Names like Amazon, Wayfair, Overstock, and Article are no doubt familiar to brick-and-mortar home furnishing retailers. Even though these new names may be trying to eat the lunch of traditional retailers, having a physical presence still provides a tremendous competitive advantage.
There was a time when home furnishing retailers had some inherent barriers to entry against the competition. You needed a good location, a few reliable sources of supply, adequate capital to display product and the ability to get merchandise delivered to the customer. All of that still applies.
However, in the online world, an e-commerce retailer can be located anywhere, have unlimited access to suppliers, present product with the use of images, text and video; while delivering merchandise rapidly by common carrier. In the online world, a consumer can buy and receive product without leaving their house or talking to a human being.
Truth is, most consumers want to connect with people who can help answer their questions, solve their problems and help them buy. They especially want to connect with someone when something goes wrong. It’s one of the reasons strictly e-commerce retailers struggle with profitability – especially when they need to include the cost of return for products bought online.
The Smarter Retailer recognizes the importance and power of maintaining personal customer relationships. The Smarter Retailer can offer product information online together with the ability to purchase merchandise at the customer’s convenience. The SmarterRetailer does not fear e-commerce – but embraces and leverages it to create new value propositions for their customers.
The really Smart Retailer has also discovered the power of providing an “extended aisle” of relevant, curated merchandise – where partnering with one or more key suppliers can enable them to drop-ship product directly to consumers. The key is to create a seamless experience for the consumer. The process for purchasing non-stocked merchandise in-store should be just as easy as buying product online.
Smarter retailers also recognize that an extended-aisle strategy generates more margin while avoiding the need to invest in inventory or manage a logistics process that gets product to the consumer. However, the drop-ship supplier had better deliver efficiently and consistently or the retailer risks impacting their relationship with the customer.
An omnichannel approach that resonates with customers is rapidly becoming the standard performance expectation of consumers.
And while e-commerce retailers constantly look for new ways to differentiate themselves (think customer-obsession; next-day or same-delivery; extensive selection and highly competitive pricing) – traditional retailers must focus on leveraging their physical presence with in-store discovery experiences that offer unique customer retention strategies.
Traditional retailers already have the lead and a significant advantage – a physical presence – that can serve as a powerful foundation on which to build an effective omnichannel strategy.
A physical presence also offers something that a strictly online retailer may never achieve – a local, real-life, face-to-face, customer connection.
By Brad Geddes
Brad Geddes, CEO & President of ZucoraHome regularly shares insights about the Canadian home furnishing market, changing consumer behaviours, and the process he’s leading to transform ZucoraHome into a smarter living business that leverages IoT (Internet of Things) technologies with professional home services.