impact of digital on consumers in the furniture industry - swiss market
TRANSCRIPT
[WOOD FACTORY]
Digital Marketing
Research
Postgraduate Diploma in Digital Marketing
(111010-PG-Web)
10/08/2014
5114 words, not including Table of Contents, tables and List of References.
PLAGIARISM DECLARATION
Student Name: Mario Bacco
Course of Study: Postgraduate Diploma in Digital Marketing (111010-PG-Web)
Assignment Title: Digital Marketing Research
Submission Date: 10.08.2014
Declaration:
I declare that, to the best of my knowledge and belief, this assignment is my own work,all sources have been properly acknowledged, and the assignment contains noplagiarism.
I further declare that I have not previously submitted this work or any version of it for
assessment in any other courses or award offered by the Digital Marketing Institute, or
any other institution, without first ensuring that an explicit provision has been made and
that I have obtained written permission from my Course Director for doing so.
Student’s Signature:
Date of signing:10.08.2014
Contents
1. Executive summary
2. Research methodology
3. Introduction to Wood Factory Furniture Shop and its target audience
3.1. Product Offer
3.2 Customer Profiles Swiss Furniture Market
3.2 Wood Factory Target Customers
4. Evolution of digital technologies relevant to these target
4.1 Swiss Household access to Internet
4.2. Mobile replacing fixed lines
4.3 Smartphones and Tablets progression
5. Impact of Digital Technologies on Target Audiences
5.1 Swiss Media Digital Evolution
5.2 On line shopping attitude
5.3 Store vs Online shopping across product
5.4 e-commerce and m-commerce
6. Digital Technologies and their impact on furniture Industry globally and locally
6.1 Furniture purchase process and impact of digital
6.1.1 Need Recognition
6.1.2 Information search
6.1.3 Consideration set and evaluation criteria
6.1.4 Outlet selection and purchase
7. List of references
1 Executive Summary
This research is written from the perspective of Wood Factory, a small furniture shop located in
the city of Zurich, and its core target customers: Swiss young singles or couples, aged between
25 and 35, highly educated and with fairly good disposable income, interested in design but not
absolutely linked with a major established brand.
Evolution of digital technologies in the Swiss market, like the widespread access to high speed
internet, the increasing popularity of mobile and smartphones and tablets are analysed.
Impact of digital technologies and final effects in terms of new behaviours are then represented
through the Swiss media new landscape and Swiss consumer’s attitude toward e-commerce and
m commerce across the different product categories.
Finally, the impact of digital technologies on the furniture industry is discussed analysing each
step of the classic purchase process and mentioning current and future role of digital
technologies in each step.
2 Research methodology
Considering the size of the business, a small furniture shop based in Zurich, and the amount of
resources available, mainly secondary sources were used in order to achieve the objective to
understand:
1. Key characteristics and different profiles of the Swiss furniture customers.
2. Relevance of digital technologies and impact on different customer profiles acrossdifferent product categories and furniture goods in particular.
In order to achieve the first objective, key source has been the market research carried out by the
Ernest Dichter Institute on the Swiss furniture market, commissioned by the Swiss furniture
association. Though not a very recent study (2009), findings of that study on the different
customer profiles describe and match quite perfectly key characteristics and behaviours of Wood
Factory current customers types, while providing a broader and more structured view.
To understand the relevance of digital technologies on the Swiss market and Furniture customers,
a broad source types (not older than 2011) were exploited:
Swiss government statistics on household internet access
Telecom and media operators and associations reports and publications
Consultancy companies reports (Accenture, Deloitte, PwC)
Academic Researches
Articles and Press releases related to the furniture industry
3 Introduction to Wood Factory Furniture Shop and its targetaudienceEstablished in 2011, Wood Factory is a small "furniture-port-shop" placed in the middle of the
city of Zurich.
Managed by its owner and founder, this shop aims to offer unique products with a quite distinctive
and different design which are produced around the world by small manufacturers and not sold
through the normal channels.
3.1 Product Offer
Products are handmade of high quality solid wood. A large selection of pieces is made of recycled
wood: wooden boats, old doors, planks of wood ceilings, etc. Some wooden elements are
combined with metal and get a new industrial vintage look.
