Wendy Youds, vice president of product and merchandising, Article
As we continue to scale and the pandemic-induced demand continues to surge into 2021, we’re doubling down on supply chain efficiencies.
We’ve diversified the number of manufacturing partners we work with to take more control of the design process and introduce more original equipment manufacturer (OEM) designs. We’re also developing exclusive raw materials for our products, including upholstery fabric and leather.
These efforts ensure our products are readily available to consumers and improve manufacturing lead times while maintaining our quality standards across our catalog with competitive pricing, which ultimately makes the furniture-buying experience easier for our customers.
Todd Wanek, CEO, Ashley Furniture Inds.
The biggest focus for us and everyone in manufacturing and retail is figuring out the supply chain and get back to executing at a higher level in 2021. We need to gauge consumer demand and put together a plan that meets that demand. 2020 was a year of learning for everyone because the entire system was stressed. It showed us and everyone else the flaws.
We’re expanding our physical infrastructure with more warehousing, more new trucks and more capacity. We’re re-inventing the flow of information, from manufacturers to retailers, from retailers to consumers, all the touch points.
2021 is a year of challenging everything that was constrained in 2020, from manufacturing to distribution to supply chain. We’re identifying everything that went right in 2020 — and there was a lot — and everything that went wrong, and (we’re) refocusing to improve execution and flow of information.
Andrew Crone, CEO, Chaddock
We made some big moves in 2020 that have set a solid foundation for a great 2021. We’ve set new standards for quality and turnaround time. We’ve innovated easy custom programs inspired by our design accounts, and we’ve made the process of bringing custom-crafted furniture to life easier than ever.
We plan to do even more of that in 2021. Chaddock remains committed to being on-demand for our customers. Whether that’s by expanding our quick-ship program to offer more designs that maintain industry leading lead times or continuing to inspire personalization or develop new tools to create greater efficiencies, we want to allow our customers to focus on what they do best, creating and selling design.
Roy Calcagne, CEO, Craftmaster Furniture
The opportunity in my mind is reducing our lead times. … Everyone has 12-week, 14-, 16-, 22-week delivery right now, and (manufacturers) are all in the same boat. The first guys to come back to normal lead times are going to be the winners.
If we can be one of the first to reduce our lead times back to normal, we can pick up slots and permanently lock in these great gains in business we’ve had this past year. When the economy opens up and people start traveling and dining out again, a lot of this disposable income will dry up, and where once we had, say, five slots on a floor, we want to have 10.
The biggest way to achieve that is expanding capacity. … We believe our Lenoir plant that opened in September will give us an additional 25% capacity, and we’re adding a line in each of our three plants in Alexander County, so we’re talking about a total of 40% expansion in capacity this year.
Farooq Kathwari, chairman, president and CEO, Ethan Allen
Our focus for 2021 revolves around strengthening the ways that we combine technology with personal service.
These are our main priorities: employee safety, continued investment in digital design and interactive communication technologies, growing our business and continuing to generate cash, refining our product offerings to reach a large client base, and leveraging our vertical integration, including continuing to make 75% of our products in our North American workshops.
Jerry Dittmer, president and CEO, Flexsteel Inds.
Flexsteel plans to accelerate growth investments focused on building a differentiated and highly compelling customer experience, rapidly expanding our supply chain capacity and agility, and integrating our omnichannel and digital experience with all our customers.
Dave Swers, president, Glen Raven Custom Fabrics
With more time at home, many consumers are investing in and around their homes to create an environment they can enjoy. This has created additional demand for Sunbrella fabrics in every category, including both indoor and outdoor upholstery, among others. For example, the outdoor season is now extended with the patio becoming a new focal point for leisure and family time.
With these shifts come new opportunities, as the desire and demand grows for comfortable textiles that perform throughout every season.
We recently announced a $65 million investment to expand our production capabilities at our U.S. and global plants to support our manufacturing and retail partners. This significant investment will support even greater future demand for Sunbrella, Dickson and other Glen Raven fabrics so we can continue serving our customers with success.
In addition, the way consumers shop is changing, and we are increasing our marketing investments on new channels while working with our partners on new ways to connect with and inspire consumers.
Bob Naboicheck, president and CEO, Gold Bond
The industry is still in the midst of the COVID-19 pandemic, and we have been very fortunate to be able to get materials that we need to keep up with the increased demand that we are seeing.
