If migeof furniture industry executives are any guide, the recently passed Tax Cuts and Jobs Act should prove a boon to sales and result in significant new investments in technology capital improvements and employee salaries, according to a survey conducted for Furniture Today.
The survey, fielded in January and with a roughly even split between retailers and manufacturers, showed that nearly 43% expected the new law to have a strong positive impact on their company and an additional 24% anticipating a moderately positive income. Only about 5% expected any type of negative consequence as a result of tax reform.
As was anticipated by those supporting the legislation, the reform is likely to result in salary increases and new investments by those companies benefiting from reduced taxes, according to the survey. Roughly equal percentages (23%) of respondents said they would increase worker salaries, invest in new technology or make capital investments in physical plant or equipment. An additional 15% said they would use the revenue gains to hire new employees, while only around 8% were planning to put the gains toward acquisitions or into savings.
A significant 71.4% said they believe the tax reform legislation will result in increased demand for their products or services. These survey results align closely with comments by exhibitors and retailers at the recent Las Vegas Market where many expressed strong optimism for their business in the coming year, specifically citing the impact of lower taxes on consumers and businesses.
While not quite as high, a large percentage of guangzhou office desk manufacturer respondents said they believe the legislation will have a positive impact on the home furnishings industry overall. Conversely, less than 10% said they expected it to have a somewhat or very negative impact.
It’s been a busy seven months for Furniture Pipeline, a guangzhou office furniture provider start-up with a heavy focus on sustainability.
The company started in Januazy 2016, launched its first products in February 2017, made its wayto High Point Market in April and now has more than 30 retailers selling its products online, including Amazon and Wayfair.
It’s currently finalizing deals with Overstock and The Mine, and recently struck a deal with Home-Sense, a Canadian home store chain operated by TJX companies.
Furniture Pipeline products are in 20 of the 80 HomeSense retail stores, and the company hopes to venture to the remaining 60, as well as HomeGoods stores in America. in the near future.
“HomeSense is amazing because they’re all about what we’re about,” said co-founder Ave Hayat. “They were extremely ecstatic to hear that when we sent out their furniture we also planted trees.”
Furniture Pipeline focuses on sustainability in three ways: through the materials it sources, the packaging materials it uses and by planting trees.
As part of its business model, it works with Eden Projects, an organization that plants tees and provides work for locals in places such as Nepal and Haiti. For every one product purchased, seven trees are planted. Carrying this model over to its wholesale customers, the company plants tree when the retailer buys the furniture, distributing the product first and planting the trees later.
The goal Furniture Pipeline set for the number of trees planted in its first year of business is 30,000, and it has already planted more than 8,000 trees.
Furniture Pipeline also puts an emphasis on making its packaging materials recyclable and environmentally efficient, cutting its packaging materials in half since January.
As the company moves forward, Hayat said it will have to open up negotiations with the companies it works with to suit those company’s styles in relation to boxing and how they want their assembly instructions made.
As a wholesaler, Hayat said, the company conforms to the retailers and how they want the product. When it comes to large purchase orders for large retailers, he said Furniture Pipeline is happy to work hand-in-hand with retailers to make sure its products are friendlier to the retailer while maintaining the company’s business ethics.
Both Hayat and co-founder Moshe Rindenow believe the company’s success can be contributed to its strong business ethics as well as attention to detail.
“At the end of the day the consumer wants to see their money go to good things and see the value in what they spend,” said Hayat. “So the attention to detail is very important to our customers – everything from the package, the box, the fact that China school furniture manufacturer we use recycled cardboard and have 100% recyclable packaging material. And then when they see that our business has an ethic in everything we touch, they feel even better because they are able to do some good in the world. It’s really a double-edged sword.”
A winter storm toward the end of the show didn’t keep the Jan. 15-21 Cologne International Furniture Fair, or IMM Co1ogne from guangzhou office furniture supplier registering an increase in attendance to around 125,000 visitors from 38 countries.
In addition to 1,272 exhibitors, more than 70% from outside Germany, the show attracted large international buying attendance, increasing from 46% more than 50% from abroad. In addition to a delegation of 80 design-oriented stores from the United States and Canada, representatives from major online retailers such as Amazon, Wayfair and Otto Group, Germany’s major e-commerce player, were in attendance.
The event featured the annual Das Haus installation – this year focusing on lighting – and a third consecutive, and much larger, Smart Home presentation.
