Furniture.com adds new products as Blueport
By Brian Carroll -- Furniture Today, March 9, 2009
WALTHAM, Mass. — After a decade specializing in home furnishings, Furniture.com is expanding into other markets, including building materials, tools, appliances, electronics and apparel.
To facilitate this expansion, the company is re-organizing as a new corporate entity, Blueport Commerce, while retaining the Furniture.com URL and division dedicated to home furnishings.
Signaling the expansion, Blueport Commerce's first client is Flooring America, a national chain of 600 stores with a combined $1.3 billion in sales. As a national chain with independently owned franchises, Flooring America is a model of the kind of client Blueport will be targeting, said Carl Prindle, CEO of Blueport and the long-time chief executive of Furniture.com.
“We will be announcing our entry into some surprising segments in the next few months,” Prindle said, segments in which retailers have “complex product lines, products they have difficulty conveying online.”
Blueport Commerce's goal is to double its business this calendar year. Furniture.com's e-commerce platform facilitates online sales for six national chains combining for $4 billion in sales. Blueport seeks to double that figure, or to represent $8 billion in retail sales among its clients.
Leveraging the experience gained in the 10 years operating Furniture.com, the company's management team is targeting what it calls “considered markets,” or non-commodity markets in which retailers require sophisticated e-commerce solutions for complex product categories.
“We really think that the bulk of growth in e-commerce will be in these markets,” said Prindle, who just celebrated his 10-year anniversary with Furniture.com. The company was acquired out of bankruptcy in 2001 by Furniture.com management, including Prindle, joined by Resurgence Asset Management, owners also of Levitz, and Prentice Capital Management.
Furniture.com's customers include The RoomPlace, Room Store, Leon's Furniture in Canada, Lighting One and ProSource, a wholesale building materials business. The company also operates FurnitureFind.com, which it acquired in December 2007.
An analyst with Forrester Research said he sees Blueport's move into other categories as timely.
“The silver lining in the cloud of the global recession is that Web businesses are certain to fare better than their offline counterparts as consumers continue to shift their daily activities online,” said Sucharita Mulpuru, an e-commerce analyst. “With considered purchases, where shoppers research products first, more than half of consumers begin their research process online and are more likely to ultimately purchase products through the online channel.”
Considered markets like home furnishings, tools, appliances, apparel and electronics are projected to be the largest and fastest-growing segments of e-commerce in the next five years, according to Forrester, outpacing commodity categories like books, music and toys.
The expansion does not mean a de-emphasis of home furnishings, however, Prindle said. Furniture.com will remain an online destination for consumers shopping for home furnishings, but as a portal powered by Blueport Commerce.
“Furniture remains an incredibly important category for us, and the Furniture.com Web site will continue,” he said. “It is a powerful URL. But it is time for the company to grow beyond” furniture.
A new Blueport Commerce Web site, Blueport.com, has launched to showcase the company's service and technology structure.
As Furniture.com did, Blueport will generate its revenue by taking a percentage of the transactions facilitated by its e-commerce platform. The company does not charge development costs to retailers up front, but for this reason typically seeks a mid- to long-term commitment from the retailer. Five-year service agreements are common, Prindle said.
“And anything that happens in the (brick-and-mortar) stores is free,” Prindle said. “We take a share only of online sales.”
It is common for brick-and-mortar chains with an e-commerce site online to generate about 95% of their sales in the physical stores and approximately 5% of sales online.
To get the word out, Blueport Commerce will rely on word-of-mouth, on some online advertising, and on its new sales team, a first for the company.
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