By investing in cloud ERP and industry-specific functionalities, furniture and home goods retailers can forget about the systems that they’re running on and focus on what they do best: procuring and selling furniture.
With significant brick-and-mortar footprints, diverse customer bases, and extensive product lines, furniture and home goods retailers like Crate and Barrel, West Elm, and Pottery Barn need technology tools that help them increase their return on investment (ROI), optimize their resources, and maximize efficiencies.
Because these companies come in many different shapes and sizes, their systemic needs vary by operational setup. Most appeal to the business-to-consumer (B2C) audience, with a portion of their business involving business-to-business (B2B) customers. With sales ranging from $5 million to over $200 million annually, they run the gamut from single-store operators to national retail brands. Collectively, these home furnishing stores posted revenues of roughly $31 billion in the U.S. in 2020.
This white paper explores the top technology challenges that these retailers are dealing with in the current selling environment and shows how a unified, cloud ERP and industry-specific customizations help furniture and home goods retailers optimize their sales processes, save time, and get closer to their valued customers.
COZYING UP TO THEIR CUSTOMERS
With physical presences that include spacious showrooms, thousands of square feet of retail space, and large distribution centers, most furniture retailers have their sights set on a single goal: getting up close and personal with their customers. “The customer relationship is critical for these companies,” said Patrick Hicks, NetSuite Principal Consultant at Bresatech, “mainly because furniture is a big-ticket item that ranges from $2,000 to $5,000 per order, on average.”
A former Lovesac executive, Hicks has years of experience with all aspects of the furniture retail industry, including customer relationship management (CRM), data management, sales order management, purchasing, and logistics. In most cases, he says furniture and home goods retailers rely on Excel spreadsheets to run their operations, although some are also using homegrown ERPs.
Recently, for example, Bresatech worked with the customer that was still using an AS400 system that it had built 30 years ago. “They finally got to the point where they realized the system wasn’t working for them anymore,” said Hicks. “Now, they’re looking to NetSuite cloud ERP to help bring them into the future.”
That scenario is playing out across the retail furniture industry, where the cloud is becoming a focal point for companies that want to be able to run their business from anywhere in an affordable, cohesive manner. “This is a cost-conscious group that makes its systems last,” said Hicks. “They squeeze as much as they can from their current systems, with Excel being the glue that holds it all together, especially when it comes to moving data in and out of their ERP systems.”
Ironically, this focus on cost often leads to massive inefficiencies and bigger expenses in the long run. “Furniture retailers’ value proposition is often out of whack; they spend a lot of money keeping their systems running,” Hicks explained. These companies are also challenged by the product customization and return processes, both of which have to be managed as efficiently and effectively as the sales order process itself.
Knowing this, Bresatech provides the NetSuite customizations that companies need to be able to accommodate these and other industry-specific needs. Where the ERP traditionally converts a single sales order into one purchase order per customer, for instance, furniture companies don’t necessarily manage their vendor orders in that manner. Instead, they want to be able to submit bulk forms to vendors, primarily due to the processing fees that are added to every document. To address this need, Bresatech builds a customization that consolidates the day’s orders into POs for individual vendors.
SUPPORTING THE PERSONALIZATION TREND
As designers look to create unique spaces that reflect their clients’ individual tastes and preferences, more furniture companies are producing custom pieces that can be used to develop these one-of-a-kind spaces. This trend puts new pressures on furniture and home goods retailers, who need advanced configuration tools to help them manage the tens of thousands of different SKUs associated with specific finishes, materials, hardware, and fabric types.
“We get pretty creative in building configurator options that help these companies construct ‘on the fly’ versions of a SKU, couch, bed, or other product,” said Hicks. “This kind of functionality is not native to NetSuite, but we've been able to customize around that and build out this industry-specific functionality.”
A team of technology specialists, design practitioners, and product strategists that take pride in building cutting-edge products and solutions within an agile and iterative development model, Bresatech uses a Center of Excellence methodology that helps its furniture and home goods customers break out of the Excel spreadsheet mode and begin taking advantage of a modern, cloud-based ERP. Depending on a company’s size and specific needs, implementation times can be as short as three months or as long as one year, with six months being the average timeframe for the end-to-end process.
The NetSuite partner has also created turnkey integrations for platforms like Oomi, Celigo, AWS, Azure, Cascade, Narvar, Shopify, and Magento, all with the aim of utilizing its intellectual property across numerous different customers and industry verticals. “We’ve built customizations that, with a bit of effort, can be generalized for other customers,” said Hicks, “and for a larger audience, if so desired.”
