How Does The Economy Affect the Furniture Industry?
Does the economy affect the furniture industry?
“The economy absolutely affects the industry, as furniture is a discretionary item” says Leslie Carothers of The Kaleidoscope Partnership, a social media and marketing company focusing on the furniture industry. “When the economy is good people are definitely more willing to invest in furniture as well as better quality furniture as they have more money for such investments.” In addition she believes that, “whether or not a local economy is strong, furniture companies, whether retailers or manufacturers, who are executing in the following ways are thriving in today’s economy.”
The companies that are more environmentally aware are thriving in the new economy.
Carothers explained that “The consumers are much more environmentally aware and more educated, thanks to the internet, about hoe their purchases impact the environment. Parents, especially, understand the importance of not having their purchases end up in a landfill. Companies that make or sell authentically and environmentally responsible products are thriving – whether or not the local economy is strong.”
Furniture companies working with Flash-Sale sites to offer something otherwise unattainable are thriving.
Companies working with flash-sale sites, like Joss and Main, One King’s Lane, Gilt, and offering items that are unattainable elsewhere are thriving because consumers want both quality and the most they can get for their discretionary dollar. Consumers want both quality and the most they can get for their dollar. Many shoppers may not be able to afford a new, high quality piece are now looking to purchase items from flash sales sites.
Retailers that are partnering with the vintage sites like First Dibs and Vintage and Modern are also doing very well. This as another profitable distribution channel for retailers that also have a brick and mortar stores. The stores that sell the vintage items are doing very well.
Furniture companies that realize today’s consumers are savvier and more educated than ever before are thriving.
Today’s customers are looking for items that fit their lifestyles, their personal styles and tastes, and those pieces of quality. All these factors play into their final decisions, and all within a certain capped budget. Carothers believes that “The blogosphere has a huge impact, and is doing a great job educating the general consumer.”
More importantly Carothers talks about the younger consumers (25-35 years) knowledge of sustainability. “These consumers have been educated since babyhood and that doesn’t mean green to them. It means quality to them. Because they are environmentally conscientious “they are open to alternative methods of purchasing furniture where they can get the good quality pieces that they love at prices they can actually afford today. There’s an awareness in their minds that we didn’t have.”
Furniture companies that realize that consumers are doing most of their research online and making their information transparent are thriving.
Today’s consumers are researching before making their purchases. They are buying things that they love, but they are going online to research quality and price and things that matter to them – whether fabrics are sustainable, or made here in the USA. Carothers believes that the younger consumers are now expecting the vendors that they know and love to understand and provide those kinds of items.
The economy’s influence on this, she explains, “Is that it’s forcing the consumers to look at all the facts and weigh their options. The internet, as we all know, has made that easier than ever. The US economy has forced today’s consumers to look much more carefully and make their choices much more carefully. They want the best they can get when they need it.”
Furniture companies that are willing to mix the old with the new are thriving.
Social media and the internet are great influencers. “The blogoshphere, has made it hip and cool to own vintage pieces, to repurpose and up-cycle.” The newer items may not be as good quality as the vintage piece in the second hand store. Because of the bloggers, there’s no more stigma attached to owning a vintage piece of furniture. This really focuses on the younger buyer.
Furniture companies that are making or selling products geared toward the needs for universal design are thriving.
The older buyer, 50 and above, has a different focus and different needs. “The older consumer is looking ahead to retirement, downsizing to a smaller home and also inheriting inheritance. They purchase with the intent of need, as opposed to that of desire. They look at what they really want to live with for the rest of their lives.” Furthermore she adds, “I do think that people 50 and up are buying, but they’re buying much more judiciously.” Carothers explains, “but there are pockets of the country where the economy is strong and this does not necessarily apply there.
Furniture companies that are making quality products are thriving.
“Regardless of the economy, people are looking to buy better quality and they are educating themselves before making their decisions. The impulse purchase pricing is not as strong as it used to be because people are taking time to really think about the need for their purchases. More and more are now consulting with friends and family more for help with their decisions. “People are looking for a little bit of approval so they don’t make the wrong decision – They’re looking for reinforcement.” Carothers believes that, in the end, the economy is changing us, making us more aware, making us much savvier.
Furniture companies offering lower priced “on trend” accessories for the home are thriving.
Just as in fashion, the things that are trendy don’t have staying power. Accessories are the best way to follow and enjoy these trends. “Accessories are lipstick for the home,” Carothers explains. “That’s what people are doing. They’re buying their lipstick for the home in the form of pillows and all the other little pretties.” These smaller items are often seen as things that can potentially be given away as well, perhaps to children when they go to college or go out on their own. These are items that can be recovered easily or repurposed. There’s a conscientious effort being made to ensure that these items won’t end up in landfills, as the consumer thinks about the environment as well as the economy. Accessories are a great way to add color and personality. Accessories are a great way to follow trends even in a weak economy.
Furniture companies actively involved with new global markets are thriving.
“When you look at the global economy in respect to furniture, you have to look at the bigger picture and the manufacturer has to ask itself how big or small it hopes to be,” Carothers explains. “Would it prefer to be a small company with as few as 5 employees or would it prefer to be a global company with a world-wide presence. The manufacturers have to make those decisions as to where they want to be distributed and the economy impacts those decisions because if they are big they have to go where the money is. They have to in order to survive and stay in business.”
She explains, “If you look at all the points of distribution that are available to you as a retailer or manufacturer and you figure out how to best use those sites to your advantage, whether a blogger or some other resource – you suddenly have a lot of options you didn’t have before because you were too dependent on a local economy. If you’re a legacy manufacturer, now is a good time to rethink your business and marketing strategies. This allows the legacy manufacturer not only to maintain relations with its current clientele but to take advantage of opportunities to develop new relationships as well.”
How trade shows help
Shows like High Point, explain Carothers, help bring the consumer, the marketer and the furniture companies together.Carothers believed that “High Point has worked well w the new economy and has done everything they can to support the new visitors in their show. Cheminne Taylor Smith, Vice President of Marketing for High Point Market Authority, and High point has revitalized High Point, and how she has done it is nothing short of truly spectacular. She has helped everyone there see what the [new] possibilities are. She used her position to reposition her market to reach visitors and new customers and made it designer friendly. She reinvented High Point and it is the biggest in the world.” By combining creative new ways of marketing and bringing consumers and vendors together, High Point is a perfect example of how thinking outside the box can help companies in furniture markets, and any other market for that matter, survive and succeed even during a down economy.
Carothers concludes by explaining that “The brick and mortar retailers that are thriving in this economy are those that are doing these things: They are interacting with their customers in social media channels, and via mobile apps. They understand and are making their stores desinations for out of the ordinary events because they understand that people need a place to connect and network off-line. These retailers are allowing their stores to be used as spaces to be used in creative ways, and in so doing they are becoming a destination place, and therefore becoming an important part of the community.”
Leslie Carothers is the founder and CEO of The Kaleidoscope Partnership and its division, Slow Down Social, delivering one on one internal training, onsite *Slow It Down Social* workshops and executive level social media strategic advice to international furniture and design brands and their executives. She is also the community manager for Olioboard and has first hand knowledge of how brands are using Oliboard ‘s free site to reach and create relationships with today’s global consumers.
She has been in the furniture and interior design business for the past 31 years, is an international speaker and has also been the writer of Furniture Today.com’s *Retail Ideas* blog for the past 9 years. On Twitter, she is @tkpleslie. For more information on her company’s services, please visit her site at Tkpartnership or contact her on Facebook.