Furniture Retailing On The Web - Part 1

The discussion that follows is based upon two years of experience in building and operating what has become one of the highest traffic, largest volume Internet-based retail furniture sites in America, and very likely in the world.

Based on our experience, we feel we can now offer some insights into this channel of distribution that will be helpful to our industry in better understanding the realities of Internet-based furniture retailing, and the significant opportunities before us as retailers and manufacturers.

Background: Bookout Furniture, Inc., Established in 1952, Bookout Furniture, Inc. (Bookouts) is a privately held Michigan Corporation engaged in the retail furniture and appliance business. Through our main store and budget store located in southwestern Michigan, Bookouts offers a wide selection of mid-priced home furnishings. With over 40,000 square feet of combined display space, Bookouts offers the largest total furniture, appliance, electronics, and mattress selection in our marketplace.

Name brands offered in our store include Berkline and a Berkline Comfort Gallery. Also represented on the floor are BenchCraft, Bassett, Lane, Vaughan-Bassett, Peters-Revington, Virginia House, Howard-Miller, Pulaski, Ridgeway, England-Corsair, Gentry, Sedona, Towne Square, Best Chair Company, plus Whirlpool and KitchenAid appliances, RCA, Panasonic and JVC electronics, plus Sealy Mattresses.

Competition in our market has been keen, especially with the entry of Heilig-Meyers, Value City Furniture, Penneys Home Store, Oak Express, Ethan Allen, La-Z-Boy, two Flexsteel Galleries, plus a host of local competitors all fighting for a piece of the pie. In spite of this intense and growing competition our market share in our primary trading area has steadily increased.

Our First Internet Site - Bookout.com
In early 1996, we recognized that a Web site would afford us another opportunity to stay close to our customers and share information about our staff, delivery procedures, service department, and brands and products offered. Our intent was to have our Web site function as a "brochure" for our local customers.

By June of that year the original Bookouts web site was complete. We featured the www.bookouts.com URL in our print and TV ads. It served its intended purpose well. Feedback from our customers was very positive.

Then, much to our surprise, calls and emails started to come in from well beyond our local market. People were finding our Web site by means of the search engines, and they liked what they found there. In most cases, these folks had the same basic questions: "How can we buy from you?"

For a good while, we politely turned these determined shoppers away, recommending that they visit a local store. We heard some interesting replies, like, "We live two hours from the nearest town with a furniture store." Or, "I work full time and go to school, I don't have time to shop." Or, "The last time I shopped at the local furniture store... (they would then relate some horror story)... and I will never step foot in that store again!"

After a few months of resisting, it dawned on us that there was an unmet demand for home furnishings on-line. (Remember, at that point in time there were very few online furniture retailers; not so today.)

Creating an e-commerce Web site
As we soon discovered, building an e-commerce Internet site requires huge investments in computers, networks, software and most importantly, a team of highly skilled Web creation specialists. At the same time, we began the process of merchandising a product line-up, establishing systems for order entry, site security, email systems, administration, consumer financing, nationwide home delivery and nationwide service after the sale. Procedures and policies were created to deal with the unique aspects of this new business model.
Six months and hundreds of thousands of dollars later, Furniture Find.com opened its doors in March 1997. Systems were tested and debugged. By April we were ready for our national launch with print ads in 58 newspapers all over America.

Since then, we've continued the process of evolving FurnitureFind .com with enhanced customer service, easier navigation, greater selection, and ever larger ad buys.

Building Trust Online
Like our retail store, we've carefully designed our Web site and policies to reflect our core values and our friendly, "small town" approach to customer service. That means providing our online shopper with the same kind of friendly, competent sales help she would receive in our store. Our sales staff is available by email, toll-free telephone, or by means of Instant Message™ technology. This immediate access to our sales professionals helps to differentiate our Internet business from the vast majority of online competitors. The idea is simple: Personal contact with our visitors builds trust.

We also boost our online visitor's confidence by displaying the "Public Eye Certified Safe Shopping Site" symbol as well as the "Customer Satisfaction Certified" symbol from WebWatchdog on our home page. There's a link to a page where visitors can read other customers' comments on their shopping experience at FurnitureFind.com as well.