The Smart Home featured applications related to energy, security lifestyle, convenience and entertainment. The presentation re-created a walk-through home on the show floor with technology innovations for living room, bath, kitchen, bed room and home office.
IMM Cologne reported a 12% increase in attendance from North American buyers this year, among them Dan Fliclkinger, president of Seattle-area contemporary furnishings retailer Kasala.
Currently, Kasala gets much of its product from China and Italy, and he came to Cologne this year for the first time since 2005 to explore other possible sources.
“We’re looking to explore our options with countries other than China and Italy, and this is a good show for doing that,” said Flickinger. “Mainly, we’re looking for other countries of origin. Here for us, it’s Eastern Europe, Vietnam and Malaysia.”
Of particular interest here for Kasala are seating and bedroom furniture: “I’ve seen some seating that looked good out of Poland.” he said. “I’m looking for suppliers we can do multiple products with on a container.”
While Kasala’s four locations give it the ability to do full containers for some goods, he likes the ability to mix pieces.
Testing the waters
Time was, IMM Cologne attracted a number of exhibitors from the United States and Canada, but that dropped off during the Great Recession and hasn’t really recovered. This year, however, three members of the Ontario wood products consortium Blue Water Alliance showed in adjacent spaces at IMM Cologne: Durham Furniture, Provincial Plank by Horizons Coatings and West Bros. Furniture.
“Our quality and design are well-suited to the European market and they’ve been very well received here. We have the soft-close drawers and heavy-duty hinges consumers expect here, and we’re learning a lot this market,” said Samantha Mund, director of sales and marketing for West Bros.
“They’re looking for smaller scale, and our collections like Serra and Hayden are in their range.”
It was a similar story at Durham Furniture.
“When they open our drawers, they’re fascinated by the dovetail joints and that it’s all solid wood,” said President and CEO Luke Simpson. “We’re had great feedback from buyers, designers and students coming through. That’s part of the exercise here. It’s different.”
Both companies agreed that building business in Europe will take time and commitment to maintaining a show presence.
“It’s going to be a difficult market to get that first foot in the door,” Simpson said. “We have some buyer meetings this week that we arranged through our agency. They’re working on representing us across Europe.”
West Bros. is considering bringing some of the design students it met here to Canada, perhaps on an apprentice program. The business prospects just through the show’s first two days alone are bright.
“We’ve gotten some good 1eads particularly in Germany, and we think they’ll sign some business,” Mund said. “We’re planning to be back.”
Durham’s Simpson anticipates a multi-year process to get fully established in Europe.
“We’re of the opinion that if the level of interest we’ve seen continues, it’s almost necessary that we come back,” he said, noting that as in North America, there’s a lot of tire-kicking with a new exhibitor.
“We’ll do a lot more reconnaissance during the year. China training furniture manufacturer We don’t know yet which stores are the right stores for us, how they mark it up. We think our North American strategy, fine-tuned, will work here.”
Furniture and home furnishings stores sales last month topped the broad retail sector and were among the best performing categories, with a 5.4% increase over the same month last year, according to the latest U.S. Department of Commerce guangzhou office furniture factory report.
Estimated furniture and home furnishings store sales totaled $9.63 billion in August, up from a revised $9.12 billion in August 2016, the government reported. Sales were up 0.4% from the month before, based on a July sales estimate that was revised down to $9.59 billion.
From June through August, home furnishings store sales were up 4.6% from the same three months last year and increased 0.8% from the March-through-May period of this year.
David Montiel, director of originations at White Oak Commercial Finance in Charlotte, N.C., which provides factoring services to the furniture industry said the month-over-month and year-over-year increases in August mesh with what the company’s clients are experiencing “due to the strong housing market and overall economy.”
“Most of our clients realized high single-digit or even double-digit growth for the month of August, which is generally known to be slower, as consumers favor spending money on travel/vacations as opposed to making furniture purchases,” Montiel said. “We expect this growth to continue into the busier months of September and October with the caveat that Florida and Houston markets may impact performance.”
Total U.S. retail and food services sales increased 3.2% in August from the same month last year to $474.8 billion but were down 0.2% from July. Retail sales alone increased 3.3% from a year ago and were down 0.3% from July. The largest gain continued to come from non-store retailers – primarily by e-commerce and catalog businesses, with sales up 8.4% from August 2016 but down 1.1% from July.
