• Clint Engel

Panel discusses growth of furniture e-commerce

Carl PrindleCarl Prindle, left, Blueport Commerce; Lenny Kharitonov, Unlimited Furniture Group; Kecia Hielscher, Hautelook.com, and Mike O’Hanlon, Wayfair.com, discuss the burgeoning e-commerce channel and the trend towards a blended bricks-and-clicks strategy.
NAPLES, Fla. - The $2.4 billion in furniture sales that e-commerce websites rang up in 2011 is expected to double to $4.8 billion in 2016, Carl Prindle told attendees for Furniture/Today's Leadership Conference here, and that's just a baby step.
     Furniture e-commerce is in its infancy, said Prindle, president and CEO of Blueport Commerce, which offers furniture-specific ecommerce technology platforms to brick-and-mortar retailers and also hosts a shopping website, the relaunched Furniture.com, for retailers. He believes 10% of all furniture sales eventually will be transacted online.
     But to get there, it's going to take the kind of "wow experience" provided by e-commerce player Zappos.com in shoes and Amazon.com in other product categories. And in furniture, the companies best positioned to deliver that wow are brick-and-mortar furniture stores, he said.
     Prindle was part of a Mastering the Channel panel that also included e-commerce leaders Mike O'Hanlon of Wayfair.com, Kecia Hielscher of Hautelook.com and Lenny Kharitonov of Unlimited Furniture Group. In their presentations, the panelists touched on a wide range of issues from ideas on earning loyalty, to appealing to the Millennial generation to fears and lessons from e-commerce giant Amazon.com.
     For Kharitonov, president and co-founder on Unlimited Furniture Group, with one physical store in New York and a large online presence, it's the convenience of online furniture shopping that's making it appealing to a growing swath of consumers.
     "More and more people feel comfortable" with it, he said. "The new generation of consumers doesn't go to stores."
     He added that time constraints, combined with the ability to buy any time they want online and from a vast selection, are winning consumers over to online shopping.
     The latter point about selection was seconded by O'Hanlon, vice president of corporate and business development at Way fair, which features more than seven million items and expects to do more than $900 million online this year at its flagship Wayfair.com site, the fast growing Joss & Main flash sale site and its All Modern and Dwell Studio sites.
     O'Hanlon said it's more difficult to develop loyalty online vs. in-store because of consumer trepidation over how the process will go, but "you get big points whenever everything goes well," he said.
     Asked about what it takes to appeal to the Millennial generation, Hielscher of Hautelook.com said there are a few ways to do this, starting with the most obvious - pricing. The Haute look flash sale model is known for featuring premium fashion and lifestyle brands at up to 75% off retail, she said - in furniture as well as apparel and accessories and other categories the website features.
     Haute look was founded in 2007 and was acquired four years later by Nordstrom. It launched the home category in 2009, and has more than 15 million subscribers, or what Hielscher calls "style enthusiasts."
     The company targets Millennial generation consumers, ages 24 to 45. This consumer is educated, Hielscher said. She's also affluent and lives in major metro areas. "She's really trend meets timeless. That's who we go after."
     That young consumer is Internet- savvy, too, completing more and more of her shopping and buying via mobile device, and she wants unique items - another key to attracting Millennials. Along with this, Haute look focuses on eco-friendly and made-in-the-U.S. product, as both resonate with young consumers, she said.
     Panelists offered varying takes on the e-commerce world's 800-pound gorilla, Amazon.com, and how it has affected their businesses.
     In one sense, it has been great to have a competitor like Amazon, O'Hanlon said, noting that it's "the bellwether on how to do things well." Amazon, he said, has been a key player in pushing consumer down the e-commerce path and getting them comfortable with it.
     On the other hand, O'Hanlon said Amazon is a "fierce competitor" and has "influenced pricing in a negative way," making life difficult for companies such as Way fair, which respects and encourages suppliers' minimum advertised pricing policies.
     Blueport's Prindle got a laugh when he said Amazon is a "massive company with unlimited resources and no apparent need to make a profit, so they're terrifying."
     But at the same time, he said the giant competitor has set the bar for all companies in the e-commerce space in terms of showing how easy and seamless shopping and doing business online can be. The goal, he said, is to bring furniture up to that level. "They are the standard."
     O'Hanlon added that there are a few things most furniture retailers can do better than Amazon, including offering "new, different and exciting products."
     Amazon is "very good at helping you find (something), not great at helping you discover things and fall in love with something," he said.
     "Everyone in this room has a massive leg up in that regard."

Clint EngelClint Engel | Senior Retail Editor, Furniture Today

Please feel free to email or call me with all of your retail news and tips, including expansion news, successful merchandising and marketing strategies and anything else you would like to see covered by Furniture/Today.  Contact me directly at cengel@furnituretoday.com or 336-605-1129.

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