Are Online Stores a Threat to Your Cover Sales?

“Profits from covers pay my rent each month,” futon retailers often remark. Indeed, covers are a lucrative part of a futon retail businesses. They outshine frames and mattresses with their generous margins. They are also appealing because special order covers can be made available to customers without having to invest in considerable inventory. Retailers are uncomfortable with the thought of losing a share of their bread and butter to competition from online stores.

Like it or not, online businesses have started to appear on the worldwide web over the last decade, making it possible for customers to purchase bargain covers for twenty five dollars as well as top grade leather covers for almost three hundred dollars. At over dozens of websites and with a click of a mouse, futon customers can view hundreds of patterns and colors, order any size cover, all sizes of pillows and bolsters, as well as fabric by the yard. With orders delivered to their doorstep, nothing could be more convenient.

Ad banners for online stores boast of deep discounts on futon covers: “Save up to fifty percent”, “Low prices!” “Big discounts!”. Because they are able to sell to customers around the corner and around the world, the potential for doing a large volume of business and for economies of scale are tremendous. Online merchants are also free from many of the overhead expenses incurred by brick and mortar stores. Once their web site is established, these merchants e-mail orders to cover manufacturers, who in turn take care of order fulfillment and drop ship orders. It’s no wonder they can offer customers discounts on hundreds of futon covers over the internet.

Too good to be true?

Cover manufacturers report to Futon Life, however, that internet futon cover sales are having little impact on the cover market as a whole. Most report that less than five percent of their sales are to purely online businesses. Manufacturers also report, however, that online cover sales are a growing segment of the market. MaryLou Rath of CottonBelle has noticed that an increasing number of traditional stores are going online in an attempt to broaden their sales.

Should retailers be anxious about their cover profits up and leaving, hitching a ride on the internet? Most manufacturers believe retailer concern is unfounded because “we live in a touchie-feelie world,” quips Marcia Nachriener, General Manager at Omni Softgoods. The fabrics that make up today’s futon covers are meant to be touched and felt. This is especially true given the superior hand of so many of today’s most popular styles. Whether it’s microfiber, faux suede or chenille, today’s fabrics are appreciated most when they are touched. This is impossible to experience through a visit to an internet store.

The visual aspect of futon covers fabrics is another feature also gets lost when merchants go online. Computer monitors are not able to reliably and accurately represent the fabric’s colors. Colors are not true and it can be difficult to choose the right color. Subtle visual textures can also be poorly represented on a computer screen. Small online swatches often fail to show the entire repeat of a fabric, making it difficult to envision what it would look like on an entire futon sofa.

Checking out the Competition

Futon Life’s survey of web sites selling futon covers revealed that the savings offered by online merchants, their biggest selling point, were not substantial. We selected a Group C lodge look full-size cover and comparison shopped on the web and at our neighborhood stores. We found prices ranging from $135 to $175 at online stores, including delivery charges. The same cover was available for $160 at our local stores.

But there is more to consider, however. Many online merchants recommend customers first order swatches so they are able to see the actual quality, color, and pattern of a fabric they are interested in. Most sell swatches for about five dollars apiece, a small price to pay for a little insurance of a satisfactory purchase. If the cover turns out to be unsatisfactory, however, he is out the cost of return postage plus a restocking fee, typically fifteen percent. In the case of our northwoods cover, that fee would be twenty-four dollars.

It is possible that, in many cases, the online store does not offer a clear bargain on futon covers. Additional costs come into consideration. What initially appeared as a twenty-five dollar savings for the online purchase could easily evaporate should he want to look at a few swatches before ordering or if he is unhappy with his choice and wants to return the cover.

Edward Nazginov of Platinum Covers and Accessories doesn’t think internet cover sales will take off. “People aren’t willing to go through the work of finding (a cover) online to save ten or twenty dollars. I know I wouldn’t!”

What is it good for?

“The internet is here, and it’s not going away,” reminds Mark Binkhorst of Burlington Futon. In what direction and to what extent it will impact futon cover sales, however, is yet to be seen.

At this point, however, there are already sections of the futon cover market that can be well-served by online stores. For customers shopping solely on the basis of price point, the cheapest covers around can probably be found on the internet. Our survey found a site with a bargain cover in fourteen colors for twenty-six dollars.

And that includes free shipping and is sales tax-free!

The internet market is also well-positioned to service demand for add-on sales. If a customer has a futon cover and would like to purchase a pair of pillows or extra fabric for draperies in the same fabric, ordering online and having the merchandise shipped directly to their home is very convenient. One web site surveyed had a pleasant feature which allowed customers to search their site using a fabric’s name, a feature which would be very useful for add-on sales.

Brick and Mortar: tried and true

While online stores can service these portions of the futon cover market well, there are other portions which internet stores are not yet able to support. Futon covers, by their very nature, are meant to be touched, draped, felt and examined and sat upon. This quality makes them particularly unsuitable for sale over the internet.

Furthermore, customer service, quality and value continue to be foremost motivators for customers in today’s economy. Nesting, a desire to create a home environment that speaks of comfort and stability, is a prevailing attitude in our country and is causing the home furnishings industry to be more service oriented than ever. Brick and mortar stores excel at providing the person-to-person face time required for high quality customer service.

No doubt, however, technology will continue to improve. Advances may enable online stores to better represent futon covers on a computer monitor and internet merchants may develop strategies for improved customer service. Online stores present both a present and future challenge to traditional retailers. It’s true: the internet is here and it’s not going away.

FL

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