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E-commerce, new online technologies reshaping the home furnishings landscape

New technologies and an increasing comfort level with the Internet are proving to be game-changers in the home furnishings industry. In this month's Business Update, two leaders from the e-commerce side of the business share their thoughts on the changing retail landscape, and a technology expert talks about some of the most effective new tools for maximizing online business.


The E-Commerce Landscape

NIRAJ SHAH, CEO and co-founder of Wayfair (formerly CSN Stores), the second-largest online home goods retailer


How is e-commerce is changing the landscape at the retail and wholesale levels?

There's no doubt that e-commerce is taking a larger slice of the overall retail pie each year. However, there is much more growth ahead of us in the home goods arena. At this point, less than 7% of the overall $500 billion U.S. home goods market comes from online purchases.
However, over the past few years, e-commerce has been growing at a faster rate than traditional retail, and many traditional retailers have not only struggled, but several have closed their doors. In May of this year, Internet Retailer noted that, on average, e-commerce is up by 14.8% compared to 2010. Some of us have seen even more significant growth.
The reasons are many, but revolve around convenience and the vast selection an online retailer can offer. At, we have the largest catalog of home goods online - anywhere - with more than 4.5 million items, representing all styles and price points. And I think, given the economy, people tend to be spending more time on their computers, working longer hours, and it's just easier to do more of their shopping online.


How are you helping consumers overcome fear of buying home goods online?

I think time helps folks get comfortable with anything new. We have a core base now of millions of customers and that keeps growing, so I would argue that it is safe to say that many people who once feared buying home products online are now very comfortable with the experience. And, of course, that's great news for online retailers.
A lot of the reason why is the hard work over the nine years we've been in business. We spend a lot of effort constantly upgrading our technology and working out better processes and methods for everything in the business.
We also focus on great customer service - we think it plays a huge role in fostering consumer comfort. If you have a great customer service team, and consumers know they have somewhere to turn if there's an issue with their order, they'll be more likely to make it. And if there is something that needs to be addressed, and it's handled quickly and professionally, they will be back again. Advances in Internet security over the years certainly have helped, as well.


How do your vendors or vendor prospects handle the issue of e-commerce sales, while trying to protect their brick-and-mortar customers at the same time?

That is really a question for each brand, supplier and manufacturer. Some were slow to bring their products online, fearing negative reactions from their brick-and-mortar merchants. That was especially true among several high-end modern brands. But as brands saw competitors enter the online marketplace and do well, they would follow suit and try it out. In many cases, they saw that their goods did attract an online audience and they continued selling both online and offline.
While more people are selling online now than ever - and more consumers are buying items online - the brick-and-mortar retailers still do have an advantage at least in the home accents and furniture businesses. Fewer than 5% of visitors to online accents and furniture retailers actually make a purchase online, often opting to research products on our sites or others and then make purchases at their local brick-and-mortar store. So, for now, there's comfort in that statistic for the brick-and-mortar retailers.
Because of that phenomenon, we've created the Get It Near Me program, which sells online advertising on to local accents and furniture retailers, encouraging visitors on our site from the advertiser's local area to purchase the item locally at the advertiser's brick-and-mortar store, if that's what they prefer. 

Is the perception of e-commerce changing for them?

Our total number of products over just the past few years has increased from less than 1 million to 3 million last year and now 4.5 million and counting this year, from 5,000 brands. Fortunately for us, many suppliers and manufacturers have embraced the online marketplace at this point, and more are joining every day. They're seeing online retail as one of the fastest-growing sales channels for their products, and in this economy, that's especially valuable to them.

What advice do you have for B&M retailers who are interested in e-commerce - or for ones that feel very threatened by e-commerce?

E-commerce is a challenging business and looks much easier than it is, in reality. It involves a great deal of technological know-how and the ability to tackle countless logistics. If someone from a brick-and-mortar retailer is reading this article and wants to explore e-commerce, he or she should hire or partner with people who have successfully launched and maintained e-commerce sites in similar industries. I would also recommend that they review the competitive landscape to assess current opportunities.


ANDREW FREEDMAN of, an online "flash-sale" site for the home furnishings businesss

Tell us about Froogal - what it is and how it works?

Clearly, flash-sale sites are redefining Internet shopping. Just as Marshalls and TJ Maxx changed the retail landscape many years ago, flash-sale sites are doing the same to the internet and this niche is here to stay. Not only because the economy has forced many consumers to look for bargains, but because flash sales are entertaining. Froogal partners with vendors to bring product directly to consumers at a compelling value for a short timeframe. This helps to introduce the brand to the consumer, provide market insight to the vendor, as well as enable the vendor to move potential excess inventory. Products are drop-shipped directly to the consumer in a matter of days.

