Retailers are reportedly filling their warehouses to the rafters now that furniture shipments have improved.
Time to resume a promotional stance?
By Alan Wolf, YSN
Talk about whiplash!
After two years of scrounging for inventory and contending with irate customers on backorder, the home furnishings industry appears to be entering an oversupply situation.
Indeed, efforts to overcome pandemic-induced supply chain challenges and expand production amid rapacious consumer demand are largely proving effective. Unfortunately, the pipeline improvements are coming just as the furniture frenzy is cooling.
As AVB’s Home Furnishings GM Michael Posa noted following his recent visit to the High Point spring market, “Nearly every vendor we spoke with, as well as the retailers we met there, have seen a slight dip in sales. Most are expecting this pattern to hold through the summer.”
Industry news site Home News Now (HNN) concurs. According to a new report, retail warehouses began filling up after the floodgates opened and inflationary pressures put a damper on discretionary spending. The result said HNN: slowdowns, postponements, or cancellations of new orders.
“This has probably been one of the most recognized slowdowns in the past two to three years,” Coaster EVP Don Deeds told the news site. “You can’t compare it to anything.”
The good news, said Posa, is that backorders are down from their pandemic highs; lead times are shortening, especially for domestic- and Mexican-sourced vendors; many manufacturers have begun taking on new accounts; and wholesale pricing is actually falling in some instances.
That said, certain categories, particularly dining and bedroom, are still feeling the pinch of inventory tightness, while custom upholstery is still running 25 to 30 weeks out, Posa reported.
So, what’s a dealer to do in the meantime while awaiting a return to inventory equilibrium and stepped-up consumer demand? For BrandSource members, “We highly recommend you revisit your marketing strategy and speak with your AVB Marketing reps about your share of voice and other important metrics in your trade area,” said Posa, who leads AVB’s Furniture Technology Source (FTS) contingent. “Some have even suggested that it’s time to reevaluate your marketing budgets and adjust back to pre-pandemic norms to keep the market share we took from the big-box and online-only players during the pandemic.”
And while in-stock messaging remains important, “It may also be time to resume tent sales and assume a more promotional tone as inventory availability improves,” Posa added.
“Again, reach out to your AVB Marketing specialists for ideas,” he advised.
BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, mattress, furniture, and CE dealers.