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Furniture retail moves online

André Müller from OTTO on this radical change in the sector.

For a long time, there was a general belief that furniture could not be sold via the Internet. Now the statistics reveal that the opposite is true and are shifting their focus to online retail. We spoke to André Müller, Director of Home & Living at OTTO, about the current situation and what changes the future holds for this online business model.

André Müller from OTTO on the changes in the online furniture trade

André Müller from OTTO on the changes in the online furniture trade

OTTO outperforms IKEA in online sales

The Swedish furniture giant IKEA has been able to grow its online sales from 11 per cent in 2019 to 18 per cent in 2020, making it one of the leading companies in this sector – but still well behind OTTO. Why is OTTO so successful in terms of online furniture retail? And what are the challenges it faces?

What makes furniture so well-suited to online retail?

André Müller: Shopping for furniture online is becoming more and more popular in Germany. This is partly because suppliers like OTTO, which has been the largest online furniture retailer in the country for many years, have taken great pains to develop this business. We work every day to make the online shopping experience as pleasant and convenient as possible. We’ve expanded our product range many times over, offer a very good delivery and assembly service and supply good-quality products and sustainable goods, too.

To make distance selling in the home and living segment as attractive as possible, we also make use of technological aids. Augmented reality is the key here – with our yourhome app, users can try out many of our pieces of furniture virtually in their own homes before buying them. On request, we can also send out free fabric and product samples before a purchase and offer personal and professional interiors advice over the phone. Customers have the choice of travelling to a furniture store on the outskirts of town on a Saturday or ordering their new bed from the comfort of their sofa at home – and having it delivered and assembled. More and more consumers are opting for the more comfortable option.

Of course, we too need to keep on improving and becoming more innovative. And we’re working on this every day.

What do you see as OTTO’s competitive advantage?

I think our main competitive advantage lies in our combination of a wide range of products, attractive prices, a unique service and free, personal interiors advice over the phone. OTTO has the advantage of being able to draw on many years of expertise in the home and living segment, but of course, we too must keep on improving and becoming more innovative. And we’re working on this every day. This includes, for example, constant technological development, also in the field of augmented reality, and collaborations with influencers and designers like Lena Gercke, with whom OTTO has just launched an exclusive collection. This collaboration marks a step towards attracting the attention of a younger target group to OTTO and showing them what makes the OTTO brand tick today – that we’re modern and increasingly innovative.

To what extent do customers get a better service online than in a furniture showroom? What do you think wins them over?

I’m sure you’re familiar with those situations when you’ve stood around in a gigantic furniture showroom on a Saturday morning, unable to find a member of staff anywhere to help you. Of course, that’s not always the case everywhere. But when it happens, it’s frustrating and you feel you’ve needlessly wasted precious leisure time. We’re keen to spare our customers that experience – they can call us seven days a week for personal advice or even request a call back within the next 30 minutes with just one click. If the shopper then decides to buy from us, we’re usually able to deliver the new piece of furniture to the desired location and even

We’re currently in the midst of the biggest transformation in OTTO’s history.

How have you reacted to the shake-up in the industry? How quickly have you developed and implemented new (online) concepts?

We’ve been working on them for 25 years. I mean that seriously – that’s how long otto.de has been operating. A great deal has happened in that time, naturally. We’ve developed enormously and are currently in the midst of the biggest transformation in OTTO’s history. As a result, OTTO is no longer a traditional retailer; instead, the company is on its way to becoming a shopping platform that allows third parties to offer their product lines, too. The focus here is on home and living, closely c“We’re currently in the midst of the biggest transformation in OTTO’s history onnected with our aim of remaining the online market leader in the furniture segment in the future.

Of course, that’s a big ambition, but fortunately the shift in the industry towards a growing online share is playing into our hands. We’re grateful for this, but we mustn’t rest on our laurels. What makes the difference in the end is creating the most perfect customer experience possible – and that’s exactly what we want to keep on steadily improving. With the right products, the best services and employees who enjoy working for OTTO.

Has the pandemic played an additional role in driving/intensifying this major change?

I’ve read many times how the pandemic and its repercussions are said to have accelerated the shift from the bricks-and-mortar trade to online retail in the furniture sector by about two years. But this also poses a major challenge for us as online retailers: we have to process many more orders much more quickly and maintain the usual high level of service. I’m pleased to say that we’ve largely managed this quite well so far at OTTO, but it’s certainly a challenge.

What are your predictions for 2021? What direction might online furniture retail take next?

It depends on many factors – including the ongoing development of the coronavirus pandemic, which isn’t something that a furniture expert like me can forecast reliably. What I do expect is that the online furniture market will continue to grow – just like the range of furniture offered on the otto.de platform.

The figures: current trends and forecasts

According to the Cologne-based market research and consultancy firm IFH Köln and retail consultancy BBE Handelsberatung, the share of online trade in the sector’s total turnover could rise from 10 per cent in 2018 to 33.8 per cent in 2023. The auditing and consultancy firm PwC also forecasts annual growth of 8.4 per cent for this period, whereas overall sales in the sector are expected to stagnate.