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From Home Furnishing Business

Cover Story: Consumers are Demanding but they are the Customer

Figure 1 summarizes all factors. As you can see, many of the factors are POSITIVE and few are NEGATIVE. However, much of the recent comments in the industry are about the impact of housing starts and inflation on the current performance.

For example, do you remember what happened when Reagan was elected? After Carter, inflation came down and mortgage rates declined. Yes, the industry accelerated. However, it began with Carter and only accelerated Table A.

The point is that the industry must recognize what drives it. If we recognize those factors that impact the industry and adjust our plans accordingly, performance will be maximized. Easy to say, but hard to do. Company management goes through distinct phases; DENIAL – It is just a temporary blip; ANGER – It’s the supply chain; ACTION – I must do something; and finally, RESOLVE – I will wait it out. The alternative is to have a fact-based plan. While the industry, at least the traditional industry, is experiencing a downturn, the TOTAL industry including furniture and bedding sold through all distribution channels is holding steady as can be seen in Table B.

Something’s Happening Here – What It Is Ain’t Exactly Clear However, we have a conundrum. While the industry appears to be stable if not improving as illustrated in Table C, the reality is that the TRADITIONAL furniture industry is faltering. It is not a typical industry rumbling, but a fact that since April TRAFFIC has plummeted. However, increased CLOSE RATES and maintained AVERAGE SALES have minimized the impact to written sales. The key performance indicators from top quartile retailers from FurnitureCore, a sister company of Home Furnishings Business, illustrate’s the trends below.

The question is, what caused the deviation in 2023, as illustrated by the furniture store results (retailers that derive at least 70% of revenue from furniture) and the KPIs of FurnitureCore’s top quartile? To understand, we must go to the consumer, the foundation of all retailing efforts. The following section examines TRADITIONAL retailers focus on the generational shift that is occurring; specifically, where they want to shop and what styles they desire, but most importantly, how do they perceive furniture in their priorities?

FURNITURE CONSUMERS – WHO ARE THEY? Times, they are a-changin’ It couldn’t last forever. The United States market has enjoyed the consumer consumption driven by the Baby Boomers. The population expansion that occurred after WWII resulted in one of the largest groups of consumers that wanted to spend. Without the constraints of wartime memories of their parents, and the “depression” of their grandparents, they were ready to consume, and they did. The HOUSEHOLD FORMATIONS is one of the prime drivers of the furniture industry. Table E presents the historical statistics. Each generation has different characteristics that influenced HOW THEY SHOPPED and WHAT THEY PURCHASED. And with each generational shift, retailers had to change the way they “retailed.” With each generational shift came different distribution channels that served the demands of this new generation. Table F illustrates the transitioning. It would obviously be easier if retailers could stop one generation and begin another. However, the transitions are the most difficult. Now we have a trifecta with three generations almost equally spending at the same time. The graphic below illustrates the expenditures and households.

This issue’s STATISTICALLY SPEAKING article provides additional information on the generations and their impact on the industry. The most important understanding is the consumers attitude toward decorating/home furnishings. As with other consumer products, the differentiation between “need” and “want” has shifted from a few product categories to many, especially among generation segments. When we asked the question, “WHICH OF THE FOLLOWING STATEMENTS BEST DESCRIBES YOUR ATTITUDE TOWARD DECORATING/HOME FURNISHINGS?” Figure 2 provides the response. The industry should be delighted to see that the coming generation is positive about our product and services. However, both retailers and manufacturers must interpret this attitude. The industry must gradually move away from “price” as a motivator to QUALITY and STYLE. The consumer does not want to communicate cheap and practical, but UNIQUE, STYLISH AND SUSTAINABLE. The marketing message must convey the same with quality visuals. Please note the caution related to the word gradually mentioned above. While the desire is there, the pocketbook may be reluctant to follow. When we analyze the survey results by income, we see the hesitation as shown in Figure 3.

This purchasing (expenditure) barrier is reflected when the purchase, by age/income of the majority of independent furniture retailers as well as regional chains. Figure 4 below presents the industry statistics for the past 12 months.

