Is the furniture industry ready for take-off in 2018?
All the fundamentals that presage sales growth for the furniture industry are in place.
Housing activity positive? Check.
Consumer confidence strong? Check.
Unemployment low? Double check.
Demographics of household formation rising? Check.
With all that in mind 2018 should be a great year right?
Not so fast. All those things were essentially true in 2017, and yet, depending on who you ask, the words you’re likely to hear about this year are “disappointing,” “struggle,” “flat.” According to Furniture Today estimates, which tend to be somewhat conservative, the industry will end 2017 up a little more than 3%. In a tough economy, that would be considered a victory. Except there is nothing to suggest this is a tough economy; in fact just the opposite. And yet sales of big ticket goods, not just furniture, continue to be challenged.
There are factors that could positively impact sales activity, mostly in sections of the country impacted by various natural disasters, which are serving to bring consumers back into the market. However, for the remainder of the country, questions still remain about what it will take to get consumers to part with their discretionary dollars.
And the answer for 2018 is likely to be essentially the same as in 2017 — hard work, an ever-increasing share of voice and a relentless commitment to delivering functionally and aesthetically unique product. Couple this with an in-store experience worthy of turning off the computer, getting in the car and driving to the store, and you’re starting to understand all that goes in to being successful in today’s more competitive retail environment.
And that doesn’t even include the digital portion of the experience, which had better align seamlessly with that of the store.
If all this sounds impossible, take heart — it’s not. In fact there are retailers that are delivering on most and, in many cases, all of this, and guess what? They’re outperforming the industry.
Take RH whose membership model and design galleries offering food and drink for sale propelled the retailer to 7% same-store gains in the most recently reported quarter.
After a challenging 2016 putting the pieces in place to disrupt its own model, RH has rebounded strongly and appears well positioned to deliver above average growth in 2018. And it is not alone. There are many, albeit lower-profile, retailers that are finding their own paths to success.
The difference is they are no longer relying on the traditional business drivers or even their own traditional methods to grow their business. They are breaking out of their comfort zones, trying new things, testing, failing and trying again.
There is no question that 2018 has all the elements to be a great year for the furniture industry. And it will be, for those who make it so.