CIS8100: Developing an E-commerce Strategy for Online Furniture Sales

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CIS8100 ASSIGNMENT 2

Contents
Executive summary.....................................................................................................................................2
Report Section 1 – E-commerce Business Strategy.....................................................................................5
Report Section 2 – E-commerce Business Models......................................................................................6
Report Section 3 –Online marketing and advertising tools..........................................................................8
Conclusion...................................................................................................................................................9
Recommendations.....................................................................................................................................10
References.................................................................................................................................................11

Executive summary
E-commerce website is the online furniture seller. The website follows the main niche of modern
furniture including bedroom furniture and dining furniture. The website has the business of
selling the furniture all across the world. The E-commerce website sells the furniture goods at
low prices than its fellow competitors. However, the furniture quality is of par excellence. The
website provides return, exchange and maintenance services also. The customers can buy the
furniture either directly or by hiring an interior designer to do that work for them. The interior
designer facility provided the company makes it better than its fellow competitors because
customers are afraid to buy the furniture that they haven’t seen. The website offers various
coupons, deals of the day to keep up with its current customers and to advertise their products
online it uses major social networking sites such as Facebook and YouTube.

Introduction
Every E-commerce business always requires proper planning and strategies to make sure that the
company not only generates profits, as profits alone are not enough for a business to survive. The
companies should effective strategies to make sure that the revenue is generated keeping in mind
the long term goals of the company. There are several business strategies to make the website
different from other websites. The major business strategy that has to be used in order to make
this furniture selling E-commerce website different is cost competition. There are several other
websites working in the same niche and offering quality products and services to its customers.
The E-commerce website provides good quality products within the reach price range of the
customers. The revenue generated by the company depends upon the sales revenue model. The
marketing tools used to advertise the furniture this website is selling, are Facebook and YouTube
advertising.

Report Section 1 – E-commerce Business Strategy
The chosen business strategy for E-commerce website is Cost competition. There are a lot of
furniture retail stores and websites and every retailer whole local or online is providing quality
furniture. Hence the product differentiation strategy might not be as suitable as the cost
competition. Through cost competition strategy, E-commerce website will provide good quality
products with least cost (Mi 2015). This is done by reducing the production cost because to
provide the same quality, the cost involved in raw material is going to be the same. Hence the E-
commerce website ensures this by lowering the side cost involved which includes setting up the
production in the areas having low cost of production and the decreasing the cost 0f
manufacturing of furniture. E-commerce website aims to lower the cost compared to its
competitors but maintain the cost according to the market. The customers will be attracted to the
E-commerce website because of the good quality products within lower price range. The
furniture niche the E-commerce website is providing, is the modern furniture only, thereby being
more focused to expand the business in one niche only (Gregory, Ngo & Karavdic 2017). The E-
commerce website will be providing the service of buying the furniture online all over the world
and the customers can also select the furniture on their own which will be delivered to them
according the address provided or the customers can book an appointment with E-commerce
website and then the interior expert belonging to their address will check for the house and type
of furniture that will suit. The customers can make their choices according to the expert’s
suggestions. The website makes sure that there are a lots of interior experts collaborated with it
to give the customers an unforgiveable buying experience. In addition to the furniture quality and
interior experts available to help, the E-commerce website will provide excellent delivery
services and the facility of return and exchange on every ordered item. The customer will be able
to get the furniture repaired in case of any fault through the customer service desk available at
the E-commerce website. The customers will also get an additional option of fixing the date of
delivery. The warehouse will be present at the areas of most delivery requests to make sure the
low delivery charges for the customers. The furniture E-commerce website provides is bedroom
furniture including bed, sofa and TV table etc., dinning furniture including tables and chair and
several other décor items. All the furniture items are exclusive and not available in the
competitor’s store. This is ensured by closely examining the furniture everyone’s selling and
designing the furniture differently keeping in mind the needs of customers (Morimura &
Sakagawa 2018). This way the E-commerce website ensures excellent modern furniture,
excellent customer services including faster delivery rates, easier return and exchange and
maintenance services all in affordable costs.