As can be seen in Figure 4, while traditional furniture retailers sell all demographics, their sweet spot is above $75K in income. The challenge is to return to communicating “Furniture is an investment – that will last for many years” and stand by that promise. Now traditional furniture retailing is focused on less than a third of the nation’s households.

There are distribution channels – value retailers, such as Big Lots, which are targeting the middle-income demographics, $35K - $75K. The use of retailer credit cards and revolving credit at the department stores can address a need and build loyalty. How has the purchasing process changed from the Baby Boomers to their children?

As can be seen in Table G, the initial shopping is NOT a family outing with partners on a shopping expedition. The impact of dual income families creating busy weekends, along with additional research on the Internet has led to delegation. Also, home furnishings are no longer the domain of the female with the male participating. However, the female/spouse is 3x more likely to take the lead.

When the consumer shops for furniture, what are they looking for? Interestingly, there is no significant variance between generations, as can be seen in Figure 5.

Now for the actual process of purchasing. With the limitations of the pandemic, you would expect a significant change, however not as much as expected. Figure 6 compares the length of the shopping prepandemic and post-pandemic. The table compares the shopping time by generation currently.

As can be seen from the graphic the shopping process is not savored as it was in the single income family time period (1980 – 1990) when the decorating project was a timeconsuming project. Figure 7 shows, the number of retailers shopped did not vary significantly by generation. Rest assured that the United States will remain a “shopping” nation.

During the pandemic, consumers were reluctant to travel great distances to shop or travel at all. However, furniture retail shopping has returned to normal with the majority of consumers driving 10-24 miles to shop. Table H presents the pre/post pandemic comparison.

As can be seen, there is no generational differences as to willingness to travel. This is important for future expansion plans to determine the number of stores in a market (Table H).

And finally, was the consumer satisfied with their shopping experience and if not, why not? When we solicited the consumers input, we got the following results as shown in Figure 8.

For the most part (30-40%) of consumers were extremely pleased with their experience. The most negative area was “good decorating advice from the retail sales associate.” This finding caused us to reflect on the growth of designers/personal shoppers.

In the last decade, the traditional furniture retailer has been under significant pressure with the disruption caused by the deterioration of the national chains; Montgomery Ward, JCPenny, Sears, Levitz, Helig, and Myers. While the decade, beginning with the year 2000, saw the decline of the national chains with many bankruptcies, other retailers that continued as more shadows of the concept of a national furniture chain also vanished. However, this disruption gave rise to the next generation of the family to expand the single-store independent to regional chains, such as ROOMS TO GO, RAYMOUR AND FLANIGAN, and HAVERTY’S, and later BOB’S DISCOUNT. Again, financial difficulties, often fueled by venture capitalists, led to the failure of ART VAN, FURNITURE FAMILY OUTLETS (FFO), and others. Furniture retailing is a tough business impacted by the ever-changing consumer purchasing and style preference. One furniture retail solution, after the deterioration of the national chains was the opening of dedicated manufacturer brand stores such as THOMASVILLE, LANE and BROYHILL driven by the conglomerate FURNITURE BRANDS. Most of this distribution channel has disappeared except for the ASHLEY brand that is now the largest furniture manufacturer/ retailer with more than 1,000 stores in 60 nations. There are other manufacturers that have pursued a combination of retail and wholesale such as LA-Z-BOY and BASSETT INDUSTRIES to name some of the larger retailers pursuing this manufacturer direct strategy.

Larger general retailers such as COSTCO and TARGET and more recently BIG LOTS attracted by the high margins embraced the furniture product. With the creation of offshore manufacturers capabilities new retailers collapsed the channel and began to design and produce their own product line. Led by entrepreneurs CRATE AND BARREL, RESTORATION HARDWARE, and POTTERY BARN, these major players developed product and a retail experience focused on a specific consumer group. And finally, the most recent retail challenge is the move to ecommerce in 2010 with WAYFAIR who after an experimental beginning as CNN STORES in 2002, became a threat to traditional retailers. Wayfair has been joined by general retailers and other ecommerce players such as AMAZON. The digital retail presence for furniture is here to stay. In fact, furniture manufacturers following their sister manufacturers in bedding, are beginning to sell direct to consumers (DTC). As always entrepreneurs are filling the space with no prior furniture experience and launching successful companies such as MAIDEN, BURROW and ROVE CONCEPTS.

