Five Mistakes Furniture Retailers Make Online

When it comes to e-commerce, most furniture retailers have already taken the plunge. But how many have simply rushed in without a thoughtful strategy? Category leaders and experts name five mistakes to avoid.

Mistake #1: Viewing the Internet as enemy rather than ally
An online presence "is not an option. Retailers must have a strong web presence or they will become extinct within the next five to ten years," warned Leslie Carothers, owner of The Kaleidoscope Partnership.

According to Carothers, it's easy to understand why smaller independent furniture stores may resist entering the World Wide Web. They may be unaware of the marketing opportunities presented by the Internet. In any case, they are busy. Very busy. Running a successful small business consumes every bit of time, energy and attention.

But consumer-buying patterns are changing. "Retailers have to realize that they have to allocate their advertising dollars to the Internet rather than to traditional advertising," Carothers said. She noted that with the advent of TiVo, consumers are no longer watching television advertisements. Rather, they are getting shelter magazines, tearing out pages of the rooms and items that appeal to them, going online to gather information about those products, and then visiting brick and mortar stores.

A 2005 study by Dieringer Research Group sketched the details of these new shopping patterns. The numbers are stunning: in the fourth quarter of 2004, 11.7 million shoppers sought information on the web before purchasing furniture at a local store. This Web2Store Benchmark Survey found that more than 80 percent of consumers who researched their furniture purchases online went to retailers' web sites first. Seventy-five percent of shoppers who did online research about furniture made a local shopping trip within the following week.

Mistake #2: Underestimating costs
How much does it cost to create and maintain a website for a brick and mortar store? "A lot more than you think," said Gabe Leblanc of Futon Planet. Futon Planet has two stores in the Orlando market and has been online since 2002 when they presented product images and store directions to customers. In August 2005, they added pricing information, which prompted telephone calls from all around Florida. Don't be fooled, however.

Running an online business requires more time, money and energy than most brick and mortar retailers realize. Leblanc urges his fellow furniture retailers to "be aware that there is a lot to it." He particularly notes the money required to offer a toll free number and the time required to answer e-mails. Here's a typical e-mail of the type that floods his inbox every day: "My sister gave me a black metal futon, and I don't have the assembly instructions. How do I put it together?" Leblanc answers each of these emails himself-a time-consuming endeavor.

(On futonlife.com, we offer animated futon assembly instructions HERE)

Mistake #3: Not aligning online and offline
Retailers in the furniture industry are "finally waking up to the fact that they do need a website, but very few have a good website. It's disappointing," said Andy Bernstein, founder of FurnitureDealer.net, which provides managed Internet solutions for furniture retailers.

According to Bernstein, a common mistake retailers make on the Internet is that they too often hire a website designer who doesn't understand the furniture industry or their particular store and its branding. Creating an online presence is more complicated than uploading images and building links.

Many retailers neglect to ensure that their online presence is consistent with their offline presence. The connection between the store and its website needs to be consistent from a branding perspective. This is achieved through images, colors, fonts, visual presentation and sometimes even background music that matches the feel and message of the brick and mortar store.

Industry experts cite Crate & Barrel as the model for this seamless branding between online, catalog and Internet stores. By design, the mood and shopping experience is the same whether a customer is clicking on Crate & Barrel's web pages, flipping through their catalog or walking through their store. "If you go onto the web site and see the color story and the seasonal theme, you'll see the same story in their windows if you walk past one of the stores," said Jim Okamura, a retail consultant.

Mistake #4: Focusing too much on sales
Furniture e-retailers are finding that the margins on online sales are “small,” “slim,” and “not as good as my brick and mortar store.” They are finding that there is “not a killing to be made” on e-commerce. Industry consultant Carrie Johnson, vice president of Forrester Research, said that many businesses are rethinking their online strategies. “Many believe they became too focused on sales.”

Similarly, many have also come to question the wisdom and effectiveness of posting prices online. Bernstein believes that once retailers post prices on their websites, “your customers have the ability to use that against you. They bring your prices to your competitor and ask that he beat it. This drives the margins out of the industry.”

Instead of battling it out online on the basis of price, retailers do best when they look at their web sites primarily as an effective way to drive in-store traffic. Unlike traditional advertising, which tries to find customers, the Internet is full of customers who are already looking for certain products. A website is most effective when it is used as a marketing tool, as a net to scoop up customers already looking for you.

Retailers should look at their websites as a way to increase their engagement with their customers rather than as a means to drive sales. Through blogs, e-mail and even instant messenger, websites are opening up instantaneous dialogue between retailers and customers. “It’s like a roundtable discussion with your best customers,” Carothers said.

Mistake #5: Imitating the online strategies of other categories
Internet pioneers like eBay and Amazon have revolutionized the way consumers purchase items like electronics and books. In an eager attempt to get in on the rush, furniture retailers have copied their strategies to get in on a share of the gold. But they are finding that consumers shop for furniture in a way that is very different from the way they shop for other types of products. And they are finding that what works for other categories doesn't work for furniture e-retailing. From a customer perspective, furniture buying is an information-intense process. Shopping for furniture is not something people do very frequently, and they need to be educated on the differences between, say, a $300 sofa and a $3,000 sofa. Furniture is also a style statement for consumers. They want to do the research properly.

When the Dieringer survey compared the Internet shopping habits of furniture shoppers with those in other categories, a distinct difference appeared. While shoppers in all categories research products online, furniture researchers spend more time on their research, going online almost 50 percent more often than shoppers in other categories. Unlike shoppers in other online categories, online furniture shoppers are not looking primarily to buy but rather to gather the information they need to make offline purchases. They visit retailers' websites not primarily to click items into their shopping carts but mostly to see what is available, to solve specific furniture needs, and to find ideas and inspiration. The more retailers understand the specific behavior of furniture consumers, the better their websites will connect with shoppers.

In the futon category, www.futonlife.com is a popular site for consumers doing product research. Futonlife.com gets over 30,000 unique visits each month, most of those from consumers exploring in-depth product and category information. When consumers type the word "futon" into the top three search engines (Google, Yahoo and AOL), futonlife.com always comes up in the top five search results. Retailers can partner with industry resources like this through advertising to drive these interested consumers to their e-commerce sites.

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