All furniture retailers employ marketing strategies and tactics to varying degrees. In future however, when competing for an Australian consumer’s hard earned dollar, those retailers are going to have to become smarter.

Now not only do furniture retailers have to compete with online shops, but the economic turmoil of the GFC resulted in a decline in customer confidence which meant that high price items have been, metaphorically speaking, left on the shelf.

What is emerging now, according to some, is a retail revolution. Alexander Grünsteidl, Director with Method a US consultancy firm, believes that bricks-and-mortar retailers have an important, albeit transformed role to play in the future. He argues that they must completely rethink current transactional driven business models in order to add new value to the physical retail experience.

Grünsteidl is not the only one of this opinion, there are many others who also believe that retailers need to develop more value-add services that help drive sales and that we may see a new “showroom” or “art gallery” category emerge.

Some retailers, such as Nespresso (with 215 boutiques worldwide offering an intimate coffee experience), National Geographic (their flagship store has an exhibition area, a photography studio, café and auditorium) and Fallow fashion boutique (blends fashion with art, food, drinks and beauty treatments) have already embraced change and radically revised their retail offering.

These retailers are pioneering a new direction for retail space and the advent of social media marketing provides functionality for companies to accurately target product offerings to specific demographics. Which means that all retailers need to sit up and take notice.

It is worth noting that in the first half of 2011:
- Goldman Sachs invested $450 million in Facebook, valuing the site at $50bn (3.1.11)
- Twitter’s market valued reach $4bn, a month after raising $200m in funding (25.1.11)
- JPMorgan Chase raised $1.2bn for a new fund to invest in social media-related companies (3.3.11)
- Microsoft buys Skype for $8.56 bn (cash) (10.5.11).

This is put into perspective when online retailing has forecasts of triple digit revenue growth over the next three years, with sales set to top $36 billion by 2013.

A new survey conducted by Nielsen found that nearly 75% of Australian businesses allocated 10% or more to their marketing budgets for social media, whilst 44% of businesses expanded their budgets to include social media activities. According to the Nielsen-Community Engine 2011 Social Media Business Benchmarking Study the highest proportion of social media spending is going to facebook advertising at 21%.

Facebook is no longer a place solely for US college students to fraternise (which is how it started in 2004), it is now serious business. With over 600 million user accounts it is literally changing the face of the world, the way we live and communicate.

A recent article in Furnishing International points out that a number of Australian furniture retailers have facebook pages, outlines how to use facebook and notes that every business dealing actively with customers needs to engage with social media.

Traditional retailers will only survive by providing a full shopping experience, embracing online sales platforms or social media marketing strategies, or all three. Diversification in a digital age can be a question of survival.

 

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