This is the challenge for traditional retailers – can they change the product they merchandise and the buying experience to maintain their market share. Table I presents the historical transitions: The pandemic caused disruption in the furniture industry distribution channels with many furniture stores being declared “non-essential retailing” while other retailers continued to sell furniture along with other products. Retailers such as home improvement stores gained market shares.

Figure 9A and B compares distribution channel preferences before and after the pandemic. While ecommerce experienced an initial bump it was short lived. The major recipient was other alternative distribution channels such as home improvement stores and value retailers. While this temporary change in purchasing habits, driven by demand, many returned to their pre-pandemic preferences. A recent national survey shows the results. Driven by demand, long term consumers will return to their preference based upon lifestyle. A recent national survey measured this preference by generation.

Currently (2023), the traditional furniture retail distribution channels have just over half of the market share (62.1%). The Internet market share does not include those online sales in mass merchants and catalog chains such as Amazon. We estimate total online furniture and bedding sales to be about 18%. The next question is, “why are these various distribution channels preferred by consumers?” A recent national survey of consumers ranked specific retailers as #1, which we then attributed to specific distribution channels. As can be seen only in the valuation of the physical plant – exterior/interior—are regional chains found lacking.

What Does the Consumer Want?

As was previously mentioned, the Baby Boomer was easy to satisfy as long as it was traditional.

Yes, there were variations; CHIPPENDALE, LOUIE THE FOURTEENTH, or to the extreme SHAKER, but it was traditional. While not as exacting as their parents as to the finer styling details, the transition from craftsmen in small shops to manufacturing plants went well. Overtime the distinct design points were lost in each manufacturer’s interpretation of the style. With the next transition in the industry – moving to offshore manufacturing – more details were lost in the quest for manufacturing efficiency or just the ability to get something produced. The thoughts of dove-tailed drawers and 10-step finishes were traded in for the pursuit of margin. With this transition came a change in the consumer attitudes toward furniture from being an investment to a disposable item. As was discussed previously, the youngest generation’s attitudes especially in the upper incomes are returning to appreciate style and design. However, this return is not to the “Brown Furniture” of their parents and grandparents but a style that is uniquely their own.

Using visuals in a recent national survey, FurnitureCore asked consumers to identify their current style and then their dream style from the following visuals. The responses are shown in Figures 10 A, B, and C.

As would be expected, the American furniture consumer has not totally abandoned the traditional styling, but they have started in that direction as can be seen from the graphic below. Leading that direction is the Millennials and Generation Z as indicated in Figure 10A, when the findings were segmented by generation.

Styles changes slowly, especially in durables that are purchased less frequently. Style changes are influenced by what the consumer is exposed to. Before we moved away from stay-at-home moms, “soaps” were big influencers. Social Media has filled that role as shelter magazines have declined as well in content/ advertising for furniture in the magazines that remain.

Manufacturers observe the trends and hope to strike a chord with the consumers. In this issue of the magazine, Style Directions presents animal motiffs as one of these trends.

The consumer has a vision of what their personal design style would be. In the same national survey, the consumer was asked, “What is your DREAM STYLE,” and this was their input along with the variance from their current style: As with the current styles, the generations influence the style direction. Figure 10B presents the dream styles by generation.

As can be seen from the table, midcentury has lost its luster with the younger generation, but modern is more in favor with this emerging furniture buyer. Analyzing this same input by income range, the results are shown below in Figure 10C.

The major challenge related to style with furniture manufacturers and retailers is not identifying incoming style trends, but how to communicate both externally to its customers and internally to the staff that will sell the product to the consumer. To accomplish this requires that the retailer develop its own unique naming process for a style using a series of fun questions that require less than five minutes. DesignCliq identifies the consumers styles with a 90% concurrence. An output is shown below in Figure 11. This process, while informing, can be utilized to market with direct email and the website.

