From Home Furnishing Business
Editors Letter: Is There a Silver Lining?
As we live through an unprecedented shutdown of the furniture industry, much less the unprecedented shutdown of our personal lives, it is a natural tendency to want to fi nd something positive. I will not address the personal, believing that beneath the discussions of increased alcohol consumption and drug abuse, there are some positives. But what is that for the furniture industry?
In my weekly conference calls with our Performance Groups, I have been amazed at the resilience of the furniture retailers, who discovered new ways to engage customers via phone and email, which resulted in appointments while stores are closed. The results refl ect signifi cant sales during these trying times. The importance of websites that produce inquiries from the engagement applications has led to chat sessions that result in sales, leading to my belief that as the stores reopen retailers will survive.
From this experience, the retailers will embrace new ways to do business. Ecommerce will become a must and not a “maybe”, left to the major players like Wayfair and Amazon.
The business model by necessity must change with the probability of less demand in the near future. ADVERTISING as a % of revenue will decline as the need for the block buster promotions transitions to a continuing relationship with their best customers. SALES EXPENSE could change as less retailer sales associates sell more. The importance of LONG TERM FINANCING will be challenged. Does the retailer need to expand 3-4% of revenue for fi nancing? The bright spot is the consumer demand as can be seen from the graphic below. After an initial blip, the consumer is back on the Internet researching how home furnishings can enhance what is becoming the new normal of being at home. The graphic from FurnitureCore, (the parent company of Home Furnishings Business), is a national sample of a balanced sample of INDEPENDENT furniture retailers. The consumer is waiting for the industry to open.