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3/6/2019

E-commerce and the Future of the Furniture Industry

Once upon a time, shopping for furniture was always a tactile experience. Couches were sat on, mattresses laid on, and drawers opened and closed. 

Today, those decisions are often made through sight alone. Website, that is.

E-commerce’s rise to power

It’s common knowledge that e-commerce has been growing in influence since the 90s. E-commerce currently accounts for only about 10 percent of all retail sales, but that figure can be misleading. Across categories, the size of e-commerce sales varies from around 2 percent for grocery to more than 20 percent for apparel.1

Furniture is one of the fastest growing product categories for retail e-commerce.2 That may sound positive, but the danger is that the size of the retail industry isn’t growing in tandem with e-commerce. Instead, digital-only and digitally savvy furniture retailers are taking more of the market share from smaller, regional retailers.

Manufacturers and importers may soon feel the impact. Tough competition can affect your small business customers’ ability to pay for inventory. As those retailers look to innovate, you must stay informed about the effects of digitalization. Otherwise, you may find yourself selling to customers who can’t keep up.

Strategizing for a digital world

In an increasingly digital commercial climate, furniture retailers need to stand out to keep pace. Competing with the lure of e-commerce takes creativity and a willingness to adapt, while at the same time managing risk.

Some retailers may find their differentiator is convenience and speed. For example, imagine a store that offers to deliver furniture purchase by 7 p.m. if customers visit the store before 3 p.m. It’s unlikely that an e-commerce company could compete with that promise. 

These and other in-store-only offers help furniture retailers play to their strengths. Consumers typically expect to find the best and most convenient deals online. Smaller retailers can surprise shoppers and increase foot traffic by offering limited-time in-store discounts. When possible, price-matching competitors’ prices on in-store purchases can turn a hesitant customer into an enthusiastic one. These tactics can inspire loyalty and prevent customers from shopping elsewhere.

Many shoppers still enjoy the traditional experience of shopping that they can’t get online. An engaging and personal shopping experience offers them something live chatbots and recommended items don’t. Retailers can invite customers to see, touch and sit on the pieces they’re interested in during creative events. A “movie night” can help show off new living room sets while a “bedtime stories” event can help sell children’s bedroom furniture.

Creating an omnichannel experience

Retailers can also work to compete via their own e-commerce capabilities. Smaller companies actually have an advantage over large ones when working to up the digital ante. Because they don’t have lengthy implementation processes or miles of red tape for approvals, change can happen quickly.

It’s not enough to simply invest in digital processes, however. To outsmart and outpace the competition, retailers must integrate their physical stores and digital platforms. The goal is one seamless system that puts the customer’s experience at the center.  Once the digital systems are in place, offers like local pickup can entice customers to make purchasing decisions. After they’re in the door, there’s another opportunity to sell them.

Who are you selling to?

The bottom line: Your success depends on who you’re selling to. It’s important to understand who your customers are and where they’re going. As digital evolution in the retail industry speeds along, you need assurance that your customers in the furniture industry will be around for the long haul.

Seek a financial provider that understands the landscape. Don’t leave your business at risk; consult with a seasoned team that has experience determining who is positioned for success and who is headed for trouble. Once you understand your risks, you can begin seizing opportunities for growth.

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