Reincarnated Furniture.com partners with retailers

DSN Retailing Today, Feb 7, 2005 by Mike Duff

Furniture.com is making the most of its reincarnation. After the '90s version of the furniture and home furnishings Web site failed dining the dotcom bust, a new Furniture.com rose from the ashes, one that has the experience to know where real opportunity lies.

In today's dotcom world, that means establishing solid relations with traditional bricks-and-mortar retailer.

Carl Prindle, Furniture.com president, said the e-tailer's latest manifestation arose because several employees, who assembled investors to restart the company about 30 months ago, still believed in its potential. After all, it was doing about $80 million in annual business even as it was failing, which made it a major furniture e-tailer in the United States. What they didn't believe in was the original business model that required the online business to build expensive distribution centers and fulfillment infrastructure. "The previous Furniture.com followed the model en vogue at the time, the model getting funded at time, which was to be the next Amazon of the relevant category," Prindle said.

Furniture.com today doesn't do any distribution or fulfillment. It partners exclusively with furniture retailers in markets where it operates, using the bricks-and-mortar store's delivery system to get product to consumers. The dotcom now focuses on continually enhancing its online operations and functions--for example, the site includes a virtual room planner that potential purchasers can use to mix and fit various furnishings--and operates its retail partner's Web sites. For its part, Furniture.com takes a percentage of each online sale.

Retail partners include Seaman's Furniture in New York and the recently-signed Harlem Furniture located in Chicago.

"We identified Harlem Furniture as a partner we wanted to work with in Chicago," Prindle said. "We signed an exclusive agreement with them and went through a four-month integration process. We took our technology and integrated it into their system. The idea in doing that was to provide them with a seamless e-commerce platform, a seamless consumer experience and a seamless shopping experience."

Central to its mission, Furntiure.com makes e-commerce easy for the retailer in terms of getting up to speed on the Web. It also strives to provide consumers with ease of use and satisfaction in purchasing. Furniture.com's expertise extends to functionalities such as the room planner, but also a style guide that lets shoppers browse according to taste definitions such as casual contemporary and country. There is also a magazine that offers ideas about, for instance, putting together a bedroom retreat. Furniture.com even provides a tracking function for consumers who might grow anxious about where the sofa they ordered is in the furniture delivery system. Additionally, Furniture.com can deal with issues such as search engine optimization that retailers might not want to tackle

"We're always thinking about improvements and the retailers benefit from that," Prindle said. "And there is a huge marketing benefit from our name. One of the stumbling blocks for most retailers to going online is the process of putting a catalog togther. It is daunting. Then, usually the photography is not great. In a lot of cases, retailers have good internal data but have no systemized way to get information to the consumer. We have a department that gets information from retailers to do a comprehensive catalog so that we can get the assortment online quickly."

With so many consumers researching purchases online now, e-commerce Web sites are compelled to provide a thorough accounting of products online, Prindle said, and element can only become more important. Prindle emphasized that those purchases made on the furniture.com site are almost entirely incremental for its partners.

"The majority of people who purchase at Furniture.com--70%--never went to a [bricks-and-mortar] retailer," he said. "The other 30% went to a store but purchased online. Ultimately, it's all incremental volume for our retailers."

Furniture.com also can bring a wider range of purchases. For example, most furniture retailers only offer a handful of lamps at their showrooms, if they offer any lighting at all. Furniture.com has worked with its retail partners to add more than a hundred lamps lamps, frames and art, RTA furniture and other categories to their online assortment. Because it helps retailers add new home furnishings categories such as, the Web operator can help its furniture store partners grab a piece of the categories usually dominated by mass-market retailers.

Although reticent to reveal exact sales figures, Prindle added that Furniture.com's sales demonstrate that furniture can be sold online at a premium rather than at a discount.

"Two million dollars of merchandise a day is added to Furniture.com shopping carts," he said. "Some of it is purchased in-store, some is purchased online and some is never purchased, but from our retailers' perspective, we are a top show room in terms of volume and gross margins. The gross margins on purchases from our site are as much as 300 basis points above what our retailers get in store."