2015 ABTV report: Industry positioned for growth

2015 ABTV report: Industry positioned for growth

Bill McLoughlin — Furniture Today, October 7, 2015

GREENSBORO, N.C. — The furniture industry is well positioned for growth but is facing significant change and challenges, including the increasing importance of technology, evolving consumer lifestyles and, for those companies seeking to produce domestically, a shortage of next-generation workers.

That is according to the 2015 ABTV Furniture Industry Watch Report, produced by Anderson Bauman Tourtellot Vos. “We expect the disruptive power of technology to fundamentally re-order the retail experience of buying home furnishings,” the report stated.

And while contending that brick-and-mortar retail will not go away, the ABTV report suggested that stores will need to deliver more to remain competitive.

It also noted that in an environment increasingly shaped by the Internet’s ability to attract new consumers and break down barriers, it is also serving to reward those with the deepest pockets and the most efficient distribution models.

The study, for example, noted that changes in consumer shopping habits are “forcing retailers to pay close attention to the flexible costs (labor and marketing) and fixed costs (real estate) of their stores.” It went on to note that the ability to collect, analyze and respond effectively to data about consumer buying habits will be key factor differentiating successful from unsuccessful retailers in the coming years.

Much of the advantage in the coming years will go to companies with the benefit of scale. The report noted that the 100 largest furniture, bedding and home furnishings retailers are taking share from smaller retailers, citing Furniture/Today data that shows the larger retailers representing 79% of those sales, compared to 56% of such sales prior to the recession.

“That redirection has meant a winnowing out of the number of furniture stores, now at 23,000, down nearly 20% from before the recession,” the report stated.

On the consumer side, the report noted the growing impact of generational and lifestyle shifts, noting for example an increasing urbanization of American living.

The study noted that changes in housing patterns are challenging the furniture industry to rethink its product offerings, with a move to smaller sizes to accommodate corresponding smaller living spaces a key shift in the coming years.

The report noted that apartment construction was up 29% in June 2015 from the year-earlier period, and while many have noted the movement of Millennials to city centers, the trend is as relevant among Baby Boomers.

And it is not only furniture scale, but design that is shifting, ABTV noted, pointing to the decline of dining rooms and the emergence of kitchen counter eating. “The bar stool is the new multi-purpose chair,” according to the report.

Another lifestyle shift with furniture implications is the growing number of Americans who are working a portion of time at home. The study contended that, “more than six million Americans” work primarily from home with the result that, “the desk is now the third most popular piece of home furnishings, behind mattresses and sofas.”

The study also noted the industry’s continuing efforts to re-shore manufacturing, an effort that has been most successful in the upholstery arena where, “it’s all about control and customization.”

Overall, the ABTV study noted that the furniture industry “heads into 2016 in good shape. Not perfect shape, but good shape.”

 

 

Source:http://www.furnituretoday.com/article/524459-2015-abtv-report-industry-positioned-growth

 

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