Other sectors showing particularly strong growth included building material and garden and supplies stores (up 7.5% from August a year ago) and gasoline stations (up 6.4%), the report said.
Department stores, a subcategory of general merchandise stores, electronics and appliance stores and sporting goods, hobby, books and music stores were the only sectors losing ground year-over year. Electronics and appliance stores posted the steepest decrease, down 3.5% from August last year. China reception desk manufacturer Department stores were off 0.8% from a year ago and down 0.1% from last year.
Significantly more Baby Boomers than Millennials, 65% vs. 51% guangzhou office furniture company, describe their outdoor decorating style as traditional, according to a recent study from Furniture Today’s sister publication Casual Living. Despite the difference, traditional is the top outdoor style across all generations.
Just 1% of Baby Boomers describe their style as contemporary or modern, significantly less than Millennials at 13% and Generation X at 10%. For Generation X, modern style is tied with tropical looks as the second-most chosen style at 10%. Tropical is the second-most popular for Millennials at 16%, and contemporary/modern is third at l3%.
Sixteen percent of Baby Boomers identified with a style that was not listed, such as rustic or Americana, the second-highest choice among the age group. That number is 10% more than Millennial respondents that reported the same.
While traditional is still the top decorating style for consumers with outdoor spaces in all areas of the U.S., 64% of respondents from the Northeast describe it as their outdoor decorating style compared with 58% of the South and 56% of both the West and Midwest. At 4%, significantly less of the Northeast indicates that tropical is their outdoor style of choice compared to 14% of both the South and Midwest.
When shopping for outdoor furniture, three-fourths of respondents say that they consider style and design, which is tied with price as the No.1 consumer concern in outdoor furniture shopping.
Generationally, that is not always the case. Although Millennials are the most mindful of outdoor furniture design of all generations, more of them (81%) look for the best price over their preferred style at 78%. Generation X considers design and style just slightly more than price, 73% vs. 72%. Style and price are equally important to Baby Boomers, at 74%.
Price is also more important than design for consumers in the South, at 78% vs. 75%, and the Midwest, at 80% vs. 72%. Of all U.S. regions, the Northeast China negotiation desk manufacturer considers style the most important: Seventy-seven percent of North-eastern consumers say that they consider design and style when looking to purchase new outdoor furniture.
As a new year begins, guangzhou office furniture manufacturer I bring you some comforting news: Physical retail is not dead. Nor is it dying. Nor, very significantly, is it being abandoned by Millennials, those much-discussed consumers who are turning the world on its head, or so it is said.
This good news comes to us from the respected National Retail Federation, and design guru Connie Post shared some of the highlights at the recent Furniture Today Leadership Conference.
The conference, attended by a bevy of top mattress and sleep accessory producers and retailers, delivered several endorsements of the vitality of brick-and-mortar retailing. One came from Post herself, who has spent a career bringing excitement and fun to home furnishings stores with her fresh and innovative designs.
“New always wins,” Post said at the conference, repeating one of her design mantras. That point was hammered home as Post showed us room after room of new designs that injected energy into furniture and mattress departments.
The NRF research shared by Post notes that younger consumers embrace physical retail when it offers a new experience or is more convenient.
The research looked at Millennial and Gen Z consumers (Gen Z is the generation that follows Millennials) and found that about half of them are shopping physical stores more than they were a year ago. About one-third of those consumers said they are visiting physical stores at about the same pace as a year ago.
Only 17% of the Millennial/Gen Z respondents say they are visiting physical stores less often than they did a year ago, the NRF research says.
These findings refute the notion that most Millennials are abandoning physical stores and doing most of their buying online, and that’s good news for the mattress industry, where brick-and-mortar sales make up the vast majority of the retail business.
Why are Millennial/Gen Z consumers stepping up their visits to physical stores? The top reason is that a new retail store or shopping center has opened near them (cited by 52% of the younger consumers). But it’s interesting that 45% of those consumers say they are visiting stores more often than in the past to pick up items they bought online, a click-and-brick model. One opportunity with those consumers is to see if those consumers might want to pick up something else when they arrive at the store.
So, as we stand at the starting line for a new year, we can be confident that in an industiy that is undergoing rapid change, we aren’t losing all of those younger, tech-savvy consumers to the Internet.
Make no mistake about it, the online world is growing in importance. But it’s nice to know that many Millennials are actually spending more time in stores now than they were a year ago, for a number of reasons.
