Home Decoration Fabrics Business Plan

Interior Views LLC

Web Plan Summary

Interior Views plans to increase overall sales revenues by entering the Internet retail channel through a store presence on eBay.com. The following topics discuss the e-tail market trends, our strategies for this channel, and the development requirements and planning for our home site and eBay store.

6.1 Website Marketing Strategy

Our website strategy will be to reach these key groups listed in order of importance based on their expected use and purchases from the site.

Professional Youngsters – Expected to be the most likely of the targeted segments to use this resource because of their relatively high Internet use compared to the other segments. This group should offer the greatest online revenue opportunity.
Outsiders – Comprised of people outside the area with Internet access that have come in contact with the physical store or learned of it though a referral or promotion. This group, most commonly located in rural areas of the Western U.S. and Hawaii, are expected to be a small but faithful sector of buyers.
Online Fabric Shoppers – Most often find the site through search engines and these online decorator fabric shoppers are browsing multiple sites for a best buy or access to discontinued and hard-to-find fabric. They hold potential, but are typically the most work for the lowest return.
Internet Learners – Represents all of the targeted segments that are just beginning to become familiar with the site and will increase their use of the Internet over time. Revenue expectations from this group are low at this point and it is viewed as an investment in the future.

6.1.1 Website Demographic Strategy

The target group of the site is divided up into four primary groups listed in order of importance and expected use of the site.

The “Professional Youngsters” are expected to be the most likely of the targeted segments to use this resource because of their relatively high Internet use compared to the other segments. This group should offer the greatest online revenue opportunity.
The “Outsiders” are comprised of people outside the area with Internet access that have come in contact with the physical store or learned of it though a referral or promotion. This group, most commonly located in rural areas of the Western U.S. and Hawaii, are expected to be a small but faithful sector of buyers.
The “Online Fabric Shoppers” most often find the site through search engines, and these online decorator fabric shoppers are browsing multiple sites for a best buy or access to discontinued or hard-to-find fabric. They hold potential, but are typically the most work for the lowest return.
The “Internet Learners” represents all of the targeted segments that are just beginning to become familiar with the site and will increase their use of the Internet over time. Revenue expectations from this group are low at this point and it is viewed as an investment in the future.

Each of these groups possess these demographic, psychographic, and behavior characteristics.

Website Demographics

Female.
Married.
Have children, but not necessarily at home.
Have attended college.
A combined annual income in excess of $50,000.
Age range of 35 to 55 years, with a median age of 42.
Owns their home, townhouse and/or condominium valued at over $125,000.
If they work out of the home, it’s by choice in a professional/business setting.
Belong to one or more business, social and/or athletic organizations.

Website Psychographics

The appearance of her home is a priority and entertaining and showing her home is important.
She perceives herself as creative, tasteful and able, but seeks validation and support regarding her decorating ideas and choices.
In addition to using the Internet to gather design, decorating and pricing information, she also reads the same publications as the retail shopper.

Website Behaviors

She takes pride in having an active role in decorating her home.
Her home is a form of communicating “who she is” to others.
Comparisons within social groups are made on an ongoing basis, but rarely discussed.
Considers the Web to be a more convenient information gathering resource and potential shopping alternative.

6.1.2 Web Market Needs

Like all customers, the people that will visit the site are looking for the opportunity to create a home environment to express who they are. They have the choice to select their fabric and go whatever direction they choose–to fabricate it themselves or have it done for them. They have the opportunity to actively participate in the design, look, and feel of their home. They desire their home to be personal, unique, and tasteful as well as communicate a message about what is important to them. Interior Views’ website seeks to fulfill the following benefits that we know are important to our customers.

Selection – A wide choice of current and tasteful decorator fabrics with the convenience of online shopping.
Accessibility – The buyer can visit the site and view the most popular fabrics from a vast array of suppliers. They can also communicate with the store through email or phone, to have access to additional assistance after reviewing the information on the site.
Competitive Pricing – All products will be competitively priced in comparison to retail stores and other channels of distribution including catalog and Web sales.

6.1.3 Web Market Trends

The following trends and issues impact the success of Interior Views.

National Economic Health – The store does better when the country experiences “good times” regardless of its direct impact on the local economy. The volatility in the stock market correlates with changes in sales.
New Home Construction Activity – More closely related to what is taking place in our local economy, new home construction has a significant impact on sales across all product lines.
Shifts in Design Trends – Major changes in design trends increase sales. The Pleasantville market lags behind metropolitan design trends by 6 to 12 months. This offers a buying advantage for the store.

The home textile market, considered to include sheets, towels, draperies, carpets, blankets, and upholstery, accounts for 37% of all textile output. The trade publication “Home Textiles Today” estimates the size of the U.S. home textiles market at the wholesale level, excluding carpets, to be between $6.5 billion to $7 billion annually. The industry is expected to realize a steady increase over the next few years.

The industry is driven by the number of “household formations” which is expected to continue through the first years of the new millennium. This is primarily due to the solid growth in the number of single-parent and non-family households. This growth also comes from baby boomers needing bigger houses to accommodate growing and extended families and, as people get older, they are buying homes rather than renting to realize tax and equity building benefits. Favorable mortgage rates will also enable others to invest in their existing home through refinancing.