We anticipate the growth will continue in 2021 as customers dramatically expand their program with us. We remain committed to maintaining the quality of our products by using the construction we have always used instead of despec-ing product with inferior components. Our deliveries have held, and our team is delivering product quickly because of our ability to receive the materials we need from our partners.
Mark Jones, president and CEO, HSM
One of the most immediate opportunities in the home furnishings segment is supporting our manufacturing customers as they ride the “nesting phenomenon.” Likely to persist well into the new year, consumers want to upgrade their homes with new furniture, mattresses and home accessories. As a key supplier of components for these products, our 2021 strategy is built upon solidifying our position as a trusted and reliable domestic supplier for the home furnishings industry.
From a process perspective, as orders climb well above everyone’s expectations — the most we’ve seen in more than a decade — we will be making further investments in automation equipment across our enterprise to drive manufacturing efficiencies to benefit our customers.
In terms of our products, we are seeing increased consumer preferences for products and brands that promote wellness and are sustainable. As such, we will continue our R&D emphasis on products such as our Flexecore sustainably designed mattress component system, which is designed to eliminate the glue that is typically used to bond coil springs and mattress layers together.
Of course, none of the changes in our processes or products can come to fruition without the support of our people. We will continue to leverage the resiliency and resolve demonstrated by our team in 2020 to continually reimagine how we operate our business in 2021 and beyond.
Lee Boone, president, Home Meridian International
Given the extreme challenges our industry is experiencing in global logistics today, we have shifted much of our attention to product availability and shipping. The vast majority of our retailers are focused on our ability to deliver existing orders on existing products. While this may not represent “new” opportunity, delivering products to our customers has never been more important or more difficult.
Regarding new opportunity, we are launching our new Scott Brothers licensed product lines in the spring of this year, and we are already seeing strong levels of anticipation and demand for the brand. Beyond that, improving our service levels across all of our business units, product categories and channels of distribution is of vital importance this year.
Jeremy Hoff, president, Hooker Legacy Brands
In 2021, we will continue our focus on reducing product development lead times. Last year, we made tremendous strides in this area, and we’ll continue that effort this year. Creating more speed in product development keeps our assortment more on-trend and provides incremental growth opportunities with our partners.
Additionally, reducing our lead times from order to shipping on existing products will be a major emphasis for us in 2021. Focusing on continuous improvements in our supply chain and logistics will allow us to better align ourselves with the increasing demands of today’s consumer.
Lastly, we will also concentrate on rationalizing our portfolio of products to ensure that our overall capacity supports our efforts to be in stock and ship quickly.
Hooker Casegoods, Hooker Upholstery, Bradington Young, and Sam Moore will be ready in March for High Point Premarket in April and the rescheduled spring market in June. This will allow us to expedite all our marketing efforts to present our customers our new product assortment in person or virtually.
Jill John, chief customer officer, Interior Define
Interior Define saw an increase in demand during the holidays, and really post COVID-19 hitting in the early spring. The company is taking the following actions to meet the increase in demand: Expanding our manufacturing facilities to meet increased demand; leveraging our shipping providers to offer expedited options when available; and growing our customer service team to better assist with a high volume of requests.
Terry McNew, CEO, Klaussner Home Furnishings
My main goal is to continue to evaluate the business in terms of processes, both in supply chain and internally. We have a number of changes underway that we’ll continue in 2021, and they’ve only been accelerated by COVID-19, which has impacted the supply chain all over the world the same way it impacted us with things like absenteeism and quarantines. We’ve been working on ways to eliminate waste, and we’ve been able to increase our through-put by nearly 70% per employee in the past 10 months, but we’ll still be working on that.
First, we’re reducing transportation waste within the production process. When you cut wood in one location, ship it to another to turn it into frames, and walk those frames 50 yards to another place for assembly, that’s not a lean process. We’ve reorganized to put all the processes beside each other. We’re about 80% of the way there. Since we have 2.5 million square feet of production space in five main campuses with multiple plants on each campus, it takes a while to fully implement.
We’re also on a march to rationalize our product line, and we’ve already begun reducing the number of non-productive SKUs. We’ve discontinued slow-moving pieces; people forget how to build them if it’s only a few times a year, and you end up with excess supply of materials due to minimum order quantities. That’s increased our through-put, and our SKU count is down 30%, but we still have a long way to go.