This approach blends particularly well with NetSuite ERP, which comes with a wide range of native capabilities plus the potential to accommodate specific industries’ technological needs. “NetSuite is very flexible, so it allows us to build out new tools that make the platform a perfect fit for furniture retailers and other industries,” said Hicks. “As a result, we’re constantly going through iterative cycles to figure out how we're going to solve specific business needs using cloud ERP.”
Once in place, NetSuite cloud ERP plus Bresatech’s customizations produce benefits for furniture and home goods retailers almost immediately. Those wins include an optimized, automated order processing system, the ability to leverage accurate data across the enterprise, and time saved by not having to manually manage a business based on Excel spreadsheets. With all of their enterprise data housed on a single ERP that resides in the cloud, furniture retailers can access their information from anywhere, make good operational decisions, and improve customer service levels.
Furniture retailers also benefit from NetSuite’s robust data analytics capabilities. Those that were previously exporting and importing spreadsheet-based data across AWS, Azure, and other platforms, for example, suddenly find themselves able to access, manipulate, and share data that can be used for good decision-making. “This is a pretty powerful win for furniture retailers that previously lacked this level of data visibility,” said Hicks, “and the ability to ingest, isolate, and identify data analytics.”
For example, the retail furniture company located in the Northeastern U.S. that doesn’t know which furniture colors are selling well during a specific time of the year (e.g., vibrant hues, specific patterns, or neutral colors) can’t adequately promote and stock the goods that consumers are most interested in.
Armed with that information, it can set up more successful product promotions and have more productive conversations with customers who visit its showrooms. “This is a return on investment that one wouldn’t normally associate with ERP,” said Hicks, “but that we’re able to provide through our customization work.
HELPING THEM PROVIDE A WHITE GLOVE EXPERIENCE
When Furnitureland South’s custom-developed AS400 system outlived its useful life, the furniture retailer went in search of a modern, cloud-based enterprise solution. Inefficient and lacking in many areas, the solution required a large IT staff to maintain it, incorporated obsolete hardware, and operated in a siloed manner that prohibited good information-sharing across the organization. The system also lacked logistics and customer service capabilities.
Realizing that a full system replacement would interrupt FLS’ daily operations, Bresatech implemented a phased approach that allowed NetSuite to work seamlessly within the legacy system to provide solutions to the biggest issues using updated technology. “In order to keep operations running with their current system, our team integrated much needed NetSuite solutions into FLS’ legacy system,” said Hicks. “This provided immediate relief for the bigger, bulkier issues and built a more solid foundation for our team to work from.”
Combining its own industry knowledge and NetSuite expertise, Bresatech gave FLS an advanced fulfillment solution that it uses to fulfill customer orders efficiently, accurately, and on time. It also developed a complete replacement/return process and a comprehensive warranty package that FLS’ customers use to submit claims for repair or replacement.
Today, FLS has one central, cloud-based repository for all company data, along with cohesive management of customers, orders, products, inventory, and underlying financials. “NetSuite’s search and reporting tools allow FLS staff to reinvest formerly inefficient time into proactive business analysis, management, and process refinement,” said Hicks. “Additionally, the easily customizable native dashboards in NetSuite give staff immediate information they need to make quick, informed decisions that contributed to providing a true white-glove customer experience.”
SHIFTING FOCUS FOR THE FUTURE
Quoting a Chinese proverb, Hicks likes to remind furniture and home goods retailers that while the best time to plant a new oak tree was 30 years ago, the next best time is today. Knowing that the industry is weighed down by a mix of antiquated, proprietary technology and Excel spreadsheets, he said there’s no time like the present to break the mold and start realizing the benefits of a cloud ERP that comes stocked with all of the industry-specific functionality that a retailer could need.
“Every day that a company waits to make this move, they’re just missing out on opportunities to work smarter, better, and faster in a competitive industry,” said Hicks. By moving away from manual processes, non-centralized database systems, multiple external integrations, and other end points that need much care and feeding, he added, furniture and home goods retailers can set themselves up for success today and in the future. “Once they move over to cloud ERP and one central database, furniture retailers can shift their focus to doing what they do best—procuring and selling furniture and home goods,” said Hicks, “instead of worrying about the systems that their businesses are running on.”