Changing industry

Why e-commerce is a path to long-term success

The past few years have not been easy for the retail trade. In many sectors, a change has taken place that has not always been positive: books, toys, (especially small) electronics, increasingly also fashion and many other product groups are going over the exclusively digital counter more and more often. Customers have become as accustomed to the offer as they have demanded it themselves. Inner cities have therefore changed their face, shop spaces are now empty or are being used differently.

Nov 22 2021

This raises the question of whether this fate also threatens the large furniture stores. I say: yes. Not immediately, but the furniture industry is not immune to change. At the moment we are still in a seemingly comfortable situation where both ways work.

Stationary and online trade can coexist, but the ice is thin and deceptive. Nevertheless, the sales from stationary trade are still huge - there has not yet been a wave of change towards more e-commerce, fortunately we are still ahead of the big online wave.  

But examples from the retail sector should be warning enough: The big department stores that have stuck exclusively to stationary trade for too long no longer exist. I am convinced that furniture e-commerce will gradually take hold. Not because it was the only solution due to the pandemic, but because it offers great advantages for manufacturers (and customers) and the future compared to stationary trade.  

Certainly, the Corona pandemic was a fire accelerator for furniture e-commerce. Retailers and manufacturers and customers alike have seen within a very short time that old beliefs do not have to apply. Would this realisation have occurred even without the external shock of the pandemic? Most certainly. Just later and more gently.

In the meantime, it has become clear to both sides that furniture e-commerce is much more than just an alternative solution. The growth figures also show this: While stationary trade is growing by around 1.5 per cent annually, online trade is recording between ten and 20 per cent growth. These figures clearly show where the previously and in the future untapped purchasing potential lies: certainly not in an additional huge furniture store, but in good and well thought-out web shops. Which brings us to the key point of demand.  

Demand constancy as a success factor 

Long-term success is crucially linked to a constant and sufficiently high demand. Until now, the solution to this challenge seemed to lie in ensuring that agreed quotas were purchased through established organisational structures. However, seasonal fluctuations and inflexible advertising media in print and radio lead to sales peaks - to the detriment of the manufacturers.  

The necessary constancy in demand can be controlled much better online. Advertising brochures and inserts are produced with a long lead time, whereas online advertisements and ads are iterated daily. If it becomes apparent that certain offers are not generating the desired interest, campaigns can quickly provide a remedy.

Performance marketing is also the tool of choice when new furniture products are introduced to the market. MVPs, so-called minimal viable products, can be tested quickly and easily in order to adapt the strategy accordingly. Which target group responds to the product and how? Does it meet sales expectations? Where is more marketing necessary? The data generated by e-commerce is extremely valuable and crucial for success.  

In short, e-commerce's high degree of flexibility offers the adaptability needed to survive and be successful in the long term even without strong sales partnerships. Not to be overlooked, however, is the fact that all the possibilities described above require quite different experience and know-how.

Furniture e-commerce only brings constant demand and high sales potential if all the tools of the digital world are operated correctly. Instead of the usual processes, a high-performance team that takes care of online marketing, a well-functioning enterprise resource planning system (ERP) and a support team that is always available to customers for advice before and after the purchase are now needed in addition to production. If all the cogs mesh, the step from stationary to online trade is a step towards success.  

Contact persons
Portrait of Philip Kehela
Philip Kehela Senior Management
mokebo GmbH
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