Omnichannel strategies for Homeware retail
The Homeware market is forecast to be worth £13.6bn for the whole of 2018, an increase of roughly £200m on the previous year. The size of this market is only expected to grow – meaning the already huge opportunity for retailers is also on the increase.
Our ‘Homeware market leaderboard’ revealed the online winners for the last quarter, but how did key retailers achieve their strong performance?
Omnichannel: working online and offline
We’re all about online success, but we also understand that online performance can be bolstered or even made by offline activities. Focusing on the top 4 performers from the homeware leaderboard, we look at their recent activities and the importance of creating a streamlined multichannel customer experience for overall retail success.
Position 4. Ikea
Ikea has always been known as an out-of-town warehouse store that requires a whole day to fully peruse (factoring in time to stop for their famous meatballs). Now, in an effort to make their shopping experience easier and more accessible to a broader demographic (not just those with cars), they’ve started opening smaller shops on high streets. These Ikea ‘Planning Studios’ offer a degree of personalisation that their bigger stores don’t, with staff able to offer their expertise.
Last year, Ikea profits were down by almost 40%; potentially as a result of capital injections on the website and in-store.
And website investments are clearly paying off, as Ikea steals 5% of the entire homeware market and ranks 4th out of a total of 45,607 brands. Will its new city centre stores prove effective?
Savvy traditional retailers are beginning to prioritise seamless, authentic and tailored customer experiences.
Ikea is seemingly joining the ranks, by making a positive move towards modernising the way it conducts business.
Position 3. Wayfair
Originally an online-only store from the US, Wayfair is ranking 3rd in the UK homeware leaderboard. It could be argued that Wayfair has an edge, as it has been trading online for longer than other retailers; achieving competitive advantage earlier on, in a less saturated marketplace.
Even as a certified ecommerce retailer, Wayfair is beginning to see the value in
bricks and mortar stores, and plans to open temporary physical stores in some US cities.
Although Wayfair is only currently testing to see how customers will react to the brand offline, its level of offline personalisation, coupled with its online success, makes for a brilliant and modern omnichannel shopping strategy.
Position 2. Dunelm
Dunelm recently merged the three websites it acquired over the last few years into its main Dunelm.com site.
To some, shutting down three websites may have seemed like risky business, but by implementing a smart website migration strategy, Dunelm now has three-sites’-worth of traffic, rolled into one.
Its success is only underscored by its revenue uplift of 25%+ since 2017.
In store, it is supporting digital transformation with a tech strategy, using tablets to offer stock that’s not on display to its customers. Dunelm’s Chief Executive, Nick Wilkinson, has asserted that they are focusing on multichannel experiences – very smart.
Position 1. Argos
Argos is this quarters winner, with at least 3% more share of voice than any other performer.
Having been bought by Sainsbury’s back in 2016, Argos has benefitted from smaller concessions within the supermarket and introduced a fast-track in-store feature. These strategies not only improve customer experience, but link Argos’ online experience with its physical store, making it easier for shoppers to purchase via both channels.
They also announced this year, voice shopping with Google Home. They’re the first UK retailer to adopt voice into their omnichannel strategy, meaning they’ll be the go-to for early voice search users. Will they increase their share online as a result? As voice search and voice shopping is not yet widely used, it is unclear what this will mean for their online presence, but they are staying well above the digital curve with this investment.
A number of Argos stores have announced their imminent closure in the new year and, while this seems like a setback, it actually makes more sense for the business. Closing some stores, and opening up smaller concessions will ultimately save money – it’s a long term strategy.
Keep innovating your omnichannel strategy
Is it a coincidence that the top performers all have omnichannel experience at the forefront of their strategies? All four retailers are taking steps to secure their future by experimenting with digital and physical mediums. It’s clearly paying off online.
However, as we know, a lot can happen in a quarter so they’ll be no lounging about on their comfy reclinable sofas. Retailers need to keep innovating to stay abreast of the changes in retail shopping and the homeware environment.
If you like the insight from this blog, download our Homeware Retail report for more.