The climate for outdoor living: Online or in store?
Furniture Today Staff -- Casual Living, February 15, 2007
Be careful what you conclude when you hear about retail sales and how the outdoor living market is affected by it. eCommerce and traditional brick-and-mortar business models co-exist peacefully, and success may be achieved from either means — depending on who you talk to.
Our economy operates like a Swiss watch with many components that make the ultimate machine run. The environment surrounding the outdoor living market is clouded with relatively low inflation, a notable slowdown in housing starts, and a 2007 forecast of about 5% slowdown in the growth of retail sales.
How nervous should retailers in this market be?
"I don't think that there is any chance of doing successful outdoor furniture business through online sales," said Carol Christensen, a patio buyer with Exton, Pa.-based Waterloo Gardens, one of the top 10 retail garden centers in the United States. "The industry is dependent on dated early buy orders with dating that represents a real commitment to the vendor and provides the retailer with immediately deliverable stock. In the last several years, our business has 'floated' to the top with high-end sales. These clients 'want what they want' and our business is almost 40% special order."
Many outdoor living merchants seem to agree: the personal touch influences consumer choice and selection.
"The personal touch is very important, but to maximize this advantage employees need to be well informed in their customers' needs, and the types of solutions the store can offer," said Mark Grambart, CEO of Canadian- based Contech Electronics, which produces innovative technology products for the pet and specialty garden markets. "For example, Contech designs and manufactures animal-control products (like the Scarecrow motion-activated sprinkler) for gardeners, so the best retail sales staffs for those products are gardeners themselves. Customers are unlikely to go into the store and say I need a motion-activated sprinkler, but they may say they need something to keep deer or cats out of their yard. That is where a helpful and well-informed employee can make the difference, by telling customers about the alternatives available."
Contech emphasizes the absence of a real live human being in the online experience. "There's really no online substitute for a personable, helpful and well-informed sales person," Grambart said. "A sales associate who's an expert in the field can take a consumer's need, and match it to the best solution."
But not all agree that an offline sales environment is exclusive of the rich information well of the Internet. Online does play a key part in the events that lead up to a purchase decision for consumers and prospects in the outdoor living environment.
"Based on our research we've found that consumers tend to do a lot information gathering before they start buying for their outdoor living spaces," said Steve Kleber of Kleber and Associates Marketing and Communications and a member of the Board of Trustees of the National Remodeling Foundation. "This is where the Internet plays such a huge role. Consumers use the Internet to help refine their decisions or get design ideas. Once they have an idea of how they want their spaces to function and how it should look like then they prefer going to a physical store. They want to interact with products, use in-store displays, and have the ability to ask questions from a sales or customer service rep. The online experience and showroom experience should work hand-in-hand and retailers should strongly invest into their Web sites by having a greater selection of products featured as well as offer tips and inspirations for consumers. "
This may explain why Jupiter Research recently predicted that off-line retail sales are greatly influenced by consumers' online browsing and research. In fact, they forecast an increase in off-line sales by a compounded annual growth rate of 12% over the next five years.
Not all retailers subscribe to the business model of in-person, showroom sales with the personal touch. Some are exclusively online and are quick to profess that it always comes back to the product that you represent — not necessarily the showroom location if there's even a physical showroom at all.
"A compelling combination of design, quality, service and value will always carry the day," said John Baker, CEO of the Bainbridge Island, Wash.—based Thos. Baker Company, a supplier of premium teak outdoor furniture. Baker explains that his company, despite its commitment to quality and service, relies exclusively upon online sales.
This is the point that is disputed by buyers such as Christensen, who feels there are just too many questions, too many options and too many choices that require "being there."
"How would a consumer be able to navigate the myriad of choices available — frame finishes (with subtle antiquing), fabrics that could be tone-on-tone or have a texture (would chenille even be able to be photographed?) How would she be able to test the 'sit' of one cushioned piece versus another collection?" Christensen asked.
"We have well-trained salespeople who are able to do space planning, to show options, to recommend step-ups, to do home visits and to create individualized outdoor living spaces," she said. "Our customers do not want 'cookie cutter' — they are looking for furnishings that will honor their homes, their landscaping and the taste level of their interiors."
Kleber concurs. "We find that consumers are often disappointed by the selection, style and quality of outdoor living products," he said. "They also often have questions about durability, a large consideration in products that will 'live' outside over time. These are things that can be answered in literature and online but are better understood in a 'show and tell' situation with a knowledgeable expert. Homeowners feel that they make more decision that is informed when there's a sales or customer service rep to help guide them through product specs and refine the selection for them. Where the opportunity lies for retailers is to create more of a 'showroom' experience for consumers. A satisfactory one-stop shop for outdoor living is yet to be seen in today's market."
Christensen points out that eBusiness has gained some momentum and this is enough to force any retailer in such a competitive environment to keep pulse with what's working, what's not and why. "With a reputed 30% increase in eBusiness this year, I think that we all have to mindful of who is doing what successfully," Christensen said. "I think that we have to be as 'slick' as the Boxes and to work hard on perfecting what they cannot do and to determine why consumers are using the Internet."
"The accessories market is gaining a lot of traction for eCommerce retailers," Kleber said. "Items such as lighting fixtures, candles, fire pits, umbrellas, seat cushions are easier items to sell and ship than big ticket items like barbecue grills or patio furniture."
The investment in outdoor living warrants great care and attention and often a professional designer, Kleber added. "Because dining and entertaining are central to outdoor living, the outdoor kitchen has become the ultimate manifestation of this idea, and consumers usually hire a designer or buy directly from a physical store," he said. "Additionally, many elements of creating an outdoor living space require installation such as landscaping, decking and patio and fencing. Many online retailers have not perfected the service side of their business, which is installation. "
Baker emphasized that it's all about the end product that makes the end-user a satisfied customer. "Anyone who can deliver that combination will be warmly received regardless of their postal code," Baker said. "Given our capabilities and experience, we are more excited about exporting competition than we are afraid of facing it here from abroad."