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Home furnishings retailers better open virtual stores

Lissa Wyman -- Furniture Today, January 30, 2012

Lissa Wyman Rug editorLong before Wal-Mart gave independent retailers the heebiejeebies, the A&P drove Main Street grocers, butchers, bakers and candlestick makers to despair. I heartily recommend a new book, "The Great A & P and the Struggle for Small Business in America" by Marc Levinson (Hill & Wang, $27.95). Not only is it an interesting history of the A&P, which started in 1859, it also provides a valuable overview of how we buy and sell goods and services.
     Without making any moral or ethical judgments, Levinson's message can be summarized simply: People want to buy stuff cheap. Expanding on his thesis, I say that the desire to buy stuff cheap affects every level of the distribution chain from manufacturing to wholesaling to retailing to consumers.
     The saga of A&P might seem quaint now. But the same old story - with modern twists - repeats itself in every product category.
     Rugs are a perfect example. Many people in this business are just waking up to the fact that 99% of consumers don't want to buy expensive hand-knotted rugs. (The 1%, of course, will always be with us.)
     Consumers who like the look of classic Oriental style rugs can buy a perfectly serviceable and quite beautiful machine-made or hand-tufted rug for less than $500 in 5 by 8 size. It makes sense on many levels, not the least being how rugs work with other home product categories. Who in their right mind wants to buy a $3,000 rug to go with a $600 sofa?
     So, consumers want to buy decorative rugs that are inexpensive. What they don't want is to be hassled by a helicopter salesperson while they are shopping a store.
     So what do they do? They go to Wal-Mart, Costco, Bed, Bath & Beyond and their ilk. There they are guaranteed not to be disturbed by a salesperson, even if they want to ask a question. Better yet, let's look for a rug on the Internet! We'll order it and if we don't like it, we'll just send it back. (An estimated 25% return rate on Web rug sales.)
     Now the Main Street retailers are really shaking in their boots. There is a perception that Internet retailers can sell rugs cheaper because their overhead is lower and they don't have to stock merchandise.
     The Internet is still in its early stages, and it's not a monolithic retail presence ... yet. I urge every rug and home furnishings store in the U.S. to make a major push into Internet sales. It's not exactly rocket science. It might save your life. Consumers are telling us they feel comfortable on the Internet. Let's welcome them into our virtual stores.

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