20 May 2024, 10:37
By Frank Lochbaum Feb 08, 2018

Disruption in furniture retailing now firmly in focus

Are UK furniture retailers adapting quickly enough to growing multichannel demand? Frank Lochbaum looks at some of the market disruptors to see how these firms are changing the operating model in line with the shopping preferences of today’s consumer, and explains why digital transformation is a crucial consideration for any retail business looking to stay ahead …

With Made.com reporting an annual profit for the first time and DFS missing profit targets within days of each other, the disruption and change in furniture retailing was neatly underlined recently.

Online-led retailer Made.com – and other digital-first furniture players – have shaken up the way consumers shop for big-ticket items in recent years, and it’s up to the more established businesses in the sector to think differently and reshape their processes.

In some cases that will involve some merger and acquisition activity – as shown by the DFS-Sofology deal in August – but mostly it requires some strategic thinking and consideration of what digital transformation means to individual businesses.

The processes of the new wave?

Philippe Chainieux, CEO of Made.com, says that since the company’s inception seven years ago it has had the “specific purpose of winning and winning big in the consumer transition from high street to online”.

The aim was to create a contemporary customer proposition to help overcome the hurdles to online purchase, which previously had meant the sector was slow to embrace the power of digital.

Chainieux talks up his business’ technology platform, which involves harvesting the views of customers to help shape product and proposition.

“The pace of this structural shift is increasing and is now more evident than ever, with consumers growing in confidence transacting online, for home and big-ticket items,” he explains.

There is a lot for traditional furniture retailers to take on board here, but it cannot go unnoticed that Made.com is in the process of opening up a number of physical ‘showroom’ spaces in locations across the UK and Europe. Despite being positioned as a digital-first retailer, the company sees the power of an omnichannel approach to serving customers.

Larger businesses and longer-running players in the sector should take note, and decipher which processes they need to put in place to make their established store portfolios work smarter. And, importantly, understand how they can better capitalise on furniture shoppers’ growing inclination to head online, in order to give them reasons to visit their stores.

Influences from the industry

Disruption is the name of the game across the furniture retailing sector, with Ikea making some major moves to transform what had been a well-established model for a number of years.

Clearly reshaping their processes and customer proposition for a digital world, the Swedish flat-pack furniture company has started opening smaller hub stores that target new catchment areas across the UK. They are set up as pick-up points for online shoppers and located in more urban areas than Ikea’s usual out-of-town sites, meaning they act as showrooms for passing consumers already in the mood for shopping.

Ikea’s senior management team recognised it was time for a change, understanding that they had to listen to what consumers wanted from their business – as opposed to laying down the terms of shopping themselves.

With the right strategic focus and tech investment, Ikea has shown the wider furniture sector that traditional retailers can change with the times. It’s even launched an augmented reality (AR) mobile app that helps customers gain a better understanding of how items will look in their home prior to purchase.

There’s still a lot of change that furniture retailers must consider. And if last year’s trading statements showed them anything, it was that the old mantra that ‘people don’t buy big items online’ is certainly not true.

Hopefully, it’s also been made clear that it’s no time to stand still. By mapping out an end-to-end furniture retail process model, containing greater online configuration, more in-store consultancy via tablet devices and other infrastructure change, there is an opportunity for businesses in the sector to thrive.

With the right processes in place and suitable digital transformation plans that better link up retailers’ physical and digital estates, there are plenty of shoppers out there who will want to buy furniture retailers’ products – either online or in-store.

Frank Lochbaum is managing partner at KPS, one of Europe’s leading management consultancies for the retail sector, covering the entire range of omnichannel business and digital transformation.

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