Amazon wants to compete against Ikea by selling furniture: augmented reality, private labels and free shipping are its main weapons
Amazon has become a strong commercial competitor for all types of sectors, in which it has entered both with third-party products and with its own marches: technology, clothing, low-cost products, etc. Now he has in his hands to go on to compete in a more difficult sector in which he has great competitors: decoration and furniture. And that’s how he plans to carve out.
A bet on augmented reality
Following this strategy, last year Amazon presented ‘Room Decorator‘, a tool created for your website that allows you to place, both in your own space and in a given space, brand furniture. The goal is none other than be able to visualize size and appearance of them in a more convincing way thanks to augmented reality. For now, this tool is only available in the Amazon Shopping app for iOS, but it means that Amazon takes another step in its commitment to selling furniture, after launching a less advanced version of augmented reality in 2017 (again, only available for iOS).
Augmented reality allows the user to visualize how the furniture or household products would look in the space itself. Nevertheless, the old Amazon app only allowed the consumer to view one product at a time, now allowing the new tool to place several, so that an entire furnished room can be viewed. It also allows you to save the “rooms” that have been decorated and view them later, as well as access to the purchase of all the products that have been superimposed in the space.
No matter how much the available space at home is measured and compared with the measurements of the desired furniture, it is not always clear how much space it will occupy or whether it will fit in with the rest of the space.
It is something that Amazon already thought with its first application and that, of course, other competitors have thought, such as Ikea, who also in 2017 launched his own augmented reality application, Ikea Place, which allows practically all the furniture and elements of the brand to be placed in its own space. Although not all Ikea products are included, those that can be seen do so with great quality and it works especially well, allowing the user to also place several in the same space and giving an idea clear of the final result.
Although for now Amazon have only bet on this technology with Apple, it also allows you to view it in some way from the web browser and from the Android application. This second option, however, only allows you to see the products in black, which allows you to get an idea of the size but difficult to visualize the appearance. It also does not allow this operation to be carried out with a large number of products, although it does with many of the main furniture of its own and exclusive brands.
Bet on free shipping
Amazon has been clear from the beginning that this should be its strong point. Although the shipping costs on the web depend on the seller, Amazon’s own brands, Movian Y Alcove, have free shipping costs and flexible and comprehensive return conditions. In fact, the global situation, together with the arrival of Christmas, has meant that, if we buy one of their products now, we do not have to return it until January 31, 2021.
As in any web, the trust center is other users. Some products even reach the thousand opinions of buyers who, generally, have ended up satisfied with their purchase and who even share photos to add veracity and perspective. When the product does not have any comments, it only remains to cross your fingers and trust, something that is not difficult when the return costs tend to zero.
Amazon has also bet on something that Ikea also has: the financing, since both entities allow payment in installments. At Ikea, the terms depend on the product and you must have a VISA card of the own brand, while Amazon has established four fixed installments to be paid within 90 days for any product.
For brands that Amazon has exclusively (Rivet, Stone and Beam and Infinity) there are, however, shipping costs, because these brands are not found in Spain. The rate of bringing them from the United States is often double the price of the product.
This addition of shipping costs to the initial price of the product mainly happens when we buy on the main pages of these brands, which at first seem intended for the American public. When entering, for example, Amazon Rivet, the page appears in English and assumes that you are buying in the US, so perhaps the best thing to do is to do a search from the Amazon home page.
In this point, Ikea defends that they have always been exposed to competition and that it pushes them to do things better. They explain that the business model, the way of conceiving the stores and the “democratic design” has driven them in the sector and that their age (more than 70 years) has made them a successful brand. It is not easy to face a great empire, but neither is it easy to face a giant like Amazon.
With this new technology, which the American brand has been developing for more than a year, Amazon hopes customers will find buying furniture from home attractive. Unlike brands like Ikea, where the strong point of the purchase is in the experience lived in store, Amazon wants to offer a technological experience through the design of a room.
This situation leaves the choice to the consumer’s taste, because although in Ikea you can see rooms already pre-designed and have a similar application, the ease and versatility of tools such as ‘Room Decorator’ allow you to buy with agility and order without thinking twice due to shipping costs.
More than 150 own brands
Amazon’s ability to penetrate new markets is staggering, to the point that there are already more than 150 private labels. Most of them are related to the textile sector, although it also sells its own food, technology, pets and even hardware products.
Without a doubt, fashion is his big bet and he fully trusts his brands, because on the website itself you can see how it places these (find The A rainbow for them) alongside others widely known such as Lacoste, Vans or Tous. In the decoration segment, apart from those previously mentioned, it has the furniture and products that fall within the brand Amazon Basics, in addition to the classic furniture brand Ravenna Home.
The challenge of selling furniture without the buyer being able to try it
Amazon began as an online sales website, but its capacity for growth and desire to expand of its owner have taken the brand to all economic areas. Not only have they already gotten into the financial services bandwagon in which many large technology companies go, but they are also competing with well-established brands that see their reign in jeopardy against one of the largest companies in the world.
Although the American company has been selling furniture for a long time, a few years ago it opted for this segment and decided take out their own brands and take others as exclusive. Several entire catalogs of decoration can be bought already on the web.
At a time when online sales cut across all segments, both for products and services, it seems that there are some sectors that are resisting, such as clothing and furniture. Many people do not want to buy a pair of pants without first trying them on and many others do not want to buy a sofa without having been able to lie down (at least five minutes) on it.
Some brands, such as Ikea, although they have implemented their online store quickly and effectively, lack the advantages that encourage people to buy online; mainly, affordable shipping costs. Although from Ikea they point out that have set up collection points In your ‘Ikea Designs’ and shipping costs from four euros for accessories and small furniture (with maximum volume and weight), it should be taken into account that buying a large piece of furniture such as a closet or a sofa still has a price shipping costs around 50 euros.
To this question must be added that the brand has not been able to optimize its shops in central locations, having to travel to the outskirts of cities to see most of their products in person.
Although Ikea has not lost steam in the furniture market, many decoration stores have put their efforts in improve home service in order to compete.
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