The rise and success of numerous online furniture brands and marketplaces is a glaring indicator of the direction in which the channel and distribution strategies in furniture markets around the world are heading. This blog highlights six reasons why brick-and-mortar furniture enterprises should consider taking the route of eCommerce and taking their business online.

Riding with the wave itself

ECommerce itself is a tide that retailers cannot afford to shy away from especially in big countries like Saudi Arabia and Egypt. It revolutionised how value is delivered to customers, especially in retail. ECommerce was a little late to influence furniture retailing but once it started, there was never a looking back. The idea was an instant hit with many customer segments. A prime example would be working professionals who stay away from home and need easily accessible solutions. It saves them the headache of looking for furniture stores or showrooms in cities they might not be aptly familiar with for buying furniture. ECommerce, as a way of shopping, is also something that people mostly from younger generations are more acquainted with. They know what factors should be considered on product pages on eCommerce platforms in making purchases. There are many other advantages of online shopping (discussed later) for both customers and retailers making it further more necessary for businesses to sell via online channels.

The case of convenience over validation

The extent of convenience offered by online shopping is often overshadowed by the factor of validation in the case of many product categories and furniture is one of them. However, that is not strictly applicable to all customer segments, product categories, and sometimes, even brands. For example, if a brand is reputed, customers may comfortably put convenience over validation. For repeat customers, this trust is even stronger. The same is true for relatively inexpensive, simple products like plastic furniture. It is also true if brands have a local logistical presence making deliveries quicker and creating a scope of direct contact with a company or its authorised representatives. So, convenience wins the battle over validation on multiple grounds marking eCommerce as a green flag for online furniture business models.

Max the mix

Online stores can offer an extensive range of products for a myriad of reasons. To begin with, online retailers can have stocks in warehouses or transit and still list such products on their websites/apps. This enables them to show a wider product mix in the offing as compared to traditional furniture stores with limited store space. The use of furniture inventory management software adds more agility to this advantage. Closely follows that is the element of holding cost. Online retailers can offer products which are not even in their physical possession yet. This means goods with zero holding costs can also be offered. This is a critical advantage considering that furniture inventory management is a tough job. The next advantage to online furniture stores is their potential ability to sell heavy or bulky furniture products directly from warehouses or workshops with optimised handling requirements and comparatively lesser emphasis on furniture showroom layout planning. Physical stores may also do the same thing but customers who visit stores for buying such heavy-duty furniture do so because they need validation. This necessitates physical stores to showcase such products (even as samples) or take customers to their workshops or warehouses. Online buyers already know that they do not get to physically examine a product before buying but that apprehension is also addressed with brand assurances and return/replace policies. With all these flexibilities, online furniture stores can provide a plethora of choices to customers.

Hurts the pocket lesser

With lower overhead costs in the form of saved store rentals and other resources required to run a store, eCommerce furniture brands are able to pass on a part of this benefit to customers. Cost benefits also emerge from optimised inventory handling. It is also possible for eCommerce players to keep a tab on each other’s prices all the time as product prices are displayed on the websites/apps of each brand. This helps them keep their prices competitive and in alignment with the prevalent market rates. The use of data analytics further allows online players to study the impact of their pricing strategies in the backdrop of various internal and external factors including competition. It leads to them having a more dynamic pricing paradigm reflecting the best alignment to business and market conditions. Last but not least, eCommerce dismantles the frameworks of traditional distribution, nearly eliminating the need for intermediaries and potentially creating additional margins (than in traditional distribution) benefitting both business and customers.

Explore new markets

Having multiple markets to cater to helps businesses achieve scale and growth in a short time. These markets could be international, within a country, state, or city. This holds for the furniture business as well. For example, if a luxury furniture store is catering to its target segments in one city, having one more city to cater to will create the opportunity to serve more customers with the same set of expertise and experience. Such expansions do entail separate planning but it will concern mostly the non-core functions as the core speciality or the nature of the value proposition does not change except maybe for minor improvisations in business modelling. Going online quickly opens up the possibilities of targeting new markets in new areas. The expansion strategies may vary but the vision to be able to do so becomes clearer.

Riding on technology

ECommerce or omnichannel players are in a vantage point over brick-and-mortar stores when it comes to technology applications for a few reasons. First of all, eCommerce businesses have access to a large volume of data as most of the operations have a digital footprint by default. It helps generate a large quantum of business data and information. Secondly, the evolution of eCommerce necessitated the induction of many technological solutions. Something as simple as a smartphone is a glaring example of it. Before smartphones, people used computers or laptops for online shopping. On the contrary, physical furniture outlets had no such compulsion to begin with. Thirdly, eCommerce itself is based on technology. It makes the integration of eCommerce easier with new technological developments or solutions. Lastly, high levels of internet and smartphone penetration combined with their high usage patterns in places like Dubai, Abu Dhabi, and Doha is one of the driving reasons for the proliferation of eCommerce in the respective countries. It would not be naïve to assume that eCommerce is partly responsible for pushing or giving impetus to certain technological advancements that benefit both businesses and customers. The emerging developments in 3D printing of furniture products serve as an example here.

Quick Recap

ECommerce is something that modern-day retail enterprises cannot afford to shy away from. In one way or the other, going online or omnichannel has become indispensable for brick-and-mortar retailers for a myriad of reasons. That furniture could be bought online resonates strongly with many customer segments. The criteria of validation do not apply to all customer segments, product categories, and sometimes, even brands. For multiple reasons, convenience is preferred over validation. On top of that, eCommerce allows furniture retailers to offer an extensive product mix that goes on to expand the product options available to different customers on different parameters. ECommerce also provides an edge in competing against furniture rental business models. Cost-wise, purely online stores make big savings (in comparison to their physical counterparts) as they do not have to run a full-fledged furniture showroom. Such brands are able to pass on the benefits to customers in pricing. Going online helps extend business coverage to new markets within a short time. When it comes to technology applications, eCommerce or omnichannel enterprises find themselves in a relatively better situation than their brick-and-mortar competitors. 

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How to expand my furniture business in the Middle East?

If you are thinking of business expansion, you must be willing to take calculated risks and plan everything. This may also involve improvising your existing furniture store business plan. You should know what your strengths are in your line of business and the value chain. Here are five strategies for consideration:

New Product Lines: Focus on innovation and developing new product lines. These new offerings should enable you to cater to new market segments or fulfil additional needs in the consumption process. For example, you may consider developing furniture products for the WFH segment. If you are already into it, you may consider ways to add more value to your products.

New Branches: This is a pretty straightforward approach where you open new branches in new locations with the same or slightly adjusted set of offerings. Starting a new branch is a more capital-intensive strategy but it keeps the control over business compared to other strategies like franchising or partnerships.

ECommerce: Take the eCommerce route and take your business online. Adopting the eCommerce route requires a separate set of planning because online furniture business models are different from traditional retailing. For example, you may have to rope in new value chain partners with abilities to meet the requirements of eCommerce.

Franchising: Done right, franchising is one of the reliable methods of business expansion. It reduces the risk exposure of franchisors, especially when new markets are involved. However, franchisors need an acceptable level of brand recognition in target markets otherwise it becomes difficult to attract franchisees. There are many forms of franchising with different pros and cons.

Other strategies include partnerships, joint ventures, mergers and acquisitions, and amalgamation.