As the ecommerce channel in the home furnishings space becomes increasingly competitive, it also becomes more challenging for manufacturers to maintain a prominent position online. Today’s market requires a proactive approach—an accidental ecommerce business simply won’t cut it if you want online to be a meaningful slice of your overall sales.
The opportunity is there. In 2023, 20.8% of retail purchases are expected to take place online in 2023. But by 2026, that number is expected to be 24%. Shopping online is more than just a trend, and customers will only turn to the internet more and more when they want to make a purchase. Investing in ecommerce is investing in the long game—a way to ensure your business stays competitive both now and in the future.
Here, we’ll lay out the key pillars of creating a thoughtful ecommerce strategy to ensure you’re set up for success: program, process and promotions. Consider this a fresh spin on the 3 Ps.
Whether you’re well-established with online partners already and thinking about the next few years of growth or just starting to think about building an online strategy, this guide is for you. Let’s dive in!
Jump to:
Part 1: Program Development | Part 2: Process Creation | Part 3: Promotional Strategy
1. Ecommerce Program Development
While your home furnishings business likely has many of the foundational elements in place, those don’t always translate directly to an ecommerce business. There are three areas you’ll want to reassess for the online world: your pricing strategy, selecting your retail partners and your product assortment.
Setting a Pricing Policy
Before the days of GPS, you wouldn’t dream of embarking on a major journey without a map. And in ecommerce, you won’t want to embark on a new program without a MAP (minimum advertised price) policy. Your MAP policy is vital to leveling the playing field across all of your distribution channels and becomes especially to keep online from becoming the wild west of pricing strategies.
Think if this policy as the dos and don’ts of pricing your product. You’ll want to outline the nuances you’re comfortable with and outline them clearly so that all your partners can understand the parameters they have to work with. A well-defined pricing policy includes:
- Your brand’s mark-up or MAP multiplier (can potentially vary by category)
- What constitutes a MAP price violation
- Any pricing flexibility for selling to the trade
Creating a pricing policy is the easy part—but you’ll also need to develop an internal process for enforcing it, which is often more of a challenge. This process should outline:
- How and when violation notices go out and at what cadence
- What steps are involved when there is a violation
- Who on your team will execute those steps
Enforcing a pricing policy is challenging because it requires consistency. If your brand isn’t consistent in dealing with violations, retailers may try to fly under the radar and keep pricing under MAP to remain competitive. So if you put a pricing policy out there, you need to have a plan to stick to it.
Selecting Online Retail Partners
When choosing which online retailers to partner with, remember that less is more. Deciding who to align with is all about quality over quantity.
The key is to partner with retailers that can properly reach your intended audience. You may be on the higher end of one retailer’s site and on the lower end of another, but if both reach your target customer, both are viable partners to consider.
How do you know if a retailer is a worthwhile partner? Look for those who:
- Align with your brand on price point and product types
- Are well-funded and able to be technologically innovative to keep up with today’s shopper
- Have sizable traffic (to understand the size of the opportunity)
- Have an aesthetic that aligns with your brand and products
- Can show their potential investment in your brand and contribute to the partnership
By diligently researching and understanding the retailers you work with, you’ll increase your likelihood of controlling your brand along with the probability of converting the end customer.
Choosing Your Online Product Assortment
Taking the time to define an online product assortment is one of the most important exercises you can engage in as you build out your ecommerce strategy. The online shopping experience is not the same as buying in a showroom, so it’s critical to offer as robust of a selection as you can, while keeping it simple enough that it doesn’t give the end customer decision fatigue.
If you have an easy-to-understand product line with few sizes and finishes, it’s fine to offer the breadth of your assortment. If your line is complex and option-heavy (such as upholstery with many fabric choices, 15 versions of a “gold” finish), you may want to consider paring the options down a bit. Your retail partners can be great collaborators for how to approach this, as they know the styles, categories and products that perform best on their site.
Focusing on these foundational pieces in the beginning stages of your ecommerce program will set you up for success in the end.
2. Process Creation
The road to success in distributing through brick-and-mortar channels and distributing through online channels are quite different. Much of this lies in processes—in particular, those involving your product information, customer service and operations. Establishing thoughtful processes for these will enable your online partners to best represent your brand to your intended audience and therefore drive sales.
Product Information and Assets Processes
Most online retailers have a minimum set of specs that are required to publish a product on their website. This typically includes things like SKU, price, color/finish, dimensions and shipping information, but that’s just the bare minimum. Many manufacturers overlook details that are specific to each retailer, which can create missed revenue opportunities by delaying product launches.
Establishing a process for properly gathering, organizing and centralizing the required specs for each of your retailers will ensure the fastest publishing time possible. But this process isn’t limited to new products—it will also help you gain an understanding of how to enhance your product pages over time. Being able to distinguish between what’s required to publish and what’s nice to have will help you avoid publishing delays and give you insight into spec enhancements that will increase conversions.
Digital assets are also an important part of this process. Having a best-in-class suite of imagery that properly displays your products digitally is critical, so make sure your brand has a process in place to create:
- Product images with every finish option
- Product images with alternate angles
- Close-up and detail images
- Lifestyle imagery
Pricing and imagery are the first two items that the end customer sees on a product page and are often the only components used to make a purchasing decision. You read that right—customers don’t always read the product features before hitting the buy button. Visually showcasing the features and details is key to both inspiring them to buy and ensuring that what they receive meets their expectations.
