Since stores reopened in the summer, the furniture business has been booming. So much so that it’s strained supply lines close to the breaking point and created backlogs that will likely stretch into the second quarter of 2021. At last week’s Furniture Today Leadership Conference, that theme emerged again and again as speakers addressed the changes wrought by the pandemic and the reinventions companies are undertaking to deal with them.
While most manufacturers now have a sense of when the backlogs will begin to clear and when supply lines will begin to flow more smoothly, albeit at higher costs, the one question that appears to remain is how long consumers’ new-found infatuation with their homes will last. It is perhaps one of the most important questions facing the industry in the coming year.
The answer could have a significant impact on manufacturers’ future production plans. At some point, many if not all will need to decide whether new capacity will be brought online with all the attendant investment that entails or whether existing capacity can be stretched until demand returns to pre-pandemic levels or even slightly above.
The answer to this question will dictate retail order placements, particularly in the near term when backlogs make it necessary to forecast inventory needs six to eight months out. That answer could play a pivotal role in retail expansion plans, encouraging some to invest in additional locations, more warehouse space and additional manpower, while encouraging others to hold the course in anticipation demand finding its level.
How long consumers’ insatiable demand will last is the furniture industry’s $64,000 question.
And while none can answer with certainty, there was a strong sense among those speaking at last week’s Leadership Conference that the time frames we’re dealing with will be measured in years, not months. Day three of the conference kicked off with a presentation entitled the Decade of Home, certainly an optimistic sentiment but hardly out of line with other presentations.
There is a strong sense that the furniture industry’s time has come again and that we may be primed for a new Golden Age of consumer focus on the home as a true focal point of everyday life and, in turn, of discretionary spending.
Heading into the conference, Furniture Today Strategic Insights group conducted a wide-ranging consumer study to look at the impact of the pandemic on their purchase plans. I would like to tell you that there was overwhelming evidence that consumers are planning to spend massively on furniture for years to come. Consumer research is rarely that definitive, particularly since consumers themselves face uncertainty about the future.
But it’s very clear that the home has become a far more central element of consumers’ everyday lifestyles than it has been in years. There is also strong evidence that suggests a level of underlying stability to furniture purchase intent, particularly when measured against other potential areas of discretionary spending.
It’s probably a little soon to pop the champagne in celebration of a new Golden Age of furniture sales. But it couldn’t hurt to have a corkscrew close at hand.
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