The “do-it-yourself” (DIY) market continues to grow and closely parallels the professional home-improvement market. DIY market growth is attributed to an increased presence of products, the personal satisfaction experienced, and the cost savings customers realize. A portion of the do-it-yourself market is the “buy-it-yourself” (BIY) market. Consumers are buying the product and arranging for someone else to do the fabrication and/or installation. This is more expensive then the do-it-yourself approach, but less costly than buying finished products from other sources. It also provides similar feelings of creativity, pride, and individuality associated with direct creative involvement. This sense of “participation” in home decorating is an important factor for many of these committed customers.

Interior Views’ website will seek to benefit from meeting the needs that these trends create.

6.1.4 Web Market Growth

American Demographics projects the number of U.S. households will grow by 16% to 115 million by the year 2010. Almost half of the households comprised of people from 35 to 44 years old are married couples with children under the age of 18. Based on this research, households in the 45 to 65 age range will grow to 45 million in 2010 as baby boomers add to this peak-earning and spending age group. This families will either build new homes or move into existing dwellings. With approximately 46.2% of the nation’s 93.3 million dwellings built before 1960, many of these homeowners are also expected to update.

One important factor is that married couples in the 35 to 65 age range represent a growth segment and enjoy larger incomes than other family structures. They enjoy the choice to spend their disposable income on life’s amenities. They may demonstrate “cocooning” by making their home a more comfortable and attractive haven. They choose to spend resources here rather than on vacations and other discretionary options. This group represents a larger subsegment of the target market.

These factors contribute to an increased need for home decorator fabrics for window treatment, upholstery, pillows, bedding, and other fabric accessory needs. This demand is expected to be complemented by the growth in the Boise market. The majority of homeowners spend a large percentage of their disposable income on home goods within two years after buying a new house. Therefore, positive trends in new housing activity represents growth and opportunity for home textiles.

Recent slow downs in the local economy have resulted in falling below sales projections and these factors will affect market growth. Adding additional revenues through the website will hopefully add a more stable factor in to the revenue stream.

6.2 Development Requirements

We have determined the general look and navigation of the existing site revamp. We still have to accomplish the following tasks:

Choose fabric and other product selections for site;
Establish eBay and PayPal accounts;
Purchase and install new hardware and software to facilitate sales fulfillment, shipping;
Establish database of online customers, complete with Sarbanes-Oxley security protocol compliance;
Prepare eBay store product pages and establish direct click through links between our home page catalog and the eBay products pages.

6.2.1 Front End

We currently have the basic elements of the site in place at www.interiorviews_fabrics.com. It possesses some of the functional components that we want to keep including:

A URL that is not ideal, but tolerable.
Identifiable home page.
The ability to select and view the most popular fabrics.
Newsletter access.
Contact information.

A site redesign is desperately needed to attract additional traffic, support easier and quicker navigation, and hopefully result in increased sales. We are not satisfied with these components of the site:

Graphic design characteristics – the look and feel of the site is dated and “amateurish.”
Speed – the site is slow in areas where we can speed the process.
Basic navigation through the site – a consistent method to move throughout the site.
The addition of other products and select home accessories.
General information about our eBay store.
Direct click-through links to individual products on the eBay store sites

6.2.2 Back End

Our back-end features should include the following:

Web hosting with 98% uptime through the local provider.
Web Analytic statistics to determine page views, unique users, banner impressions, sponsorship impressions and clickthroughs.
The ability to enable visitors to gain easy access to product information, visuals, newsletter information, and a robust email system.
The full establishment of the eBay store.
Compliance with Sarbanes-Oxley security protocols to protect customer database information.

6.2.3 Resource Requirements

The site has been, and will continue to be, supported through a local Internet provider and the consultant that we have been working with. We have found that experience to be relatively economical and he has been highly responsive to our need. Employees do not have the expertise to do much more than respond to emails and check the status of the site, so this has been a good complement to what time and resource limitations impose.

The monthly budget, including Internet access, is $65.00 in addition to hourly consulting rates for redesign work and fabric scanning.

Additional hardware and software will be purchased to handle fulfillment, shipping, inventory, and the customer database.

Start-up expenses for site revamp, eBay store, equipment and software have been budgeted at $10,000.

6.2.4 Future Development

The objectives of the site redesign will include:

Increased speed.
Enhanced navigation.
Additional products added to the decorator fabric selections including “Oval Office Iron” hardware and select home accessories.

This is Interior Views’ first foray into e-commerce. The eBay marketplace offers us an excellent venue to test waters so-to-speak, with relatively little investment. If, after a couple years experience we can project a reasonable return, we will invest in another site renovation and bring our entire online store operation in-house.

6.3 Business Model

Our website and eBay store will generate revenue through initiating product sales to the targeted audience that we would not have realized through the retail store. It will be measured on the basis of revenue generated each month compared to our stated objective. On a secondary basis, we will also measure and track traffic to the site and document what activities that traffic contributes to the other objectives of the site, including sales leads and information dissemination.