Austin, Texas — While ready-to-assemble furniture has seen its distribution channels shrink during the past couple of years, at least one retail outlet is demonstrating strong growth.
The Internet, where most of the original furniture explorers quickly sank their ships, is proving to be more than viable for Eurway, a chain of three Texas stores specializing in take-with contemporary furniture. And the company is preparing to invest in a cross-docking fulfillment facility to handle the growing volume of its Web shipments.
"While our sales are flat at the brick-and-mortar stores, the Web site has generated a 60% increase," said Gary Greeson, vice president of operations. "Furniture is really hard to ship, especially set-up furniture because of its bulkiness and size. But being KD (knock-down), our line has the perfect characteristics for going on an LTL carrier."
The eurway.com site debuted at the end of 2000, just as many of the leading players in the first wave of furniture e-tailing were closing shop. Greeson said Eurway, which was started by his brother, Greg Greeson, conceived its e-commerce Web site as a way to supplement the marketing efforts of its stores in Austin, Dallas and Houston. But the site quickly demonstrated that it could reach a much broader audience.
Despite passive marketing at first, sales doubled in 2001 and tripled in 2002. And now that the company has bought search-engine support, Eurway is on its way to doubling or tripling its Web business again this year. Internet sales volume has surpassed the sales level of one of Eurway's brick-and-mortar stores, and the company now has five staff members processing an average of 60 daily Internet orders.
Instant gratification
Eurway's Web site is designed to mirror the in-store experience, with clear product presentation, straightforward navigation and easy-to-use features. Customers can browse, select pieces and complete orders rapidly.
"It works because of the immediacy," Gary Greeson said. "It's the instant gratification, and it's the exceptional value that we both get out of it."
While out-of-state customers don't pay sales tax, they do pay shipping, which is calculated based on their location and order weight and size. As an example, a $900 workstation would cost about $400 to ship to a home in Atlanta.
However, that doesn't seem to deter folks, Greeson said. "Our biggest areas of the country are the two coasts and then you work your way in from there."
Again, it's the immediate gratification that seems to drive the purchase decision. "A lot of these customers are very knowledgable," he said. "They've seen it at stores already, but maybe it wasn't in stock. If we have it in stock, they'll have it in their home in less than a week coast to coast."
The typical Web consumer is younger and tech-savvy, added Greg Greeson, president and CEO.
Eurway has increased its inventory levels to keep pace with its Web orders, which are handled by all three stores based on which site has the item in stock. The stress this work puts on the stores is the reason that the company intends to set up a fulfillment center, probably in Austin, within the next six months.
Eurway's fastest-moving Web categories are storage pieces and chairs, but the company ships some of every product category that it offers, including, occasionally, leather sofas and sectionals.
"We sell more small items on the Web than larger, bulkier items because of the problems and cost of shipping," Gary Greeson said.
While assembled furniture has enjoyed only sporadic Internet success, Greeson said flat-pack products have good potential because of the price and ease of shipping.
"It's obvious that this type of furniture lends itself to the customer who is not afraid of doing some of the work," he said. And while Eurway's average Internet sale is about $600, that isn't as scary to many consumers as buying an assembled bedroom collection or upholstery group. "The risk is not as great," Greeson said.
And for the retailer, the advantages are considerable, with the major ongoing cost being the price-per-customer fee that search engines charge when they bring a customer to the site. "You've got no sales commission, no rent, and basically your advertising costs are what it takes to get the customer to the site," Greeson said. "We're pleased."
