Already the leading online furniture retailer, Amazon has amped up the pressure on the sector with the launch of two private-label furniture lines.
Amazon’s Rivet and Stone & Beam lines are still too new to have made a big sales impact, but the launches are a signal that consumers are growing more comfortable with the idea of online purchases of furniture. And that in turn is a clear warning sign for competitors in a sector that has been considered somewhat less at risk of being "Amazoned."
Even before it launched its private labels, Amazon already dominated online furniture sales. Amazon holds 42.4% of the US online home and kitchen goods market, according to Slice Intelligence data. No other online sellers—including Wayfair at 4.2%; Target at 3.8%; and Overstock.com at 3.2%—held more than 5% of the market.
Slice, whose data is based on online receipts from a panel of 5 million online shoppers with the latest study covering purchases in the past two years through September, said Amazon’s online home goods category growth of 37% in the past year also has outpaced the industry category growth of 25%.
That powerful growth can be seen in data from One Click Retail, which estimated that Amazon's US furniture sales for the year through August 5 rose 50%, with particularly strong growth in bedroom furniture.
Between 2011 and 2016, total brick-and-mortar store sales of furniture and other home furnishings rose an average of 1.9% each year, compared to 16% online, according to Euromonitor.
“The rollout of private label furniture and home decor brands is a big bet in a category where consumers often feel the need to physically evaluate products before purchasing,” said Ken Cassar, principal analyst at Slice, in a note. “The big question is whether Amazon’s quick shipping and 30-day evaluation policies will get consumers over that hurdle. The one thing that is clear is that this move is uniquely possible for Amazon because of the resources it has invested in distribution capabilities over the past 10 years.”
For the two brands, Amazon promised 30-day free returns and one or three-year warranties respectively. All the new products basically qualify for free shipping since they exceed Amazon’s minimum free-shipping threshold of $25.