Furniture Retailer

I: The client is a retailer of furniture. They are one of the largest retailers in India and are a part of Top 100, but they are not able to grow their business. Can you help identify what could have gone wrong?

C: Sure. May I know more about the client. Does the client sell through an offline or an online presence? If it is offline, how do they sell and where are the stores located?

I: The client sells furniture only in the offline medium through retail stores. They have a pan-India presence but let’s consider that the problem faced by them is at a particular location only. Why don’t you tell me what factors you would consider to assess the present condition?

C: To understand the present situation, I would like to essentially look at four factors – product, customer segment, pricing, and channels. Since we know that the client sells furniture only via retail stores, I would like to understand the other factors because I can make any recommendation. To start with products, may I know what kind of furniture does the client sell and is it in line with the latest trends or is it more classic in nature?

I: The client sells normal day-to-day furniture. They are trying to introduce new furniture similar to the old ones but with better designs and functionalities.

C: Can I know more about the customer segment the client caters to? Are the customers urban or rural?

I: The customers are urban residents. The location of the retail outlet is not in a rural area.

C: As the client serves more urban customers, do we have any data on the customer demographics? Are the customers a couple or single or are they looking to buy furniture as a replacement?

I: We do not have this data as of yet.

C: Okay. To move further, can I know more about the average revenue per customer. This would be a function of the number of addressable customers*the conversion rate*number of items purchased*price mix.

I: Let’s not look at this formula. Why don’t you look at the pricing of a product.

C: Sure. In that case, I would like to consider the material cost and discounts given to understand the pricing of the products. May I know whether the products are of high quality or low quality? Also, are the discounts competitive in the market?

I: The client deals in high-quality furniture and yes, the discounts are on the lower end as compared with the competitors.

C: Though the discounts are lower than the competitors, is it right to assume that the customers still visit the store because of the high quality products offered?

I: That seems reasonable.

C: To understand the conversion rate of customers, can I know more about the retail experience offered? How is the feedback for the employees deployed at the store and what about the ease of locating various products?

I: The employees are dedicated and have been working for the client for a long time now. When it comes to the retail experience, the ambience is a little outdated and they don’t have many products on display for the customers. They also do not allow the customers to test all of their products on display. Let’s wrap it up now. Can you share some recommendations for the client.

C: Sure. I would like to share recommendations for each of the factors discussed. Firstly for the product, the client can incorporate customised product offerings to have an edge over the competitors. They are already trying to introduce new products so marketing would be essential to showcase the differences. For the customer segment, the client can conduct a customer analysis by storing their information to understand their preferences and their backgrounds to be able to provide the right products and increase revenues. For pricing, the client can provide higher discounts on specific occasions to attract customers and ensure it is competitive. For the channel, the client can increase the store size to be able to display a larger number of their offering and also provide a product test to meet customer satisfaction. They can make use of the latest advancements in technology and use augmented reality to show their products in various settings. The client can also think of developing its own website and create an online presence.

I: That sounds good. Let’s close the case now.