Product videos were once squarely in the nice to have category, but ecommerce moves quickly, and video is swiftly moving toward being a must-have for your product pages. These allow you to show how certain features work and are a way to help your product stand out and increase customer confidence.
Customer Service Processes for Retailer Transactions
In the home furnishings space, drop-shipping from your warehouse will be the majority of your ecommerce business, unless your average order value is under $25. That means retailers who are striving for a best-in-class customer experience (spoiler: most are) are heavily reliant on the manufacturer to meet their specific standards to ensure customer promises are kept.
Your customer service team should understand each of your online retail partners’ order processing systems and invest in automation (for example, EDI) as often as possible. Many online retailers have more complex customer service requirements than brick-and-mortar retailers, so having a training process for your team on the ecommerce channel specifically is vital to your success with these partners.
Operations and Logistics Processes
Another part of meeting the customer promise is ensuring your lead times are both fast and accurate. Fast means that an order can ship anywhere from 12 to 24 hours after the order is placed, and accurate means it shows up when the customer is told it would.
Thanks to Amazon, two-day delivery has become a gold standard, though one-day or same-day options are moving up quickly, especially when competing with things like curbside delivery or BOPIS (buy online, pick-up in-store). If this isn’t achievable from your own warehouse, your brand may want to consider retailer 3PL programs like Wayfair’s CastleGate Fulfillment or Amazon’s Fulfilled By Amazon (FBA).
Another important operation process is establishing an inventory feed for each online retailer to ensure messaging around product availability is accurately communicated on each site. These inventory feeds should be tailored to meet the needs of each individual retailer and, if possible, automatically submitted multiple times per day to ensure real-time accuracy.
Electronic data interface (EDI) takes some of the human element out of this process through automation, and in turn, makes it more efficient and less subject to errors. There are third-party EDI providers that help facilitate this type of communication for manufacturers that don’t have their own systems in place.
Healthy Inventory and Replenishment Processes
There isn’t anything more deadly to your ecommerce business than an inventory outage. Why? Unlike brick-and-mortar partners, online retailers vary greatly in how they handle back-ordered product, including:
- Some retailers do process backorders, but there is an adverse impact on product rankings with zero inventory. Once the product is back in stock, that ranking doesn’t automatically return—you have to earn it back.
- Some retailers have a “notify me” function that can communicate to a customer when it’s back in stock but won’t let them actually order it at that time. The customer often opts to purchase something else, so your brand will lose that sale.
- The most common approach is for a retailer to remove a product from the site if the available quantity reaches zero. It won’t reappear until inventory is replenished—and you’ll have to start over to regain your positioning.
Use your retail partners' forecasting tools to mitigate the risk of going out of stock on your best-selling products. And establish an inventory management and replenishment process that takes your ecommerce business into account. Creating and using a never-out list can help make sure the products that mean the most to your online business always stay in stock.
Strong processes make any business go ‘round, but they’re especially critical to have in place before you can take your ecommerce business on a path toward growth.
3. Promotional Strategy
Creating an online promotional strategy for your brand isn’t just about slotting some sale dates into the calendar. You’ll want to approach promotions thoughtfully, both to consider the results you’re aiming for and to make sure your online promotions complement your other channels like brick and mortar.
The purpose of a promotion isn’t solely to offer a discount on your products (though of course, that’s part of it!). Promotions offer impact around exposure and placement for your brand, as well. Participating in sales gives your retail partners a reason to put your brand front and center to drive volume—and volume helps you work your way up in algorithms to naturally elevate your products for the longer term.
There are two approaches to building a promotional calendar for your brand, and both are equally important.
The Brand-Driven, All-Channel Promotional Calendar
A strategic all-channel calendar goes beyond marking the calendar for a quarterly sale. You’ll want to consider:
- Your MAP discount and how to offer something compelling without giving everything away
- The assortment you want to offer, whether the whole brand, specific categories or even individual products
- How often you want to be promotional, finding the balance between too frequent and not frequent enough
- The seasonality of your products to determine when your brand and products will receive the smartest exposure
- Retailer calendars and how your timing should play into those
- Potential channel conflicts and how your online promotions will impact other channels of distribution
Your all-channel calendar should allow you to partner with the greatest number of retail partners (and definitely your key accounts) to drive the most business possible—all while maintaining your own margin and minimizing any channel conflict.
The Retailer-Driven Promotional Calendar
To truly maximize the opportunity in ecommerce (and quickly elevate your product rankings), you’ll need a deep understanding of your internet retailers’ target audiences, go-to-market strategies and even calendars. Studying the cadence of retailer events and their strengths and weaknesses in themes and categories is imperative to be able to properly align your calendar with theirs.
You don’t need to participate in every single retailer opportunity, and you don’t want to gain a reputation for being on sale all of the time. But, remember that these events are a way to gain exposure. Approach your participation in internet retailer events similarly to how you approach your own calendar: By focusing on maximizing volume and awareness while minimizing conflict and overlap in and outside of the channel.
It doesn’t matter if your brand is just considering creating an online presence or you’re set up with a few online partners already—these fundamentals are non-negotiable for building an ecommerce business for the long term. Starting now will help your brand capture today’s home furnishings customer—and set you up for tomorrow’s customer, too.
Ready to take your ecommerce channel to the next level? With a full-scale ecommerce team, and retailer experts across merchandising, content and online sales, BrandJump helps manufacturers build and manage their online business. Let's talk!