It is difficult to incorporate generational and style preference into the execution of a strategy. The use of the old standard of a war room with pictures and notecards posted to a conference room wall has served retailers for years. Transforming this concept to a digital format can provide a demographic and style preference to merchandising. Figure 12 illustrates.

What Sells: SUPPORTING CAST A look at the trends in Home Office, Entertainment and Occasional furnishings.

Home office furniture sales continue to grow, despite many households purchasing the necessary pieces as working from home became mandatory in recent years. Whether they’re adding to existing setups or creating new workspaces in the home, consumers continue to search terms such as #desk and #bookcase on social media, Houzz and Pinterest. Manufacturers are responding by providing a constant stream of fresh designs—with a growing number of collections designed with modular pieces that work together to accommodate a variety of floorplans. AICO credits product design as the route to customer satisfaction in the home office arena, according to president David Koehler. Describing AICO’s fashionable Belmont Place desk, Kohler explains:

“The success of this desk lies in its exquisite pairing of the ethereal allure of white anigre veneer coupled with the deep richness of espresso, beautifully accentuated by gold touches. Consumer sentiment echoes our belief: this desk is a statement, ensuring the home office reflects the luxury of the rest of the home.”

In addition to dedicated home offices wellsuited for a desk, console, bookcase, and file storage pieces, desks are being used throughout the home as multifunctional solutions. Today’s open floorplans offer numerous spots to integrate a desk. Desks placed behind the sofa take the place of console tables and are perfect for finishing up work, paying bills or doing homework. Adding a desk to an open wall or nook creates a focal point and can be styled with a mirror and accessories to look decorative while providing a worksurface and smart storage to keep clutter out of sight.

Modular furniture designs are an essential element of Stickley’s home office strategy. “Our Origins By Stickley line represents tremendous value as the opening price point for Stickley; it brings customers functional furniture options that are fully customizable and well-constructed as well as affordable,” explains Edward Audi, president, L. & J.G. Stickley. “The Dwyer style has become especially popular among our home office products. Its modular storage components offer incredible versatility, and a choice of ten finishes and nine hardware styles means that Dwyer will work beautifully in any setting.”

As Americans spend more time working from home, the home office category has benefited. Industry research—from the FurnitureCore model developed by Impact Consulting Services, parent company to Home Furnishings Business magazine— estimates the home office furniture category grew a solid 8.1% from 2021 to 2022. While impressive, last year’s growth pales in comparison to the pandemic-fueled growth of 21.3% growth documented from 2020 to 2021. So far in 2023, the home office category is tracking 2.4% above last year through second quarter. In 2022, home office sales finished at $6.88 billion up from $6.36 billion the previous year. As of Q2 year to date, sales in the home office category are estimated at $3.38 billion.

Occasional Tables
As functional as they are fashionable, occasional tables are design essentials. Creating a seating area without them leaves a room looking and feeling empty—and without the ability to support a beverage or TV remote. Gone are the days where a well-designed room boasted a matching ensemble of two end tables, a cocktail table and a console table. Today’s interior design directions highlight tables (and ottomans, benches, etc.) that complement rather than match each other. Notable features in this category include eclectic mixes of wood, metal, glass and stone; durable, cleanable surfaces; and multifunctional design. “Our Anaheim cocktail ottoman is one of our best sellers because of its versatility and mixed media,” explains Jim Telleysh, president of Spectra Home. “It’s a great accent piece with a gunmetal-gray base made of aluminum. The upholstered top is stocked in our Data Cream performance fabric or a rich charcoal Nubuck leather and is available for 48-hour delivery. You can also choose from our extended selection of performance fabrics, bleach-cleanable acrylics and more leather options by ordering through our custom design program.”

Home Entertainment
While consumers continue to spend more time at home streaming their favorite shows, the need for home entertainment furnishings grows. From minimalist to modern farmhouse styles, there are looks available to meet every consumer’s style preference and budget. The most desirable features include open and closed storage, adjustable shelves, powerstrips, cord management, and open or glass-front component compartments.