A big key in the year ahead is President-elect Biden’s tax policies: Mr. Biden tends toward higher taxes, and that reduces economic activity. … If one party controls Congress and the administration, higher taxes are more likely. To me, that’s the last piece of the puzzle for forecasting 2021.
Kurt Darrow, chairman, president and CEO, La-Z-Boy
Obviously technology is going to play a larger role going forward in putting control of the purchase process and buying experience in our consumers’ hands. Today our customers not only shop and do research online, but can schedule and track their own delivery from our distribution centers.
Another technology area is personalization. In the past, we’d run ads and always the same message to every customer, but now we are able to get targeted messages to targeted customers utilizing all the data we have on what they’ve bought and what they’re looking for. That will become the norm rather than the exception.
Everybody with a large retail footprint is trying to catch up with e-commerce or omnichannel, and the e-commerce businesses are trying to establish a retail footprint. Our core customer wants white-glove delivery and won’t accept drop shipping to the door. Technology is the key again, and we’re doing a lot of work on the technology and communication side.
From the distribution center, we are working toward a system where we’ll send a picture of the delivery team to the consumer in advance. And our system allows the customer to schedule their own delivery times and, once it leaves the distribution center, track the timing to her home so she isn’t waiting for a call. The more information you put in the customers’ hands, the more control you give them, and that’s where we’re making significant progress.
A second issue is supply chain, and given the increases in volume, everyone’s supply chain is stressed, and everyone’s re-thinking it. With the industry’s experience with tariffs and the pandemic, a number of questions are being asked: How many different partners do you need, how do you strategically spread your country risk? How can you remain agile and have flexibility when volume goes up or down?
A major retailer told me recently they used to shop only for “value” — the best price you can get — but they got over-weighted with one or two countries. He mentioned he does not want to make a single bet on a single geography, and he is thinking about what that looks like in the future so we’re not beholden to the winds of change in one part of the world.
A third consideration is our employees. What do they need coming out of the pandemic to continue to feel safe in our plants and in our stores, and what can we do to help them enhance their performance with things like technology, processes and workflow in both our factories and stores.
I think the pandemic “hangover” is going to last a while, and the expectations for your customers, your supply chain and your employees are going to be a little different.
Michael Campbell, CEO, Leather Italia
First is a continued focus on our forecasting and making sure the flow or our product and our production schedules are consistent and true to demand. It is critical that our company look at product needs and make sure we are supporting those needs for the retailers.
To that end, we’ll increase pre-purchases of raw material, in particular leather, which has become very polarized with this growth and demand we experienced in 2020. In order to be consistent and perform at an extremely high level, keeping more material on hand is a very clear need, and it’s become a very high-action item we’ll be concentrating on.
Also, at our main motion facility in China, Shae Motion, we’ve added four more production lines to support more growth in 2021 and to ensure consistency of flow with respect to our current and future product obligations.
Phil Haney, president and CEO, Lexington Home Brands
For Lexington Home Brands it is not so much a change, but rather a continuation of our commitment to service our business with our retail dealers and designers. When the pandemic hit, we did not cancel any purchase orders with our suppliers, we did not delay any shipments or slow down any production in process. During the “shut-down,” we continued to receive inbound product at our service centers and as retail business rebounded strongly for our retail partners, we had inventory to service their needs.
As business continued strong through the balance of the year, we have continued to place large orders for product and remain committed to providing excellent service for our dealers and the design community. However, we are not immune to the various logistic issues challenging our industry; container and ocean freight availability; and fabric, foam and metal delays.
The biggest change is just the amount of inventory on hand to support the business.
Jack Krause, president and COO, Lovesac
The biggest changes we will make are in how we define our go to market strategy and how we guide our customer through the purchase journey. We have learned a great deal this year about customer needs and how they cross between the digital and physical world almost seamlessly, from showrooms to the live chat experience, or making online appointments, etc. We have a strong test-and-learn agenda to help us continue to design our organization, and our customer experience around this new reality with an aim to create the most efficient and enjoyable customer journey.
Billy Curtright, national sales manager, Magniflex
Our 2021 strategy is focused on helping our brick-and-mortar dealers sell our products online. By combining our social media marketing campaign and our drop-shipping capabilities, we want our dealers to be able to compete in the new marketplace.
