Disconnected From Your Customers?

Move from a product orientation to a customer orientation and watch sales soar!

Probably the most important question not being asked by people in our industry, particularly retailers is, what is going to be the impact of the internet on furniture retailing? In this article I'll pose several questions that might trigger some thinking among readers, but won't offer many answers because I, like most people I meet in our industry, am somewhat confused about how this is all going to unfold. Of course, this could be due to the fact that I'm now an old codger who didn't even own a computer five years ago. I know this, though; the future will be different than the present and, at the speed of change in our times, it's probably already here.

Think about all the things we thought wouldn't work, but that did: Home shopping through television was one that I thought wouldn't make it. Who would buy jewelry that way? Or collectibles? And if people did buy, how could there be enough of them to make it work in the long run? In fact, the whole idea of selling anything consistently over the air waves or the internet seemed pretty goofy only a few years ago, but as I read through my latest purchase from Amazon.com (more on this later), I can't imagine what I was (or wasn't) thinking.

The point is that furniture selling over the internet is already here and several sites are up and running. Visit www.furniturepoint.com, www.furniture.com or www.furniturefind.com and you'll get a glimpse of the future of furniture retailing in its embryonic stages. This implies, of course, that these sites, and others to come, will develop and transform from their present state to some new, more advanced state, and as they do, what else will be forced to change in this snail-paced industry? Even as the cyber-based retailers establish themselves, some large traditional retailers are investing in more brick-and-mortar. This would seem to show that two divergent philosophies are driving our industry today.

So, I'd like to share with our readers some of the thinking and questions that have been running through our minds as we visit hundreds of stores around the nation.

High Touch Versus High Tech
Remember when you had to do all your banking inside the bank? You stood in line with, perhaps, dozens of other customers to cash a check or make a deposit and if you required any other services you waited for the one or two officers to assist you. For some type A personalities, a trip to the bank was fraught with all kinds of horrors.

Since the introduction of the ATM, things have changed dramatically for the bank and for its customers. Today when you go inside a bank (I think) there may be only one or two tellers available. At the same time, you will find many more service desks where highly trained people can help you with loans, investments, insurance, mortgages, financial planning as well as the standard banking services that have always been available. This is due to the changes in the products banks can offer as well as to the affect of freeing up bank resources (people) to provide these new services.

Here is a case where a technological innovation caused massive changes in how business was done and in the level of services offered by the companies to hold on to their customers and attract customers from competitors.

As companies enter the marketplace using high tech methods, what does the response have to be by the traditional retailers who are vested in land and buildings? Can traditional furniture retailers continue to operate as they have for the past fifty or so years? Common sense would say no, but where is the evidence that anything is changing at the fundamental level of serving customers? I believe that the response to this new competition will have to be a high-touch approach to customers and their needs. High-touch means that a new paradigm will have to replace the old one when examining the business we are all in. We are not in the furniture business, but the beautiful homes business. Understanding this should lead retailers to seek out new ways to engage and hold on to their customers. Innovative high-tech companies who have no investment in "old" ways of doing business will constantly woo these customers – who are your customers.

Important Questions to Ponder
·The more commodity-like a product is, the better it is suited to cyber-selling. Think about the commodity products you sell: bedding, recliners, and RTA furniture are some examples that come to mind, but there are others. It could be that the more "branded" a product becomes, the more it lends itself to cyber-selling because customers have more information about branded products than non-branded ones. What will the affect be if half of the customers you get for these commodity items don't show up in the stores?

·What will the affect of cyber-selling be on distribution patterns? Will manufacturers not sell to cyber-retailers to protect your distribution franchise? How can they refuse to sell to cyber-retailers if that's the way millions of customers have voted to shop? Will the websites of manufacturers really only point the customer to the nearest store, or will manufacturers eventually be tempted to sell direct to your customers?

·Is it possible that many customers who would be your customers will shift to electronic shopping when they realize that they don't have to leave their homes to get the same level of service that you provide in the store? After I made my first purchase from Amazon.com only a few weeks passed before I received an e-mail message one day offering me a new book by the same author. They used the little bit of information they had about my reading habits to keep me as a customer. Think about this in relation to the amount and quality of the follow up your sales staff does with your customers when they have (or should have) a large amount of information about their customer's needs, homes and dreams for the future.

·What would happen if a cyber-retailer were to acquire a company like Decorating Den? Now, a hit on the website could result in a visit to the customer's home. Now the on-line retailer could offer a higher level of help in achieving what we believe the customer really wants: to create a beautiful home. The local franchisee would, of course, have all the power of CD-ROM and CAD. They would also have direct, on-line contact with suppliers, plus the ability to provide ancillary design services in many areas that most traditional furniture stores don't even offer – like kitchens, bathrooms and outdoor areas.

·Everyone in the industry is familiar with market research studies that have documented the fact that customers don't relish the furniture shopping experience. This is, in my mind, directly related to the disconnection between what the customer wants to talk about and what the salesperson wants to talk about. Customers can't find any real help because the salesperson has been trained to tell customers about their store and their products. Believe it or not, this is not the most important concern for a customer trying to understand how furniture will look in her room. What will happen to your store if 20% of the traffic disappears?

WEB PREDICTIONS
As you ponder the above questions there are some predictions to be made about what will happen in the very near future:

• The things you think will cause cyber-selling of furniture to fail (the need for customers to touch things, service and distribution) will be overcome by new innovations in information and data transmission within two years.
• Change will come faster than you ever imagined it could.
• On-line CAD for use by consumers will change the way people think about designing their home interiors and shopping for furnishings.
• Most furniture retailers will not change their traditional way of doing business in the face of these challenges to their existence.

We believe that the most important thing retailers can do to meet these new challenges is to offer customers more innovative and higher touch solutions to their home decorating problems. If this means providing in-home services to better help customers understand how to use your products, then do it. If it means establishing on-going relationships, then actively set up those kinds of systems. Your new competitors are already moving down these roads.