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Consumers have gotten off the couch, shifting their spending to services like travel and entertainment. Now they're buying fewer couches.
The furniture industry is reeling, suddenly far removed from the historic pandemic-fueled boom in sales of furnishings and home improvement items. This is certainly not a good news for furntiure industry in 2023. But how much worse it is?
Driving News
The North Carolina-based furniture company Mitchell Gold + Bob Williams, an estimated $197 million company with 69 stores, is shutting down.
Klaussner Furniture Industries — which had about $300 million in annual sales, according to TD Cowen — shut down in August.
The Big Picture
Several major furniture brands are experiencing a sales crunch:
Wayfair's revenue was down 3.4%.
West Elm's comparable revenue was down 20.8%.
ottery Barn's comparable revenue was down 10.6% in the 2nd quarter, compared to year earlier.
Luxury furniture brand RH reported a 19% drop in 2nd-quarter revenue.
Hooker Furnishings, a Virginia-based furniture manufacturer's 2nd quarter revenue plummeted to 36%.
West Elm saw a revenue decline in 20% in Aug while Pottery Barn saw a decline of 10%.
You get the picture right? Furniture companies with big ticket furniture sales is not working its magic in 2023 like it did in 2021 or 2022. People are spending comparatively less, partially due to inflation and imbalance in housing market in US.
Coincidence or Good Strategy?
While furniture companies are sufferring worldwide it is also true that most companies predict to normalize the sales faster. The companies which are bullish on faster market recovery, often contain the following trait:
-- Companies are mostly digital focused, than the retail outlets.
-- Companies are using 3D technologies (like WebAR and Configurators).
The recent trends shows the furniture companies which are equipped with better customer experience and strategy are quite optimistic to recover fast:
-- IKEA is expecting to close 2023 with a record breaking 5% increase in revneue.
-- Crate and Barrel is optimistic to turn the market soon in their favor.
-- UK company DFS is looking for profitable pre-tax revenue in coming months.
-- Shares of Steelcase jumped on Sept 20 for more than 25% in afternoon trading.
There are many other companies across geographies who are thriving in the moment of crisis. Coincidentally most of them have 3D ecommerce integrated already. Does it really help to survive? Perhaps yes, perhaps not. But certainly the companies who have not adopted 3D, are showing a staggering struggle for survival.
It is expected that the situation will turn over soon in the favor of the market. To remain in the forefront of the competition, 3D ecommerce will remain a strong strategy for most furniture companies across the globe.
