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.