Report Section 2 – E-commerce Business Models
Value Proposition
This website is offering strong value propositions because unlike other websites, E-commerce
website offers value for money. The production cost is less, making sure the quality of furniture
is not degraded (Andreu, Sánchez & Mele 2010). The E-commerce website offers the facility of
fixing appointments with the interior designer so that the customers who are afraid that the
furniture might not be suitable to their home or office can get assured. The website also offers
easy maintenance, return and exchange facilities so that the customers may not have to worry
about the quality of furniture delivered. The website also offers money back guarantee to the
customers in case the furniture fails to impress them. The services provided by the E-commerce
website are super-fast because of numerous warehouses present and the tracking system of the
ordered furniture item is very fast and helpful. These facilities are highly effective in attracting
the customers who always prefer to shop from the local market. The low price strategy will also
affect the interest of customers as no customer wants to pay extra money for the same quality
goods. The furniture is designed by keeping in mind the needs of customers. Also the location
based preferences are shown to the customers so that only those items can be shown to them
which are highly popular in the area (Jansen 2017). The machine learning algorithms used to
identify what a customer may also like if he has purchased a certain item facilitates good
experience of shopping. The prices are lower compared to the competitors but not low enough to
make the customers feel that the furniture quality might be poor. The website also offers deal of
the day to engage more customers. The total charges are shown on the website thereby
eliminating any hidden charges that could be a negative point for the customers. The website has
an About Us page to communicate with their customer on why should they choose E-commerce
website instead of choosing any other website (Murray 2013).
Revenue model
The E-commerce website will generate revenue through sales revenue model and Fee-of-service
model Guo, Zhong & Zhang 2016).
Sales revenue model- The E-commerce website will generate the revenue by using the sales
revenue model because the furniture products that the E-commerce website will be selling, the
company will be generating the revenues for that only. As the E-commerce website produces
goods at low costs and it sells furniture at comparatively low prices but there is a difference
between the production cost and selling cost that is where the profit is earned by the company.
The services like easy return and exchange, maintenance for the purchased good are the indirect
way of increasing sales for the E-commerce website. As this profit alone is not enough to make
E-commerce website stand in the market for long terms hence it uses one more revenue model
that is the Fee-of-service model (Shafiq & Savino 2019).
Fee-of-service model- This model is used by the E-commerce website in order to cover up the
direct cost involved in the manufacturing of furniture goods. The delivery services provided by
the E-commerce website makes the revenue to compensate the direct costs. Other than that the

services like maintenance after the delivery of furniture is free of cost hence that is not included
in the Fee-of-service revenue model (Wirtz et al. 2016). The delivery services make the increase
in sales as the customers wants the product to reach their home without them making an effort.
Hence these services increase the sales and although the selling prices are less but this model
gives the indirect way of generating revenue. Sometimes by providing free shipping services
occasionally will also generate the revenue indirectly because the customers are ready to pay a
little more for the products but never for delivery services (Alibage & Ahn 2018). E-commerce
website has a fixed limit up to which a customer has to shop to avail free shipping this might also
be an effective approach because this has been proved that customer tend to add more products
in order to avail free shipping thereby increasing the overall sales of the company (Rust &
Kannan 2016).
Competitive Environment
Online retail websites for furniture are growing in numbers. More people are indulging into
instant catalogue access, price list information etc. the furniture industry is now not only limited
to designing a piece of wood but it is also coming up with features like monitoring health data
like blood pressure, heart rate etc. (Iskoujina et al. 2017) The local retail store stores are less
preferred because they are limited to a particular geographical area both in terms of design,
trends and services. Hence more online retail stores are opening up to provide global shipping
and global trends to everyone (Papadopoulos et al. 2017). Therefore, competition is high. In
order to make the company stand out technology has to be embedded in manufacturing furniture
(Ezrachi & Stucke 2016). The direct competitors are the manufacturer of furniture only and the
indirect competitors being the wood industry, home décor industry etc. the products indirectly
affect the sale and manufacturing of furniture (Chang et al. 2016). Some of the furniture retail
websites are also using Augmented reality to let their customer know how the furniture they are
buying will look in their home (Azizi , Mohebbi & De Felice 2016). Hence more technology has
to be incorporated in the websites to provide extraordinary customer experience (Wang, Lau &
Gong 2016). The technology friendly furniture is also providing a tough competition to today’s
furniture industries. Hence the furniture retail industry has developed through the years and will
still continue to make progress if technology is properly used in manufacturing and services
(Aroso, Babalola & Popoola 2016).