FurnitureCore research estimates the entertainment furniture category grew 8.1% from 2021 to 2022; down from the 21% growth recorded the previous year. In 2022, the entertainment furniture group finished at $8.29 billion in sales, surpassing 2021’s stellar sales of $7.67 billion. At the close of the second quarter this year, home entertainment is tracking at $4.08 billion in sales, up slightly over last year where 2022 sales closed at $3.98 billion during the same period.

Statistically Speaking: Generation X Dominates the Furniture Industry as Millennials Make Their Move

Gen Xers households (ages 42 to 57) averaged $1,014 in furniture expenditures in 2022 followed by $770 for Millennials, $679 for Baby Boomers and $430 for Gen Z (adults 25 and under) (Table B). Our 2023 consumer spending article will focus on these generational households, quantify their spending and shed some light on what may be ahead for the furniture industry. A future article will look at each generation’s shopping choices and outlets and explore how each furniture channel can attract them to theirs.

In preparing this article, we have borrowed a quote from the Pew Research Center, a leader in generational studies, which says, “Generational signals can sometimes be lasting, but youth itself is not a permanent state.

Generational Influences Generational spending is sometimes a difficult concept to grasp as it follows the same groups through time who shared similar economic, domestic and world events during their coming of age. Generations get older together with the shared experiences and events shaping them throughout life. This approach is opposite to the traditional method of analyzing spending, and that is by looking at age and income at a moment in time. For example, traditionally, one might ask how much were 35- to 44-year-olds with incomes between $50,000 - $70,000 spending 15 years ago compared to today. In this example, the age group would have been from two different generations. The shared generational experiences can be wars, economic recessions, terrorist attacks, pandemics, medical discoveries, (i.e., birth control pills) or technological advancements, like the personal computer, cellphones or the Internet. Usually, the beginning of a generational identity (birth year) often begins with the adoption of a new technology.

Figure 1 gives an overview of each generational cohort and the cultural experiences and events that influenced them.

Demographics Millennials (ages 26 to 41) are now the largest generation alive numbering 72.3 million, which is 21.7% of the population and 27.7% of adults 18 and over (Figure 2). Immigration is expected to swell their ranks further. But not all Millennials have formed households, and are thus second to the Baby Boomers (ages 58 to 76) in consumer units/households. Boomers comprise 26.3% of the population 18 and over and are still the largest group of households at 32.4%. The smaller generation sandwiched between Baby Boomer and Millennials, Generation X (ages 42 to 57), represents 25.1% of the population over 18 and over 27% of households. Younger Generation Z (ages 10 to 25) comprise only 5.5% of consumer units, but their ranks will grow rapidly as more age into adulthood. Figure 2 shows the demographic detail followed by Table C which compares percent of adult population versus consumer units.

The growth rates in household formations for each generation prepandemic (2019) and post-pandemic (2022) were varied (Table D). Before the pandemic, very few Gen Zers (ages 10 to 25 in 2022) were out of college. But between 2019 and 2002, their numbers almost doubled. Millennial households (ages 26 to 41 in 2022) grew 5.7% over three years, which is a significant amount considering their already large numbers before the pandemic. Generation X (ages 42 to 57) grew less than 2% over the three-year period, and Baby Boomers less than 1%. The toll the pandemic took on the Silent Generation was wide spread with households declining 27.7% 2019 to 2022.

Income by Generation Generation X (ages 42 to 57) has by far the highest incomes averaging $126,892 per households in 2022, followed by Millennials (ages 26 to 41) at $100,315 and Baby Boomers (ages 58 to 76), $81,827 (Table E). But the higher the income bracket, the higher the taxes paid. In this case, Gen Xers paid 16.8% of income in taxes, Millennials 11.9%, Baby Boomers 11.6%, and young Gen Zers just starting out 5.3%.

