Home decor is a crucial part of one’s home that often reflects the owner’s taste as well as personality. In order to get the things absolutely spot on, it is often required to take help of the experts. In addition to the brick and stone interior decorators, online home decor and furniture retailers are slowly but steadily gaining peoples’ faith and finding their feet in this sector to provide people with that expert guidance. Exclusive online furniture retailers, known thus far, on top of satisfying individual specific furniture needs of their customers are now looking to expand their business domain by providing end-to-end solutions and offering the complete package of home decor to meet the changing need of people and provide a hassle free one stop shop for them.
In order to meet customers’ demand, the furniture etailers viz. the likes of Urban Ladder or the marketplace like FabFurnish are looking to launch modular kitchen setups, bed linen etc under their own brand and also working to restructure their business model to accommodate interior design services respectively. To clarify their stand, Rajiv Srivatsa, the COO of Urban Ladder, explained The Economic Times that while they are not looking to do wall paintings and floor designing, they are concentrating on decorating the room with equipments available on their respective websites with the expert services of their on-board interior design consultants.
Although the move will increase competition and will be looking to share the same market niche with the dedicated home design solution portals like Bessemer and LivSpace, it will nevertheless give more options to the prospective customers to choose from.
Ecommerce or online retail is a big and booming sector now-a-days with the focus being shifted from one product to another in any particular phase. Initiating with a craze in electronics like mobiles to the current hype concerning home decor and furnishing along with basic needs including grocery and lingerie. Professional interior design and quicker installation ensures the customers to use their newly decorated homes without any delay or disruption. This sudden hype are not always driven by drastic increase in need of those commodities, but rather are also influenced demand generation through tactically placed marketing strategies.
According to an interview given to IndianOnlineSeller (IOS), the founder and MD of FabFurnish stated that the drive is mostly created by brand awareness through a strong social media presence and co-ordinating an active YouTube channel and privately owned home decor and lifestyle blog and quarterly magazine under the title ‘FabLiving’, besides participating in various promotional events and furniture exhibitions. With a view to capitalise on the unorganised and untapped nearly $35 billion market of Indian home decor and furnishing that offers lucrative online segment promising impressively high profit margins, the online players of this domain trying out all their stratagem to cash in on the present demand.
Every unexplored market comes with its fair share of dealing complexities. The following are some of the major obstacles usually faced by these online firms.
Among the top two complexities that absolutely stand out from others is the logistics issue. While pointing towards the problem, Anuj Srivastava, the co-founder and CEO of LivSpace stated to IndianOnlineSeller that furniture ecommerce portals ship only one product at a time whereas the established home decor and furnishing sites can ship all the equipments to furnish a 3 BHK apartment in a fortnight’s time. Apart from the shipping access, higher propensity of furniture damage while loading-unloading or transport itself or during the assemblage products makes the delivery complicated.
Moreover, to reach to the last mile of delivery and that too, within a couple of days time, is another huge problem to address, which even in some cases leads to loss of customer base due to untimely delivery, according to Anuj Srivastava, the CEO and Co-founder of Livspace. Though third party logistics can be used to deliver the goods in due time but in that case, the expense of delivery becomes very high from the etailers perspective. Even after having own logistics without depending on third party logistics, the proper maintenance and management is crucial. Or else the move can actually backfire as was witnessed by Jabong for its own logistics service JaVAS.
With online purchasing a very frequent and common problem is with the quality of product delivered. It is often been found to deliver product that doesn’t match the specifications like color, size, material etc. that were specified on the website or the product that is delivered is found tampered or having a manufacturing defect.
According to a report published in The Economic Times, Arvind Singhal, the Chairman and MD of Technopak stated that although such services will help the online firms would earn them customer loyalty, but providing certified and quality designer consultants especially for tier II or III cities and towns will be a big challenge.
This is the very common obstacle for any ecommerce section. With the lack of “see and feel” factor, the customers often appear sceptical about the quality, color. size etc of online furniture and decor products while investing big on such relatively long term assets.
In order to thrive in the competitive market, the etailers have to address the issues mentioned above to prosper in their business front. Here are the steps they have taken to resolve the hindering issues.
The deal with the logistics related problems such as last mile delivery, delivery on time and to cut down the price of warehouse usage and goods delivery through third party logistics, most of the etailers are now looking to set up their own logistics and warehouse services. Most of the etailers are still inclined towards using third-party logistics such as Gati, Bluedart, Delhivery etc., as they don’t have sufficient fund to build their in-house delivery channel to deliver the items on tier II and III cities which accounts for almost 30% of their sales. The setting up of in-house delivery system, in addition to curbing the problems mentioned above, guarantees better customer satisfaction, professional assemblage of furniture and also, convenient reverse shipping while order return or replacement.
Apart from that, own logistics services also opens up a new avenue to earn income from it by working as third party logistics service for other etailer firms. FabFurnish for example, have set up their own logistics service called “FabOne” that currently delvers 40% of the ordered goods across 7 cities, which is far less than the rivals Pepperfry which already accesses over 150 cities through their home-run logistics services.
According to FabFurnish co-founder and MD Mehul Aggarwal, FabFurnish is looking to raise through its stack and invest around $15 million to further strengthen the FabOne delivery network and also build 4 own warehouses across the country, besides investing over $60 million for its basic expansion programme.
To address the issue of quality control mechanism, Mr. Mehul Aggarwal emphasized that they work with the best in the field as the matter of installation partners in metro cities are concerned and have penned down strict quality and commercial diligence clauses with the logistics partners, related to penalty or incentive in contract agreement, that makes sure that only promised quality and genuine products are delivered to the customers and in due time.
By further incorporating the barcode tracking system FabOne as well as its third party logistics have enabled the customers to track their ordered product shipments at every moment.
The most technologically advance approach taken by the etailers is providing the option to the customers to visualize and customize their designer furnitures according to their needs. The app features allows the prospective customers to drag and drop their desired products from the available catalogs to decorate a room in virtual reality and have a clear idea of what exactly they should opt for while ornating their own real homes.
To address the issue of “see and feel” or physical inspection of products from customers’ part, Mr. Srivastava, the co-founder and CEO of LivSpace, have detailed about delivering a swatch box of product sample material as well as setting up of model apartments with different sample home décor and furnishings to enable the customer to experience offered sample interior designs by visiting in person.
Thanks to the lucrative profit margins, value-driven and cost effective sales approach and generous investor pool, the online furniture segment is flourishing, despite all the above mentioned challenges. Moreover, the sincere steps taken by the furniture etailers to address the inherent challenges has also produced beneficial results. With firms like LivSpace opening up to international brands and Urban Ladder modulating their business strategies to offer complete home decor solutions under one roof, the online furniture market is destined to reach new heights in days to come.
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