Amazon has sometimes been called "The Everything Store" for its huge selection of products. But it has a few holes in its lineup like furniture, a field that has been dominated by brick and mortar retailers like Pottery Barn and Crate & Barrel along with online merchants like Wayfair (“w”) and Overstock.com.
Amazon now appears to be doubling down on furniture as it eyes taking a bigger piece of the $150 billion market, according to a new report from the Wall Street Journal. The company is opening a number of new warehouses to store and ship furniture as well as expanding its inventory of furniture and home goods.
There's good reason Amazon (“amzn”) wants to expand its furniture footprint. U.S. online furniture sales grew 18% in 2015, making it one of the strongest categories in e-commerce, according to Barclays.
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Veenu Taneja, general manager of furniture at Amazon, told The Wall Street Journal that the segment is one of the fastest growing retail categories at Amazon. The company has an estimated 17% market share in home furnishings, according to Morgan Stanley.
But for the company to gain ground, it needs to be more aggressive in offering a wider variety of furniture and home goods, ensure faster shipping to customers, and offer a greater selection. The company has also reportedly built four new warehouses for bulky items like furniture.
Taneja confirmed that the e-commerce giant would add more inventory like sofas, and that it would also let customers design their own sofas, and other types of furniture. In some cities, the company will try to guarantee one to two-day shipping for furniture items.
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Delivering furniture is more complicated than selling books and toys, which can be easily packed and shipped directly to customers' doors. Many furniture retailers also offer "white-glove" delivery, which involves workers delivering furniture to homes and then assembling it.
Because of its size, furniture requires a lot more effort and cost in terms of logistics. Amazon is likely to rely on third-party companies to provide some of that work, according to the report.