The E-Commerce Numbers And What They Mean for Furniture/Lighting Retailers

E-commerce made substantial gains this quarter, but the online home improvement sector appears to be one of the biggest winners. Here's what furniture and lighting retailers need to know.

Alison Martin
08/21/2018
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Sell online? Great, online retail is up, especially in the home improvement industry.

Don't sell online?  You still need to know the latest e-commerce numbers and what they mean for your business.

Love it or hate it, e-commerce will continue to grow. Here are the numbers right now and what they mean for furniture and lighting retailers.

E-commerce stays under 10 percent of overall retail sales, but makes gains

Online sales continue to make large gains in the second quarter. The Census Bureau of the Department of Commerce reported this month that the estimate of U.S. retail e-commerce sales for the second quarter of 2018, adjusted for seasonal variation, but not for price changes, was $127.3 billion, an increase of 3.9 percent (±0.7%) from the first quarter of 2018. Additionally, the second quarter 2018 e-commerce estimate increased 15.2 percent (±4.2%) from the second quarter of 2017, from $110,505 billion in 2017 to today's $127.3 billion.

That's a substantial gain, especially when compared with overall retail sales. Overall retails sales grew by just 1.3 percent between the first and second quarters and only 5.7 percent from the same time last year. As it stands, e-commerce now makes up 9.6 percent of overall retail sales, and if the growing trend of 2 to 3 percentage points each quarter continues, e-commerce will hit the 10 percent mark at some point next year.

Bottom line: If you entertained any thoughts that e-commerce was just a phase or just for certain products, think again.

Online home improvement sales growing at double digits

According to industry analyst NPD Group, U.S. online sales of home improvement products grew by 34 percent in 2017. The firm's Checkout consumer receipt mining service found that air filters and blinds showed the most growth year over year — up a whopping 90 percent in sales — and other categories, including hardware, lighting and ceiling fans, bath and faucets, and storage, actually exceeded the industry's overall growth in 2017. All major home improvement categories showed double-digit improvement.

Whether retailers like it or not, consumers love the ease of buying online. Companies like Wayfair and IKEA have stepped up their virtual reality offerings, allowing consumers to design their rooms in real time, and the omnichannel approach — being able to buy online, pick up or return in store — seems to be making a huge impact on consumers.

Not to mention a new crop of furniture manufacturers that are selling directly to consumers and keeping their shipping costs down. This week, Floyd, the Detroit-based furniture company that makes bed frames and tables, released a new sofa design. Much like sofas from Campaign Living and Burrow, the Floyd sofa offers buyers a few simple designs and colors, and it comes to them in a flat-ship box. All three companies aim to maintain a high level of quality — no fast furniture here — that can be packed up and moved as easily as people are moving nowadays.

“The home improvement industry is evolving," said Joe Derochowski, Executive Director and Home Industry Analyst at NPD, in a prepared statement. "E-commerce maturity is translating into sales results that more accurately reflect the nuances of the industry’s broader seasonal, and more traditional category-specific trends. The future path for the industry depends on three things – the consumer’s ability to connect products to their needs, the retailer’s ability to keep up with logistical demands around delivery, installation, and returns, and finally, a cohesive relationship between brick-and-mortar and e-commerce that helps consumers with whatever home improvement task is at hand.”

What furniture and lighting retailers should do now

Even if you don't sell online, e-commerce affects your business, and you still need to have a presence online.

Whatever your online strategy is, follow these tips to make it stronger:

- Review your website's look and layout. Decide if the time's right for a few upgrades.

- Definitely upgrade if your website is not responsively designed.

- Got a Google By Business page? Double check and make sure the information is accurate. If it's not, update it immediately.

- Develop a digital marketing strategy for your business, even if you don't sell online. Not sure how? Check out our advice here.

Your website is now your first impression for most potential buyers, so make it a good one.

Photo: Pexels

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