Reference no: EM132233718
Furnishing Dollars with Online Initiatives
With the early adoption and use of websites, there were certain items that businesspeople and consumers believed were “off limits” for online purchasing. Who would have thought you could have purchased shoes online? Cars? Clothes? How about furniture?
According to an IBISWorld study released in 2012, online furniture sales amounted to $6.3 billion in 2011, a 7.5-percent increase from 2010. With the estimate that 2012 online furniture sales will increase by 9.9 percent. While they predict that the growth will increase to $10.8 billion by 2017, these sales are not just for small items, but all types of furniture. The original thought was that people needed to “touch and feel” furniture in order to complete the sale. However, with the growing number of furniture sales being completed online, that attitude and culture is changing. Here is a tale of three companies that set up their furniture businesses in an online environment.
Gardiners, an 80-year-old company with five stores in the Baltimore area, has leveraged website technology for its business. They launched their online business with help from a website development and Internet consulting firm that specialized in the furniture industry. Their transition into the online environment was planned with the “walk before you run” mindset. They began by selling online only those products that were stocked at their stores. Because their original online system did not directly interface with their in-house systems, they were required to update the online system nightly with accurate product information based on what was sold in their stores each day.
Can social media have a positive influence on furniture sales? La-Z-Boy believed the answer to that question was “Yes.” They used the social media site Pinterest in a recent marketing campaign. Pinterest, a popular social media site, was conceived to create a platform where users can upload images of what they enjoy in their lives in an online “bulletin board” format. In 2012, La-Z-Boy’s Hammary division developed a marketing campaign using Pinterest to increase its consumer and retailer participation, along with its current social media channels (Facebook and Twitter). Consumers participated in a contest by posting images on Pinterest of Hammary’s products that they would like to win. After uploading images to Pinterest, the contestant then “pinned” their submission to Hammary’s Facebook or Twitter account. The contest winner, chosen based on the largest total number of Twitter followers, Pinterest re-pins, and Facebook “likes,” would be given $2,000 worth of furniture. La- Z-Boy is leveraging the success of this campaign to target retailers. Their marketing executive stated, “We’ll use Pinterest to get retailers into the showroom. This interior design community we built definitely helped position us.”
The concept of online shopping carts can be transformed with social media. Carl’s Furniture City in Utica NY has attempted the integration of a shopping cart with Facebook. In one month, they received three sales totaling $2,100 sourced from Facebook. Data like this, compiled by Web4Retail, can provide a measureable, objective payback for retailers to support social media strategies. However, could the use of an online site draw shopping away from stores? Web4Retail executives believe that “retailers that commit to doing business on the Internet are giving their stores more protection against getting shopped than those who don’t.” They believe that customers visit the store to view items which were once created by an online shopping cart. Customers do not have the time to re-visit the store, but then rely on the shopping cart to purchase products at home. Sales personnel at the store can properly log the visit and then gain credit for the online sale, protecting their commission.
Source: Zakrajsek, L., & McGee, K. (2012). Wells Fargo’s New Home Lending Site. Mortgage Banking, 72(9), 88–91.
Thinking About the Case
1. Do you think that the more gradual implementation of online sales implemented by Gardiners is too safe? Is there a benefit to this careful, planned approach? Are there any risks to the delayed updates to Gardiner’s online system?
2. How did the Pinterest campaign using social media increase interest for La-Z-Boy’s retail channel? When the marketing executive discussed the “community we built,” what do you believe he meant?
3. Are retail stores being used by consumers to “touch and feel” products and then purchase them online from other online retailers? Do you believe this practice is widespread? Do you believe that social media and an intelligent strategy can create synergy between a retailer's online and "brick and mortar" channels?