Failure of Furniture.com

Abstract

The growing U.S. furniture and home furnishing market is highly segmented (Bransten, 2000). Although many large manufactures and retailers have 100 years or longer history in this industry, none of them dominate the market. In the e-commerce boom starting from mid 1990s, many companies began to use the Internet as a new channel selling furniture to customers. Among those new online furniture businesses, some were traditional furniture retailers setting up a Web site as an additional channel reaching customers, and others were pure-play e-tailers, owning only online presences but no physical stores. This article traces the history of furniture.com, a once-famous pure-play retailer in the furniture retail industry, and analyzes the reasons of its failure theoretically. We believe that the narrative and the analysis will provide valuable insights for pure-play e-tailer managers from many aspects, including product selection, online and offline services, and management of relationships with suppliers, etc.