Sales reps at City Furniture are able to pull up product information on iPads in store to better assist customers during the buying journey.

HIGH POINT — More than 50% of companies currently use some type of data management platform, but global research firm Gartner found that many of these businesses believe poor quality data is responsible for an average $15 million per year in losses. This means that having access to high quality data is increasingly important when it comes to success, especially for home furnishers retailers.

“More and more companies are taking advantage of tools like machine learning and other automated processes that are available through the business applications they leverage to manage inventory, order fulfillment, costs and match supply with demand,” said Chris Benner, industry principal for retail at Oracle NetSuite, a cloud computing company.

“Historically, many of these tools have been difficult for retailers to take advantage of, especially for small retailers, but cloud-based solutions have made it much easier and more affordable for retailers to do so,” he added. “Now more than ever, brands are turning to technology to help them adapt and survive.”

Quality analytics

According to data provider Statista, home décor and furnishing platforms have seen a 7% online traffic increase due to the global coronavirus pandemic that forced millions of people to spend more time at home. This increase, along with the temporary store closures in March and April, has forced many retailers to improve their omnichannel performance.

City Furniture President Andrew Koenig said the growing importance of quality data has resulted in a culture shift in his company.

“You need a passionate culture of data and analytics in your organization, and a strong leadership team to manage this cultural shift that all traditional businesses are trying to overcome to be a tech company,” Koenig said. “You need platforms and warehouses to store your data, tools to manage it, processes and standards to organize and clean it, and then you need to put it in the hands of the users that need it most.”

Canadian furniture retailer Tepperman’s also has an enterprise system that is the guts of the business and is connected to a different web platform for e-commerce.

“For our company, that’s four different systems all talking to each other,” said Andrew Tepperman, president of Tepperman’s. “When you look at the ease of purchasing from Amazon as well as with the level of their automated communication, there’s a lot of opportunity in our industry.  This type of integrated process challenge excites me because I know we can get a lot better, which will ultimately make the customer experience better.”

Storis, a provider of retail software solutions and services to the home furnishings industry,  recommends that companies have inventory and sales data analyzed from both in-store and e-commerce sources, which empowers retailers to forecast across channels and accurately plan their merchandise strategies.

“With shifts in behavior online and the rise of certain product categories during the pandemic, access to this quality data is critical to timely decision making,” said Pete Dressler, Storis product manager for eStoris solution. “Related to inventory, we are finding that tags showcasing product availability, delivery date expectations and on-display by showroom are valued. Logistical information is as crucial to decision making as price is in this current environment. Therefore, providing transparency into this data is key.”

Necessary data?

Retailers such as City Furniture and Tepperman’s say capturing an email address is one of the most crucial pieces of information to obtain in order to re-target more efficiently to drive both online and in-store promotions.

But tech companies in the space agree that the amount of additional data needed is growing increasingly more complex.

“The buying journey a customer undertakes today is non-linear,” said Aleksandar Atanasov, head of marketing at Cylindo, a 3D furniture visualization platform.  “Customers hop in between buying stages, devices and media, with growing expectations for richer and more convenient furniture shopping experiences. This makes the process of obtaining customer data that could be useful for decision making more challenging.”

Atanasov suggests that retailers have an overview of traffic sources and revenue per channel, average order value and an understanding of the behavior and interactions for its most valuable audience and segments.

Oracle NetSuite’s Benner said there is so much data available to retailers and manufacturers that it can be difficult to get to the right data at the right time. He believes one area that is important to capture is consumer behavioral analytics, which offers visibility into shopping trends, preferences and correlations across all items sold.

“All of this data can give you better insight into both your customers and products to ensure you have the right products, in the right place, at the right time and at the right price,” he said.

Online merchandising is just as important as in-store merchandising, according to Dressler from Storis. Analytics on products that are typically bought together or that customers view as alternate options can help retailers to properly populate customer suggestions for items that are ‘frequently bought together’ or offer additional options for out of stock items.