How is e-commerce changing the landscape at the retail and wholesale levels? Discuss some of the new tools that are helping ecommerce grow at such a fast rate.

Traditional retail stores will be extinct within 10 years; stores either need to be entertaining or educational to an extent beyond which a website can accomplish in order to exist. Wholesalers need to have the ability to ship everything directly to consumers in order to exist. This is dis-intermediation, and while the writing has been on the wall ever since the first Internet bubble in 2001, the world can only change as fast as we are ready to change our actual habits. However, change in this direction is inevitable.
On the one hand, e-commerce is dragged down by the glut of offerings available, which increases the complexity. However, e-commerce will see a lift due to the entertainment and simplicity of the flash-sale model. Flash-sale sites in essence shop the marketplace to find and negotiate the best deals on behalf of consumers so that they won't have to. The sharp increase in smart phones and tablet devices also means that shopping is never far from your fingertips. Smart phones also deliver tempting deals right into your purse or pocket, an attribute that was not possible just a few years ago.

How are you helping consumers overcome fear of buying home goods online?

There is an unwritten standard that Internet retailers have come to adopt, and most online consumers have come to expect a certain level of service in this respect. Some might consider this level of service as common sense or just being a good merchant. No retailer wants to lose customers, and on the Internet, where you are one keystroke away from your customer going to your competitor - more so than in B&M - I think that your service levels must be higher than average. Through experience and the market leadership of consumer-centric companies such as Zappos or Amazon, I think that most consumers now treat buying product online or in stores to be the same thing.

What advice do you have for B&M retailers who are interested in e-commerce - or for ones that feel very threatened by ecommerce?

B&M stores can participate in Frooogal as long as they are willing to provide photography and descriptions for their products. We are vendor-friendly and will work with every vendor to ensure that every sale will add to their bottom line. Just as wholesalers are using this new sales channel, retailers should be able to do the same.


Technological Tools for the Industry

PENNY SCHNECK, online manager for Sandow Media's Furniture Today Media Group, parent to Home Accents Today.


What are some of the most effective tools online right now?

Video. E-commerce video has grown in the past year, with 73% of U.S. retail sites now using video according to eMarketer. Still, video remains relative underutilized in our industry with only a handful of videos on some sites and many of these videos hidden deep in the website.
There are a lot of good reasons to feature product videos on your website as well as the multitude of social media sites now available. First, video is interactive. It will keep customers on your site longer; lower the number of abandoned shopping carts; reduce return rates; generate higher sales; and enhance the customer's experience of your brand. Video is more personal and can help build trust with your customers. It also can bring your product and brand to life in ways unattainable through text and photographs. You can use video to showcase new products; demonstrate special features; instruct customers on how to use or put a product together; bring testimonials to life; and bring new life to the traditional "lifestyle" product images.


LinkedIn. Many of us have a LinkedIn profile, but just aren't sure if we are accomplishing anything with it. So whether you have a personal LinkedIn page or you are an advocate for a company profile, here are some smart ways to use this network to actually help with business development.
Gone are the days where persistent cold calling would pay off. People often screen their calls before picking up and generally view cold calls as an annoyance in their busy schedule. From a sales rep perspective, you can scope out your prospect to learn where he/she worked before and with whom. If you have a contact in common, this is a great way to get a referral without being intrusive. You might even find that someone in your own company has a direct link to a prospect. An introduction via LinkedIn is much warmer than a cold call because it comes with an element of trust from the person making the introduction. Even if you can't find a connection (preferable only one connection away), a request on LinkedIn has a better chance of getting your prospect's attention because it comes in the business context of the network.
Think of LinkedIn as a rolodex that never gets outdated because you can keep in touch with your contacts even after they change jobs. Keep growing your LinkedIn network because the larger your network, the better your ability to find someone in your network who can connect you directly with a new person with whom you want to do business.
It is also a good idea to join a few professional groups on LinkedIn. Don't sell on these groups. Instead, respond thoughtfully to questions that are posted. This is a great way to better understand your customers' needs and then develop new products or new sales presentations that speak to those needs. The Home Furnishings Professionals Group has nearly 8,400 members.


Email marketing. Email marketing continues to be the mainstay of most online marketing programs. It's easy, fast and inexpensive to send out an email to your customers and the metrics on open and click through rates make the tactic very quantifiable.
I really do encourage everyone to do a careful analysis of the many email marketing tools available to determine what service is best for your specific organization. Competition among email marketing services is fierce not only on price, but also on features and functionality. Your decision should not be based on price alone. I recommend doing a weighted scorecard analysis before making a decision. A weighted scorecard takes some of the emotional factor out of choosing an application and helps you focus on the issues that really matter the most to you and your company.

For much more on all of these topics and other online tools and technologies, visit Schneck's blog - What Works Online.


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