Report Section 3 –Online marketing and advertising tools
The online marketing and advertising tools that can be used for advertising E-commerce website
are Facebook, twitter, Pinterest and YouTube. These social networking websites will be a good
source of reaching out the customers very quickly. The E-commerce website will be paying for
the google advertisement that will be shown on the YouTube videos and web pages. The strategy
will be to provide a coupon at the end of the advertisement to know how much traffic has been
engaged through this advertisement campaign. Further Facebook page can be a good way of
advertising the furniture available to the customers (Tafesse 2015). This will be done by creating
a Facebook page showing the furniture in an interesting way (Swani, Milne & Brown 2013). The
interior designer will be given the work of arranging the furniture in a house and after clicking
pictures of that to upload on the Facebook page. It will engage more customers as they will get to
know it from the real customer experiences. The page can be further reach to more and more
customers by contacting the popular to write about it on his/ her own page. The page can have
various contests in order to win exciting coupons and flash sale deals. Facebook advertisement
can also be used to engage more viewers to their page. The another way of reaching out the
customers is to take help of the current customers. The happy customers can post a story on their
Facebook account tagging the E-commerce website’s Facebook page. This will leave a positive
image on the viewers (Hansson, Wrangmo & Solberg Søilen 2013). Although the Facebook can
be the most useful way of reaching out the customer but the challenges it faces are that the
content customers might post cannot be controlled (Kirtiş & Karahan 2011). There might be case
where the customer was not happy with either the service or about the furniture then he/she
might post angry comments on the post. It can be discouraging for the new customers. Secondly
Facebook might give the opportunity to the competitors to view the original content that E-
commerce website will be posting to the Facebook page. The competitors may also follow the
page to steal the exclusive content and may even use if for their own benefit. Hence it can
become the challenge for value proposition also (Schultz & Peltier 2013). The YouTube is also
seen as unprofessional platform for advertising the content. However, if used correctly these
tools can be proven to be the most useful for advertising. The data can be analysed as the likes
and comments a Facebook post is getting and the percentage increase in the rate of purchases
made. The number of posts, the likes, comments whether being positive or negative can be used
to identify what the customer is liking or not and accordingly the furniture can be made
(Lipsman 2012). The YouTube video advertising can be used to analyse the customer’s interest
in the company by showing a poll at the end which the customers can answer. This can also help
to analyse the customer traits. As the generation today buys something only after researching
everything about the company and their website hence online awareness about the company can
be very useful for new customers (Ketonen-Oksi, Jussila & Kärkkäinen 2016).

Conclusion
The E-commerce website uses cost competition strategy to compete in the market. Whenever the
business has competition in the market which is providing the same quality of products then the
strategy is to focus more on lowering the prices by maintaining the quality of products. The
value proposition is maintained by the website by providing excellent services to its customers.
The customers find in difficult to buy furniture items online but the E-commerce website
provides easy return and exchanges on the furniture goods and the maintenance services are also
provided by it for after shopping experiences. The marketing tools are the main factor of
expanding a business and the E-commerce website makes the use of Facebook and YouTube as
the major social networking websites for advertising their furniture.

Recommendations
Online retailers of furniture are high in demand. The demand of online retailers is much higher
than the local market because of quality products and superfast delivery options. The online
retail furniture business can boom more with the help of social media advertising. The online and
offline retailers should come together and emerge as a single unit to take this furniture business
to the next level. The online retail will provide the technical advantage and the offline business
will keep up the true essence of shopping. The warehouses can be seen as the offline market.
Products and quality may remain same but what affect the customers most is the services a
company is willing to provide them during and after they make a purchase. Fast delivery
systems, tracking systems and keeping up the old customers is the key to maintain and leave the
mark in the furniture industry.

References
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Furniture Enterprises in Ibadan, Oyo State Nigeria’, Journal of Forestry Research and
Management, Vol. 13, pp.14-30.
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