By Lorrie Grant, USA TODAY
Nov. 23, 1999
HIGH POINT, N.C. -- When furniture makers and others
converge on this tiny town for the biannual showing of new collections,
the shop talk is usually about style, construction, function, fabric
But when the International Home Furnishings Market
opened here last month, the subject that reached a near brawl was
the Internet. Online furniture selling is an issue that pits manufacturer
against retailer like no other.
"(Manufacturers) are in a painful evaluation
of the desire to sell online vs. the practical wisdom of maintaining
their existing channel of distribution (through traditional retailers),"
says Ivan Saul Cutler of accounting and consulting firm BDO Seidman.
Indeed, some furniture executives dismiss virtual
retail, citing delivery concerns, service demands and the high risk
of alienating retailers.
Others believe it is here to stay because consumers
have shown a strong willingness to shop online.
Manufacturer Mitchell Gold is in that camp.
"The next wave of furniture buyers are those
already on the Net," says Gold, during a break from showing
his New Cottage collection.
He is overhauling his site so consumers can purchase
his trademark slipcover and leather-upholstered chairs. But the
sale will be transferred to his nearest dealer.
Restoration Hardware and Pottery Barn are among the
top dealers now selling goods from The Mitchell Gold Co. in stores,
catalogs and on the Web. Gold profits indirectly from the sale by
helping the dealer do more business. "I'm going to make money
from the dealer buying more product from me," he says.
Slow to buy online
Furniture is the latest product to hit the Internet,
a retail channel that gained immediate clout with such industries
as books, music, clothes, even art. But with furniture, the impact
has yet to match the hype.
"About 20% of consumers have purchased something
(online)," says Britt Beemer of America's Research Group. "Of
them, only 6% are furniture buyers. So there isn't a cry for online
Still, Internet-only sellers such as Furniture.com,
Living.com, FurnitureFind.com and Goodhome.com are emerging almost
The influx comes amid forecasts of increased consumer
demand for furniture. Sales are pegged to rise 6 % this year to
$61 billion and 5 % next year to $64 billion, according to the American
Furniture Manufacturers Association.
Just how much of that will stem from electronic commerce
is unclear. The online companies are not public and do not disclose
sales, although Forrester Research forecasts $268 million this year.
Online furniture retailers' sites are slick and categorized
for easy room-by-room shopping. They show fabric samples, and, while
textures may be hard to grasp, many will mail samples. There is
also information about construction, delivery and return policies.
Online room planners and vast selection are among
their strengths. An entire collection can be viewed over the Web
while bricks-and-mortar showrooms have limited space.
But enlisting major furniture makers is a weakness.
Baker, Century, Henredon, Lexington, Thomasville and other top brands
are not for sale online at Internet-only sites.
"If you're a quality manufacturer, you want to
be serviced by a quality dealer. If that's not happening, then you
lose your name," says Randolph Chrisley, senior salesman at
Pulaski, Va.-based Pulaski Furniture, known for grandfather clocks
and curio cabinets.
Furniture.com, which had 722,000 visitors in September,
boasts more than 50,000 pieces in its e-showroom. CEO Andrew Brooks
asserts that customers' needs are met.
Adria Silverman is one of them. She could not find
the pieces she needed for a master bedroom shopping around Miami
and had reservations going online.
But Furniture.com answered her questions about the
thickness of the wood and quality of construction in such detail
that she and her husband, Scott, bought an armoire and two nine-drawer
chests for $2,000.
"They were so helpful on the telephone that that
pushed us to make the decision," says Silverman, 48.
Furniture.com's discounts relative to retail range
from 15 % to 25 %, Brooks says.
Retailers have responded to such price reductions
by leveraging their buying power against suppliers.
"Merchants are telling manufacturers that servicing
the renegade 'furniture-something-dot-commies' constitutes mercantile
treason," Cutler says. "The sentence is immediate death
in the form of dissolving their relationships.
"Stanley Furniture in Stanleytown, Va., found
out retailers were serious. Their executives ran a test on Living.com
"We did it for two weeks but received a real
negative response from retailers. They thought we were bypassing
them," senior sales rep Bill Sibbick says. "From there
we said, 'Don't disturb the nucleus of our retailers for a really
small part of the market.' "
Jim Kittle Jr., CEO of Kittle's Furniture, an Indianapolis-based,
family-owned chain of 16 stores in Indiana and Ohio, is more direct:
"I would not carry the product of a vendor who opened a store
across the street from me. Why would I want to compete with my own
As a result, manufacturers still move products largely
through dealer networks and factory outlet stores. Those with Web
sites use them to drive shoppers to the retail outlets like Kittle's.
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