A Furniture Store Scenario

Product Ideation Use case

Use case:
A Furniture store in Bangalore operates a chain of three physical stores but there are still buyers the company can cater to.
As a Business Analyst, how do you help the company to expand business leading to inventory & revenue?

Goal: Launch an e-commerce website.

Furniture store

1. Questions about the business:

• Is the business profitable?
• What is the current customer segment?
• What are the pain points customers face when purchasing furniture?
• How many locations does Furniture operate?
• What is the current sales volume and revenue of the stores?
• What is the online presence of Furniture?
• What are the logistical capabilities for shipping furniture?
• What is the budget allocated for building an e-commerce website?
• What are the competitors’ strategies in the online furniture market?

2. Assumptions:

• Target Group: {Bangalore, Middle-class, working audience}

2.1 TAM (Total Addressable Market)

• The population size of the geographic regions where its stores are located or where it plans to operate its e-commerce platform.
• The percentage of the population that falls within its target demographic for furniture purchases.
• The average annual expenditure on furniture within those regions.
• Any market trends or growth projections for the furniture industry in those regions.

2.2 Define TG (Target Group) from TAM

• Potential customers interested in purchasing furniture:
  This includes individuals or households looking to buy furniture for their homes, offices, and institutions, both online and offline.
• Online shoppers:
  Specifically, individuals who prefer to shop for furniture online rather than visiting physical stores.
• Tech-savvy consumers:
  People who are comfortable using e-commerce platforms and technology to make purchases.
• Homeowners and renters:
  Those who are in need of furniture for their living spaces, regardless of whether they own or rent their homes.
• Potential partners or collaborators:
  These could include other businesses or platforms interested in partnering with Fancy Furniture to expand its online presence or reach new customer segments.

3. Aggregation Model

• Partnering with multiple furniture manufacturers & suppliers, and local vendors with no marketplace to create a comprehensive catalogue of product categories like ergonomic, rental-friendly, space-savers, multipurpose, and kid-friendly.
• Logistics with economical & environment-friendly packaging for the safe transfer of furniture from manufacturer/supplier to furniture shop owner to the user’s homes.
• Integrating with third-party logistics and delivery services to ensure efficient and reliable shipping of furniture items to customers on or less than the estimated timeframe.
• Collaborating with interior designers or decorators to offer additional services such as virtual consultations or personalized recommendations.
• Implementing a user-friendly online platform that aggregates various furniture products, allowing customers to browse, compare, and purchase items conveniently. Eg: Partner with Urban Ladder, and Royal Oak (No Ikea as they are already giants)
• Providing comprehensive product information, including specifications, dimensions, materials, and customer reviews, to facilitate informed purchasing decisions.
• Offering flexible payment options and competitive pricing to attract a wide range of customers.

4. MVP comprises of:

• CRM is setup with CRUD operations with product descriptions, high quality images, payment gateway, Support with call back option
• Develop a basic e-commerce website with essential features like product listings, shopping carts, and checkout.
• Implement a user-friendly interface with easy navigation and clear product descriptions.

5. Identifying Personas:

• Inventory is updated in real-time & used by admins of all three stores for the items displayed on the e-commerce portal. When an item goes out of stock, ensure notification/order is place by collecting user details.
• Homeowners looking for stylish and affordable furniture for a new house or renovating a house
• Interior designers seeking unique pieces for their projects to grab more consultations from customers
• Online shoppers prefer convenience and a wide selection of furniture with the adrenaline of visualising their house using online software with real-time measurements & manifesting by ordering it.

6. Hypothesis and validating them:

• Hypothesis: Offering a diverse range of furniture styles will attract a broader customer base.
  Validation: Conduct market research and analyze customer preferences to determine the most popular furniture styles.
• Hypothesis: Providing virtual room visualization tools will enhance the online shopping experience.
  Validation: Gather feedback from customers through surveys or focus groups to assess the usefulness of virtual room visualization.
• Hypothesis: Launch only the most sold items & mark the rest as coming soon
  Validation: Gather feedback from customers through surveys
• Hypothesis: Launch COD in the initial phases for MVP instead of integration with payment gateways & commissions.
  Validation: Gather feedback from customers through surveys

7. Outcome-focused success criteria:

• Increase in online sales revenue by 30% within the first year of launching the e-commerce website.
• Acquisition by expansion of the customer base (TAM) to include younger demographics and online shoppers.
• Improved customer satisfaction ratings (CSAT) for the online shopping experience.
• Positive feedback from customers regarding the variety and quality of furniture available online.
• Average bill orders spike up to every quarter with offers, using recommendation engines like “People who buy this, will also buy that” using the existing data & buyer patterns.
• Retention of users (1st baby, 2nd baby/upgradation, guest room, house-help's room, etc)
• Exchange offers for loyal customers or early customers (as requirements change with discounts)