What does At Home know that Amazon, Wayfair and other online furniture sellers do not?

Discussion
Photo: At Home
Jun 08, 2017

Furniture is among the fastest growing categories online with retailers including Amazon.com, IKEA, Wayfair.com, Williams-Sonoma and others vying for share of market. Despite the rush to gain a sales edge online, not everyone is following suit as evidenced by At Home, a fast growing chain of big box furniture stores.

The retailer, which plans to grow its store count from 129 at the end of the first quarter to more than 600, has a website that focuses on providing visitors with information about its extensive inventory of more than 50,000 SKUs, but offers no option for completing the purchase online.

Lewis L. (Lee) Bird III, CEO, At Home

Lee Bird, At Home’s chairman and CEO, told analysts on the chain’s first quarter earnings call that unique visitors to the company’s website had increased 40 percent over the last year.  He said research has shown that home décor consumers go online to see selection and price before buying. They then go to stores to “see, touch and feel and take it (purchases) home immediately.”

At Home posted a sales gain of 23 percent in the first quarter, the company’s twelfth consecutive quarter of over 20 percent net growth. Same-store sales for the chain increased 5.8 percent, marking the thirteenth straight quarter of positive comps.

The chain has used target e-mail campaigns to increase awareness of the At Home brand and drive traffic to its website and stores. Mr. Bird said, “We have more than doubled the size of our e-mail database for six straight quarters.”

Roughly 15 percent of the $70 billion market for furniture in the U.S. is now conducted online, according to IBISWorld.

DISCUSSION QUESTIONS: What do you think of At Home’s current approach to using its website to drive sales at the chain? Do you think it will move to add an e-commerce option in light of the amount of furniture sales that have moved online?

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Braintrust
"In my mind the online and instore businesses are symbiotic. The customer is ultimately engaging with a brand, whether it’s in person, or online..."
"Furniture is a category where human senses — touch, sight, and smell connected through a physical experience are preferred by shoppers."
"the phrase retailers should aspire to as they recreate the shopping experience is, “Build it right and they will come … and buy things.”"

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7 Comments on "What does At Home know that Amazon, Wayfair and other online furniture sellers do not?"


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Max Goldberg
Guest

At Home is capitalizing on the consumer habit of researching online, then banking on the fact that consumers want to visit a store to make the purchase. This practice is working now, but may not last in the long run, as consumers increasingly buy furniture online. Management should be working on an e-commerce strategy, from online orders to processing to delivery, so they are prepared to grow if consumer habits change.

Adrian Weidmann
BrainTrust

Furniture is a category where human senses — touch, sight, and smell connected through a physical experience are preferred by shoppers. These experiences simply cannot exist online. Creating a physical environment where these senses and emotion can stimulate purchases is the future of physical retail. Meile’s Inspirience Center is a great example of what these “stores” should become. The store supported by digital technologies that can amplify the physical journey and continue that dialog with the customer after the purchase is imperative.

Art Suriano
Guest

The first thought I had when reading the article was remembering Borders Books who was so convinced they didn’t need a website to sell books because they felt their customers would prefer going into the store…well, what happened to Borders? At Home, with 129 stores has very impressive sales now but as they build a larger customer base and add many more stores, their business model will change because the customer will make that happen. Customers like using the Internet to research and then go in-store to buy, but they also look in-store and then buy online. Additionally, if the customer just wants to purchase an item and they know what it is, online shopping may be their preference. I respect At Home’s feelings about not needing to offer Internet buying, but I seriously doubt once they reach the 600 store count, they will continue that practice.

Brandon Rael
BrainTrust

In my mind the online and instore businesses are symbiotic. The customer is ultimately engaging with a brand, whether it’s in person, or online, and regardless of where the goods are ultimately purchased, the experience has to be seamless, and fulfilling throughout. The furniture sector is growing significantly, and it’s already a crowded marketplace with Wayfair, Restoration Hardware, Crate and Barrel and others to compete with.

It’s already a competitive marketplace, so adding an ecommerce site is a no brainer, and essential in this emerging retail sector.

Peter Charness
BrainTrust

Shoppers buy online when they have comfort that they are engaged in a low risk transaction. That means the price is comfortable, they trust the seller (usually Amazon) and they believe they know enough about the product that they are okay to purchase it, with a back up of a simple return if necessary. Comfort is often achieved through buying a product they have seen/touched/researched elsewhere (think Bonobos). None of those factors apply very well to the furniture industry. Putting a sofa back in the box and returning it isn’t really all that easy, and while all those pictures and reviews are great, they don’t make up for actually sitting in the chair. I think they are smart.

Larry Negrich
Guest

This is the type of story that reinforces my belief in the ability of smart retailers to understand their shoppers and create the processes, promotions and product selection that deliver to that shopper a great experience — online or physical. Too many retailers seem to have a business belief that can be summed up in the phrase, “build it and they will come.” Just showing up and doing the basics of retail whether online or in stores is no longer enough to win the shopper’s purchase. More correctly applied to retail, and exemplified by At Home, the phrase retailers should aspire to as they recreate the shopping experience is, “Build it right and they will come … and buy things.”

Min-Jee Hwang
Guest

At Home has a fascinating business model, in my opinion. I’m sure a good number of their online visitors are a bit frustrated that they can’t check out online. After all, what if they don’t live near a store? Which must be part of the reason At Home is expanding so significantly. They want to be helpful with product information online, but they of course want to close the loop and get shoppers to buy the items.

Online furniture sales are growing, but they’re still just a small fraction of the whole. Lee Bird shows that he really gets it: if you’re shopping for something, it’s probably because you have an immediate need for it. Being able to walk out of the store with it fits with the instant gratification so many shoppers have grown used to.

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Braintrust
"In my mind the online and instore businesses are symbiotic. The customer is ultimately engaging with a brand, whether it’s in person, or online..."
"Furniture is a category where human senses — touch, sight, and smell connected through a physical experience are preferred by shoppers."
"the phrase retailers should aspire to as they recreate the shopping experience is, “Build it right and they will come … and buy things.”"

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