And we will give them all of web tools required to do that ranging from dynamic video and engaging copy for their websites to generating consumer leads in their trading area. We will do whatever it takes to help them combine their in-store experience with the latest in online marketing to close the sale.
Stephen Chen, president, MLily USA
We will be adopting a two-pronged strategy in 2021 to take advantage of the opportunities we anticipate. First, as our business continues to grow at a brisk pace, we are expanding our domestic manufacturing footprint with two additional plants in the United States. That will bring us to a total of four to handle all our production needs domestically.
Second, we will continue to expand our product line, with a special emphasis on innovative and unique products that truly differentiate us in the market. Prime examples of this strategy include the upcoming launch of our JAMA collection — our first entry into the juvenile bedding segment — which will include two mattresses and a pillow. We see opportunities for significant growth in the juvenile sleep products category, and JAMA will fill a niche by offering retailers bright, fun mattresses from an already trusted vendor partner.
In addition, we’ll be expanding our innovative fan-cooled PowerCool sleep system with a new model designed with a higher-density foam to deliver a firmer comfort feel. With this addition, the PowerCool line will be available in plush and firm, providing consumers a choice of comfort options on one of our best-selling designs that features industry-leading technology.
Scott Hill, president of sales, New Classic Furniture
Our owner and I are really bullish on 2021. There are so many good signs: the housing market, interest rates, the stimulus package that just passed, a vaccine. We all want to put 2020 behind us, but we need to keep in mind what we learned and how to take advantage moving forward.
The biggest thing we’re focusing on is that it’s all about speed to market. What a year the industry could have had if we’d been able to get more product to market faster.
We’re increasing our footprint in domestic warehousing by double digits so we can have more product waiting for our customers. We’re also increasing our overseas warehousing to allow customers ordering containers to get the goods faster.
We’re adding more personnel and investing in our online platform, which skyrocketed in 2020. We see that growing again substantially in 2021, at least by double digits.
Finally, we’re taking the guesswork out of product development. We won’t be waiting on markets anymore and are making product decisions every month. We’re getting input from key customers across the U.S. before it’s exhibited as well as our own gut feeling. If we can make those fast product decisions with key retailers, we’ll be able to increase turns at least one time per year, which will be huge for our growth.
Jonathan Johnson, CEO, Overstock
Overstock will continue to leverage new and improving technology to help our target customers find the products they love and deliver those products to them quickly. We are focused on the online retail blocking and tackling to continue our sustainable, profitable market share growth.
Alex Shuford III, CEO, RHF Companies
The spike in demand that we and the industry have enjoyed over the last two quarters is likely to continue through the early part of 2021, and so capacity expansion is top of mind. However, we don’t “trust” the durability of this demand surge, as we believe it is, as least in part, being fueled by short-term shifts in consumer spending that will subside once travel and entertainment industries recover in the second half of 2021.
With that in mind, our capacity expansion plans have to be flexible enough to move up and down with volatilty in the coming year. We certainly need people and are hiring, but we are also looking at capital spending (equipment) projects and efficiency programs to help get more out of the workforce we already have.
We do however believe that part of the demand equation has changed more structurally. We believe the pandemic has jump-started household creation among the Millennials and helped to shift their focus from urban living based on “convenient access to personal entertainment” to suburban living and starting or enhancing their family structures. This coupled with low interest rates and “work from home” flexibility has the potential to increase the total amount of residential square footage that needs to be furnished over the next five years.
These new customers shop differently and have unique service expectations. Speed, convenience and trust are critical. Smaller boutique retail experiences that are authentic should thrive.
Brad Cates, CEO, Sarreid
Our plan and associated strategy for 2021 started in April 2020. … Along with the major improvements we made to our website and printed catalog, we ramped up our social media presence and built a 3,000-square-foot, state-of-the-art studio for photo, video and Zoom calls, enabling us to entirely rethink our reliance on the traditional, market-driven product introduction cycle.
