Top Challenges and Solutions for Furniture Manufacturers
Furniture manufacturers in California and abroad need to be aware of emerging trends that are shaping a new furniture industry landscape in order to take advantage of these changes. Fundamental shifts in U.S. consumers’ buying preferences due to changing lifestyles can pose new challenges for furniture manufacturers, but can also open doors to new opportunities for those willing to adapt. By understanding these changing industry trends, furniture manufacturers can capitalize on behavioral changes to pose their business for success. To get more news about wholesale furniture, you can visit beour.com official website.
The global furniture manufacturing industry has revenue of nearly $400 billion annually as per the World Furniture Confederation. In particular, US furniture manufacturing involves over 20,000 firms, with annual profits reaching around $60 billion. Top furniture manufacturing companies in America include La-Z-Boy, Sealy and Herman Miller, Heritage Home, Steelcase, and HNI.
The furniture manufacturing industry involves a wide array of furniture for personal, household, and public use in hospitals, theaters, cafeterias, schools, and other facilities. Furniture is typically made on a stock or custom basis and may be sold assembled or unassembled.Currently, over 44 million people, or 35.9% of U.S. households, rent their homes. Rising home prices, apprehension in the wake of the housing bubble bursting, rising student debts, and the delay of millennials in getting married and starting their own families, are some of the reasons owning a home is not a priority for some Americans. Additionally, the US rent-to-own industry - worth about $8.5 billion annually - is increasingly growing among consumers.
The bulk of the furniture market is composed of millennials, generation X, baby boomers, and seniors. With lower disposable income and higher levels of debt, millennials tend to delay the decision to start a household — which poses a potential problem for targeting that demographic because furniture and bedding account for just 4.5% of millennials’ total spending, compared to 7.3% for Gen X and 10% for baby boomers.
The Gen X group, which tends to be more affluent and represents 30% of the market, has different tastes or needs when it comes to furniture and buying preferences. The baby boomers and seniors are the settled consumers who represented 29% and 4% of the market, respectively.
Heightened unemployment and decreasing consumer spending as a result of the COVID-19 pandemic have curbed discretionary purchases, such as new furniture, and have negatively affected demand. In addition, income constraints are expected to amplify price-based competition between domestic operators and foreign import substitutes, contributing to industry consolidation. The revenue decline in 2020 resulting from the coronavirus pandemic and its ensuing economic fallout certainly contributed to heightened revenue volatility.
The good news is that the expected revenue is on the rebound in 2021 due to increased consumer spending with returned employment and boosted demand for industry operators. Furniture and home furnishings consumption growth through the first five months of 2021 increased 31% from the same period the previous year and was well above pre-pandemic growth rates of 5%.Online retailing will continue to be a preferred buying channel for millennials - nearly half (47%) buy furniture online compared to 40% of Gen X and 37% of baby boomers. By utilizing the internet and social media, millennials tend to be skilled comparison shoppers and will spend a couple of weeks researching products before making a purchase. This means furniture manufacturers will need to tailor their products to these online platforms and include details - and options - for their younger prospective customers. Regardless, incorporating more specifics and choices online benefits all demographics.