Expert says many retailers still fear the Internet
By Furniture Today Staff -- Furniture Today, June 2, 2003
This week we take an in-depth look at a basic business tool – the Internet – that may or may not be growing in importance in the home furnishings industry. (You'll need to read on to find the answer to that question and many others.)
We asked one of our virtual friends (and a real friend, too) to share his Internet insights with you. Our Internet expert is Gary Chase, president of FurnitureFan, which directs furniture shoppers to participating dealers and is one of the most-visited Web sites (www.furniturefan.com) in the industry. He's also co-founder and partner of GPS/Sunset Trading, an importer of wood furniture.Here are some questions I recently posed to Chase and his answers to them:Is the Internet here to stay in the home furnishings industry?Yes, as sure as the sun rises in the morning. The real question is how the furniture industry will embrace it. The early adopters include Benchmark, Gallery, American, Raymour and Flanigan, 1-800 Mattress and Crate and Barrel, to name a few. Each of these companies have their own approach and understand the need to take pro-active steps with their business to be on the leading edge. There have been many steps forward and backward, but in the end, these companies are leaders and not just with the Internet. We then have the next generation of adopters such as Rhodes, Rooms to Go, El Dorado, Jordan's, and others who view the Internet as a natural extension of their business. They display a price of furniture on the Internet the same way they sell it in their stores. Wow, what a novel idea! Our research has shown that when the consumers use the Internet to search, the number one thing they are looking for is the price or the price range of the item they are looking at. Manufactures are starting to utilize the Internet as a way to communicate more efficiently with their stores including email campaigns, specials, and invitations for market, rather than for faxing or mailing cards. Some have password-protected areas on their web sites where dealers can log on to check stock status, inventory or download ad slicks. Manufacturers are also realizing they can build brand awareness with the consumer in a cost effective way, while assisting dealers in selling more of their product. So, yes, I would say the Internet is here to stay. The Internet will become increasingly friendly to the furniture industry and we will learn how best to utilize it as a tool to grow our businesses. How prevalent is Internet use among home furnishing manufacturers and retailers today?I would say most retailers and manufacturers, regardless of size, have access to the web today. Frequency of usage and how it is utilized are more of a concern. Often I find myself explaining how the Internet is a tool to better serve manufacturers and dealers. Many times the issues simply fall on whoever is in charge of the Internet and the company's web site becomes a low priority. The Internet is unique as it touches so many departments. Often, this becomes a major obstacle in moving forward. The CEO, president, head of the IT department, and sales and marketing executives are involved in making routine decisions. My suggestion would be to have sales and marketing lead this area because the Internet is a communication tool and a delivery vehicle for sales and marketing strategies.Retailers, for the most part, are afraid of it. Most storeowners don't check email regularly. They feel if they build a web site and display too much information, the consumer will not physically visit the store or the competition will eat them alive because they know their pricing. All of these points are valid, but consumers are going to the Internet anyways. So the question you have to ask yourself is, Do I want to be where the consumer is? We are all in the service industry. Your website should be viewed as an extension of your business, just like a business card. Five years from now if you don't have a good informative web site you probably will not be in business.How fast is the move toward the Internet in our industry accelerating?Painfully slow. If we embraced the Internet, like UPS or FedEx, where would we be today? MUCH further ahead in our mission to reduce costs and aid brand awareness both with the trade and the consumer. We have to begin somewhere. Let's inform Mrs. Jones of how much the furniture costs, what the features and benefits are and where she can purchase it. We have to understand today's consumer is younger, richer and smarter. She will surf the Internet to research her purchase. Again, do we want to be where the consumer is?Did the companies who were early adopters to the Internet gain a significant competitive advantage in the marketplace? Raymour and Flanigan, Benchmark, Gallery, FurnitureFan and FurnitureFind all have a very strong web presence. They have all been building a significant infrastructure to make the web part of their business to save money and capture more customers. The same is true for Hooker, Stanley, Sunset Trading and Thomasville. Are they more profitable because of the Internet? As most of these companies will attest, building a web site is the easy part. Catalog management, traffic generation, keeping the site relevant and up-to-date, capturing consumer information, and incorporating the web site into your business are more difficult issues. Can all manufacturers and retailers benefit by utilizing the Internet in their businesses? Just like the fax helped us 15 or 20 years ago, the same holds true with the Internet and email. Manufacturers will utilize the Internet as a communication tool with their dealers, catalogue management, email marketing, etc. Retailers will use the Internet as an extension of their business. Five years from now how will our industry utilize the Internet? Look at how FedEx, UPS, Amazon, Orbitz and Ebay use the Internet. I believe we will take the best from each company and apply it to our business.What is the greatest myth about the Internet? Originally it was perceived that the Internet would supersede the brick and mortar. It isn't going to happen in the furniture industry. Sure there will be some furniture sold over the Internet, but also through warehouses clubs, catalogs, and dozens of other distribution areas including furniture and bedding stores. The Internet is only one means of distribution.What is one Internet truth that all manufacturers and retailers should keep in mind? Your consumer is there! Are you? The Internet is a tool, offering lots of new and exciting ways to conduct business more cost effectively. My thanks to Gary for sharing his thoughts on the Internet and its role in our industry.I think he's made some excellent points. What do you think?
