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Furniture Industry Consulting

Furniture Industry Consulting

Furniture | Home Furnishings | Home Decor Industry Consulting

Before getting into the industry and business-related aspects of the furniture market, it is worthwhile to understand the role and need of furniture for humans living in a society.

Households are the biggest consumers

The biggest consumers of furniture products are households. Furniture occupies an overwhelming majority of space in houses with sofa sets, dining tables and chairs, study tables and chairs, desks, beds, dressers, stools, bookshelves, organizers, benches, nightstands, TV stands, shoe racks, mudroom lockers, etc. If the furniture is removed, a house gets empty and unadorned. Furniture completes a house with its utilities. It makes living supportive, easier, comfortable, organized, and stylish in what otherwise are vacant spaces with walls and ceilings and doors and windows. Offices and hotels/hospitality services fill up the remaining market demand for furniture.

Why we cannot do without furniture

Furniture plays an important role in residences and commercial institutions. Without a suitable bed, a good night’s sleep is difficult. Without a well-equipped workstation, an employee may not be able to perform his desk job with the bare minimum comfort. A customer will not prefer to stay in a hotel room whose main door has a broken knob or an uncomfortable bed.

Overall problem statement of the furniture industry

The indispensability of furniture in domestic and commercial setups makes it an all-season, high-demand market. But the industry comes with its unique set of challenges placed throughout the supply chain. The various businesses involved in the furniture supply chain are manufacturers, suppliers, assemblers, and retailers.

Bulky nature of furniture products

Furniture products are bulky by nature. This creates problems in merchandising, handling and transportation. The problem compounds with physical stores but online retailers also have to pay their warehouse bills. With limited space, businesses have to be specific and strategic with merchandising. Even with favourable demand forecasts, all products cannot be stacked up in stores or warehouses.

From storing and packaging to delivery and/or assembly, the risk of damage to products always remains high. Even a small damage means return or replacement. Such products have to be sent back to warehouses or workshops causing more expenses and more working hours. Investments remain locked with defective products till correction and sale.

Inventory management in customized furniture

Custom furniture is an effective, niche-oriented business approach. Unlike in the case of ready-made furniture where the options of customization are limited, in custom furniture, customers can go to great lengths in specifying their needs in terms of design, colour, quality of wood, etc. But in both cases, inventory management poses a big challenge to businesses. For workshop or production-based retail businesses, with an increasing degree of differences in customization requests, it becomes difficult to pre-assess the inventory requirements. Storing inventory in anticipation also does not make business sense as investments would get stuck for an indefinite period. In the case of ready-made furniture, even though customizations are limited, the unused parts or add-ons get to play the odd man out.

Returns and replacements

Given the bulky nature of furniture products, especially those made of wood or steel, returns and replacements do not bring a genuine smile despite the best of efforts. In the case of returns, refund of expensive products is a straight loss of sales and stressful for operational liquidity. Replacement saves the order but invokes a repeat of the entire order fulfilment process with the additional task of picking up the defective product from the aggrieved customers.

Challenges in the brick and mortar model

A huge share of the global furniture market falls in the ambit of the unorganized sector. This means such businesses are yet to be synchronized with the mainstream developments taking place in the industry. Most of these businesses are MSMEs by volume and revenue. Only a handful of local brands operating in the urban centres carry the expertise and financial prowess to aim for scale and expansion.

Many conventional furniture businesses undermine the strategic significance of a strong organization. These businesses exhibit weaker middle-level management. In most cases, the owners are involved in the routine operations and handling of employees. Business owners must be focusing on long-term business goals and vision. A strong middle-level management helps business owners to focus on the future of business and addressing the bigger issues at hand.

Challenges in the furniture eCommerce model (Online furniture business)

A big underlying challenge of the furniture industry is unsparing to the eCommerce retail businesses as well. It is always cumbersome to handle bulky furniture products irrespective of whether it is carried out by an in-house team or a third-party service provider. Eventually, it is the product that has to move. This weighs heavily even on the eCommerce-based inventory-light business models. Even if there is a potential market in a different city or a country, it also needs to have the required logistical facilities and services.

