Buying furniture online almost seems counterintuitive. You can’t sit down on a couch or lie down on a mattress via the web, but that hasn’t kept online furniture stores from flourishing. And now that going into a furniture store and sitting in a chair hundreds of people before you have sat could be life-threatening, online furniture shopping is fast becoming the norm.
Acquisition costs are down across the board, but selling furniture is much different than marketing a gaming app or finding new users for your ride-hailing app. Still, there’s a lot to learn from companies who are taking a traditionally brick and mortar area of commerce and bringing that experience online. That’s why, in a recent episode of Retention Masterclass, John Koetsier and I talked to Ian Leslie, CMO of Industry West – maker of modern, industrial, and mid-century designs –who is famously transparent about his data. From a holiday boom to the art of retaining furniture shoppers, we covered it all.
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Down is the new flat
Holiday weekends are traditionally a big boon to sales on big ticket items like furniture, and that remained true for Industry West, even during COVID-19. “What we’ve seen, year over year for Memorial Day, is that our website cash revenue was up 36% while our media spend was down 11%. So we saw our CPA down 58% year over year,” says Ian.
But even with that good news lifting sales figures are not where the company had hoped when doing projections for this year. “I mean, 2020 has obviously been difficult, and we’ve had to make some very tough decisions,” says Ian. “Even with the strong holiday weekend, we’re going to end up behind where we were in May 2019. And obviously, when we’re behind last year, we’re obviously not going to hit the projected growth that we expected to hit this year.”
But as most marketers know, Industry West isn’t alone.
“A friend of mine said, you know, being down 10% to 15% has been flat. So, I think we’re maybe a little bit better than the new flat,” says Ian.
For Ian and the Industry West team, the secret to their success has been the ability to pivot quickly when circumstances demand it. That combined with a history of e-commerce put the brand in a good position to deal with the challenges of sales in the time of Corona. “So whereas a lot of legacy brands in the furniture vertical are kind of scrambling with real estate being closed. We just kind of got back to what we knew which was e-commerce.”
Personalization wins the day
Every marketer is – or should be – convinced of the power of personalization at this point. But just in case you need another data point to prove it, Ian announced a 15% increase in average order value, and 8.1% increase in revenue since his team introduced personalized content. This number is made all the more fascinating because you don’t necessarily think of furniture and content together.
Ian says that it all begins with simple suggestions of the kind we’re all used to – “People who viewed this item also bought…” or “You may also be interested in….”
“I think, you know, that’s personalization at the most basic level that I think every good e-commerce company needs to be looking at,” says Ian. But Industry West takes things a step further. “It’s not just, you know, as simple as because you went to this, you also may like that, for us. It’s also to segment the trade buyer who may be needing 100 stools versus the consumer buyer who’s looking for, you know, a dining room set for stools for their kitchen. So being able to segment in that regard and show them different things is important. And that’s why I think personalization is huge for us.”
So huge, in fact, that the team looks at their personalization efforts and iterates every three or four months to make sure it’s keeping up with trends, technology, and customer expectations.
When you’re selling furniture, retention looks a bit different. These are often relatively big purchases that people don’t make lightly – or regularly. So, what does it even mean to talk about retention in these terms?
“I think we’re really just kind of starting to broach the tip of the iceberg in that regard,” says Ian. For Industry West, retention can be as simple as turning a first-time anonymous user into a second-time user, so the team can serve up a more personalized experience.
“We’re kind of looking at what you browse and tried to push that first and foremost – also potentially offering codes based on that,” says Ian. That’s a fairly standard e-commerce retention practice. But Ian also tells us, “So if we are able to identify that you’re a trade user versus a residential user – whether that being via a login or via how you’ve purchased in the past, having purchased with a trade account – we will present to you what we’re calling quick ship items, even though everything for us ships rather quickly.” These “Quick Ship Items” are high-inventory, high-stock volume, and “we know you may need something in bulk, here are the options you should be looking at.”
Putting in the effort to retain users is worth it. “We do see ARV does increase by something like 70% from that first to second purchase, and then 30% from second to third purchase.”
To learn more about how Industry West works to retain its most valuable users, read the full transcript below.