Furniture buyers care more about discount percentage than total dollars spent
Alex Back · Alex sold couches online before IKEA did. He grew to $40M in revenue and exited for millions. | A... · PMF Show · Mar 25, 2024 · at 27:36
Alex Back, co-founder of Apt2B, explains consumer psychology in the furniture market and why promotional discounting drives buying decisions.
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“That's what people are focused on in our industry. They want to know how much they're saving so much more interested in that than how much they're actually spending. They just want to feel like they're getting a good deal. We basically realized there was a direct correlation between how much discount percentage we give and how much people buy as simple as that sounds.”
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“They saw it as a threat to their brick and mortar businesses, which still, by the way, 20 years later, drive the majority of the business in the furniture industry.”
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“We were just, we would have, I mean, that company would have been, I don't know, five times the size of what it is right now, probably. Just based on organic traffic alone.”
IKEA did not have an online checkout system in 2010
“At the time, Ikea, for instance, the biggest furniture retailer in the world, they weren't even transacting business online. Like there was no online payment gateway. It was just like, A store finder, essentially, an online catalog.”
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“We were able to time it properly so that we were always stayed cash positive. So we would take a hundred percent customer deposit at the time of border placement.”