The offer of Wood Factory combines three basic characteristics: functionality, original design
and reasonable price.
3.2 Customer Profiles Swiss Furniture Market
Looking at a research carried out on Swiss furniture market (Ernest Dichter Institute, 2009), we
can identify 4 different defined furniture customer profiles in the Swiss market:
Perfectionists: about 30% of the population, aged over 45 and with a quite high
disposable income, interested in design but with a quite traditional attitude and no value
for innovation, trusting mainly established major brands and traditional channels.
Minimalists: about 27% of the population, price oriented and looking at furniture only to
serve their convenience, with rather limited income/budget and limited sense for trends
and design.
Trendsetters: the smallest group representing about 10% of the population, aged between
35 and 60 years old, giving great importance to image, trendy and willing to show off.
Wannabes: about 33% of the population between 18 and 34 years old with high education
but with some limitation on purchase power. For them design is particularly important
even if not absolutely linked with a major established brand.
Swiss Customer Profiles (Furniture)
Source: Ernest Dichter Institute, 2009
3.3 Wood Factory Target Customers
The above mentioned customer profiles have been compared with the current Wood Factorycustomers (interview with Wood Factory owner), namely:
Profile 1 (majority of customer base): young singles or couples, between 30-35 yearsold, living in the city centre of Zurich, highly educated and fairly good disposable income.
Profile 2 (top high end of the customer base): high end profiles, quite passionate fordesign and new trends, professionally involved with design or fashion.
Clearly current Wood Factory customers fit quite well the key characteristics identifying the
Trendsetters and Wannabes profiles described in the Ernest Dichter Institute research, confirming
the key attributes of the potential target of a Digital Campaign:
young singles or couples, aged between 25 and 35, highly educated and a fairly good
disposable income, interested in design but not absolutely linked with a major established
brand.
4 Evolution of digital technologies relevant to these target audiences
and impact on them
4.1 Swiss Household access to Internet
In order to understand “digital maturity” of the Swiss market, number of households with
Internet access can be the first basic indicator.
According to a recent research of Eurostat (2013), evolution of household access to the internet
has been very dynamic in Europe increasing from 40% in 2004 to 79% in 2013, but still with
major differences across countries.
Switzerland for instance with 90% of the households connected to the Internet at home (2012),
is placed significantly above the average of the 28 EU (79%), just behind the Scandinavian
countries, the Netherlands and South Korea (see graph below).
International comparison household access to Internet
Source: Eurostat 2013
Nevertheless if Internet is extremely popular (90% penetration) across the entire Swiss population,
age represents a relevant differentiator factor.
Considering the age of the household reference person (source: Swiss Federal Statistics Office),
the person who contributes the largest share of household income, internet access can be
considered a well-established standard for age groups below 54 years, with a pick of 98%
penetration for those below 35 years old.
At the opposite in households in the retirement age group (+65) Internet is present only in the 52%
of the cases, while households in the 55 to 64 years range being somehow in the middle (88%
penetration).
Household access to internet according age group of reference person
The educational level of the household reference person represent another significant
differentiator in the proportion of households connected.
In 2011 only 56% of households whose reference person had only an elementary education were
connected to the Internet. Households in the middle group (secondary education) were closer to
the Swiss average (82%), while 94% of households in the group whose reference person had a
higher education in high school had internet.
Household access to internet according to level of education
Together with the educational level of the reference person, household income is another
important determinant of access to the internet in Swiss households.
Since 2004, the increase in the proportion of households with internet access is marked for all
income bands. However, the strongest growth is achieved by households with an income of 5,000
francs to 7,000 (30 percent points).
For seven survey years (2004, 2006, 2009, 2011) the positive correlation between income and
access to internet is quite clear. In 2011, 96% of households with more than 9,000 -. Francs of
gross monthly income are connected. At the other end of the scale, only about half (55%) of
households with 3,000 to 5,000 -. Francs income are connected, the proportion is even lower for
those with less than 3,000 francs.
However, the difference between the highest and lowest income diminishes slightly since 2010
(difference in 2010: 64 percentage points in 2011, 54 percentage points).
