The eCommerce evolution of Home & Light companies

Evolving from selling products to integrated solutions

There’s turmoil brewing inside our homes.

No, it doesn’t have anything to do with who is doing the dishes tonight or what channel the TV should be on. It’s about the space inside our homes and how it should be shaped, how it should be occupied.

The lights and furniture we buy today are more sophisticated and that’s why the stakes are at an all-time high. The initial purchase is important for Home & Light companies, but the shift in the industry is centered on complementary purchases and the lifetime value of the consumer.

eCommerce has been an invaluable tool for these companies to take a drip approaching in securing recurrent revenue from their customers.

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And we’re not the only ones saying it – some really clever people are thinking the same too!

As part of their report on the changes within the lighting industry, the Boston Consulting Group believe that “lighting customers are increasingly looking to buy an integrated solution – the entire package including lamps, luminaires, controls, software, and services. This is spawning a new category: lighting as a service.”

The same logic can be applied to home furnishing customers. Shifting to a dual model of product-and-services is a powerful way for home & lighting companies to differentiate their offering and develop new, recurring revenue streams.

In this new model data is king, and that is why eCommerce has been such a force behind delivering ongoing revenue past the initial purchase. Brands that thrive in this new dynamic have shifted from a hard online sell online to a softer approach with varying degrees of sophistication. While some of their services are offered online they build a tighter integration between their online stores and their retail presence. They use their online presence to service a huge range of niche markets.

What Luzern have noticed is the key to success in these models is to have a carefully designed workflow that directs customers to a personalized product offering. This ensures the customer has a starting package suited to its home. More importantly for brands, this starting package makes selling add-ons possible.

A critical success factor is to ensure to gather data across the workflow. This can help build relationships and push towards longer term, serviced-based agreements including installation, consultation and more. A number of companies have used this data to direct customers to physical retail stores to get one-on-one consultations with professionals.

It’s important not to try to get there from day 1, but rather slowly work at it and continuing to fine-tune the solution. That’s why data is so critical – this is not a project but a process, where the right eCommerce platform can bring increasingly sophisticated features and technology to develop a multi-stepped approach of integrating online and offline activity.

Home and lighting companies that undergo this process typically evolve over 3 different manifestations:

• The online seller of slower-moving inventory and commoditized products, with standardized features and one-way communication with the customer
• The introduction of sophisticated products from a design or technology point of view, with do-it-yourself information and segmented two-way communication
• The fully integrated online solution offering products and services where customers engage with brands and brands with customers

The evolution of the home furnishing and light companies online is marked by specific shifts in product, feature and delivery strategies. To help you on your journey, we’ve prepared a critical success factors checklist based on our experience with clients in the sector.