From Home Furnishing Business
Editor’s Note: It’s Time to Take Stock
2023 by HFBusiness Staff in Business Strategy, Industry
It shouldn’t have been a surprise that combined furniture store and home furnishing store sales would fall 3.2% YOY in November. Considering that traffic into the stores has fallen 16% since the beginning of the year and average ticket has begun to decline. Additionally we have been depleting our backlog, something no other distribution channels have done. The TRADITIONAL FURNITURE STORE, those that achieve 70%+ revenue from furniture, represent only about 28.5% of total furniture sold. If we add the HOME FURNISHINGS STORE, those that achieve 50% of revenue from furniture, we gain another 36.2%. But what about the other 35.3%? The other is the SILENT COMPETITION that we forget.
Over twenty years ago, with the demise of the national chains (Sears/Montgomery Wards/JC Penny) to be followed by the national furniture chains (Levitz/ Wicks/ Helig-Myers), the warning of “alternative distribution channels” became the caution. While many alternative channels have fallen by the wayside and new ones such as Wayfair in the eCommerce channels have emerged, the warnings were correct.
Traditional retailers whether independents, regional chains or manufacturing direct face significant competition in these alternative ways to buy furniture. In the disruption of the pandemic in Q1/2020 our sister company, FurnitureCore, registered a decline in market share of traditional retailers (independent and regional chains) due to the lockdowns in 2020.
The challenge is to recognize these SILENT COMPETITORS and decide, do we want to compete with some of these giants for the “trash furniture” or more specifically the $399 sofa that is missing from the assortment? It is the beginning of a new year and a new strategy.