Household access to the internet, according to the gross monthly income, 2004-2011
On the other hand internet access in private households across the different Swiss language
regions differs only partially. In 2004 there was some difference in household access by regions,
with the Swiss-German more equipped than the rest of the country.
In 2006, French-speaking Switzerland had caught up, the two regions being at 71%, while the
Italian Switzerland remained behind with 64% of households connected. In 2011, French-
speaking Switzerland (83%) and German speaking (84%) showed almost the same percentage of
households connected, while Italian speaking region increased its progression just slightly behind
with 79% of households connected.
Household access to the Internet by linguistic region
4.2 Mobile replacing fixed lines
Mobile phone usage has been quite niche factor in the Swiss telecomm landscape, limited to 5%
of the population (source: OFCOM), till 1995, while since the second half of the nineties has
experienced an extraordinary growth. Indeed in 2012, the penetration rate arrived at about 131
subscriptions per 100 inhabitants,.
At the same time this strong growth and progress had also an impact on the development of other
technologies, thus mobile and Internet telephony partially replacing fixed telephone (PSTN)
and digital (ISDN) lines.
Indeed while the number of fixed access lines continued to increase until the mid-1990s, it has
steadily declined since then. At the end of 2012 Switzerland had 37 fixed telephone access lines
per 100 inhabitants, corresponding to a decrease of 27% since 2005, with ISDN technology
(digital technology) partially replacing analog technology, but without increasing the overall
demand for fixed access lines.
Traffic data also confirm the switch between fixed and mobile lines. Between 2005 and 2008 we
can observe an increasing percentage of calls on mobile networks and a decreasing rate of calls on
fixed networks. In Switzerland, fixed voice calls decreased from 75.7% to 61.7%, mobile voice
calls increased from 24.3% to a 38.3% share of the voice calls market.
Swiss total voice calls by network
Source: Telecom operators, OFCOM Switzerland calculations.
4.3 Smartphones and Tablets progression
As mentioned before with 131 mobile subscribers per 100 inhabitants (in 2012) Switzerland ranks
in the average OECD country, while far behind countries like Finland, Austria and Italy (with 172,
161 and 160 subscriptions per 100 inhabitants respectively) but still ahead of Canada, the USA
and France.
Mobile Penetration (2013)
Source: Telecom operators, OFCOM Switzerland calculations
But Switzerland has moved fast in terms of smartphone usage. According to latest Google
research (Our Mobile Planet, 2013) 54% of Swiss people have a smartphone (Q1 2013), with only
Fixed line traffic
Mobile line traffic
Spain (55%), Ireland (57%), UK (62%) and Sweden (63%) and Norway (68%) having a higher
percentage in Europe.
Source: Think with Google, Our Mobile Planet (2013)
This gures reaches almost 80% among people between 18 and 24, while still very popular for
those aged between 25-34 (69%) and 35-44 (63%), and becoming less relevant for older age bands
(see graph below).
Source: Think with Google, Our Mobile Planet (2013)
But smartphone popularity is also increasing competition between mobile devices andcomputers.
In Switzerland, 56% of Smartphone owners access the Internet every day from their device which
represent a portal for several different activities (on top of traditional voice and SMS) quite often
in conjunction with other media (see graphs below).
Source: Think with Google, Our Mobile Planet (2013)
Source: Think with Google, Our Mobile Planet (2013)
But a rather peculiar element in Swiss smarthphone markets is represented by the strong presence
of Apple iPhones. Indeed if on global scale Android devices have the leadership with more than
75% of the market, in Switzerland about 56% of smarthphones are still Apple.
This brings perhaps another caractheristic of Swiss market being the huge popularity and usage
of apps. Indeed comparing Switzerland with other top markets:
1. Japan: 40 apps installed with 8 apps used per month in average.
2. Switzerland: 34 apps installed with 13 apps used per month in average.
3. France: 30 apps installed with 10 apps used per month in average
4. Germany: 24 apps installed for 9 apps used per month in average.
Tablets are also becoming very popular, showing a growing trend even higher compared with
smarthphones. According to latest figures (source: comparis.ch) in 2014 about 39% of Swiss
people (anout 2,4 million people) own a portable touch screen tablet, compared with 27% in 2013
and 14% in 2012.
