Read time: 3.7 minutes
Unless you’re reading this from the far future, I don’t need to tell you that 2023 is not without its share of hurdles. The many problems of 2022 still continue, and even long standing, traditional sectors like the furniture industry are feeling the pressure.
At the start of 2023, the furniture sector faced the global economic slowdown that all industries faced. However, the rising cost of raw materials, supply chain issues and the ongoing energy crisis have further impacted furniture businesses around the world.
As part of today's newsletter, I'd like to explain how you can build a business plan by overcoming furniture companies' shortcomings and moving towards profitability.
————————————–
Most Common Challenges of Retail Furniture Industry
The pandemic made the importance of online business paramount. For a sector that long relied on showrooms and in-person sales, digitization of trade in the furniture industry has increased greatly. However, it still is having its own set of challenges.
1. Lack of Online Sales Channels: In 2022, 43% of respondents in the USA confirmed that they buy furniture online, of which 25% chose an e-commerce platform and 18% made a purchase directly on the brand’s website.
2. Low AOV Per Customer: Average Order Value (AOV) is total sales divided by total customers. Increasing AOV is a great way to increase CLV (Customer Lifetime Value). Furniture companies often struggle to increase AOV with "like-or-like" offers.
3. Limited Market Potential: There's always a cap on any market growth potential. Global furniture market is expected to grow 5.02% annually until 2030 (source). Meanwhile Amazon did 220% more business during covid period.
4. Outdated IT Infrastructure: While being online is important, it’s also worth noting that outdated IT infrastructure can cause a lot of problems. Headless platforms are ideal for cross-channel growth so what happens if they end up with an old fashioned monolith or server-based system?
5. Digitization Roadmap for the Future: The biggest spenders are now coming from a generation who are completely habituated with digital experiences. Traditional business needs to adapt to this generational transformation.
How to Solve the Biggest Challenges with 3D & WebAR?
Addressing the most burning challenges for the furniture business can help them to scale the growth of their business. At the same time, those solutions can be the building blocks of your successful WebAR business. How? Let me explain.
Most customers leave furniture company websites either due to not finding their desired product (pricing is the second factor here) or not ready to spend time clicking on too many product images to find the product and then not being sure of how it would look in real life.
A 3D product configurator can solve the problem of the online users. A 3D configurator shows a photorealistic 3D model that can be manipulated to appear in different colors, materials, sizes, and styles.
At its core, a 3D configurator is a powerful sales tool that acts as a virtual showroom. It allows customers to virtually interact with a product and personalize it to their specifications. Through customization, 3D configurators offer peace of mind to customers who want products that match their personal aesthetics and fit within their homes or businesses.