The Evolution of the Online Interior Design Industry

Theres just one thing online interior designer entrepreneurs like me love more than cupcakes and thats being at the vanguard of the evolution of an entire industry.

Every industry has had its challenges when it comes to evolving to better serve its customers online. Many industries struggle with piracy, others with delivery and logistics. My industry, residential interior design, has struggled to evolve its cost-to-serve model toward something that is attractive to more than just the wealthiest one percent of Americans.

When I launched online interior design website HMDhome.com six years ago the first sightings of my online interior designer competition could be found buried on page eight of a Google search in the form of a website selling “design in a box”. “Design in a box” consisted of the client completing a rudimentary online form (inclusive of room dimensions and style questions) and paying $800 via PayPal to an interior designer hundreds of miles away whom theyd never get to speak to, let alone develop a relationship with. Six to eight weeks later a large hat box was to be delivered full of a very carefully curated selection fabric samples, paint chips, furniture plan drawing and a shopping list of furniture, lighting and decorative accessories.

Admirable in its presentation quality the design in a box as a product was extremely beautifully prepared however as a business model it was doomed to fail for three reasons. It was an impersonal transaction in an industry that requires consultative collaboration. It was technically an improperly curated catalog because it represented what the designer had to offer, not what the client ultimately purchased for their interior design project. Finally, for the typical homeowner it was expensive. At this price point the interior designer wasnt expanding the overall interior design client base to a broader market and I suspect they failed to convert a meaningful number of home owners to online interior design in the process.

Today, home owners planning a home renovation or remodeling project can get tremendous value from online interior design services at a fraction of the cost of the original design in a box. Virtual services include ongoing consultation with a designer, specifications for colors, furniture, fixtures and finishes and access to exclusive designer discounts from popular retailers and trade sources.

Let me bore you for just a moment with some important statistics about the highly fragmented residential interior design industry relevant to its potential future online evolution.

A May 2011 report by the Bureau of Labor and Statistics indicated there are 40,950 interior designers in the US inclusive of all disciplines (residential, hospitality, corporate, restaurant and specialty). A minority of these professionals are expected to be localized residential interior designers serving fewer than 1% of US households with a traditional cost to serve model made up of hourly design fees and/or extra-retail product mark-ups.

The most significant barrier between interior designers and millions of potential new customers is the structure of the current interior design cost-to-serve model which is prohibitive for all but the wealthiest Americans.

According to a 2010 household income report from the US Census Bureau 8.4% of households earn in excess of $150K per year. While 90.2% of these were owner occupied as of two years ago, its estimated that 7.8 million households representing a potential prime demographic for online interior designers have never before consulted with an interior designer.

With a lean six sigma black belt on staff at
Homemade Design Corporation (HMD) you can bet we collect and analyze key client data related to our online interior design firm. For example, 89.6% of approximately 954 current HMD clients report having never hired a designer before working with Homemade Design. Among the primary reasons given for not previously having hired an interior designer is the perception that hiring an interior designer will increase overall project costs.

Yes, wealthy homeowners in the Hamptons may enjoy bragging about how much theyve spent as they sip champagne at the polo match. However, for the online interior design industry to evolve toward delighting a greater number of interior design clients we must enable them to brag about how much they have saved.

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