Premium furniture and home goods retailer BoConcept found itself in a precarious position when the COVID-19-prompted retail shutdown swept through the nation this spring. Beyond navigating the challenges of a pandemic, the company also lacked an e-commerce site to reach today’s new consumer.
Giving new meaning to the term “quick pivot,” BoConcept which operates nearly 300 locations in 65 countries, including 15 the United States, developed a virtual showroom and personalized chat service in the span of just two weeks in April.
RIS chatted with Steen Knigge, director of marketing, about how the company was able to implement technology that leveraged its signature interior design services during a period when traveling to both a home or a store was verboten.
RIS: What led BoConcept to implement a virtual showroom and personalized chat? When did they go live?
Knigge: Due to a variety of reasons, we did not have e-commerce or other digitally important vehicles in place when the pandemic closed our store network. Obviously, that was an enormous blow to our stores as well as clients who wanted/needed new furniture. Within two weeks, we implemented an e-commerce solution that allowed the clients to purchase online, with the important note that to finalize the order, a design consultant from a store would contact and finalize the purchase, due to our high level of customization and modularity.
However, with several abandoned carts online, a live chat where a potential client could ask questions, was instituted. To further reduce barriers for the clients, we created a somewhat interactive virtual showroom for clients to get a better sense of what they were looking at, compared to the beautiful but highly stylized studio- and room pictures we offer online.
RIS: How do they work?
Knigge: The chat is manned by the actual store network, from owners to design consultants. This allows for direct purchase on the chat and very relevant and helpful solution-based answers. While a central chat organization would reduce the resources needed within the store network, the highly qualified and relevant answers a client gets from an actual store employee are highly valuable.
The virtual showroom allows a potential client to “walk around” virtually in an actual store, browsing furniture pieces, getting a better sense of dimensions, etc. Each furniture and accessory piece is tagged, meaning a client who is interested in a particular item can hover the mouse over and access the product name and price, as well as click through to the product on the boconcept.com site and configure further; this in any modularity and/or fabric/leather available.
RIS: What have been the benefits? How are you measuring success?
Knigge: The obvious benefit is that you now can get your specific piece 24/7, without the need to visit a store. For example, a “traditional” sofa purchase saw a client visiting a BoConcept store 3.8 times on average. This has been cut down dramatically now, with the client now having qualified her/his purchase before even setting a foot in the store.
Sure, it has caused a rather large drop in the store traffic; however, the hit-rate has increased substantially and the client satisfaction likewise.
We are of the strong conviction that clients are well served by at least one visit to the store, as online doesn’t allow for the tactile part of furniture buying, except receiving fabric/leather swatches. For example, a living chair is not just a living chair; your height, the length of your torso, length of your legs etc., all plays a large role in how comfortable each living chair model is for you. You can buy online, but the actual feel is missed. We want to reduce the returns and increase client satisfaction, so the chat/e-commerce/virtual showroom should be seen as additional convenience for the clients.
With the above said, we do of course track online/chat sales, which has stayed strong even after our store network has reopened. However, each online generated sale is still attributed to the individual store, based on geographical closeness to the client. So, we don’t chase online KPIs, rather look at it from a holistic store performance: How well do they engage with the online clients, what is the closure rate of online-generated leads, etc.
RIS: Have you seen a rise in new customers?
Knigge: Very much so. As we were strictly brick-and-mortar pre-pandemic, the overwhelming source of revenue came from each store’s uptake area. This has now been expanded dramatically, basically reaching clients nationwide.
Another benefit was the re-ignition of areas where we have had stores but since then have closed them. A good example is Texas, where we had three stores several years back. That area is now generating daily sales from clients — past and new — who was aware of the brand but couldn’t really experience the brand.
The expanded footprint also allows us to do targeted marketing outreach to areas where we, based on demographics, think a mirror-group of our actual clients reside. Based on results, it gives us a much stronger foundation to research and identify potential new franchisees (and stores) in these areas.
RIS: Has anything surprised you about the results?
Knigge: We have had e-commerce for several years in our largest markets such as France, Germany and the U.K., however, with limited results and mostly entry-level products purchased by clients. Introducing e-commerce in the U.S. immediately vaulted our market to the top globally in online transactions.
Also, our entire collection, from basic pieces to large top-grain leather sofas, are now being purchased here. I did not expect to see sofas in the price range of $7,000 to 8,000-plus to be sold online, but here we are.
RIS: What were some of the challenges you encountered? Any unexpected?
Knigge: As our collection is modular and customizable, we basically do bespoke sales. This means each purchase of, let’s say, a leather sofa first will be put into production after the sale is confirmed. This creates longer lead times than what several of our competitors have.
Some, especially new, clients expect just-in-time delivery of their purchased product, as they would receive on Wayfair.com or similar outlets. When said client then learns that delivery time can be several weeks, we do see some transactions reversed.
Also, each store will have somewhat different shipping cost, mostly since delivering in places like Manhattan or San Francisco is very different from other places. Some transactions are lost here as well.
The great outcome of those challenges is that it has shined a light on various barriers we’ve had and battled with for a long time, without any hard data. Now we can work strategically and fact-based to reduce several challenges and create much better client experiences.
RIS: What best practices can you offer to retailers looking to improve their consumer engagement, especially during this challenging time?
Knigge: As mentioned earlier, the highly knowledgeable staff we have (actual owners, store managers and Design Consultants) literally handle the chat function. This creates trust, immediate solutions for the client and high client satisfaction. I think we all have engaged in chats where it was an outsourced staff that answered, without ever getting a detailed and action-oriented answer, rather a cookie-cutter and pedestrian experience.
Be available at all touchpoints, with as many digital tools possible. Each client prefers something different for their experience, and the variety of possible connections is a huge plus — obviously making sure it’s a resource- and financially sound toolbox.
Our hybrid on/off-line funnel is fairly unique and is not the right fit for all retailers. However, should you have a highly customizable collection of products; the many questions and uncertainties a client has with a high-involvement and, relatively speaking, expensive product purchase, makes sense.
Generally speaking, make sure to have the client and her/his needs in focus; don’t waste precious resources on items that doesn’t help the client.
RIS: What are your plans for the virtual showroom and chat going forward? Are any upgrades or changes planned?
As we continually introduce new products to the collection, the virtual showroom needs frequent updates. This needs to be taken into account, both financially and in regard to people resources.
We are looking to upgrade the chat, so that store personnel do not have to spend time on more “rudimentary” questions such as assembly manuals etc. Also, other markets are looking at the success we’ve had in the U.S. and wants to implement similar client-facing tools. Considering we’re present in 65-plus countries across the world, we do need to strategize how to create economies of scale while not detract from the client experience.
The e-commerce platform is also being looked at and very likely upgraded to a more client-friendly platform, with additional information and tools available.