LFL moves to Shopify
TORONTO – As part of its strategy to grow the e-commerce piece of its overall business and enhance the customer’s online shopping experience, Leon’s Furniture Limited (LFL) has shifted all three of its online stores to the platform operated by Shopify, the publicly-held Canadian technology firm.
In a statement, the company said in addition to hosting and operating its online stores on the new Shopify platform, LFL is also working on the development of dedicated apps that will significantly improve customers’ online shopping experience. Among these enhancements are intelligent room planners, virtual decorating and augmented reality capabilities where shoppers can place items from the online store against a backdrop of their own rooms.
Among the transactional features being planned for LFL’s online stores include instant deferred payment options and enhanced delivery features, among others.
“Leon’s Furniture Limited has been an e-commerce player for nearly two decades. Working with a leading provider like Shopify puts us on the right track for continued success,” LFL president and chief executive officer Edward Leon said. “Emerging technologies and changing shopping behaviour forces retailers to re-think how they operate and transform their business to create a truly seamless shopping experience between the online website and traditional brick and mortar store.
“To win in the retail space, and specifically in the industry segment in which LFL operates, requires mastering both our chain-wide in-store customer experience and our e-commerce offerings across all of our online properties,” he added.
LFL said selected Shopify because of its ability to demonstrate the platform’s dependability, adaptability and value. Additionally, both companies share a strong willingness and commitment to work toward the customer having the best shopping experience.
Indeed, Leon told Home Goods Online they interviewed six different companies during the process that lead to Shopify’s selection. “Since we went online with them in September, we have seen an uptick in terms of traffic,” he added.
“As a fiercely Canadian company, Shopify is proud to have been chosen by the iconic Canadian entity, Leon’s Furniture. This is a great example of how a large, brick and mortar retailer is working with Shopify to innovate its online shopping experience,” said Loren Padelford, Shopify vice president and general manager.
According to data published on its web site, Shopify currently powers over 600,000 businesses in approximately 175 countries and with total annual sales of about $82 billion.
Although better known as a traditional brick-and-mortar retailer – operating some 304 stores across the country under five banners including Leon’s, the Brick, the Brick Mattress Store, the Brick Outlet and Appliance Canada – LFL has been active in the online space for some time and sees tremendous growth potential in e-commerce.
“If we compare our online operations during the past decade to those of other pure-play e-commerce retailers, our e-commerce division shows outstanding performance with a CAGR (compound annual growth rate) of 45% topline growth coupled with EBITDA margins of 18%,” Constantine Pefanis, LFL’s chief financial officer observed.
Earlier this year, Statistics Canada said the typical furniture and home furnishings store in this country generated an average of 2% of its annual sales via e-commerce. For 2016 – the last year for which data is available – these stores had total e-commerce sales of about $376 million.
Although he didn’t give specific figures, Edward Leon said LFL’s e-commerce sales were much higher than 2% and believes his online stores could account for as much as 10% of revenue within the next three to five years. Based on last year’s corporate revenue, that would mean sales in excess of $220 million, which would place LFL at the top of leader board and ahead of several pure play e-commerce sites such as Wayfair, Amazon and perhaps even the Vancouver-based Article.
“We are very high on the potential of our e-commerce business,” Leon told HGO.
So much so LFL created appointed a director of e-commerce last year who is now supported by a team of about 50 people – everyone from IT to marketing and merchandising specialists. Leon is particularly excited by the virtual reality app they are currently developing. “It’s going to ensure the only thing holding you back is your imagination,” he said.
Until it made the switch to Shopify, LFL used the platform provided by Blueport Commerce, the Boston-based IT specialist that developed furniture.com for the U.S. market. Leon said they retain the equity stake they acquired in 2014.
Leon said one of the advantages LFL has over its pure play e-commerce competitors is it already has an efficient and effective national distribution system. In fact, he said the company has already been approached by other e-commerce players seeking to flow goods through LFL’s warehouse and logistics operation.