Scandi noir or Conran for the 21st century? Whose online home and garden offer is winning over the UK?

James Hammersley compares the ecommerce performance of the companies in the headlines against their key competitors and benchmarks them to find the real winners & losers.

Since the turn of the century property porn on television and online has become ubiquitous. Not just content to offer us buying and selling programmes, schedulers offer us programmes on every aspect of ‘living’ at home, so much so that the BBC have twice run an interior design equivalent of ‘Bake Off’.

One of the consequences is that we’ve seen an explosion of mid to low-cost retailers (multi-channel and pure play online) that bring ‘the look’ out of the small screen and the glossy magazines and into the average home and garden. What makes them an interesting sector is that the majority of them are playing in or just off the high street.

In this week’s infographic, The Drum’s Mystery Shopper compares the performance of four online players and explores where to go to keep up with the Joneses and whose offer is in need of a makeover.

Traffic

Insight: Revenue comes from traffic that converts. Having more traffic than your competitors is a real advantage.

Analysis: US-based Wayfair is the recent arrival and it has invested heavily in TV advertising. As a result it is attracting considerable traffic compared to our three home-grown rivals. Habitat, despite its brand recognition, is fighting off Made.com to stay in second place. High-end proposition The Cotswold Company may be fourth but it still attracts a reasonable amount of traffic.

Paid Campaign

Insight: If you are confident about your sales execution (ie customers stick on your pages and convert well) then you don’t have to outbid your competitors to gain a top three ad slot, which is where you will attract exponentially more traffic than position four or below.

Analysis: Wayfair is investing significantly to buy market share – it is funding adverts on over four times the amount of key words of Made.com. Its performance, however, suggests that this investment may be spread too thinly. The Cotswold Company, in comparison, with a far more focused keyword strategy is the best performer on their top 100 keywords. Made.com is the poorest performer in terms of their top 100 keywords.

Landing pages

Insight: Landing pages are a mark of how well you understand the different customer needs that you are fulfilling. More pages and more thought is being put into the marketing proposition and the following sales execution.

Analysis: Wayfair is on top here as well by some way. Made.com’s fourth place suggests that there is an opportunity to improve sales given their advantage in paid advertising. By implementing a larger number of landing pages, Wayfair will be segmenting its market more effectively than its competitors. It will therefore be taking its customers to where they want to be in fewer steps and driving more sales as a result.

Toolbox

Insight: Listening to your customers is vital; without understanding the needs and wants of a potential buyer it is near impossible to improve conversion.

Analysis: This looks like a sector less interested in the online customer than many. Wayfair, surprisingly for a big pure play online retailer, doesn't have a testing solution or a way of getting customer feedback. Habitat has all the tools: if used well, these could provide it with a competitive opportunity. The other two are flying as blind as Wayfair – how do they know why customers don’t buy and what execution changes work best?

What can you tell from this?

The obvious conclusion: Wayfair has bought its way into this market. Its paid marketing performance suggests it is looking for share rather than worrying about efficiency. It is overpaying for its digital real estate and spending heavily in soft furnishings to increase value. They need to look a little more carefully at the structural issues, otherwise they could over-invest and fail to generate decent returns.

The inevitable conclusion: Habitat, despite the full toolkit and the slightly better paid marketing performance, looks like a dated property with an avocado bathroom and magnolia walls. The two smaller players have more defined niches and Habitat’s minimal paid marketing suggests a proposition that is not confident that it can convert traffic it has to pay to acquire.

The surprising conclusion: Made.com, often lionised in awards, isn’t cutting it against the benchmark. Its scale will be one factor, but the failure to engage in building insight and testing, too few landing pages and the poorer performing paid marketing are a concern for an online-only retailer.

The insight: This is a major sector. The DIY and furniture stores listed in the Retail Week top 150 UK retailers have an estimated market size as defined by search of c. 90m visits a month. With this degree of competition, entering the market without the tools you require and a lazy strategy and your investors should have you on the carpet.

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