Houzz Builds Trust—Trust Generates Money

By Vibeke Specht, Jun 17, 2018 10:18

This is how disruptive marketplaces like Houzz build trust. And this is why trust generates sales.

It is not really strange at all that Houzz is doing so well. It is not offering a product or service in the old-school Internet style. Instead, it turns itself inside out to give the users inspiration, help them make decisions, and also to have good relationships with them.

Houzz is a bit like the sellers that refer you to the competitor across the street if they cannot help you themselves. The most important thing for Houzz is not making money off your purchases; it is that you get what you really want.

The Interior Design Community That Became a Marketplace

Houzz has “simply” created a platform that revolves around the user’s needs. In Houzz’s case, it’s people who want to renovate or redecorate their homes. To be a reliable community, Houzz’s focus always has to be on building trust.

Houzz, as well as Airbnb, Lyft, and other similar community-based marketplaces, shows that trust is not some kind of wishy-washy subjective nonsense. In order to build trust, you have to be tactically smart and strategically wise.

Houzz’s Recipe for Trust

1. Listens and grows a dedicated community—within a limited sphere

Houzz is a platform for the interior design sphere. The idea first came when the founders themselves were faced with the challenge of renovating their homes and felt forced to look through piles of interior design magazines, googling the internet and searching Pinterest like some Jolt Cola-fueled gamers at a LAN party. They noticed a need for one convenient and extensive platform on the market that could offer help, guidance, and some “feng shui” inspiration, so to speak.

When the platform began to grow into something bigger than the founders had planned, they chose to keep a cool head and nurture their community. They decided it was more important to listen to feedback from their users than to quickly try to find a way to capitalize on the progress.

Read more: “Houzz is more interesting than Amazon,” says one of the leading online retailers in Sweden

2. Integrity—never steps out of its niche

Advertising from companies outside of the interior design market is something that Houzz has never allowed and does not allow to this day. Every aspect of the platform (or website) must be relevant to its focus. IKEA was one of the first that was allowed to advertise on the platform.

By never stepping even an inch outside of its niche, Houzz is the perfect example of what integrity should mean for a reliable virtual marketplace for homeowners and those companies that are relevant for homeowners with an ambition to renovate.

3. Creates insanely good content

And by good, we mean in the class of the content in the film clip below, where you can see how this fellow has redesigned his entire home to give his cats just as big a part of the interior design as they have in his heart.

The cat-lover film clip is exceptionally good, especially because it evokes emotion. All the editorial content, however, is fuel for the renovation-inspired buyer. This means that all the content on Houzz’s website is there to visually inspire and help simplify the user’s decision process.

When the possibilities are seemingly infinite, this helpful decision-making tool becomes indispensable when you are renovating your bathroom, or maybe the whole house.

4. A review system that is so easy to use it is silly

How good was the landscaper you hired? Did the tile manufacturer deliver what it was supposed to?

With all due deference to good content, without a review system that both the buyer and seller can use for feedback, the point of a community-based platform is almost completely lost. At least the part of it where you can buy and sell your products and services: Houzz Marketplace.

A good rating system is controlled by algorithms, which ensures that bad products and service providers are eliminated or are presented far down on the page, hidden, or removed—making the lowest standard high.

5. Deliveries arrive on time

When a community like Houzz is also offering a marketplace where online retailers within its niche can sell their products (and services), it is super important that the purchased items are delivered as promised and that returning items is just as smooth and easy.

Houzz, therefore, has set up a number of criteria that the seller has to meet to get a high review rating and thus be considered reliable. Two of the criteria are good lead times (including delivery time) and real-time stock information.

Good lead times means that the seller must know exactly how long it will take to make the item ready for shipping. The important thing is that the seller knows what it can promise—and also that the lead time is not unreasonably long.

The same thing goes for real-time stock information. What can be more detrimental to trust than a package that is delivered too late? A package that cannot be delivered at all because, oops, the item is out of stock.

Read more: Houzz and the Logistics—This is how it works

Houzz and the Money

Houzz is a platform that today has over 40 million users per month. 1,600,000 professionals use the platform to advertise their products and services and interact with purchase-happy homeowners. All in all, there are about 20,000 sellers and 10 million products that the members can add to their shopping basket with just a click on an inspiring photo. The number of photos on the website amounts to 16 million. This means there are 16 million images tagged with product names giving you the opportunity to buy something you see in a photo.

Houzz makes money by, among other things, charging a 15% commission on the sellers’ transactions. There is also a subscription fee charged to sellers who want to be exclusive Houzz Pro+ members.

The company is valued at 4 billion USD and is considered one of the 50 most “disruptive” companies in the world.

Is Houzz for You?

Houzz is already active on the Swedish and Scandinavian markets, but Houzz Marketplace has not yet entered the scene. For online retailers belonging to Houzz’s niche, this is a golden opportunity to calmly read up on the community and the marketplace. Maybe is it time to get your own strategy for Houzz?

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Regardless of which marketplace or platform you want to have a presence on, a good delivery strategy is always essential. Download our step-by-step guide. This book is for those of you who want to maximize the positive experience your customers get when shopping in your e-commerce store.

The book will be available in English soon.

Read more: Can I integrate my e-commerce platform with Houzz?

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