Buchanan, Mich. — How long will it be before a dot-com is on Furniture/ Today's list of Top 100 furniture stores?
If FurnitureFind.com's plans come to fruition, the answer is: In another year or two, at least if the notion of a store is stretched to include online vendors. The e-commerce retailer had sales of more than $15 million last year, and expects to double that figure this year. The cutoff for last year's Top 100 was just under $50 million.
More broadly, the future of e-commerce furniture retailing looks bright. As Stephen Antisdel, chairman of FurnitureFind.com, sees it, selling furniture on the Net nowadays is much like catalog retailing. That limits potential sales and market penetration, but those limits aren't likely to last.
The next generation of consumers, what demographers like to call Generation Y or the echo boomers, does not view computers the way Generation X or the baby boomers do. They take for granted such online activities as chat rooms, instant messaging and smart-text software. They have personal digital assistants, pagers and cell phones, and do wireless computing.
And Gen Y-ers are next in line to drive sales of furniture.
"For the next generation, for which catalogs aren't the analogy or the psychology, for which online shopping, buying and living are normal, I don't know what the limits are," said Antisdel.
A small slice of a big pie is ... big
"Can we be a $100 million or $200 million business when the pie is as big as it is?" asked Dale Lauwagie, FurnitureFind's new chief financial officer. "Even at $500 million, it's still a small slice. Can we serve that niche competently and become a Top 50 furniture retailer? Of course we can."
Lauwagie came aboard in October on the advice of FurnitureFind.com's venture capital partner, Austin, Texas-based HQ Venture. After investing more than $1 million in the Internet company last July, HQ advised Antisdel to hire a CFO who has been with a high-growth company and who knows acquisitions and the public markets.
A veteran of companies such as Burlington Northern, KPMG and a startup, Lauwagie quickly has made an impact. By April, FurnitureFind.com will have audited financial statements. In November, he engineered the merger of the Bookouts store with FurnitureFind.com and closed an outlet store in Niles, Mich., and a branch store in nearby Buchanan, all to control costs.
"We're going to start running some print advertising in key metropolitan markets this year, and we've hired a government specialist to start up that business," Lauwagie said. "This is low-hanging fruit."
Lauwagie, who still lives in the Minneapolis-St. Paul area, said he was attracted to FurnitureFind.com by its tremendous growth potential, among other things. "When you have doubling business in a fast-growing segment in which you already have a large share, that's a good business model," he said.
E-commerce in general appears to have a promising future, although nothing like what was believed during the hype of three years ago. According to the U.S. Census Bureau, e-commerce spending during 2002's holiday period jumped 24% year-over-year to $13.7 billion. Yet e-commerce still makes up less than 2% of all retail spending.
"The figures don't account for the fact that consumers, especially those in our niche, are using the Web to research their purchases," Lauwagie said. "Furniture is a category that is researched heavily on the Net, and our mission is to make that easier for (consumers) to do."
The pattern in e-commerce favors retailers like FurnitureFind.com, BeHome.com and Frontera.com, since all allow consumers to purchase either online or in a brick-and-mortar store, and also to shop in either environment. As broadband access expands, this online-real world connection will become more important.
"We are very excited about the future, and excited that six years of the learning curve is already behind us," Antisdel said.
