Home Retail From Online to Offline: Urban Ladder to provide seamless furniture buying experience

From Online to Offline: Urban Ladder to provide seamless furniture buying experience

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In a market cluttered with various e-commerce marketplaces that allow consumers to buy different product categories from as many sellers/vendors as possible, Bengaluru-based retailer, Urban Ladder had set its eyes on something else from Day One – creating an online furniture brand that consumers trust and buy from, without having to trawl through shops and bylanes for that right sofa or recliner.

From Online to Offline: Urban Ladder to provide seamless furniture buying experience
The stores will be 3,000-5,000 sq ft in size and Urban Ladder's first store is likely to be open in Bangalore over the next six months

The company, which started operations in January 2012, till now focussed on reaching its consumers base through its own online portal. Today with encouraging consumer feedback and better recall value, it has started expanding its access points by partnering with major horizontal players – Flipkart and Amazon India – and is in the process of opening few offline stores as well.

Read: Furniture goes hyperlocal, but is it built to last?

“So, the big picture goal is to engage with our customers through multiple distribution channels to give them a better discoverability of our products. We have always been a consumer brand, born digitally. Now after the four years of operations, we felt that people have started knowing us, they like us and thus it’s important to give them multiple access points to buy us,” CMO, , Sanjay Gupta told Indiaretailing Bureau in an exclusive interview.

“We first engaged with Amazon because it’s a like-minded customer-centric organization and first month for us has been quite encouraging, considering the limited portfolio that we have on the marketplace. While the initial hypothesis was that only the smaller ticket items would be sold on these larger marketplaces, we are surprised to see that even the high-value items are resonating well with customers,” he added.

The company has just listed 400 products- out of its current 4,000 plus products portfolio across 35 categories- on Amazon and 100 products on Flipkart. However, over the next three-four months, the plans are afoot to sell the majority of its portfolio on both the platforms.

The company – which counts Tata Group chairman emeritus Ratan Tata among its investors – has raised close to $77 million in four rounds of funding from Sequoia Capital, SAIF Partners, Kalaari Capital and Steadview Capital. It claims to have been growing four times year-on-year and says that it has the highest net promoter score in the industry.

“We have believed in a philosophy of one customer, one experience at a time which has been backed by a sharp focus on innovation, ensuring top-notch delivery services and better customer experience. We have the highest net promoter score (NPS) in the industry which is .8 (or 80 per cent) that shows the amount of confidence that we have been able to instill in our customers,” Gupta noted.

NPS is a measure that indicates the loyalty of a firm’s customers and the overall quality of its service. The term was coined by Fred Reichheld, a fellow at management consultancy Bain & Co, in an article published in the Harvard Business Review in 2003.

How is NPS Calculated?

The calculation of NPS is based on one simple question to consumers: what is the likelihood that you will recommend the company to a friend on a scale of one to 10? Consumers who rate the company 9 and 10 are considered loyal customers who will keep buying from a company.

Those who rate 7 and 8 are called passives, customers who are satisfied but can be wooed away by a rival business easily. However, those who mark the company less than a 6 are considered detractors, who are unlikely to return to make repurchases.

NPS is the difference between the percentage of promoters and percentage of detractors. NPS is thus looked at as an overall indicator of the term ‘customer experience’ – it is a gauge of a company’s popularity with customers and a proxy for the quality of its service.

Experiential retail to win customers trust

Besides an aggressive online push, the company is also looking to open offline stores, joining the growing list of e-commerce players who have opened physical stores in the past in order to extend the five-sense experience to their customers.

“The first thing for us was to get the basic level of brand awareness and recognition. So we started with an online presence to make clear that we are a consumers brand and not a marketplace. We are looking to set up experience stores which will not hold inventory like traditional offline stores but will allow consumers to get a sense of our product and its quality,” explains Gupta.

Read: 7 e-tailers who set the trend for ‘O2O’ retail model in India

The stores will be 3,000-5,000 sq ft in size and the company’s first store is likely to be open in Bangalore over the next six months.

To be sure, the company is not looking to make its offline foray as major revenue generators, they will work more as a platform for consumers to interact with the brand personally.

“For the next 12-18 months, the majority of the revenue is going to come from our own website. Offline store will take some time to match the share of traffic that we get on our website. Similarly, the furniture category on these marketplaces (Amazon and Flipkart) is also much smaller than us, therefore our site will be a sole revenue driver for next one and a half year. Post that we will have to access and see how the other platforms are performing,” Gupta said.

Smaller share but larger prospect

The Rs 1,40,000-crore Indian furniture market is highly fragmented and unorganised. Within it, the online market accounts for a mere Rs 750 crore, according to a report in The Hindu Business Line. But it is growing rapidly and with more people buying furniture via PCs and mobiles, this market is set to grow to Rs 15,000 crore by 2017, the report states.

However, it didn’t deter the entry of various players in this particular segment. In the past three years, specialist online furniture retailers have mushroomed, led by market leader Pepperfry (set up in January 2012), Future Group’s recent acquisition (launched in March 2012), and Mebelkart (November 2012), among others.

And Gupta says that over the last four years, the company has witnessed a few significant trends that further resonates the growth potential.

“Initially, online purchases were limited to small products like coffee tables or some of the marquee decor pieces that consumers were not able to find in any retail store. But from over the last five to six months, people have started buying large categories as well and the contribution of beds, sofas, dining tables in our portfolio has gone up significantly,” Gupta said.

Additionally, the innovating offerings provided by the online furniture and home decor retailers are also boosting the growth, he noted.

“For instance, our home solution services has worked quite well for us. With our interior designers in place who are there to advise clients on the type of furniture and decor pieces that will fit best to consumers taste and expectation, the pain of collecting pieces from different stores and ending up making your house look like a museum has decreased considerably,” Gupta concluded.