Last week I was invited to attend Cowen and Company’s 3rd Annual Future of the Consumer Conference. Joined by retailers like Casper, Sotheby’s, Peloton, and Mack Weldon, as well as Amazon consultant Ortega Group. In addition to bringing my perspective on technology disruption in the furniture industry, I was able to get an inside view of the factors that are impacting retail from both retailers and investors alike. Topics of discussion ranged from consumer spending to mobile and the economy, but across all these topics, the omnipresent elephant was how retailers today can compete with Amazon.
Amazon—The Elephant in the Room
Amazon has proven its ability to disrupt multiple categories, with top brands behind them and the promise of delivery ultimately within hours. As summarized by Michael Goss, EVP and CFO of Sotheby’s, “Companies get ‘Amazoned’ because they’re standing still.”
But not all categories fit in the Amazon mold, despite the company’s soft movement into big-ticket categories like furniture. The furniture industry, luxury auction houses and other big-ticket hard to ship items – such as Peloton’s fitness experience involving stationary bikes and tablets – have unique business requirements and demands by their shoppers that cannot be replaced solely by an online storefront.
Pure-plays like Amazon, however, are catching onto the opportunity in these industries and testing brick-and-mortar retail locations, while many brick-and-mortar retailers are closing stores to design more quality, interactive showrooms. Who wins? Retailers that avoid browsing challenges, return hassles, inconsistent merchandise and offer a better shopping experience across all channels.
“Customer Connections Transformed: Traditional Categories Disrupted” Panel Highlights
Throughout the panel I participated in, ‘Customer Connections Transformed: Traditional Categories Disrupted,’ one theme threaded its way through our conversation. The very reason for Blueport’s, Casper’s and Mack Weldon’s existence is a recognition of “There has got to be a better way,” regardless of category saturation.
Brian Berger’s own frustration for shopping for men’s basics, like underwear and under shirts, prompted him to disrupt and found Mack Weldon. Similarly, Casper Sleep recognized that it was no longer about just crashing into bed at night – that the sleep experience could and should be elevated and that there had to be a better way to shop for, buy, and receive a mattress. Casper is even elevating the experience for four-legged family members, selling everything from dog beds to pillows. Casper is quickly becoming a diversified and distinctive retailer among mid-market mattress price points.
I brought the perspective of a company disrupting through retailer enablement at the epicenter of three converging and massive retail trends:
- Large underpenetrated categories now rapidly going online
- Cloud solutions replacing purchased software
- Mobile disrupting in-store shopping
Just like Uber and Opentable, Blueport is enabling traditional furniture players to deliver a better experience to their shoppers, making online relevant in a category where stores still matter, and providing agile omnichannel and mobile cloud solutions.
All of the industries represented on the panel were prime for disruption and were also, for the most part, still considered to be “Un-Amazonable.” Applying technology to create superior shopping experiences have enabled these companies to succeed in a crowded marketplace—especially unique big-ticket categories that don’t fit the “pick-pack-ship” mold.
What became clear, however, is that technology is just the first step to creating a stellar shopping experience. Each of these categories are ripe with opportunity to enhance the omnichannel shopping experience to get ahead of Amazon and stay there.
Blueport’s Kate Putnam (far right) joins Jason Costi, VP of Finance for Casper, Brian Berger, Founder & CEO from Mack Weldon and Oliver Chen, Managing Director & Senior Research Analyst covering retailing/specialty stores, luxury, retailing/broadlines and department stores at Cowen and Company, on a panel to discuss the disruption of traditional categories.
Additional Trends Impacting Furniture Retail
The conference also reviewed several external trends and factors that will play a role in retail and have an impact particularly on big-ticket categories like furniture:
- Taxes: Furniture retailers should carefully monitor both potentially beneficial and detrimental implications to tax changes, such as those from border imports and on corporations
- Shipping/Logistics: Providing a superior fulfillment service in furniture is key. By controlling logistics in-house, retailers are finding they can extend a superior experience not currently achievable via third party sellers. In the case of Peloton, it pulled it’s fulfillment through third party freight providers and have replaced them with Mercedes Sprinter Vans.
- Mobile: Just as consumers are driving shopping behavior, the area of most growth is on mobile. For furniture retail, mobile has grown 26% YoY in the Furniture and Home Furnishings category alone, according to comScore.
Overall takeaways? Furniture retailers who move forward with building superior technology and omnichannel experiences will create a much better experience for shoppers, versus Amazon’s largely fragmented, un-curated catalog process and “one experience fits all convenience.” Brick-and-mortar furniture retailers, and companies in other industries yet to go online, need to be online and not only that – they need superior cloud solutions and seamless omnichannel experiences that are, quite simply, just better than anything Amazon or other pure-play companies can offer.
