Targeting furniture sales

Target now offers more than 5,000 pieces of furniture for sale. The selection includes canopy beds, dining room tables and leather sofas. But you won't see most of them in Target stores. The only spot you can find all of them is a place where you can't test how comfortable they feel: Target.com.

How will furniture sell at Target's Web site? Shoppers like Sue Peterson of Lino Lakes will decide.

"Furniture!" she exclaims as she logs on to Target's Web site and begins her shopping. "So, they have living room, bed and bath.... Let's look at the decorative fireplaces."

Peterson likes what she sees, including sofa sets costing more than $2,000. But she's wary about shelling out that much -- without seeing the furniture and giving it a "tush test."

"I can't imagine I would buy that," she says of a pricey sofa. "This is high-ticket."

Perhaps she'd think differently about lower-priced items?

"Yeah, more low-ticket items," says Peterson, "where there's less risk."

Americans spend big bucks buying furniture and home furnishings online -- some $8 billion last year alone. That's according to the consulting firm Forrester Research. Even so, the Web accounts for only about 7 percent of all home furnishing sales.

But Forrester analyst Sucharita Mulpuru says the Web can be an important tool for furniture shoppers -- even if they have no plans to buy online.

The majority of people will do lots of research, compare pricing, narrow down their selection [on the Web], and then go to a store to confirm that's what they want.

"It does give you the opportunity to see a little bit more of the product selection in a depth that you wouldn't normally see in the off-line world," Mulpuru says. "If you are looking for a sofa or coffee table in a particular finish, with a click of a mouse you can get a pretty decent rendering of what that will look like."

A Target spokeswoman said the retailer has sold furniture online for a few years now. But she wouldn't reveal how sales are going.

Dave Heupel, an analyst with Thrivent Financial for Lutherans, says selling furniture online has significant potential for Target. He says the business fits the retailer's strategy of combining upscale design and low prices.

"This is a category they can become more aggressive in and use some of the leverage they have in design talent and the low-cost distribution network they offer to become more of a player," he says.

Heupel says the Web allows Target to grow the business without using up large blocks of space in stores.

Target stores sell mostly unassembled furniture. Much of the furniture Target sells online is also unassembled. But online, Target is also pitching upholstered and other furniture that's decidedly upscale and requires little or no assembly.

"What you'll find is it's fairly high quality furniture at very low prices," Heupel of Thrivent says. "I think you'd have to [compare] it to the likes of a Williams-Sonoma or Ethan Allen, but trying to offer comparable quality for a lower price."

Heupel says some consumers clearly will buy furniture on the Web, even if they can't test-drive it. He expects Target has seen the success retailers such as Pottery Barn and Williams-Sonoma have had online.

"I think they are going to test it out and see what the consumer thinks," Heupel says. "But it is an opportunity. Certainly, we have seen Williams-Sonoma do well with catalog or Web-based home furnishing sales."

Williams-Sonoma and sister companies had nearly $800 million in online sales in 2005.

Target is already among the nation's top 10 furniture retailers, along with Wal-Mart. Of course, both retailers have a lot of stores in the U.S. Target has about 1,500; Wal-Mart, nearly 4,000.

Furniture Today, an industry trade magazine, estimates Target had furniture sales of $1.4 billion in 2005; Wal-Mart, $2 billion.

Traditional furniture stores have seen their market share steadily slide.

But some of them see the Web as a key sales tool, even if they don't sell furniture online.

Hom Furniture is in that camp. The retailer has 11 stores in the Twin Cities and elsewhere in the Upper Midwest. The company's mega-store in Plymouth is the size of three football fields.

Overall, Hom's sales total about $200 million a year. The company doesn't sell anything online, but its Web site gives a big boost to store sales.

"We see both pieces as being critical for customer shopping today," says Carl Nyberg, one of the owners of the Coon Raids-based company.

Nyberg expects the majority of shoppers will always want to see and touch most furniture before they buy it. But Nyberg says any serious furniture retailer has to be on the Web.

"Customers are pressed for time," Nyberg says. "They can go to the Web, find all of our products, get good pictures of them, find details about the products, find the pricing, also know whether we have it in stock, ready for them and where it is located. So, then they are able to narrow their search and make their shopping time more focused."

But what if shopping online is the only option open to a customer? Can Target pull off selling $600 leather coaches just online?

"Given the price and the fact they back it up with a strong return policy, they definitely have a good shot at having a decent size of a business like this," says Mulpuru.

Target's Web site draws more than 20 million unique visitors a month, according to comScore Media Metrix, a firm that tracks Web site traffic.

If Target builds up its furniture business enough, buyers may start providing showrooms -- giving their friends and extended families the test sit that's not available online.

To spur sales, Target has been offering free shipping on more than 3,000 furniture items. Many of them, even some sofas, can be returned to Target stores.

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