It's noteworthy too, that FurnitureFind was selected by the Swedish furniture industry trade journal, "Mobelnytt" magazine, (December 1997 issue), as the world's best online furniture resource. Their analysis covered our presentation, depth of information, products, and our services. Over the last 18 months, we've implemented a massive national marketing campaign to establish Furniture Find.com™ as the preeminent brand name and best source for home furnishings on the World Wide Web. The coordinated effort has included national print advertising in Business Week magazine, The New York Times, and the Connect Time national newspaper insert.

In addition to national print, we've purchased banner advertising to help potential furniture shoppers find FurnitureFind. This aspect has included some of the largest and most recognized Internet sites in the world, including, AmericaOnline's Netfind, Excite, Switchboard.com, MarketSuite, and many others. Additionally, we've positioned our brand in very targeted home furnishings shopping areas including HomeFurnish.com Classifieds2000 .com, GoTo.com, Zip2.com, and LookSmart.com, just to name a few.

Complementing our banner advertising, we've implemented a vast array of partnerships with high traffic Web sites including, C2B.com, FreeShop.com, IntenetMall, InfoHiway.com, and the MicroSoft shopping channel.

Taken together, this marketing strategy has made FurnitureFind. com™ one of the leading online resources for home furnishings. This national branding of FurnitureFind. com gives furniture manufacturers who have "floor space" in our online showroom some very significant benefits.

Do Manufacturers Benefit From Internet Exposure?
The first benefit involves improved, nationwide distribution. When a manufacturer's product is on display in a virtual showroom it can be seen by millions of customers in remote areas not served by existing furniture retailers, and in territories where the manufacturer has no distribution at present.

This represents a significant potential for additional business for each manufacturer, and for the home furnishings industry as a whole. (Could the recent increase in our industry's share of disposable income have anything to do with the product being shown on hundreds of Web sites, viewed by millions of consumers in every corner of the land? We believe there is a connection.)

The second benefit includes enhanced national branding for the manufacturers who are featured in high traffic online showrooms. Our FurnitureFind.com banners are seen by millions of consumers every month. From those banner impressions, come tens of thousands of visitors who see our featured brands.

We have purposely limited the number of brands we show at FurnitureFind. While many manufacturers have approached us to request a "slot" in our online store, we have elected to show only the brands that we find to be successful in our real world store. This allows our sales staff to honestly say to a visitor, "We know this company; we sell its products in our store as well as on our Web site." This too contributes to the "branding effect" of having a product in our online showroom.

This exclusivity also means the brands we feature are not "lost" on a laundry list of hundreds of manufacturers. Each of our visitors has a much better chance of seeing and then deciding they want to own a particular piece of furniture. Demand is stimulated for specific furniture brands and products.

We know this is the case because the conversion ratio of shoppers to buyers is less than 1% at our on-line store. That means that more than 99% of the people who visit our site are shopping and then buying elsewhere. In most cases, that elsewhere is at their local furniture retail store.

By our promotional and display efforts we are helping to drive traffic to local retailers by the tens of thousands, every month. This is supported by the fact that one of the most common questions we hear is: "Where can we see this furniture locally?" Not wanting to overwhelm the manufacturers with these inquiries, we suggest that the shopper use their yellow pages and call some of the better retailers to find one that sells the particular brand they are interested in seeing.

Whenever possible, people prefer to "see it, touch it, sit on it", before they make a major purchase. So we encourage our visitors to shop around and visit their local stores. This gives the local retailer a golden opportunity to turn that "Internet inspired" shopper into a buyer. And the reality is, in most cases that is exactly what happens.

NEXT MONTH
The second part of this series on internet marketing will continue in the February/March issue of FURNITURE WORLD with a discussion of the following topics.

• Isn't the Internet unfair competition?
  
• Who is shopping, and who is buying on the Internet?
  
• The Local Furniture Store's Strengths
  
• Can local retailers compete on the basis of price with internet retailers?
  
• Can Internet distribution be stopped?
  
• Do Manufacturers Have a Choice?
  
• How manufacturers can protect their brands on the internet.

Stephen Antisdel, age 46, is President of Bookouts Furniture - Steve's main focus is administration, personnel and store advertising. He oversees strategic planning, budget forecasting, insurance, and tax matters. In the retail furniture business since 1968, he started at Bookouts on the delivery truck, showed an aptitude for sales, then buyer, and finally to management, by 1978. Steve is familiar with every aspect of the retail furniture business. Questions or comments can be directed to Stephen care of FURNITURE WORLD at editor@furninfo.com.