Bob's Discount Furniture - SWOT
While Bob's Discount Furniture benefits from its competitive price point, industry partnerships, scale in the US and customer loyalty, the company continues to be challenged by its reputation for selling cheap products and by intense industry competition.
- Bob's Discount Furniture benefits from a variety of strengths, including the company's competitive price point, industry partnerships, scale in the US and overall customer loyalty.
- Notably, Bob's Discount Furniture launched as a disruptor in the US furniture industry by introducing an "everyday low price model" that significantly undercut its competitors.
- Since then, the company has gained significant market share based on the perception that it provides more affordable home furnishings through its purchasing power, expertise and commitment to providing value for money.
- Additionally, Bob's Discount Furniture has built on this price-centric model by establishing a variety of industry partnerships with organizations such as Fortiva and Genesis Credit, which give the company's customers the opportunity to "quickly and easily" finance their purchases.
- In parallel, the company has developed a strength in its scale of operations, with Bob's Discount Furniture expanding into 18 states through its 119 furniture stores.
- As of mid-2019, the company was the twelfth-largest US furniture chain, adding to the company's visibility with customers, influence with suppliers and overall opportunity for operational efficiencies.
- Finally, Bob's Discount Furniture continues to benefit from "strong customer loyalty," as reflected in the company's A+ rating by the Better Business Bureau and overwhelmingly positive customer reviews.
- In addition to the company's value-driven business model, Bob's Discount Furniture's unique and enjoyable shopping experience including complimentary "gourmet coffee, ice cream, cookies and candy" has established its position as a loved and regularly frequented shopping destination by customers.
- However, one of Bob's Discount Furniture's greatest strengths also represents a significant ongoing weakness for the company.
- Specifically, Bob's Discount Furniture struggles with the consumer perception that it sells "cheap" products.
- According to Bob's Discount Furniture CMO Steve Nesle, the company had historically misstepped by emphasizing the words "discount furniture" within marketing and promotional activities.
- As a result, the company is commonly interpreted as selling cheaper alternatives to the better made furniture of its competitions.
- To combat this, Bob's Discount Furniture recently launched a new brand campaign to "clarify" that the company offers "Bob's discount" rather than "discount furniture."
- In parallel, Bob's Discount Furniture is also capitalizing on a number of market opportunities, primarily related to US consumer's shift to online shopping in the furniture industry as well as the growing movement around corporate social responsibility.
- According to Forbes, one of the key reasons that Bob's Discount Furniture has survived the "retail apocalypse" is that it was quick to establish an omnichannel presence.
- Recognizing changing consumer preferences and the increasing importance of online purchases, the company invested in a strong online presence, particularly through its corporate website (which receives approximately 2.5 million visits every month) as well as its social media channels on Facebook (139,084 followers), Instagram (36,600 followers), LinkedIn (13,118 followers) and Twitter (7,300 followers).
- More recently, Bob's Discount Furniture has further embraced this market trend with the launch of an IOs and Android App that incorporates an Augmented Reality experience for customers.
- In addition, Bob's Discount Furniture stands to benefit from the movement around corporate social responsibility in the US, given that the company is regularly active with charities including Alex's Lemonade and Big Brothers Big Sisters.
- Notably, the company has been committed to philanthropic work for over 20 years through Bob's Discount Furniture Charitable Foundation, and the company's separate Bob's Outreach program donates more than $2.75 million to charities each year.
- Perhaps the single biggest threat to Bob's Discount Furniture is the highly fragmented and increasingly competitive home furniture marketplace in the US.
- Not only does the company face competitive pressures from more traditional furniture retailers (e.g., Ashley Furniture HomeStore) and discount alternatives (e.g., IKEA), but Bob's Discount Furniture is increasingly facing competition from more affordable online challengers such as Overstock.com, Amazon and Wayfair, all of which are growing rapidly in the marketplace.
- Additionally, Bob's Discount Furniture is being challenged by new entrants to the industry, such as innovative retailers (e.g., Hem) as well as niche furniture stores (e.g., Campaign).
- Although the US furniture market is expected to grow overall, the increasing size, number and diversity of furniture store retailers in the US have the potential to siphon off potential new customers from Bob's Discount Furniture as well as challenge the loyalty of the company's existing customer base.
- Moreover, tariff pressure from the US-China trade war will likely represent a second significant continued threat for the company.
- Notably, many furniture retailers have been "forced" to raise consumer prices given the 25% tax on imports from China, and discount retails that import goods from China are therefore losing some of their price and cost advantages against companies that sell American-made products.