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Failed Online Retail Site Revived As Web Portal

Posted on: Tuesday, 6 December 2005, 03:02 CST

By Weiss, Todd R

Furniture.com acts as middleman via links to brick-and-mortar IT systems

FIVE YEARS after Furniture.com Inc. became one of the victims of the dot-corn crash, a revived version of the company claims to have been profitable since last year. But it has done so by following a much different online retail strategy than its predecessor did, and with far fewer workers.

In its original incarnation, Furniture.com sold merchandise online and operated a chain of warehouses that handled deliveries to customers. Its workforce peaked at about 250 people. The new company, which was launched in 2002, chucked the sales and delivery strategy and instead functions as a shopping portal and intermediary for brick-and-mortar retailers. It has about 20 employees who primarily focus on Web design and marketing.

Waltham, Mass.-based Furniture.com this month announced its fourth retail partner, signing on RoomStore Inc., a Richmond, Va., company with stores in six states.

From an IT perspective, Furniture.com's Web site sits on top of a set of retail, customer service and e-mail systems as well as an intranet option that retailers can use to link their physical stores.

Carl Prindle, the company's president and CEO, said the online customer service technology is directly integrated with the point- of-sale systems at Furniture.com's partners. That means any order placed through the Web site can be automatically logged into the appropriate retailer's system for processing.

Customers can then view the status of their orders via the Furniture.com site, Prindle said. They can also ask questions through an online message center that automatically routes product- related inquiries to the retailers and ones about the Web site itself to Furniture.com's staff, he added.

Customers can also get real-time information about product inventories at local furniture stores and warehouses by entering their ZIP codes on the Web site, Prindle said. Once a ZIP code is captured, Furniture.com's online systems automatically link to the retailer with stores in that particular area.

Under its old approach, Furniture.com lost an average of $900 per order because of the high cost of its warehouse and delivery operations, Prindle said. Within two years of its founding in 1998, it was mired in debt despite an annualized sales rate of $80 million. But Prindle and other executives felt they could salvage something by purchasing the company's IT infrastructure, Web site and name.

Carol Baroudi, an analyst at Hurwitz & Associates, said that for the retailers doing business through Furniture.com's site, it's a plus to have access to another sales channel without having to develop their own online capabilities.

And Furniture.com's URL could be an easy-to-fmd magnet for customers, Baroudi noted. "People will type 'furniture' into a Web browser and look what happens," she said.

TECHNOLOGY DETAILS

Furniture.com's IT platform includes these components:

* The RETAIL ENGINE manages and displays information about products, sales promotions and store hours.

* The CUSTOMER SERVICE ENGINE shows the status of online and in- store orders and lets customers change requested delivery dates.

* The E-MAIL EN6INE sends customers updates about their orders as well as personalized promotions.

Copyright Computerworld Inc. Nov 28, 2005

Source: Computerworld

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