• Size of the category, common issues and how easily category can be penetrated

• Understand the customers, their expectations and decision making factors for each category
• Provide an experience that delights the customer, and differentiates Amazon's offering in the online
and offline space

It’s widely accepted that roughly 80% of all ecommerce technology requirements are
similar, and defining the 20% that are unique to each business determines the extent of
success.

Furniture category has been taken because:

1. “Millennials place importance on maintaining a home that is more personalized to their preferences
than the generation before them. Almost two-thirds (63 percent) of millennial respondents surveyed
say that having a home customized to their tastes and needs is a top priority.”7 For most of these
dreamers, a custom-built home will be out of reach. Furniture and fixtures will be their best option for
satisfying their need for a personalized living space.
2. In another study by Impact Consulting, 40 percent of millennials said “furnishings must communicate
their sense of style.” That’s compared to just 26 percent of all age levels.
3. Aggressive entry by Amazon in this segment using AR and other technologies is necessary so that it
doesn’t lose out on the opportunity. If it doesn’t, some other retailer definitely will.

Decision making factors in this segment are:

1. Variety available
2. Feel of the furniture piece in real setting
3. Resale value of the new furniture
4. Exchange value (if any of the old furniture)
5.

Our Customers are:

1. Rapidly growing brand consciousness
2. Millennials with rising disposable income and varying tastes and customization needs

Briefly cover the big problems identified for your chosen category in acquiring and retaining customers. Given
constraints of resources and timeline, how will you address the top 3 problems?
1. Product Certainty –
a. Phone App – AR - Furniture Integration with room using AR and the measure app, Machine
learning Furniture suggestion can lead to high Retention rate. Furniture listing - AR solves
display woes. How well a product can be understood online. Customers aren’t able to
properly experience the furniture in live setting or understand how it would look in real life
by just looking at catalogue photos (as available at the moment) – several competitors have
moved to showing better pics in actual use of the furniture and that gives a better idea to the
customers – This will have to be done and AR will further have to be leveraged as explained
later - 60% of internet users would like to shop for furniture via augmented reality; that's
more than any other category. (Amazon once reported that 35 percent of its revenues came
from cross-sells and upsells. Most of today’s ecommerce platforms include tools to associate
products to increase the average order size. The terminology for different strategies can
change from one technology to another, but the main associations are: Related or
Replacement Products - products frequently purchased in addition to or in place of the
current product Upsells - similar products of a higher-quality, more popular, or have a better
profit margin than the item the customer is considering Cross-sells - products offered in the
cart as last minute additions before checkout). Furniture manufacturers need to be able to
customise their products to meet different customer needs, while maintaining their cost
competitiveness.
Bundled furniture pricing
 b. Big Screen Interface – (laptop, PC, etc.) – 4K photos, live setting, 360 Degree views.
2. There are limited options in terms of flexibility given to customers - For example, the Mariposa chair
can be bought (fully assembled) for $725. Now if there is a customer who wants to “Do it themself”,
they can opt to buy the item (in knocked down condition) for just $495. Customers save here on the
money and Amazon would save on labour costs, Distribution Efficiency: The ratio of product price to
delivery cost shipping costs and shipping time as well.
3. Tech Rich Furniture – product obsolescence – rapid purchase (Brands that sell furniture with already
short life expectancies can more readily integrate new and novelty technology into products. High-
end furniture will only be able to adapt more permanent technological advancements. The speed of
technology means the obsolescence will happen faster, but the challenge is not new. See TV armoires,
telephone chairs, stereo consoles, media/cd racks, and even filing cabinets as evidence of this
historical trend.)
4. Rental furniture business – Pepperfry, Furlenco
5. Old furniture exchange value?
6. Resale value of new furniture – commitment from Amazon?
7. Strategic tieups with Leading furniture brands include Godrej & Boyce Mfg Co Ltd, Nilkamal Ltd and
Durian Industries Pvt Ltd, among others.
8. Boosting Customer Photos - 23 percent of online products in the furniture industry include customer
photos; that’s more than any other industry in their study – incentives?
9. The AR advertising, dedicated booths for furniture AR projection - influencer advertising

Detail the capabilities to be built and a 6 month execution plan, which will drive growth to $1 Billion in 3
years
 Given constraints of resources and timeline, how will you address the top 3 problems?

The prime challenge of ‘How well a product can be understood online?’ can be solved by enriching the overall
purchase experience’

The main idea addressing the prime challenge of product certainty discussed above would be categorised into
two parts.

a) Augmented reality Integration -

- Each of the furniture listing will have an AR compatible 3D object to be used in real setting. Customers will
select the object to be appeared in live imagery. Customers will be able to share the pictures with friends and
family for assistance in buying decision,

- Measurement - Augmented reality vision will use the measure app technology for real time mapping of specific
home setting such as living room or dining wall.
- Machine learning - Amazon will learn as users makes their purchase decision using AR integration. Machine
learning will assist in providing better recommendation overtime learning by a fleet of buying decisions made
by all users. The same can be used by Amazon to provide real time suggestion on customer consent as they
share AR view of their home or office.

b) Furniture category purchase experience

- 360 degree HD view - Furniture category would also need to be updated as the current listing do
little to persuade buyers to make a purchase.
- DIY vs assembled furniture - Certain categories will be given options of Do-it-Yourself vs
assembled furniture shipping. For example - Mariposa chair can be bought (fully assembled) for
4200 with a standard delivery of 30 days. Now if there is a customer who wants to “Do it them
self”(or self-assembly), they can opt to buy the item (in knocked down condition) for say 3200
with a delivery date of around 14 days saving both shipping time and shipping cost related to it.
- Using the AR technology and machine learning and based on the furniture setting photos users
shared. Amazon will share new furniture ideas via mail with customers. Growing millennials
customization preference about furniture ideas at home these suggestion would assist in re-
purchase decision as well as customer retention.
- Data fleet- better recommendation - Amazon will get the first mover advantage by collecting first
hand consumer preference data. Collected data based on machine learning capabilities stored in
cloud would help provide better furniture suggestion keeping Amazon staying ahead of the
competition.

Tania wants to buy a On the Amazon app in her She then selects the Urban
Murray Lounge Chair iPhone, she selects AR option Ladder Murray Lounge-
for her living room which displays her living room Accent Chair 3D object
setting in real setting preloaded

Amazon mails after a year Tania Upon selecting one Amazon uses
new 3D chair suggestions in the machine learning and suggest a Tania tries other 3D chair objects of the
same AR setting for a re-purchase Forzza Daniel Side Table as a cross- same price range in the AR setting and
consideration sell product chooses one