider says that 25% of the broad home furnishings category were purchased online in 2016, growing fast. Amazon garnered 43% of total online sales in 2016.
2. Furniture retailers have been trying to “crack the code” to reach millennials, a demographic that has not shown up in brick and mortar stores. They are moving into what has traditionally been the age of furniture purchasing, but it’s a category that is low priority for them. Amazon is the most relevant “brand” among millennials, according to Advertising Age. They are tech savvy, want their purchasing experiences to be quick, pleasant, “best”price, and fulfilled fast.
3. While furniture has been sold for quite sometime on Amazon, the category is gaining considerable traction with the massive reach of this dominant online force. Well known brands are already offered. For example, Ethan Allen just announced that it will soon be selling its products on Amazon. With Amazon’s vast customer base, one click ordering and free delivery, others will surely follow quickly. Most other brands are sold on the internet by aggressive retailers who have virtually wiped out distance as an obstacle to “shopping price”. Consumers can narrow their choices online, often on manufacturers’ websites, then if necessary, visit a local store before ordering from an online source, often with free delivery and easy return policies. Browsing online will usually generate ads that will present the consumer with multiple online buying options.
4. Online furniture retailer Wayfair, along with its family of five other names, claims a portfolio of 5000 home furnishings brands. This relative newcomer is growing rapidly, currently at $4.5 billion, with very little investment in inventory. Consumers can browse Wayfair in the comfort of their easy chair, and enjoy quick shipping, free delivery, and easy returns. Consumers shopping online will likely see Wayfair pop up ads … “70% Off!”. Independent designers can register with Wayfair for an additional 25% off.
5. Bed, Bath, and Beyond is rapidly expanding furniture selections. Every product and service they add is instantly available in 1500 brick and mortar stores and online, with free delivery.
So what’s a traditional furniture retailer to do? Call the Lynch Sales Company, spotlight your business in a positive way with a profitable high impact Lynch Sale. Broaden your customer base, reactivate prior customers. Raise $1 million or more, clean up inventory, give consumers new reasons to come in. With multiple locations, consider consolidating, closing “tired” locations. Where there is too much square footage, consider reducing space. Where the real estate is owned, it’s likely that the property is worth more than the business. If there is a burdensome lease, the Lynch Sales Company has answers.