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Furniture brands focusing on customers

Released at: 16:26, 14/07/2019

Furniture brands focusing on customers

Photo: Viet Tuan

Local furniture brands are switching to business models that allow them to adapt to the demands of local digital consumers.

by Nghi Do

A After nearly 13 years in business, Vietnamese furniture brand UMA changed its name to BAYA in June. Mr. Vu Anh Nguyen, CEO of the Anh Nguyen Co., owner of the UMA brand, told VET the new brand has been adopted due to changes in the local market and in customer behavior and the appearance of modern shopping models over the last two years, which drove him to introduce a change in brand. 

New journey

Back in 2006, UMA’s shopping model was quite new to Vietnam. The three co-founders - Mr. Nguyen and two Swedish friends - worked hard to build the brand, whose name comes from their three names. They pursued a mission of taking care of every house and every home and to make the life of families easier. The brand became well-known as a Western-style furniture and household item retailer, with a combination of Nordic design and quality and local price and shopping experience. 

Amid a modern business environment in Vietnam featuring both challenges and potential, the three co-founders decided to choose a new name, BAYA - a bird famed for its clever nest making. Each nest is meticulously made from more than 500 leaves and twigs, which represents the co-founders’ desire to bring a variety of classy products and services to each family. 

Mr. Nguyen said planning for the strategic step forward began a year ago. The change focuses on three main factors: technology platforms, product development direction, and investing in people. As product development direction is one of its core values, the brand has been developing a range of new products customized to Vietnamese tastes. “Inspired by the unique culture of Vietnam, we are trying to make products that recall Vietnamese corners and Vietnamese memories and that are ‘thoughtful’, in addition to our best-selling products,” Mr. Nguyen said. 

One of the most important steps in the change to BAYA is developing its people. With many staff working for the brand for five or even ten years, the retailer is investing more in training in soft skills, systems, and product knowledge. Each staff member of BAYA is a brand ambassador, he added.  

The retailer has installed store management software in all 12 of its outlets, to bring customers a better and safer purchasing experience. The new management database connects all sales channels (retail outlets, e-commerce, and interior design services) with its supply chain and logistics network. 

Basic steps have been completed and products and services enhanced in the expectation of customers being given more choices for the home. 

Other changes

The change to BAYA is also to stay abreast of trends such as omni-channel in the 4.0 technology era, and other brands are doing likewise. 

Xhome, a relatively-new Vietnamese furniture brand, also paid due regard to omni-channel shopping in boosting its business strategy. Mr. Nguyen Tuan Dung, CEO and Founder, acknowledged that technology has created many channels to reach customers, and new consumption habits have been shaped thanks to these channels’ access tools. The omni-channel not only creates an opportunity for businesses to access more customers but can also assist in cutting wasteful marketing costs. It’s especially effective for the furniture businesses, which requires recognition of customer habits and consumption trends. It hasn’t, however, been the company’s core focus, with it instead looking closer at appropriate sales channels for the core products it develops.

An Duong Home Center, another multi-segment furniture player, is using the omni-channel method in pre-during-post selling. It integrated its offline and online sales system with social networks, advertising, and customer care platforms to approach targeted customers. A representative from 20-year-old An Duong Home said physical showrooms remain popular among customers, where they can find what they need. 

Believing the omni-channel method to be an ongoing trend, BAYA needs more time to conduct deeper research to identify what products are most suitable for customers and the market, according to Ms. Vo Pham Phuong Anh, Marketing Manager at the Anh Nguyen Co. During its process of change, the retailer has also launched an upgraded e-commerce website and an interior design service integrated with 12 physical outlets in Hanoi and Ho Chi Minh City. 

Location is not necessarily “king” in the retail industry if a digital marketing strategy and supply chain management are applied, according to the 2018 Vietnam’s Furniture & Home Décor report released by the EU-Vietnam Business Network (EVBN). 

Branding from building core value

Many furniture retailers have expanded their distribution networks to support rapid growth and expand their presence even further. According to Mr. Dung from Xhome, owning a chain of stores covering a wide area is a huge advantage in the furniture retail market. As the economy grows, lifestyles are improving and demand for a great product experience is also increasing, especially among customers seeking high-end furniture. Large chains also create value and open up opportunities for cooperating with major domestic and foreign brands, he added. However, as technology continues to change lives every day, chain stores also face huge risks from consumption habits changing due to new tech products.

Having faced such challenges when UMA was first launched, the Anh Nguyen Co. is confident about its preparations, according to Ms. Phuong Anh. Together with purchasing behavior, the preference for cash payments and individual rather than public transport are decisive factors in its expansion plans. For such reasons, the new brand will focus on developing more convenient touch points, guarantee reasonable prices, and reinforce services such as free interior design consultancy and free delivery, while also continuing to innovate product design and quality.

Mr. Dung believes branding in the industry involves a focus of resources to create and develop products as a core value, but few retailers follow this way. In order to develop multi-segments, the company has introduced separate brands and each has its own core product orientation, communications methods, and even a team developing separate core products. Each brand also comes with a network of specialized units that clearly separates values and builds a team of management personnel.

In its four years, Xhome has built a team of 200 designers, has eleven showrooms and branches in ten cities and provinces, and recorded revenue growth of 100 per cent in the 2014-2018 period. The company is still young and takes advantage of its flexible model to stay abreast of the latest trends. Investing in a marketing strategy is quite low but it is nonetheless effective. “Once we make good products, we will choose the quickest marketing channels with the lowest cost, with Facebook being an example,” Mr. Dung said. 

In general, the fastest way to success lies in product orientation, with each having its own identity, and addressing the essential needs and desires of the majority of customers. 

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