“With insights into sales data such as best sellers, highest margin or fastest turns, retailers can make strategic decisions for the content they promote on their homepage, category landing pages and in their navigation,” Dressler said.

Another one of the most valuable and challenging data points to gather is the correlation between consumers that browse product on a retail website and the consumers that purchase a product at the store, said Manoj Nigam, CEO and president of MicroD, a web technology partner in the home furnishings industry.

“This is the data that helps retailers understand which customer segments are more inclined to buy online vs. the type of customer segments and products that are best merchandized for a brick-and-mortar experience,” he said. “When the right product is merchandised and presented to the right customer segment based on their buying preference, conversions increase significantly in both channels.”

The tech experts all agree that analyzing where online customers bounce or abandon their shopping carts also can help retailers to make the necessary adjustments to convert more visits to sales.

“All of this data is easily obtained through Google, your website platform and third party tools, and how it can be used to your benefit is almost limitless,” said Ken Widger, MicroD’s marketing program manager.

Value of visuals

According to a survey by Statista, 12% of consumers used some version of a visualization or augmented reality tool in 2019 during their virtual shopping experience.

Consumers want to visualize furniture in their preferred fabrics and finishes before making a purchase, according to Nigam, and it’s also a plus if they are able to virtually visualize a finished product in their own environment. Tech company experts said that for AR to succeed, 3D models of the products must be available. This requires investment from retailers and manufacturers to develop these assets.

“We’ve seen progressive retailers begin to carve out ways to add more visualization on their website, which is their virtual showroom, using a dynamic 2D visualization with fabric draping or using 3D and AR technology,” said Nigam. “For those retailers who have not adopted a path forward with advanced visualization, we recommend the 80/20 rule. Identify the 20% of their products that drive 80% of the revenue and develop those into 3D models for the AR/VR applications.”

Tech companies in the space say they advise clients to prioritize investment in the highest quality visuals and the necessity of building a future-proof content library that can be repurposed later. This allows them to leverage the same product visuals across multiple touchpoints and uses, according to Cylindo’s Atanasov. These include marketing, point-of-sale systems, augmented reality solutions and other digital environments, while reducing technology costs and the product’s time to market.

“End customers are also looking for relevant, engaging experiences that can help them visualize the product and ease the decision-making process, not just interactions that have the goal of ‘wowing’ them,” Atanasov said.

“To respond to the increased demand for meaningful interactions and to build the omnichannel experience they designed for their customers, retailers need to rely on technology,” he added.

“The old saying ‘when you show more, you sell more’ holds water now, especially for how products are presented as part of the overall e-commerce merchandising.”

Spending for data management

Retailers recommend a step-by-step approach to adding the necessary data capture and analysis, with the first step being an investment in adding people and putting together a team.

“At City Furniture, we focused on solving one business problem at a time. After we solved one problem and got a return on investment, that funded the next investment,” Koenig said. “Force your technology teams to work together and create an organization where data is democratized, and make them teach you along the way. You will be a better leader and organization because of it.”

Retailers also agree that speed and accuracy of information is critical in a fast-paced retail environment, which may require new reporting processes.

“Data can be overwhelming and can lead you down too many holes. It’s like the adage of home builders: ‘Measure twice, cut once’,” said Tepperman.  “The right analyst can identify red flags that, when addressed, can have a material impact on the business.”

This important data can also apply to clearance and closeout items, according to Ron Gordon, MicroD’s senior vice president of technology. Placing these items for sale online can help to more quickly move this inventory to open up showroom space for newer items.
“The website is an ideal way to present these items to a much wider audience, easily exceeding the in-person showroom traffic,” Gordon said.  “And all things considered, it has an excellent ROI.”

When considering the financial impact of processes like inventory management, shipping or forecasting shopping patterns, it’s important to understand these can impact both the top and bottom-line of the business in the long-term, according to Benner from Oracle NetSuite.

“Investing in a system can improve operational efficiency of inventory and the customer experience,” he said. “Retailers and manufacturers can stay ahead of the competition and benefit from a significant return on that investment, no matter the company’s size.”

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