Introduction
As reflected in the case study, Rooms To Go is a furniture retailing company with a unique approach. Instead of selling furniture pieces, the company markets custom-made rooms. Customers pick several pieces of furniture specifically designed to suit a specific room. This approach to sales has its elaborate pro et contra. On the positive side, a single purchase has great value for the company, as it is able to sell several pieces to the same customer. The company thus needs a relatively lower rate of conversion that a competitor who sells one piece of furniture at a time. On the negative side, Rooms To Go has a harder time converting visitors into purchases, as customers have to take the entire set. As the company combines online and traditional retailing, it has to invest in effective digital marketing strategies (Larson & Draper, 2019). The company thus needs to develop room sets that would especially be acceptable to a larger number of customers to increase the propensity for conversion.
Key Problems and Issues
The key problems facing Rooms To Go are attracting traffic to its website and converting that traffic into sales. Attracting traffics is a major concern in modern online marketing due to the highly competitive environment. According to Baye, De Los Santos & Wildenbeest (2016), there are two main ways of attracting visitors to a web site. The first is the organic approach while the second is the sponsored approach. The organic approach is when customers by their own notion elect to open the website. The sponsored approach involves the owner of a website paying a third party to lead internet users to a specific site. For example, since a large number of online searches take place of Google’s search engine, a marketer can pay Google to prioritize its site when users make related searches. Among the issues, facing marketers is which of the two means of attracting customers to use (Larson & Draper, 2019). Further, if the marketer elects to use both approaches, there is the issue of which of the two to spend more money on.
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The second problem facing the company is how to turn visits into sales, thus creating a high conversion rate. By definition, the conversion rate is the percentage of sales made on an online retail platform compared with the total number of visits to the website. Since Room To Go does not offer single-piece furniture sales, a low rate of conversion might mean that the company is advertising for the competition. For example, a visitor will see a room with a good bed but an unacceptable carpet. The visitor will then seek out the bed in a single item website and proceed to make a purchase. Rooms To Go needs to not only market the right products but also combine the products in a manner that they are acceptable to the target customers when used together. Secondly, it takes time for a customer to evaluate the several items put together in the same room. The marketer thus faces the problem of trying to lead the right customers to the right room-set to increase chances of conversion, before the customer runs out of patience.
A Summary of the Outcome of My Analysis
Rooms To Go needs to both expand its ability to attract visitors to one's online stores but also its ability to convert such visits into purchases. Each of the two components above is critical for the success of the company in its online retailing department.
Outline Possible Alternatives
There are two alternatives to solve the problems and issues that Rooms To Go faces as a marketer. The background for the proposed solutions needs to factor the fact that the company has invested in understanding the needs of the market. As reflected in the case study, Rooms To Go has partnered with LunaMetrics who have combined Google Analytics Premium with BigQuery for market research. Through the market research, Room To Go not only knows what furniture its customers need but also the combinations that the customers favor the most. The marketer has two main options, each of which carries advantages and disadvantages. By analyzing the strengths and weaknesses of the available options, the marketer can select the more effective of the two alternatives. If possible, the company can also combine the two approaches into one optimum approach, or use different approaches for its different divisions.
Alternative One: Influencing Demand
Marketing research may not always produce positive results or the kind of results that the marketer would have expected (Grewal, Roggeveen & Roggeveen, 2017). In the case of Rooms To Go, the window for positive marketing research is narrower than other furniture marketers as it sells furniture combinations. The company can take up the alternative of seeking to manipulate the market and make potential customers more palatable to the furniture options that it offers. Among the most effective market manipulation ways is the use of star power for endorsements. Through social media ads, Rooms To Go can endear some of the room sets that are most profitable to the company. Market research can enable the company to create rooms that would be agreeable to a large number of its target market. The company can then use celebrity endorsements to market these rooms (Hearn & Schoenhoff, 2016).
According to Baye, De Los Santos & Wildenbeest (2016), most wealthy customers who are relatively older enter specific company names to their product searches. This alternative can be most effective for such as group, as the company needs to reach them before they make their online searches. Further, with the instant approach, the company does not need to invest in sponsoring its website as the target customers will find it through organic searches.
Attentive Two: Molding Product Based on Customer Needs
With the same results, Rooms To Go may establish that its customer base only needs a limited pattern or furniture collections. The company can then use the market research data to create rooms that would be most suitable for its different customers. The company can then analyze the customer needs and preferences to create furniture combinations that work best for the target customers. By utilizing the same marketing research data, the company can use the sponsorship approach to push the right customer to sample the most suitable rooms. Getting as many potential customers to visit the most suitable rooms can exponentially expand the chances of conversion for the company.
Proposed Solution
Each of the alternatives outlined above is both feasible and suitable for different market niches. The first alternative is most suitable for the older, wealthier segments of the target market. This segment may not be large but each of its purchases is large and of high value, hence producing higher profits. For this market niche, the company can invest in option one. Make and market impressive room-sets and convince customers before they venture into the website. For the other customer segment, beginning with young children through to adults, the company can employ the second option. The company can develop a large array of room-sets and use sponsorship to guide the right customers to the right room-sets.
Conclusions and Recommendations
It is evident from the analysis above that digital marketing and online research are vital for the success of Rooms To Go. Online retailing is a rapidly expanding industry whose players face intense competition both from other retailers and from traditional brick and mortar stores. Some players such as Rooms To Go have elected to combine the traditional brick and mortar stores and the new online retailing for their products. Online marketing is the way of the future, hence the analysis I made above relate primarily to the online division of Rooms To Go. I would recommend that the company divide its target market into two groups. The first group is the high spending older generation of shoppers. As per the research above, this group uses brand names on its search, hence the need to reach out to them and influence them before they make the search. Rooms To Go should use celebrity endorsement to market-specific predesigned rooms for this group. For the rest of the market segment, the company can create a large variety of suitable rooms then use sponsorships to attract potential customers.
References
Baye, M. R., De Los Santos, B., & Wildenbeest, M. R. (2016). Search engine optimization: what drives organic traffic to retail sites?. Journal of Economics & Management Strategy , 25 (1), 6-31.
Grewal, D., Roggeveen, A. L., & Nordfält, J. (2017). The future of retailing. Journal of Retailing , 93 (1), 1-6.
Hearn, A., & Schoenhoff, S. (2016). From celebrity to influencer. A companion to celebrity. Wiley: London , 194-212.
Larson, J., & Draper, S. (2019). Internet marketing essentials: a comprehensive digital marketing textbook . Idaho Falls, Idaho: Stukent Inc.
