HIGH POINT — For direct-to-consumer companies of all sizes, now is an exciting time to redefine how consumers shop for home furnishings.
“E-commerce, especially in the home furnishing industry, will continue to see significant growth,” said Jonathan Johnson, CEO of Overstock. “The home furnishings industry saw online penetration grow to 35% in 2020 compared with 23% in 2019. That 12% increase is much more significant that the 1% to 3% a year the industry has experienced for over a decade.
“I think most of the 2020 growth will stick and even continue to grow.”
Johnson said that as brick-and mortar-retailers were forced to close during the pandemic, e-commerce became the primary shopping method for hundreds of millions worldwide. He believes many of those customers loved the ease and simplicity of online shopping and will continue to using it as their primary and preferred shopping method in 2021 and beyond.
Rethink the journey
In fact, many leaders in the DTC world say it’s important to follow the consumers’ lead when it comes to how they want to shop.
“We’re really excited about e-commerce in 2021,” said Jill John, Interior Define chief customer officer. “We now have a deeper understanding around the value of our Guideshops and one-on-one experience with design specialists, and we’ve been able to rethink our customer journey.
“Customers are taking more and more ownership of the shopping cycle, and we can now meet their needs anywhere.”
Home furnishings and décor retailer Wayfair believes that the move to e-commerce adoption in 2020 will be followed by a continued march of category dollars moving online even after the environment normalizes.
The home category is vast, according to Wayfair, representing close to an $800 billion total addressable market in North America and Western Europe, split roughly evenly between the two.
Despite the e-commerce step change seen over the past several months, the category remains quite underpenetrated relative to others, which began their migration online earlier, according to a Wayfair spokesperson
“We introduced millions of new customers to Wayfair during 2020,” said the spokesperson. “These customers experienced the many features that make Wayfair unique: an unparalleled product selection, the rich interface for browsing, inspiration and product discovery, and customer service and delivery that are tailored especially for the home category.
“We fully expect that these differentiated features of our business model will remain fundamental to helping more customers move from offline to online post pandemic as well.”
The team at Rove Concepts, a DTC modern furniture company based in Vancouver, Canada, believes that as consumers’ lives continue to get busier, they no longer want to spend hours hunting around showrooms for the perfect piece for their home when they can go online instead.
According to Rove Concepts, the current pandemic taught them that customers want brands to be more accessible online and they believe this need will only continue to grow.
“E-commerce is currently booming with more D2C brands entering the space,” said Art Lee, Rove Concepts founder and CEO. “During the pandemic, we saw more brands shifting focus to their e-commerce platforms since retail stores had to be temporarily closed. With restrictions constantly changing, 2020 has shown brands that to continue to deliver the same level of service, digital spaces are worth the time and investment to improve the customer’s experience with your brand.”
Clicks add bricks
While many DTC players think e-commerce will grow, they still see a value for brick-and-mortar stores that offer new and engaging ways to bring brands to life.
“With more D2C brands focusing solely on e-commerce experiences, brick-and-mortar stores do have a vital role within a brand’s omnichannel experience,” said Lee. “Depending on the company, some brands and customers may value in-store experiences especially when it comes to contemporary and high-end brands as they are looking for personalized expertise while shopping.”
Some companies, like Industry West, have a largely online presence complemented by a single retail location in the Soho section of New York.
“I think there are going to be those who have the margins or venture backing to be able to absorb the loss of broad brick-and-mortar. Others, like us, will continue to be very strategic in where we set up, potentially even better utilizing seasonal popups,” said Ian Leslie, Industry West chief marketing officer. “Then there will be a middle segment that will definitely need to close doors because of the burden of real estate cost.
“But I don’t think it’s solely brick-and-mortar that will feel the brunt. As e-commerce grows, it will become more competitive, and the customer acquisition cost will be detrimental to those who don’t have their shop in order.”
Multiple touchpoints
Overstock’s Johnson agreed that the vulnerability of many brick-and-mortar retailers will force some to move out of the game. But, he said those that have invested in their e-commerce platforms to keep up with competitors will continue to see growth in the brick-and-click model where orders placed online can be picked up in-store.
This is the case for Interior Define, a company that was born on the Internet but has opened Guideshops across the country to create a solid connection between the online and offline experience.
“This allows us to drive a true omnichannel approach where we have one single view of the customer rather than multiple views across multiple transactional channels where the customer data can become disjointed,” said John.
“As a result, 90% of our customers work with a store design specialist whether they are in a store location in-person, or working with them virtually. Because we’re inventory-free, our design specialists focus their time on the customer instead of worrying about back of house management, and instead engage with them online, creating personalized mood boards and renderings, and helping them customize.”
John said the Interior Define’s design specialists work beyond the in-store experience and engage with customers on chat, email, phone, or Facetime, so that the team is equipped to drive sales virtually.
“More importantly, we are looking less at the performance of each individual transaction channel, and instead focusing our efforts on how the customer shops, and being well-positioned to meet the customer at multiple touchpoints,” he added.
Wayfair believes that thanks to its long-term oriented philosophy, the company has been built to scale while remaining agile. The team said they saw the benefits of this approach in 2020 as they absorbed much higher than the originally anticipated demand.
“This flexibility will prove crucial as there are still many uncertainties ahead over the coming months and quarters, with high potential for both disruption and opportunity,” said Shah. “We are staying prudent as we plan for 2021 and are prepared to adjust as necessary. The long-term orientation that got us here remains firmly intact.”
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