Local retailers have fierce (but not insurmountable!) competition in 2018. While E-commerce was once the untouched Wild Wild West for home goods and furniture, it’s becoming a fast-growing opportunity for the category. Many retailers are taking note of the changes in consumer shopping and launching their businesses online… And it’s no secret that the retail giants have already staked out some significant ground.
But when it comes to Furniture and Home Furnishings, who is winning? If you ask local retailers, Wayfair is the clear leader. In fact, in a survey from Unity Marketing, two-thirds of brick-and-mortar furniture retailers said retailers like Wayfair (who specialize in home products) are their biggest threat. This is opposed to other retailers who sell a multitude of products AND furniture, such as Amazon. In fact, Only 40% of independent retailers stated that they considered Amazon as a primary threat.
However, interestingly enough, the biggest threat to Wayfair is Amazon. Which then means Amazon is also a big threat to those smaller retailers. As recently as this year, Amazon has made major strides and smart moves in all things home. In 2017, they launched their new Amazon Seller Program for Furniture, and research from April indicates that Furniture/Home Furnishings is a top 10 product category for Amazon, boosted in part by increased purchases from their Prime shoppers. They’ve also just introduced Stone & Beam and Rivet– their own two private label furniture brands, showing large investments in the category.
A Battle At the Bottom
From a price perspective, Amazon and Wayfair are going head-to-head. An article by Forbes presents the following graph showing the average price point of sofas by retailers. Clearly, Amazon and Wayfair are owning (and battling it out) at the lower-pricing tier.
The Final Word
While Wayfair has been extremely aggressive in their marketing and advertising (particularly with Google search), Amazon has been more calculated in their moves into the category. What does all this mean for local retailers? It means be wary that Amazon is in the game, and Wayfair may not be the biggest threat despite popular belief.
It’s clear however that if nothing else, brick-and-mortar retailers (of any and all sizes) need to create an online presence. How much past that they go from that is another story, and another question of available resources. With online growth comes additional costs, but without it comes risk to the continued success of the business. Finding a balance between online and offline challenges will be a challenge. Challenging sure, but it’s also an immense opportunity to keep your local market share. If you’re looking for tips to beat the big retail giants, check out our post here on How Local Retailers Can Beat Amazon.