5 Impact of Digital Technologies on Target Audiences
5.1 Swiss Media Digital Evolution
Considering impact of digital technologies on consumer’s behaviours, a quick analysis of
different Swiss media channels could provide some first indications.
TV is the most popular media channel covering 93% of the Swiss population (source: IAB
Europe – Mediascope 2012), with other channels following not very far behind (on-line 90%,
newspapers 89%, radio 86% penetration).
Just comparing EU landscape, TV still represents the most popular media channel (95%) but with
a far higher dominant position (see graph below), with on line channel still being in second
position but only with 65% penetration.
Source: IAB Europe – Mediascope 2012
Still on-line channel showed a quite different growth path compared with other media, with a 7%
increase from 2010 to 2012 compared with more modest 1% increase for TV and Radio, and a 6%
decrease for Newspapers (see graph below).
Source: IAB Europe – Mediascope 2012
As well On-line was the second channel in terms of hours spent per week (15 hrs), with Radio
(16.0 hrs) being the first and TV following third with almost 13 hrs. But On-line channel really
stood out when considering its growth rate (32% increase in hour spent only between 2012 and
2010), while other channels either show a more modest increase or a reduction in terms of
consumption.
Source: IAB Europe – Mediascope 2012
Moreover Internet is also becoming a quite popular way to access other media or in conjunction
with other media.
In 2012 47% of Swiss Internet users watched TV on line at least monthly, while 42% listened to
the Radio and 76% read news on line. Moreover 59% were on-line whilst watching TV or actually
performing on-line activities related with the TV programme they were watching (in particular
during prime time).
Therefore it is quite easy to predict that shortly on-line channel becoming the most popular and
most used media in Swiss market, with then several consequences in terms of customer’s
behaviour and advertising priorities.
5.2 On line shopping attitude
According to a recent research from PwC (Demystifying the Swiss online shopper, 2012) Swiss
consumers are becoming increasingly adept at online shopping: 24% of analised sample
(1.129 Swiss online shoppers) was buying online on a weekly basis in 2012, and purchasing
frequency had increased from 2,3 times per month in 2011 to 2,7times per month in 2012.
Nevertheless still several technical or psycological elements were mentioned as reducing the
appeal for online shopping: from a generic preference for a phisical in store experience (50%) or
having the possibility to touch and try the product (47%), to actual concerns for security of
personal data provided (35%) and payment methods (23%).
On the other side social media channels seem will have a limited positive influence on online
shopping and unlikely to become a new sales channel. Indeed a mere 5% of Swiss respondents
said they had shopped via a social media platform at least once a month, and 8% less than once a
month. At the other end of the spectrum, for instance 28% of Chinese and 22% of Hong Kong
shoppers said they shopped on social media platforms at least once a month.
But while they might not shop on social media, more than two out of five Swiss online shoppers
still visit a social media website every day. The power of social media remains intact in this
respect, especially when it comes to following a brand or retailer, looking at reviews or making
new discoveries.
As said smartphone and tablet usage is growing fast in Switzerland. Smartphone penetration has
increased from 34% in 2011 to 43% in 2012, with 57% of Swiss people using their smart-phones
every day, and everywhere (Our mobile planet: Switzerland, Google, 2012).
As for tablets, 62% of Swiss tablet users go online daily with their device, mostly at home.
Indeed, a vast majority of them use their tablet to access content and information: to read news or
magazines on screen, check emails, play games or browse social networks.
Despite this, neither smartphones nor tablets are ready to overtake PCs as the preferred online
shopping device. The PC is still the dominant online device in Switzerland. Only 12% of Swiss
respondents said that they shop with a tablet at least once a month. The use of smart-phones to
purchase is equally low, with only 11% of respondents buying at least once a month with their
mobile (see figure below).
Frequency of shopping through different channels
Source: PcW - Demystifying the Swiss online shopper 2012
On the other side two main uses of smartphones are emerging: during the prepa-ration or research
stages of the purchase journey (planning and lists), and as a payment or loyalty device. Indeed
more and more retailers are using their applications to push e-coupons or last-minute savings
opportunities that you can use when checking out, for example. The use of smartphones in stores
is also growing rapidly as a means of quickly comparing prices between locations or browsing
through a digital shopping list.
