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Hi Nancy
23 April 2013
COUCH COMMERCE...
FURNITURE ONLINE
In March 2012, Gerry Harvey told a
national TV audience that online
retailing was simply not a serious
possibility for furniture.
His proposition was that customers don’t want to buy furniture or bedding
online; they need to ‘touch and feel’ bulky goods before they buy. In classic
Gerry style he said: “There is no internet business in furniture or bedding. Zero
- practically in the world.”
Fast forward 12 months and online furniture retailers are defying Gerry’s
predictions with double-digit growth, and Gerry is one of the biggest
beneficiaries through his own Harvey Norman retail furniture business.
In fact, since 2008 online furniture sales have increased by over 12 per cent to
annual sales of more than $300m. Over the next five years, online furniture
sales are expected to grow by at least eight per cent. At the same time,
traditional bricks and mortar furniture retailer sales are expected to flat-line with
growth rates for the next five years expected to be at or below CPI.
Furniture e-tailers have achieved success by taking the online shopping
experience to a completely new level and removing the risk of buying bulky
goods sight unseen with:
Source: www.harveynorman.com.au
Furniture e-tailers have
achieved success by taking the
online shopping experience to
a completely new level and
removing the risk of buying
bulky goods sight unseen.
Money-back guarantees
‘Try before you buy’ options
Low or no delivery charges
‘No questions asked’ return policies
Take a look at West Elm’s website and you will find high-resolution
photography with multi-angled zoom technology and videos showcasing the
products in carefully crafted and interior-designed rooms that allows for cross
selling into other furniture and homewares categories.
Click on the image to view the video.
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Source: http://www.westelm.com/shop/furniture/sofas/?cm_type=gnav
Video: http://www.youtube.com/watch?v=U0LjxR0g15I
The interactive 360-degree video introduces the interior designer behind the
design of the Henry sofa (we love the personalisation and ownership of this)
and showcases a range of optional room settings.
It’s not only large retailers with deep pockets that are successfully selling
furniture online. A large number of small players, some focusing on replica
designer furniture, and others on low-cost products, pioneered the sector such
as, www.clickonfurniture.com.au and www.mattblatt.com.au.
Source: http://www.mattblatt.com.au/
So what is the secret of online retail for these guys?
These savvy online players have a wealth of customer data and know how to
use it.
Good online operators analyse the data collected to understand the buying
behaviour of their customers, massage their range accordingly and adapt
promotional activity to meet the needs of their target market.
Smart operators take these customer insights to a new level and employ data
analytics to identify the cause-and-effect relationship on buyer behaviour
across social media and traditional marketing channels.
Recent studies in the USA have demonstrated the power of remixing a
retailer’s advertising spend away from traditional media to mediums that are
actually influencing buyer behaviour and retail sales. The results are a little
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frightening as they show that the power and influence of social media is much
stronger than many people previously thought!
Source: Harvard Business Review March 2013 Advertising Analytics 2.0
Armed with this information, smart companies are obtaining more bang for the
marketing dollar and can achieve improvements of anywhere between 10 to 30
per cent (sometimes more) in their marketing performance by remixing their
marketing spend towards social media.
To remain ahead of the game it becomes more important than ever for
furniture retailers not to become couch potatoes!
In our view, leading retailers will use customer insights from data analytics to
adapt their business model, merchandise offering and marketing spend to
better engage with their customers and steal an advantage over their
competitors.
Regards
James Stewart
James Stewart
Partner
+61 3 9604 5642
Melinda Gorman
Director
+61 3 9604 5155
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