E-commerce in furniture retail: experiment, learn, compare notes

In 2016, discount mattress store Matratzen Concord launched its professional online store led by Marcus Diekmann (Director Digital, E-Commerce and Omnichannel). Since then, the online store has already received numerous awards.

Marcus Diekmann, Director Digital, E-Commerce and Omnichannel at Matratzen Concord

Source: Marcus Diekmann

Diekmann is certain that retailers need to also appreciate digitization as a cultural transformation to keep up with rapid developments in the industry sector. He shares his tips in this interview.

Many furniture retailers arrived late to the e-commerce party. Why do you think that is?

The furniture sector in Germany is dominated by a few major regional empires that practically monopolize the market with a handful of gigantic furniture warehouses. That’s why they have not paid any attention to online retail for quite some time. Meanwhile, smart furniture retailers are investing heavily in the online sector because there are no territorial rights online.

What developments do you expect for the industry sector over the next few years?

Every market sector develops in a similar manner: the big businesses expand and force out small and medium-sized companies in the process. Small specialty retailers must shift to highly curated offerings to survive.

What’s more, e-commerce will also increase price transparency in the furniture sector, thus leading retailers to rethink their pricing strategy. The good old days, where you could still make an incredible amount of money in furniture retail will be over within the next five years.

Digitization is definitely a major factor that impacts the changing retail landscape.

And there is still so much to be learned. Digitization is always seen as something that’s technical and process-related. While that’s certainly the case, it’s only half the story. The other half pertains to cultural transformation. If you want to be truly successful and competitive in online retail, you need to continuously improve your business model in addition to your technology and processes.

What are some actual ways businesses can adapt to these cultural changes?

Consulting and guided selling: With the "Mattress Finder" feature, online customers can pre-select suitable mattresses by answering a few questions.

Source: Edited and translated Screenshot www.matratzen-concord.de

There are some strategies I would like to share:

Don’t argue whether you like a design or not, whether an element is too red or too big. Experimenting and learning is the way to go. You need data-driven decision-making. Let the customer decide.

Create an “open-minded culture“. That means everybody is allowed to experiment, learn, and make mistakes. You have to create an environment that enables people to find creative solutions.

Having said that, culture also means getting rid of the time clock! Don’t force people to sit around the office for eight hours. The world no longer revolves around store hours. Create working conditions that allow your employees to be flexible and act according to the new beat of the customer.

Networking and sharing experiences is crucial. In the future, pure repetitive tasks will be automated. This means your company will soon only need specialists. And these specialists have to compare notes with competitors and manage new technologies and business models. Your staff truly has to take one day a week to learn, otherwise, you won’t be able to make the right decisions fast enough during these times of dynamic changes.

Does this mean you advocate to end the competition culture where everyone tries to keep the secret to their success?

Truth be told, all of us face a few major competitors and those are Amazon, Alibaba etc. They are aggressive and powerful. And while we fight among each other, they steamroll us. That’s why we should learn from each other. And remember: Just because you show us what works for you, doesn’t mean that others will be able to copy your recipe for success tomorrow.

It didn’t take long for you to be very successful with Matratzen Concord. How does one develop a great digitization strategy?

Matratzen Concord was willing to invest a lot in staff members to really find excellent employees. On the one hand, you need people with a lot of experience, and on the other, you need specialists in certain areas.

I noticed that many online stores make the big mistake of running e-commerce from a technical and not a sales angle. When online stores don’t do so well, companies often add more features. Meanwhile, the key factors that contribute to a successful online store is the product selection, price, and visit frequency.

What have you learned during this process?

Don’t create an annual plan! Every employee should set his/her own goals for the coming month. At the end of the month, employees should examine why they didn’t reach their goals or why they exceeded them and check what they can learn from all this. This allows you to continuously improve by taking small steps, accept personal responsibility and grow a learning mindset.