From Home Furnishing Business
Editor's Letter: Unprecedented
by Bob George,
I'am getting somewhat tired of this word. As a management consultant, with an engineering background, I am constantly in search of predictability based upon historical data. From the experience of maneuvering around fi ve economic cycles in the furniture industry, one would believe I would have found some degree of predictability.
Historical industry data carefully transferred from black notebooks to Viscalc to Excel to Access to SQL (and now considering Mongo) over the years should provide more insight as to what will occur in the next year of 2020. Without a doubt, the economy will end its current cycle but not necessarily in 2020, unless unprecedented occurrences accelerate the process. And that is the problem. The focus of this issue is the same as every October: The State of the Industry 2020. As you will read, we are forecasting another year of anemic growth. However, that was writt en before this lett er and before the accelerated calls for impeachment of the President due to unprecedented actions of individuals in the government. I believe that no matt er their political tribe, consumers are tired of the noise.
However, while processing through the data one thing became obvious. There is no one industry, but 404+ individual markets that have unique challenges. While the growth was anemic year to date, the range in growth was signifi cant as be seen in the table above.
Within these markets, individual retailers are dealing with specifi c challenges such as new retailers invading their markets. If it is not new retailers, it is existing retailers expanding into their merchandising price points as consumers race to the bott om with a perception that good is good enough. With this competitive tug of war, many older retailers are evaluating why to continue without a specifi c exit strategy. By the way, did I mention the weather?
The recent storm in Beaumont, Texas, which was the repeat of three years before occurred just as demand was returning to some sense of normal. It is a repeat performance. Interestingly, only 75% of the replacement demand, according to FurnitureCore’s industry model, had occurred. What will the consumer do? ‘Why bother?’ is the att itude for many. Research indicates that it is impacting price points.
What are we saying? As they say, “Politics is local.” Furniture retailing is as well. Understanding your market and your business performance is the most important. Ignore the noise.