5.3. Store vs Online shopping across product categories
Clearly physical stores will experience changes in the future, but of course with different degree
depending on the different industries. Many Swiss respondents (Demystifying the Swiss online
shopper, 2012, PcW) say that they indeed research more and more online, but across most product
categories a vast majority want to continue making their purchases in store.
Grocery, furniture, DIY and jewellery are traditional store categories where most of the purchase
journey (from research to delivery) involves a store visit. For other categories such as consumer
electronics or clothing, to some extent, the online channel is gaining ground – not just for
research, but for actually purchasing articles. At the top end of the scale, as in 2011, books, music
and movies remains the typical online category, with 56% usually researching and buying these
products online.
Focusing on furniture and homeware products, while 50% of respondents indicated physical store
being the only source of information and purchasing (the highest percentage compared with any
other category), still 29% of respondents mentioned the web as the element involved either in the
research or in the purchase process.
Source: Demystifying the Swiss online shopper, 2012, PcW
Some more details regarding online shopping attitude in Switzerland are provided by a Google
study carried out in 2010 among 1,000 Internet Swiss users (ThinkwithGoogle: On Line Shopping
in Switzerland).
In particular across different product categories, entertainment and consumer electronics products
have a significant share of respondents who usually purchase on line (35% and 25% respectively),
while furniture shoppers being by far more “traditionally” focused with offline purchases mainly
in furniture store (see graph below).
Source: ThinkwithGoogle, On Line Shopping in Switzerland (2010)
At the same time while for clothing and groceries online purchasing could potentially increase its role,
with respectively 41% and 33% of respondents mentioning the possibility to buy online in the near future,
furniture products were still showing the smaller chance to be purchased in an online environment as
only 11% of respondents mentioned the possibility to buy online in the next future (see graph below).
Source: ThinkwithGoogle, On Line Shopping in Switzerland (2010)
On the other side the on line channel plays a more relevant in the research phase for a broader
range of products. Indeed while for entertainment and cosumer electronics the online research is
the first step in the virtual environment that is likely to end up with a online purchase, online plays
a relevant role also for product categories where the final purchase is more likely to happen in a
phisical store.
Looking specifically at furniture products, online research seems to play a quite relevant role as
46% of respondents were regularly or sometimes searching, with online research mentioned as
one of the most relevant research methods, just coming after in shop sales advisors and family
members, therefore confirming the great opportunity for furniture manufacturers and retailers to
influence potential customers in the research phase through the digital channel (see graph below).
Source:
ThinkwithGoogle, On Line Shopping in Switzerland (2010)
5.4 e-commerce and m-commerce
Relevance of e-commerce is at the end the major element providing an indication of the impact of
digital technologies on consumers purchasing behaviour in the different markets.
Just looking at Europe Top 10 e-commerce markets by turnover (Ecommerce Europe: Europe
B2C Ecommerce Report, 2013), Switzerland ranks as 9th country with 9.1€ bn, whit a split
between goods and services turnover (55% vs 45%) quite similar to most European countries (see
tables below).
Source: Ecommerce Europe: Europe B2C Ecommerce Report, 2013
Nevertheless comparing amount of purchased goods as share of traditional retail goods, while UK
market still stands out with 13% of traditional retail goods being purchased now online,
Switzerland ranks as 7th market (5.4%) well ahead of markets with an absolute bigger turnover
like France, Russia or Spain and in line with European average (see tables below).
Source: Ecommerce Europe: Europe B2C Ecommerce Report, 2013
But Swiss e-shoppers rank very higher when looking at amount spent per capita, as they rank 5th
in Europe with 1.720€ spent compared with an European average of 1.243€ or a global average
amount spent per e-shopper at around 850€ (Ecommerce Europe: Global Ecommerce Report
2013).