While we have always been focused on a continuous offering of fresh product, we pushed product development into an entirely new gear, working with an individual I consider to be one of the best case goods designers in the business. Concurrently, we doubled, then doubled again, our purchase orders for in-line product and best sellers and kept the containers flowing, putting us in an enviable in-stock position at a time when we all know available inventory is the name of the game. The result is that Sarreid is now faster to market than at any time in our 54-year-history. …
While the pandemic was certainly a catalyst for these moves, the success we have enjoyed means we don’t ever foresee returning to the way we used to approach the business. As we move into the new year, we continue to be in heavy product development and to dramatically increase our ordering in order to have the right product at the right time for our customers.
Meganne Wecker, president, Skyline Furniture
We expect to see online sales continue to grow into 2021. Given that we specialize in e-commerce, we plan to take full advantage of this opportunity.
We will be keeping our manufacturing process nimble and investing heavily in our 3D capabilities. We firmly believe these components will be key to a successful sales strategy into the new year.
Nick Bates, president, Spring Air
We are not making big changes in 2021. Instead, we plan stay the course in helping fill the orders of our retailers. This is not the year to change our business model.
We have taken on took on a lot of new business, and our focus on expanding our manufacturing capabilities to remain current with our delivery. During 2020, we were successful in securing new business, and our sole focus will be in beefing up our production to hit maximum output.
Gerry Borreggine, president and CEO, Therapedic
The biggest thing to come out of the COVID-19 pandemic has been the increase in online shopping: the consumers’ ability to interface online to meet their purchasing needs, creating a significant amount of Internet purchasing power. Consumers have become much more savvy and adept at buying online.
As a result, we have been retooling our websites. We’ve made them more accessible for sight and hearing impaired and overall easier to navigate. Therapedic.com is undergoing an entire retrofit to make it more accessible and optimized to be more mobile friendly. All of the enhancements will be completed within the first quarter.
Wyatt Bassett, CEO, Vaughan-Bassett
Our biggest change in 2021 will be to focus on the return of retailers looking for new, fresh and different looks and new product, particularly goods that can reach retail floors before the middle of the year. It will have been more than a year and a half (October 2019) since most retailers have focused on shopping for new product vs. trying to source what was available.
We have been fortunate in the past nine months that we manufacture domestically and have a supply chain that is very local. We have maintained very good delivery (exceptional delivery relative to the overall market) and currently ship more than 80% of our line, including all best sellers, within two weeks. That will only improve on our current line in the next 60 days; and we will carry stock from day one on all new introductions.
I believe given the current strength in home furnishings, we can stock and deliver fresh, new step-up looks at attractive, saleable price points and continue to service them throughout the year on, or close to, an on-demand, in stock basis.
Matt Davis, COO, Walker Edison
As we look forward into 2021, one of our priorities will be to continue focusing on improving the overall end consumer experience. We are making large investments into our supply chain network that will improve shipping speeds and get Walker Edison products into the hands of consumers faster than ever.
Not only will customers receive their items quicker, but these investments will also lower damage rates and create business efficiencies that will ultimately lead to a happier end consumer.
Steve Oblak, chief merchandising officer, Wayfair
We know our customers have had a hard year, and if anything, have an even deeper connection to their home and community. They are going to be much more inclined to shop online to renovate, decorate and create their own unique home space than before.
The acceleration to online isn’t necessarily changing our plan as much as we’re fast adjusting to heightened expectations around quality of merchandising, financial and in-home services, inventory availability, speed to customer and of course price to value in this economic environment. So, the biggest change here for us is we’re moving even faster on our ambitious plan to deliver the best home experience for our customer anytime, anywhere.
Another big change is for our supplier partners. One of our top priorities is to be the best home platform for our suppliers. We want our supplier interface, Partner Home, to be as good as the consumer experience we have for our customers. Our suppliers should expect significant upgrades this year on the ease and quality of the tools and analytics we provide them to optimize their business with us.
Luis Ruesga, CEO, Zuo Modern
Every year there is a new challenge, and this year we think it will be in the logistics and manufacturing side. Thankfully, we have a great team overseas and our leader in production, Steve Poon, has many years of experience to minimize the overpaying on freight, delays on manufacture and QA, thus giving us a strong advantage to keep supplying products to our partners with an aggressive price and a prompt delivery.
Our focus for the first two quarters of the year will continue to be on the residential side with drop-ship as a priority as we see end consumers continuing to shop from home. We also see a possible fast recovery on the hospitality and event side by the end of the third and fourth quarters, with demand for hospitality items because of the reopening of new restaurants, bars and hotels.