The function of on-site assembly of furniture has emerged as a tough operational challenge for the online furniture businesses in the retail space. From missing parts to lack of SOPs and training, customer experience goes for a toss when they have to wait for hours to get their purchase in one piece.

Challenges in the hybrid model

In the last few years, traditional businesses and new-age online furniture business startups have started aggressively implementing omnichannel strategies in the furniture market. The hybrid model allows businesses to make choosing and purchasing furniture easier for customers with the aid of eCommerce platforms and technologies or even brick and mortar furniture studios.

But the problem crops up in the supply chain activities and inventory management. The physical problem of the bulkiness of furniture products plagues the hybrid model too. Irrespective of the business model, effective supply chain management in the furniture retail industry is a critical requirement.

Managing inventory for both channels simultaneously is a challenge. Without centralized hubs acting as fulfilment centres and workshops, businesses end up investing heavily in inventory purchase and storage and scattering inventory over transit. The hybrid model calls for a major change in how businesses see their supply chain and inventory management strategies.

How YRC can help: a glimpse

Established in 2012, YRC is a boutique retail and eCommerce consulting firm. We design and deliver business solutions for our clients. In furniture business consulting, our service areas include market research, business modelling, business plan development, business strategy, SOPs, organizational structuring, and franchise consulting. We follow processes and engage professional and experienced furniture consultants in service design and delivery.

Within the furniture and home furnishing industry, the sub-verticals that we cater to include indoor and outdoor furniture, home décor, office furniture, premium home furnishings and furniture, affordable furniture, specialised furniture, modular & wooden furniture, kitchen furniture, etc.

Market Research

YRC delivers an insightful report comprising action-recommendations for better business and marketing planning. In furniture retailer business consulting, our team of market research experts go into comprehensive levels of market segmentation on the ground of channels of distribution, product lines and product categories, consumer groups, product features, etc. The high degree of segmented view of the target market presents better opportunities to comprehend a market for more effective marketing strategies.

Business Model Development

In business model development, our team of furniture business consultants carries out a careful SWOT analysis and study of the market research report to seek and define a strong UVP. A strong UVP is critical for the sustainability and competitiveness of a business model. After identification of UVP, the team maps the roadmap of creation and delivery of the intended value offering through a network of value chain and internal capabilities. This mapping helps in the later stage of business planning and formulation of the functional strategies.

In furniture industry consulting, various types of business models that we have expertise in include online furniture, furniture retail, furniture manufacturing, furniture D2C, furniture exports, omnichannel furniture, furniture franchising, etc.

Business Plan Development

In business plan development, YRC assesses and prepares the financial implications and projections of carrying out the business project or the business idea. Various financial aspects included here are capital requirements, operating expenditure, ROI and break-even analysis, revenue and cash flow projections, purchase planning, and more. The report is useful for pitch deck and is also meant to serve as a financial action plan and lend financial preparedness.

Franchise Consulting

In franchise consulting services, we help clients define their franchise expansion strategies, prepare the financial projections and assessments, provide assistance in franchise partner search, draft franchise legal agreements, design and implement SOPs, and establish robust audit processes. These services are intended to improve the business management of furniture shops and stores operating under a franchise arrangement. Control is a big factor in franchise versus company-owned stores in the furniture industry. Our team of offline and online retail furniture business consultants work in close tandem with our clients for crafting agile business solutions.

SOP Development

Most of the operational challenges that businesses encounter in the furniture industry are resolved when SOPs are implemented. From the handling of bulky products to unpacking and assembly, SOPs simplify complex operational activities. Not just employees, even customers benefit from product SOP manuals. SOPs also provide the foundation for automation in business and help define the specifications for the required furniture retail management software. In SOP development, our focus is on creating routines, achieving standardization, lending process orientation, and building a robust furniture retail management system for businesses. These SOPs are also useful as inputs for defining the job description of retail furniture store managers and other employees.

To know more about our furniture business consulting services or if you have any queries for our furniture consultants, drop us a message for a callback.

Our Clients

Somaiya & Associates

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We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.