Finally a recent European study (Eurostat: Survey on ICT usage in Households and by Individuals
- Statistics in Focus 2012) also provides some information on the growth in smartphone users
buying goods and services via their phone (m-commerce). Of the European nations surveyed, UK
confirms its leadership role as is the most mobile commerce-friendly, with nearly a quarter
(23.1%) of all smartphone owners in the UK having accessed some online retail site from their
mobile in the last three months of 2012 and m-commerce reaching 12% of total e-sales in 2012,
while Switzerland being above European average achieving 6% of total e-sales through mobile.
Eurostat: Survey on ICT usage in Households and by Individuals - Statistics in Focus 2012
6 Digital Technologies and their impact on furniture Industry
globally and locally
In order to understand impact of digital technologies on furniture industry, is useful to summarise
the classical 4 steps of the customer decision process (need recognition, information search,
alternative evaluation, outlet selection and purchase), underlining peculiarities related with
furniture sector and impact of digital technologies in each step.
6.1 Furniture purchase process and impact of digital
6.1.1Need Recognition
In case of furniture, the need for purchase is likely to happen not very frequently as usually related
with significant changes in the customer life, due to the purchase of a new apartment or a change
in the household composition.
Indeed as reported in a recent research carried out on in 2013 on a sample of 2.000 people (Nicole
Ponder, Consumer attitudes and buying behaviour for home furniture, Franklin Furniture
Institute), only 18.4% of the respondents agreed with the statement “I change my furniture often
to keep up with design trends” or 35% agreed with “I like to replace some of my furniture every
few years”, while 95.1% of respondents agreed that “I expect my furniture to last for many years”.
Similar findings could be found in a 2012 study provided by Google (Google/Compete, The role
of digital in the furniture shopper path to purchase) which confirms as first purchase driver for
furniture shoppers is replacing old furniture (see graph below).
Source: 2012 Google/Compete Retail Furniture Study, US (multiple response)
On the other side the purchase of new furniture, though not made with great frequency, it is an
important decision that involves the whole family. This high level of importance means that
consumers will move through the stages of the consumer decision process with careful
consideration.
6.1.2 Information search
During the information search stage, consumers might use different external sources, like
traditional media, the internet, social media, and interpersonal sources, such as family members or
friends.
While furniture manufacturers and retailers have relied for long time on traditional media, the role
of new media as information sources is confirmed by several studies both globally than
specifically focused on Swiss consumers.
The internet offers the convenience and efficiency of learning about brands, trends, and product
quality information that would otherwise be difficult to obtain, especially since furniture is not a
frequent purchase for most consumers.
Nickell research provides an idea on how this trend has increased in US from 2008 to 2013, with
almost 70% of the sample (2,007 adults participating in an online consumer research panel) that
agreed they search for furniture-related information on the internet (17.7% increase since 2008)
with actually younger customers more likely to search on line (80.6%) compared with 35-47 years
old (69.4%), 48-66 years old (65.5%) or above 66 years old (44.0%).
A 2010 Swiss based research (Think with google, Online shopping in Switzerland) still confirms
almost 50% of the sample (Internet users above 14 years old) making on-line search on furniture
products, actually exploring almost the full range of on-line channels: from retailers or
manufacturers websites, to search engines and social network sites or blogs (see graph below).
Source: Think with google, Online shopping in Switzerland, 2010
Web sites becoming a crucial first step in the purchase journey is also confirmed for instance by
IKEA impressive figures, showing about 775 million in store visitors in 2013 (699 million in
2010) compared with 1,23 billion Ikea web site visitors in the same year (0.7 billion in 2010).
Source: www.ikea.com
At the same time due to the high number of variations of a furniture product, traditional
catalogues are not able to show all the variations of every model (shape, colours, dimensions,
accessories, materials, etc). Therefore e-catalogues, easier to update for the manufacturer and
more searchable by the customer are becoming more and more popular.
Again looking at IKEA as a reference for the industry, just looking at number of downloads for
the catalog App, they registered 9.7 million downloads in 2013 with an exponential increase since
2011 (year of introduction).
But the 2013 IKEA e-catalogue is becoming a case study in the furniture industry not due to its
huge content (images, prices, videos, etc) and number of downloads.
