The Top 3 Home Furnishings Challenges in 2022

But a new STORIS study also points to a plethora of opportunities for all home goods dealers

By Alan Wolf, YSN

While many retailers are still catching their breath from 2021, BrandSource software partner STORIS is helping dealers getting a handle on the new year with its 2022 Home Furnishings Retail Trend Guide.

The report, based on a survey of STORIS’s retail customers, outlines the three top challenges furniture merchants foresee this year, and provides a look ahead at some of the leading tech trends that can help dealers navigate the 2022 terrain.

Not surprisingly, the chief challenge, cited by fully 50 percent of respondents, is ongoing supply chain constraints. Indeed, 58 percent of those surveyed reported lead times as of December 2021 that were more than four months behind.  Retailers are addressing the issue by diversifying their sourcing, with 40 percent turning to Vietnam, 28 percent still primarily sourcing from China, and 21 percent getting most of their goods from the good ’ol U.S.A. And while Mexico is not currently a primary source, STORIS believes it will be in the not-too-distant future.

The second greatest challenge facing home furnishings retailers, as well as all business sectors, is inflation. Rising labor costs, higher freight and gas expenses, and the supply-and-demand imbalance have all contributed to the current inflation rates, and 85 percent of retailers surveyed said they will respond by raising prices this year. The good news is that customers won’t likely be shocked by the higher stickers, although some respondents believe that price increases may reach the limit of what consumers are willing to pay in 2022. STORIS’s suggestion: Use buying tools than can help identify price points that customers are responding to in the market. “If customers are gravitating towards a certain price point,” the company advises, “work backward to determine your target cost of goods and a feasible mark up to balance the needs of your business and consumers.”

The third most anticipated challenge of 2022, cited by 19 percent of respondents, is attracting, hiring, and retaining talent in an employee-led market. STORIS acknowledges the competition for labor, as work-from-home opportunities and higher starting wages at Amazon and other businesses makes it more difficult to fill retail and warehouse positions. But retailers can up their hiring game, STORIS suggests, by providing greater shift flexibility, opportunities to conduct some responsibilities remotely, and career paths within your company that can support the retention of talent.

The flip side of challenges is opportunities, and furniture retailers can look forward to plenty this year. The report cites a Home Furnishings Business forecast that pegs furniture industry sales growth at nearly 6 percent in 2022 — that’s on top of last year’s 19 percent gains— for a total of $160 billion in furniture and bedding business. Fueling that demand will be a continued emphasis on the home amid a persisting pandemic, and the $2.3 trillion more in savings that Americans have socked away since the outbreak of coronavirus. STORIS’s retail respondents confirmed the positive market trends by pointing to larger pools of buyers, expansion into new markets, higher average tickets, stronger conversion rates, and the return of customers to in-store shopping, which was cited by 26 percent of those surveyed as their greatest 2022 opportunity.

The complete Trend Guide report, including ten top home furnishings tech trends for retailers, is available here.