One of the outcomes of the pandemic, was the explosion of incomes in the midst of a very tight labor market (Figure 3). Pandemic monetary assistance was also a factor. Millennials that had been crying the blues were all of a sudden getting higher paying jobs. Salaries for Millennials (ages 26 to 41 in 2022) who were three years older in 2022 than 2019, grew 27%. For Generation X (ages 42 to 57 in 2022) salaries grew 19.4%. Baby Boomer income rose only slightly by 1.2%. The average Gen Xer (ages 42 to 57) had 21.1% more disposable income than the average Millennial (ages 26 to 41) and 48.6% more than the average Baby Boomer.

Expenditures by Generation
So how did the different generations spend their money in 2022? With Gen Xers (ages 42 to 57) having the highest incomes, they in turn spent the most, $91,382, followed by Millennials at $74,782, and Baby Boomers averaging $66,362. Newly forming households by adult Gen Zer households (25 and under) spent on average $47,975 (Table B and Figure 4).

For all consumers, over one-third of their expenditures was spent on their homes, which included paying for the actual structure (rent/mortgage), utilities, household furnishings and equipment (including furniture), and household operation and supplies. And even though Gen Xers (ages 42 to 57) still spent more actual dollars on average on household furnishings and equipment, as a percent of their total spending, this generation also spent the lowest at 31.2%. The general rule for spending on the actual housing structure, either rent or mortgage payments, property taxes, etc., was that the younger the generation, the higher percentage of expenditures on basic housing. For example, Generation Z (adult ages 25 and under) averaged 25% of expenditures for rent or mortgages, Millennials 21.6%, Generation X 18.6%, and Baby Boomers 18.8%. However, the opposite was true for utilities. The younger the generation, the less they paid as a percent of expenditures. The same applies for household furnishing and equipment. Baby Boomers spent more of their income, 3.9%, on household furnishings. Figure 4 shows the total percentages of expenditures, including transportation, housing, food, healthcare, entertainment, education, and contribution to retirement accounts.

Household Furnishing and Equipment
Like many other consumer products, spending on household furnishings and equipment grew rapidly between 2019 through 2022. This category includes furniture, floor coverings, major appliances, small appliances/miscellaneous housewares, household textiles, and miscellaneous household equipment. Spending by Generation X (ages 42 to 57) for household furnishings totaled $3,355 on average per household (Figure 5), which was over 30% more than Millennials or Baby Boomers. In fact, Gen Xers (ages 42 to 57) outspent Millennials and Boomers in every household furnishing product area, except small appliances and miscellaneous housewares, and that difference was very small.

Table F shows the dominance of Generation X in household furnishings spending. In average household spending on furniture, Gen Xers outspent Millennials by 31.7% and Baby Boomers by a significant 49.3%. For major appliances, the difference was less than 20%. In the popular household textiles category, Gen Xers (42 to 57) outspent Millennials by 96.1% and Baby Boomers by 54.2%

In 2019 just before the pandemic, Gen Xers (ages 42 to 57) were leading all other generations in spending on household furnishings, but not by a lot compared to Millennials (ages 26 to 41) (Table G). But throughout the pandemic and beyond, the Gen Xer gap widened significantly. Bear in mind that all generations were three years younger in 2019.

Furniture Expenditures
Coming out of 2019, furniture sales were increasing across all generations but some took different sending paths in the immediate pandemic of 2020. Table H graphically shows the spending, while Figure 6 presents the detail. In 2020, during the worst of Covid fears, spending cooled among Generation X (ages 42 to 57) to 3.4% and more so with Baby Boomers where furniture spending was down 13% for the average household. All the while, younger generations, Millennials and Gen Zers (25 and under) were posting doubledigit increases in furniture spending in 2020 as pandemic money flowed in and a moratorium was placed on student loans. The spending craze for Generation Z (25 and under) and Millennials (ages 26 to 41) continued through 2021, and then slowed in 2022 as inflation set in. Gen Xers (ages 42 to 57) and Baby Boomers were a different story. While conservative during the heart of the pandemic in 2020, in 2021 and continuing through last year spending grew over 35% in 2021 and over 11% in 2022 for both Gen Xers and Baby Boomers.