Indeed as 14 percent of its customers end up taking home furniture which turns out to be the
wrong size for its intended location, customers of the Swedish home furnishings giant can, now
try out select products in their homes through augmented reality.
By simply placing the catalogue in the room they want to decorate, which helps to set the scale,
they can then select items to be virtually added to the room and they appear at the correct size so
customers can get an idea of how they would look.
6.1.3 Consideration set and evaluation criteria
When gathering information to make a purchase decision, two key pieces of information are
necessary: the consideration set (brands of furniture being considered for purchase), and the
evaluative criteria (features of the furniture that are sought by the consumer).
With regards the consideration set, when considering buying new furniture, consumers seem to
be not particularly loyal to specific furniture brands. Again looking at Nicole Ponder study,
majority of respondents (77.9%) either disagreed or were neutral about the statement, “I am very
loyal to specific brands of furniture.” Respondents also tended to disagree with the statement, “I
stick with just a couple of brands of furniture that I know I like.”
Similar findings are confirmed by other researches specifically focused on on-line users. For
instance a 2013 research by Nickell (Online Furniture Consumers Unsure about Brands), found
that online furniture buyers are undecided on brand, with only 8% of internet furniture buyers
knowing specific brands to search for to make their purchase, while another research by Google
(The role of digital in the furniture shopper path to purchase, 2012) mentioned that 28% of in-
store buyers that used web as research tool discovered a brand they were not previously aware of,
and 44% of mobile furniture shoppers discovered a brand they were not previously aware while
searching on-line.
As regards the evaluation criteria, those might actually be different for each specific market,
therefore just looking at Switzerland, a 2011 study from the furniture association (Kurt
Frischknecht, Swiss furniture market) provides the key elements considered the most relevant by
Swiss consumers (10= very important, 1= not important):
1. Functionality (5.8)
2. Personal Style (5.6)
3. Comfort (5.4)
4. High quality (5.3)
5. Cost-effective (4.9)
6. Modern design (4.5)
7. Natural materials (4.3)
8. Exclusivity (3.8)
Therefore furniture products are complex to evaluate due to the combination of multiple
characteristics and low purchase frequency, therefore making in-store experience still the
cornerstone of the purchase process in most cases.
But digital technologies capable of creating a virtual reality might play a significant role in the
future. First enabling to enhance the in-store customer experience providing tailored information;
but virtual reality systems can also be linked to virtual prototyping for product development, and
can be used as a market research system for understanding consumer preferences and behaviours.
6.1.4 Outlet selection and purchase
Looking at furniture buyers, on-line shopping is not the most popular option, according several
studies, but still growing in terms of popularity.
Starting from Nicole Ponder 2013 research, 21.6% of US respondents have made a furniture
purchase online. But more interestingly this percentage is nearly double what it was in 2008, when
only 11% of respondents had purchased furniture online. Even more significant is the number of
respondents who stated that they are willing to purchase furniture online – 1,044, or 52.0% of
respondents.
This represents a major shift in attitudes towards shopping for and purchasing furniture via the
internet, with major differences across the different age groups, with 46.9% between 18 and 34
years old, 36.7% between 35 and 47 years old, 28.8% between 48 and 66 years old, and 17.2%
aged above 66 years.
Similar findings are confirmed by another study by Google (The role of Digital in the Furniture
Shopper path to purchase, 2012) regarding still US buyers, with about 25% of respondents who
actually had made the furniture purchase on line, and remaining 74% in store while 1% by phone.
On the other side looking at the Swiss market on line furniture purchase seems less relevant, as a
2010 research by Google (On-line shopping in Switzerland) reports 12% respondents buying
furniture on line, though the lower figure could be partially explained as related at 2010 and not
fully capturing a changing trend in Swiss online behaviour.
Again on-line purchase is already mainly affecting younger customers and will spread naturally
(as today younger customers will be tomorrow older), while technical innovation like 3D or
virtual reality would further increase the relevance of o-line across the complete purchase process
even in case of the more complex and expensive furniture products.
7 List of references
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Canalys (2011), EMEA mobile phone/smart phone market overview Q4 2010, excel spreadsheet. Canalys (2010), EMEA smart phone forecasts, excel spread sheet.
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