With lockdown eased, furniture retailers across the UK are hoping to make the most of renewed footfall – and they’ll have to look closely at their finances to do so, says Hitachi’s Brian Flesk …
While we’ve seen a surge in ecommerce sales during the pandemic as many retailers invested in their digital channels, shoppers have been missing the in-store experience. From comparing colour swatches and feeling sofa fabrics to appreciating the size and profile of a new dining table, bricks-and-mortar homeware stores create the experiential factor that consumers have been devoid of for most of the last 12 months.
Despite the emergence of AR and VR helping consumers in their pre-purchase decisionmaking during multiple national lockdowns, physical stores that can bring the ‘theatre’ into the furniture retail sector will be well placed to capitalise on an anticipated surge in consumer spending.
However, in the post Covid-19 landscape, consumers’ expectations have changed, placing an even greater emphasis on retailers to provide a fast and seamless customer journey, whatever channel they choose to purchase through. This puts greater onus on furniture retailers to provide a frictionless and interactive experience – both in-store and across ecommerce platforms.
Converting browsers into buyers
When lockdown restrictions eased for the first time in 2020, Hitachi Capital Consumer Finance’s retail partners reported a +20% increase in demand across bricks-and-mortar on the same period in 2019. As the UK’s vaccination roll-out boosts consumer confidence to its highest level in almost a year, we’re likely to see a similar, if not greater spike, this spring.
The challenge will be converting this potential into sales in a highly competitive market. Ensuring you have the right tools in place to meet that demand is vital, which is where PoS finance plays a prominent role, in making the purchasing process as frictionless as possible.
Alongside customer service, the availability of finance at the PoS plays a huge role in converting browsers of big-ticket items into buyers, whether in-store or online. It’s one of the key drivers for customers, with 50% of those surveyed stating that it is one of the key reasons they chose to go ahead with their purchase in 2020. Within the furniture market, Hitachi Capital data also reveals that 42% said they felt they spent more because finance was available.
Embracing an omnichannel future
At the start of the pandemic, retailers rushed to create an online presence to meet consumer demand – a strategy which paid off, as online spending increased YoY by +31%.
At Hitachi Capital Consumer Finance, we saw a massive +63% YoY increase in the volume of business on ecommerce platforms alone, after retailers integrated with our mobile-optimised PoS finance platform.
Many of the consumers driving this spend were exploring new categories, brands and retailers for the first time, as they were forced to adapt to life at home. Yet despite the shift towards online, there are certain aspects of bricks-and-mortar retail that cannot be easily replicated, which is where an effective omnichannel approach becomes more important and must be replicated in the PoS finance solution.
The pandemic has shaken the furniture sector, forcing the industry to accelerate the speed of digital transformation exponentially. Many retailers have adapted quickly, adding ecommerce channels. But, at the same time, we have seen a growth in the number of retailers integrating flexible PoS finance solutions into the customer journey to accelerate purchasing decisions and drive sales.
Retailers that have taken this approach are likely to be in a strong position to benefit from buoyant post-pandemic retail sales.
Brian Flesk is head of retail at Hitachi Capital, a leading UK PoS finance provider which supports the credit facility of over 4000 retailers nationwide.