With annual revenues of about $114 billion, the U.S. retail furniture market has been on a steady growth curve over the past few years. Driven by a strong national economy, the industry is seeing healthy growth in its ecommerce sales as furniture shopping becomes increasingly popular among millennials.
The furniture industry is also facing its fair share of challenges. For example, delivering an omnichannel experience has become an imperative and online furniture retailers are eating away at brick-and-mortar profits. Historically focused on getting a certain number of people through their front doors, and then converting about 25% of them into paying customers, retail furniture stores have also watched that foot traffic dwindle over the past two decades.
“Closing percentages have gone up,” said Rich Rotman, Senior Solutions Consultant at 5-Star NetSuite Provider Centium Consulting, Inc., “but traffic has plummeted.”
These realities have created both concern and panic for furniture retailers, many of which are beginning to develop their first ecommerce storefronts.
Making the Move to the Cloud
Working with furniture retailers whose annual revenues range from $20 million to $500 million, the Centium team sees firsthand the obstacles these organizations face in the race to digitize their operations and serve their online customers. Exacerbating the challenges is a workforce where salespeople aren’t generally tech-savvy, and where customer databases are both outdated and stored in on-premises, legacy systems.
To overcome these obstacles, furniture retailers not only need robust, engaging ecommerce storefronts, they also need unified cloud technology systems that integrate well with other applications. Learn more by downloading the Centium kit.
“The industry as a whole has been dogged by legacy applications,” said
Brian Denham, Centium’s President. “It’s also using applications with industry-specific functionalities, with the end result being a lot of information silos and systems that don’t ‘talk’ to one another.”
These siloed systems can create major bottlenecks for furniture retailers. For example, Centium recently worked with one company that couldn’t even extract simple cashflow statements from its stores.
“They can’t even figure out their cash position, which is pretty unbelievable in this day and age,” said Denham. “The company’s applications are so siloed that even getting this very basic level of information is impossible.”
5 Ways Cloud ERP Supports Furniture Retailers
An industry where everything from purchasing to ordering to managing salesperson commissions is handled manually, the furniture industry is ripe for automation. Here are some of the biggest advantages that retailers gain by implementing NetSuite’s cloud ERP:
- Effectively manage stackable promotions. With NetSuite’s built-in functionality, the retail furniture industry can more effectively manage stackable promotions—those that include a certain product, a financing deal and free shipping, for example—which are extremely popular among furniture buyers. “Most software platforms can’t handle two promotions at the same time,” said Rotman, “let alone three or four.” NetSuite can easily work with multiple offers being applied to the same customer order.
- Take off the legacy system handcuffs. “We’re at a point where these companies really need to evolve, and their legacy systems are keeping them stuck in a box,” Rotman said. “The great thing about NetSuite is it allows you to evolve your business without being handcuffed. If you want to change your business model, alter the way you do things, or move from being a special-order retailer to one that holds more inventory, NetSuite can handle it all for you.”
- Manage multiple commission structures. Centium recently worked with a furniture retailer that used roughly 25 different commissions across multiple sales forces. All of those allocations and distributions were handled manually—a process that ate up time, money and valuable human resources. That company has since automated the process using the standard version of NetSuite, versus a customized solution that might have cost tens of thousands of dollars.
- Print and change merchandise tags on the fly. The cloud ERP system also features saved searches, customized templates and scheduling capabilities that allow furniture retailers to more readily print up merchandise tags for its showroom products. It also enables quick switching up of those tags when, say, a holiday promotion kicks in. “This is a feature that many retailers don’t catch onto until after the ERP has been implemented,” said Rotman, “and it’s a nice surprise for anyone who was handling the process manually.”
- Provide a better customer experience. Operating in an industry where a good customer experience is paramount—and where the nearest competitor is now just a single screen tap or mouse click away—furniture retailers also need good customer case management capabilities. “With NetSuite,” said Rotman, “retailers can customize their customer support to provide a much better experience than they ever could with a legacy system.”