From Home Furnishing Business
Publisher's Letter: Who is the Real Enemy?
2014 by in Industry
By Bob George
In this issue, we have focused first on the war between the alternative distribution channels and the traditional furniture retailers whose share over the past 25 years has been depleted to less than 40 percent of the total revenue of furniture sales. Our next level of focus is the war erupting between traditional furniture retailers.
As the larger retailers begin to expand within their home states and adjoining states, they compete with other traditional retailers. One of the driving forces behind this expansion is the need to replace the volume lost to the alternative channels. The option is to reduce fixed costs and not allocate resources to invest in needed changes to compete for the consumer’s dollars. All of this is explored in depth in the later pages of this issue.
The challenge for retailers is to recognize the real enemy, all of the other products that fight for the consumer’s discretionary spending. Obviously, we are losing the war when Apple’s latest release captures worldwide attention, the imagination of the consumer, and first-day, skyrocketing sales.
Has there ever been anything close to that amount of hullabaloo for a furniture introduction?
The closest the furniture industry comes to the excitement of the iPhone is within the mattress category where we’ve had an upsurge in premium bedding. However, we’re now to the saturation point and have overexposed our “innovations” with the offering of a myriad of materials.
Now, we’re in the race to the bottom.
Even with that brief spark, the furniture industry’s slice of the personal consumption pie has fallen 24 percent since 2006. The accompanying chart shows this decline. It’s time for the industry to refocus.
Stopping this erosion is a cause that all retailers, whether traditional or alternative, can join.