This past year, we have all found ourselves spending more time in our homes. Many expect this “cocooning” trend to stay. With the home being a bigger focus, the demand for furniture will stay high. For the furniture industry, this has created a unique opportunity (and its own set of challenges…).
Many adults have suddenly found themselves working remotely and in sudden need of home office furniture. And, many students, including those from kindergarten through twelfth grade, have found themselves attending school online. This created increased demand for desks, chairs, and other home office equipment. In addition to creating home offices, many people are updating their living spaces so that they can comfortably accommodate the entire family. This could mean a new couch, extra chairs, a larger dining table for family dinners, or outdoor furniture to expand their living area.
What Will Follow This Crazy Demand for Furniture?
While these changes all began with the stay-at-home orders that resulted from the pandemic, it is likely that some will stick. Many companies are seeing the benefits of allowing their employees to work from home. Students and schools are becoming more accustomed to online learning or hybrid models. So, while these changes began as only temporary, they will have a lasting effect on our society.
And as we’re all focused on fulfilling the immediate need, it is time to think about setting the business up for success past the surge in demand for furniture. This article focuses on a few key metrics every furniture store owner should pay attention to. We’ll focus on retention, loyalty, and the average order value. Continue reading to learn more.
Understanding Where Each Furniture Customer is at in the Sales Funnel
Before we dive too deep into metrics, let’s cover the basics of converting a prospect into a customer. It’s important to understand the sales funnel and how to determine where each customer is at.
For example, if a customer is just beginning to consider purchasing a new piece of furniture, you may not want to lead with the hard sell. The customer is still in the research phase and deciding what style and features they would like. You want to help them understand why this new piece of furniture will better their life and provide them with options available. Be sure to collect their contact information for follow-up as they will likely not buy during their exploratory visit.
However, if a customer comes into your store and is searching for a specific item, they are further down the sales funnel, and you’ll want to use a different tactic.
A typical sales funnel looks like this one above. The customer begins in the awareness stage where they realize a pain point and are searching for possible solutions. They then move down the funnel until they are successfully converted. Once they finally become loyal customers, you want them to become advocates for your business.
Understanding which stage of the funnel a customer is at is essential in ensuring that they move to the next stage. In your brick & mortar location, shoppers usually are in stages 3 or 4. The first two stages are typically done online.
Focus on the LTV (or CLV) Metric – Especially When Inventory is Low
While multiple rounds of stimulus checks and the renewed focus on the home lead to skyrocketing demand for furniture, the pandemic-related supply chain issues create a unique challenge: Huge demand for furniture, but only little supply. With customers not willing to wait 10 or more weeks for their furniture items (in some cases even longer), furniture retailers need to find ways to set themselves up for success past the frenzy. This is where LTV or CLV – customer lifetime value – comes into play. But before we go there, let’s set the scene.
Getting overrun by consumers frantically looking for home furnishings items is a “good problem” to have, many retailers would agree. With uncertain inventory numbers and shaky forecasts these orders can turn into cancellations as time goes by, leading not just to missed revenue, but also potentially negative customer experiences. And when they manifest themselves as negative reviews, they become costly issues. A proactive communication strategy, steadily informing consumers about the status of their order and giving context about the backlog can definitely help. It is recommended to use multiple channels, including popular new avenues such as conversational text messaging, to successfully reach shoppers.
Capture More Data To Create Customer Profiles
It is crucial in this time of increased demand for furniture to capture not just contact information, but also recognize what categories and price points your shoppers are looking at. By providing them with a great customer experience today, they will come back for more later. And with more data, you can personalize that experience. The sales cycle will be much shorter when offering them items that fit their budget and fill their needs. Customer lifetime value (in combination with our next topic: AOV) are two crucial metrics that can be the difference between survival and store closure.
Maximize AOV (Average Order Value) With Cross-Selling and Up-Selling
During this time of opportunity, you want to make sure that you are maximizing each sale. If someone visits your store in search of a desk, you don’t want them to make a purchasing decision on their own. With a few questions you can get that higher average ticket, or average order value (AOV).
For example: A customer comes in looking for a new desk because they recently began working from home. You could leave that customer to their own devices and they will purchase just a desk. However, by providing that customer with some help from a knowledgeable sales associate, you may be able to maximize your opportunity. Some of the questions to ask are:
- Where will the desk end up? What kind of room is it? Are there other items that should match the style?
- Is there a need for additional storage – would a cabinet piece make sense?
- What type of flooring is it – would an area rug make sense?
- Are they on video calls a lot? If so, what about accent items and decor for the background?
- Also for video calls – is there enough light? Need a lamp or other lighting options?
Selling a desk that will fit your customer’s needs is great. Recommending accent pieces and storage options to make them feel more confident when in the video call spotlight is even better! Up-selling and Cross-Selling don’t need to be sleazy sales tactics to squeeze another dollar out of a customer. It’s about understanding what the consumer truly needs and providing a complete solution instead of just taking an order. For that, the consumer could just go to your website and buy a desk.
Expand Your (Virtual) Furniture Inventory With Wondersign
A large inventory of furniture can be cash-intensive to keep in stock. If you don’t have enough selection, you’ll not only lose customers for lack of choices but also decrease your opportunity to maximize each sale. However, you don’t necessarily have to have every piece of furniture physically in stock. Instead, you can use a virtual showroom catalog like the Wondersign Endless Aisle Kiosk App (known to most in the industry as the “furniture kiosk”). It expands your inventory offering without having to keep any additional items in stock. And by adding DTC (Direct-To-Consumer) items, you can provide your shoppers with a multitude of options without having to give up a square inch of floor space.
Wondersign is an innovative ‘endless aisle’ software application that gives you access to an expanded inventory from managed and normalized brand catalogs. The kiosks provide a unique buying experience and collect customer data making follow-up a breeze.
The Wondersign platform even allows you to automatically sync product data between in-store kiosks and your e-commerce website. Your customers will love the consistent omnichannel shopping experience.
Interested in learning more about what Wondersign can do for your furniture store? Contact the team today!