Retail practitioners and academics have long relied on a simple segmentation concept: For some products, consumers demand to be able to touch and feel the options, whereas others can be ordered sight unseen. But even that seemingly straightforward classification is starting to blur as the Millennial generation shrugs off the need to interact in person with certain products, especially when the retailer offers generous return policies.

The trend is particularly notable in the furniture sector. Older shoppers often insisted on going to a showroom to try out a mattress, couch, or chair before they would buy it. Instead, companies such as Burrow and BenchMade Modern ship custom furniture to online buyers, then promise to take it back if the items are not exactly what the person wants.

Such an offer can quickly get expensive, because the company is on the hook for shipping expenses, to and from the customer, as well as an inventory of custom-made furniture that will be hard to resell (though some firms charge minimal restocking fees). To support such expensive guarantees, these modern retailers work to make their supply chains far more efficient than in conventional furniture markets. By selling directly to consumers, they eliminate the retail markup that usually happens after a furniture brand takes delivery from a manufacturer. They also avoid expensive showrooms, because their customers never plan to visit anyway.

In turn, in addition to being less expensive, their manufacturing operations are quicker. Whereas many major furniture brands require six weeks or more for custom orders, BenchMade Modern averages about 10 days from order to delivery.

To minimize the risk of returns though, the brands also seek to offer as much transparency as possible in the buying process. The furniture maker Sixpenny sends wood and fabric samples to potential buyers, so they can determine which options will fit best with their existing décor. The product descriptions, listed on simple-to-navigate websites, are detailed, so buyers know precisely how long a couch is and whether it will fit in the intended space. The extensive information provided reduces not only the buyers’ purchase risk but also the sellers’ risk of having to deal with returns.

Although these buying behaviors are most noticeable among Millennials, some older consumers have figured out the appeal as well. It is not as if there is an age limit on the sites. But with their greater comfort with online shopping, willingness to take some risks, and faith that they can always return what they do not like, it is the Millennials who are driving this unconventional way to make major purchases of furniture.

Discussion Questions:

1. How and why do Millennials purchase high ticket items differently than older consumers?

Source: Catherine Romano, The Wall Street Journal, December 13, 2018