As shown in Table I, when it came to buying furniture, in 2022, the average Generation X (ages 42 to 57) household outspent Millennial households by 31.7% and Baby Boomers by 49.3%.

Gen Xers (ages 42 to 57) will continue to dominate the furniture industry through 2025 as their affluence continues to grow. Some older Gen Xers are inheriting money from the quickly declining Silent Generation parents. However, Millennials will get the biggest boost for years to come inheriting billions from their Baby Boomer parents. Younger Generation Z (under 25) is also bursting on the scene, better educated, more ambitious and some say learning from the mistakes of Millennials.

A future installment of Stat Speaking will explore where they are spending their money, and how each furniture and home furnishings channel can lure them their way.


To the top, we welcome a break from the double digit declines and increases. It is unbelievable that the quarterly year over year decline of .8% in Q2 could provide a sense of relief. The roller coaster is still moving slowly, and looking at the graphic below has the potential to repeat the same terror filled path down.
What will happen next?

Cover Story: STATE OF THE INDUSTRY: “What Industry Are You Referring To?”

Change has always been a fact of business. The key to survival for both manufacturers and retailers is to recognize it is happening and plan for it as you deal with the everyday challenges of running the business. The history of the industry is replete with examples of manufacturers that did not react to the movement of production to the south or the subsequent move offshore (Table A).

Or, small mom & pop retailers that did not foresee the expansion of their once competitors to become regional chains, filling the void left by the failure of the national chains such as Montgomery Ward, Sears and JCPenney.

All these strategic shifts occurred in the backdrop of the impact of economic conditions as illustrated in Table B.

As a result of the pandemic, many of the small independents are closing their doors. The reason? It’s not because of financial distress, but rather the lack of successors to pass down to, or the inability to find a buyer. But for many, the real reason is the owners are tired of dealing with the pressure of executing a long term strategy. Simply put, they are tired of trying to anticipate “where the puck is going.”

Our forecast, as always, will be for the TOTAL FURNITURE AND BEDDING INDUSTRY. However, our focus has been the traditional furniture retailers and the suppliers that serve them. As can be seen from Table C, this marketshare after the pandemic, has settled in at about 35% - 40%. What are we saying? Simply put, traditional retailer’s competition may not be who they think. The competitor may not be the family-owned store down the street or the regional chain that just moved in last year, but the other retailers that “dabble” in furniture.

How can traditional retailers compete with these alternative channels while satisfying the consumers and their retail preferences? For decades, the baby boomer and to some extent, the silent generation, has been the focus of the traditional retailer (Figure 1).

While this generation segment(s) is still purchasing a significant amount of furniture as they downsize and move to the next stage of life, the coming force is their children (Generation X) and their grandchildren (Millennials). Where do they purchase? Findings from a recent national survey of furniture purchasers, are shown in Figure 2.

While the Baby Boomer has remained loyal to the independent retailer, the attraction of the more focused MANUFACTURER OWNED store and the value priced experience of the WAREHOUSE CLUBS has made inroads. The younger Generation X consumer has definitely been attracted to the alternative channels. Attracted by style to the more LIFESTYLE RETAILER (Crate & Barrel, Pottery Barn, Restoration Hardware) as well as convenience (INTERIOR DESIGNER, INTERNET) and also price and finance. The younger Generation X and the Millennials are shopping all distribution channels.

From the same survey, the analysis by income presents another perspective (Figure 3). The focus for the traditional retailer has become the consumer household earning above $50,000. For groups below this income level, they recognize there is a strain on discretionary spending after securing the basics, which makes furniture a deferrable purchase.

To summarize, to furniture consumers in total and the emerging furniture consumer, the distribution choice is a very eclectic choice as shown in Figure 4. But what do they want in a retail experience? FurnitureCore has identified what is important. It is everything as can be shown in Figure 5.

To conclude, the forecast that follows is for the total Furniture/Bedding industry. You will see that while challenging, it is a positive growth for the upcoming year, but for traditional retailers, the challenge will be to stop the erosion to the other distribution channels.

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