Electronic Opportunities
There are two main areas for
potential improvement of home furnishings intermediaries: addition of transaction,
payment, and logistics capabilities for electronic intermediaries, and
new efforts at increasing community building to attract customers and differentiate
from other online intermediaries.
The current capabilities of
electronic furniture intermediaries are very limited. Realtime purchase
transaction processing will become the norm. RetailMetro was the
first company to actually complete a realtime transaction through their
site, but as more businesses realize this opportunity for growth, other
intermediaries will begin the actual handling of payment and transaction
flow and tracking. Today intermediaries only serve to showcase manufacturer
products for retailers to look at. The day of the virtual showroom
will disappear, and customers will want a site that provides "one-stop
shopping" from front to back-end. The current model seems to be to
forego a setup fee in order to take advantage of per-transaction fees that
are paid by participating manufacturers. This makes it free for retailers
to come to the site, and stimulates traffic to the intermediaries.
If online intermediaries hope to build traffic to their sites in the form
of independent retailers as well as national chains, they will have to
stick to this revenue model. The promise of no setup fees will attract
smaller manufacturers and retailers to utilize online intermediary services.
Online intermediaries will handle payment issues, and become "true" intermediaries
in the sense that they will handle the transaction front-end to back-end
throughout the entire purchase process. In this way online furniture
intermediaries will truly add value to the firms utilizing their services
to handle transaction processing and payment rather than merely functioning
as virtual showrooms.
Community building should
become a focal point for electronic furniture intermediaries. Although
the first-mover advantages are very important to success, a sustainable
site will offer something more to both retailers and manufacturers.
Message boards, e-mail services, industry data and other community building
options will become available on these sites. It is the only area
that prevents an intermediary's site from becoming a commodity.
Shipping and logistics will
eventually be handled and controlled through electronic intermediaries.
Order tracking is a feature many intermediaries are using to sell their
site to manufacturers and retailers, and this will become a main function
of online furniture intermediaries. The intermediaries will handle
the entire process from manufacturer to retailer in terms of viewing the
merchandise, uniting the parties, handling the transaction and payment,
and coordinating the shipping of final product.
There will be easier flow
from manufacturers to retailers using electronic intermediaries.
Trade shows may become a thing of the past as the industry becomes more
familiar with using new technologies. Retailers can view the products
online, and will be able to handle the entire transaction online using
intermediaries. Currently links between manufacturers and retailers
are provided by these trade shows, but in the future all links will be
formed online, and this is why building community will be important for
electronic intermediaries. They will provide the forum that was previously
obtained offline in an online manner, and it will be the intermediary that
can best provide these links between retailers and manufacturers that will
ultimately prevail.
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