From Home Furnishing Business
From the Publisher: $1,000 Purses and Furniture Flatlines
By Bob George
Yes, I am fully aware of the depth of the recession that our industry has experience since 2009. However, we are not the only industry that has been impacted by the worst financial meltdown since the Great Depression. Rather, we are an industry that is struggling with a recovery. The Consumer Price Index for all products has continued to move upward while furniture and bedding have remained flat. The CPI indexed to 2008 (100) is shown in the accompanying chart.
As can be seen from this graph, our situation occurred some years before in a previous downturn and has continued as the industry became “fixated” on price. I know many out there will point to the great value that we have given the consumer as production as moved offshore. However, a careful analysis of transportation costs, duty, inventory carrying costs and obsolescence will yield minimum savings. Nonetheless, the price has been reduced, but at a cost, the loss of quality. A sobering thought comes to mind—maybe the furniture we are producing is worth what we sell it for.
The group that is losing in this scenario is the consumer. We must ask ourselves the solemn question, “Are we presenting to this consumer worthy product?” It is important that we challenge ourselves as an industry to consider where we stand on these key factors:
Quality—Manufacturers, are we proud of the product we present to retailers who will then present this product to the consumer? We are speaking not only of upper-end products, but also the middle-priced goods.
Designs—Are we creating new and innovative collections that reflect classic shapes and forms, or are we knocking off our competitors? The result: The average life cycle of a new design is less than three years with most designs merely filling the pipeline only to be discontinued in a year.
Marketing—Are we resorting to a celebrity brand name to be noticed rather than designing collections that are inspired by original concepts that evoke dreams?
Sales—Are we basing sales on a true desire to achieve great product turnover that results in a great GMROI? Will there ever be another Collectors Cherry (Thomasville) or Fontana (Broyhill)?
Before you dismiss me as a ranting old man, there are signs that are positive. Witness the Amish phenomenon that inspires consumers to pay for quality or premium bedding where consumers appreciate innovation and will pay for it.
Yes, there is a chance. For the past 20 years of research when consumers are asked the question, “Does your home need redecorating that would require the purchase of new furniture?” the answer “Yes” has never been below 87 percent. It is our challenge as an industry to get the consumer to act on this need. Price is not working.
Let’s try a different approach.