Amazon Makes Major Push Into Furniture
Comment of the Day

May 12 2017

Commentary by Eoin Treacy

Amazon Makes Major Push Into Furniture

This article by Brian Baskin and  Laura Stevens for the Wall Street Journal may be of interest to subscribers. Here is a section: 

The online retail giant is making a major push into furniture and appliances, including building at least four massive warehouses focused on fulfilling and delivering bulky items, according to people familiar with Amazon’s plans.

With that move, the Seattle-based retailer is taking on the two companies that dominate online furniture sales— Wayfair Inc. W -5.95% and Pottery Barn owner Williams-Sonoma Inc. Furniture is one of the fastest-growing segments of U.S. online retail, growing 18% in 2015, second only to groceries, according to Barclays. About 15% of the $70 billion U.S. furniture market has moved online, researcher IBISWorld says.

But even the biggest players in online furniture are struggling to get the market right. Unlike established categories such as books and music or even apparel, retailers are still hammering out basic concepts like how much variety to offer on their sites and the most efficient ways to deliver couches and dining sets to customers’ homes.

While Amazon has been selling furniture for years, it has lately decided to tackle the sector more forcefully.

“Furniture is one of the fastest-growing retail categories here at Amazon,” said Veenu Taneja, furniture general manager at Amazon, in a statement. He said the company is expanding its selection of products, with offerings including Ashley Furniture sofas and Jonathan Adler home décor, and it is adding custom-furniture design services. Amazon is also speeding up delivery to one or two days in some cities, he adde

Eoin Treacy's view

Here is a link to a PDF of the above article.

Free returns and secure transactions make online shopping risk free and painless from the perspective of consumers. Amazon is employing that strategy in an increasing number of sectors but most particularly in furniture and fashion. The number of brands Amazon now carries as well as sporting its own designs represent not only a direct threat to Williams Sonoma but to departments stores generally.

Amazon moved to another new high today as it advances steadily towards the psychological $1000 level.

Macy’s broke to new low yesterday on disappointing earnings and extended the decline today.

Nordstrom was down 10% today even after bearing analyst’s expectations not least because sale stores sales were down.

The pace of JC Penney’s decline is picking up as it fell 15% today.

Australian listed Westfield might have some of the best populated malls in Southern California but when its tenants are doing so badly that is likely represent a threat to earnings down the line. The share encountered resistance three weeks ago in the region of the trend mean.

Wayfair broke out on more positive analyst expectations earlier this week but is susceptible to at least some consolidation as the impact of the above article filters through.

Williams-Sonoma has been ranging with a mild downward bias since early last year and needs to sustain a break back above $55 to question potential overall downward bias. 

Back to top

You need to be logged in to comment.

New members registration