by As e-commerce players continue to enter the furniture realm, brick-and-mortar stores have an opportunity to up their game
It’s a good thing that the home furnishings sector is remarkably resilient. In recent years, the retail landscape has undergone wholesale transformation with the rise of online shopping platforms, Covid, the country’s changing demographics, wars, recessions and inflation.
While each of these drivers has — and continues to play — a significant role in altering the playing field, I want to recap the impact that e-commerce continues to have on brick-and-mortar furniture retailers.
While the advent of online retailing has benefited consumers with convenience and often lower prices, it has posed substantial challenges to traditional brick-and-mortar retailers, especially in industries like ours.
Here are a few of the reasons why:
Competitive Pricing and Cost Advantage
Online retailers often have distinct advantages over their brick-and-mortar counterparts, primarily in terms of pricing. By operating predominantly online, these companies can avoid the high overhead costs associated with physical stores, such as rent, utilities and in-store staffing. This cost advantage allows online retailers to offer competitive prices that may undercut those of traditional stores, appealing to budget-conscious consumers seeking affordable options.
Convenience and Accessibility
The convenience of online shopping simply can’t be denied. Customers can browse through “endless aisles” of furniture options from the comfort of their homes, compare prices effortlessly and read reviews from other buyers. This accessibility is particularly appealing to consumers who may be best described as having more money than time.
Expanded Product Selection
Online retailers can often offer a much larger inventory compared to brick-and-mortar stores, simply because of their virtual nature and the ability to partner with multiple suppliers and manufacturers without the constraints of physical storage space. This extensive product selection allows online platforms to cater to diverse tastes and styles, offering something for everyone, from minimalist designs to luxury items.
Changing Consumer Preferences
Consumer behavior is evolving, with a growing number of shoppers preferring the convenience of online shopping. Factors such as faster delivery options, easy return policies and 24/7 accessibility contribute to the appeal of online retailers. As a result, brick-and-mortar furniture stores with no online play may struggle to adapt to these shifting preferences and maintain their customer base.
Impact on Local Economies
While we don’t talk about this often, the proliferation of online furniture retailers can also have broader economic implications at the local level. Brick-and-mortar stores contribute to the local economy by employing residents, paying taxes and often supporting community initiatives. The decline of these stores because of competition from online retailers could lead to job losses and reduced economic activity in local communities.
Clearly, the home furnishings segment has proven to be highly lucrative to scores of online retailers including Amazon, Wayfair, Burrow, Bed Bath & Beyond (formerly Overstock) and a host of others.
Based on something I stumbled upon last week, there still seems to be new online players looking to pile on to the fray.
The latest name to throw a hat into our ring, at least in terms of selling online, is a large China-based retailer called Temu.
Until recently, they had sold just about everything but furniture. But a quick click on this link confirms they are now in the furniture game and in it in a big way selling furniture at low, low prices.
What really got my attention is that Temu apparently has local warehouses in the States, allowing shoppers to buy and receive a large piece of furniture in six days.
Spend a few minutes on the site, look at how much furniture they are offering. Look at the prices being offered. Look at the delivery window they promise.
Then, if I were a brick-and-mortar furniture retailer, I might take a good look in the mirror and determine what impact a company like Temu might have on my business.
I will close with the thought I started with. We are a remarkably resilient sector. But we aren’t bullet proof. If you plan to hit the target, or not have a target on your back, you need to always keep your eye on new competition.
But even more crucial, never take your eye off your customer or how, when, where and why he or she shops where they do.
