A furniture retailer with 60 stores wants to start selling online. How would you structure the decision?

The first thing I'd ask is what online is for. Is the goal new growth, or is it defending store sales that are moving to online rivals? And how much of what they sell is big items like sofas and beds? I'd take it in four steps. First, how much would they sell online? I'd estimate how many customers would buy furniture online and what they'd spend. I'd split those sales by where they come from. Second, can they make money on an online order? Furniture is expensive to deliver. So I'd build the profit on one delivered order, with delivery, returns and damage in it, and compare it with the same sale in a store. Third, what does it do to the stores? If online only moves sales out of the stores, the rent and staff stay and profit falls. Fourth, how to do it. They could build their own site and delivery, sell through a marketplace, or buy a small online furniture seller. I'd compare those on cost, speed and who keeps the customer relationship. Then I'd pull the four steps into a business case and see if it pays back.

The first thing I'd ask is what online is for. Is the goal new growth, or is it defending store sales that are moving to online rivals? And how much of what they sell is big items like sofas and beds? I'll assume it's mostly defensive and about 70% of revenue is bulky. I'd take it in four steps. First, how much would they sell online? I'd estimate how many customers would buy furniture online and what they'd spend. I'd split those sales by where they come from. Some are new customers far from the 60 stores. Some are store customers who would have bought anyway. Second, can they make money on an online order? Furniture is expensive to deliver. A sofa needs a truck and two people, and a return means collecting it and often selling it at a loss. So I'd build the profit on one delivered order, with delivery, returns and damage in it, and compare it with the same sale in a store. Third, what does it do to the stores? If online only moves sales out of the stores, the rent and staff stay and profit falls. But people look at a sofa online, then go sit on it, and stores can hold stock for local delivery and collection. Fourth, how to do it. They could build their own site and delivery, sell through a marketplace, or buy a small online furniture seller. Delivery could be their own trucks or a partner. I'd compare those on cost, speed and who keeps the customer relationship. The decision then comes down to extra orders, less those the stores would have had anyway, times profit per delivered order, against what the chosen route costs to set up. My hypothesis is that they must go online and the real choice is the delivery model. So I'd start with delivered cost per order. What does home delivery cost them today?