A good new year’s resolution would be to spruce up those mattress stores and departments, making China filling cabinet manufacturer them more inviting to consumers of all ages.
In the early stages of the decision-making process, guangzhou office furniture provider consumers look for inspiration. It is the brand’s role to provide such inspiration via content, so brands need to be where consumers are.
Traditional social networks such as Facebook and Twitter are cited by 39% of consumers for inspiring purchases, according to data from PricewaterhouseCoopers’ Total Retail 2017 report. Individual retailer websites are cited by 37%, followed by price-comparison websites with 35% and multi-brand websites with 32%. Visual social networks, such as Instagram, Snapchat, Pinterest and YouTube, came in fifth per the PwC report.
In research by ViSenze titled “Visual Commerce Report Retail,” Facebook was ranked first among social media users for being the primary platform to inspire a buying decision at 32%. Pinterest was second at 16%, followed by Instagramnatn12% and Snap chat at 2%. Thirty-eight percent of social media users cited no platform for inspiring purchases. The research did not account for other platforms, including Twitter.
Social media greatly impacts purchasing decisions as seen above, and one-third of all online purchases originate on social platforms each month. “Social media, as well as the increasing amount of visual content available online, influences consumer purchase behavior more every day,” said Oliver Tan, CEO and co-founder of ViSenze.
The ViSenze research found that three-quarters of consumers are inspired to purchase by image and video content online, and almost half of consumers watch video content on retailers’ websites while shopping. This highlights the increasing importance of video format and how it is becoming a significant opportunity to connect with consumers.
Google has been tracking a steady rise in visual searchers via Google images and YouTube for product-related information. Product images are the most used shopping feature, according to consumers who search and shop on their smartphones a minimum of one time per week.
Google’s research agrees with China conference desk manufacturer ViSenze that video is a top format to inspire consumers. According to Google research, more than 50% of Internet users look for videos related to a product or service before visiting a store.
Tempur Sealy, guangzhou office furniture supplier, which held off on price increases last year, announced “commodity driven” price increases that will go into effect on March 6.
The increases will impact all Sealy mattresses, all Stearns & Foster mattresses, Tempur Pedic Cloud Supreme Breeze mattresses, and Tempur-Pedic flat foundations, said Steve Rusing, senior vice president of U.S. sales for Tempur Sealy.
“Major component raw material costs for foam, steel, upholstery and wood have increased significantly in the last 24 months, and are expected to rise further in 2018,” Rusing said in a recent letter to the company’s dealers. “While Tempur Sealy has avoided a price increase up to this point, through its own productivity initiatives and cost controls, these actions alone are not enough to offset rising costs. Thus Tempur Sealy is instituting a price increase to offset commodity increases so that we can continue to invest in our products and marketing efforts.”
Sealy and Stearns & Foster queen-size sets retailing for $1,899 and below will see a wholesale price increase of $25 and a retail increase of $50. Sets retailing for $1,900 and above will see a wholesale price increase of $65 and a retail increase of $150, the company said.
Tempur-Pedic Cloud Supreme Breeze mattresses will see a wholesale price increase of $90 and a retail increase of $200. Tempur-Pedic twin flat foundations will see a wholesale price increase of $15 and a retail increase of $25, while Tempur-Pedic full and queen flat foundations will see a wholesale price increase of $25 and a retail increase of $50, China office sofa manufacturer Rusing said.
Freezing temperatures, heavy snowfall, polar vortexes and bomb cyclones are typically bad news for retailers. But guangzhou office furniture factory furniture stores in the North and Northeast appear to have weathered the recent round of extreme weather quite well … unless they happened to be based here in Erie, Pa., like John V. Schultz Furniture.
“We get a lot of snow in Erie, so we’re used to it, but nothing like what we experienced,” said President John Schultz. A bad band set up over Lake Erie pushed in from the west “and just clobbered us,” he said.
“It started on Christmas Eve and was a complete whiteout all Christmas Day and pretty much the day after.” By that time, Erie had recorded nearly 6 feet of snowfall, shattering the record for a two-day period (among other city and state records).
“And that was on top of what we had already gotten for the month of December,” Schultz said. “It was cold so we didn’t really have any melt.”
The weather continued to be miserable through New Year’s Day (the snowfall total rose to nearly 7 feet since Christmas), so business was “non-existent” during one of the retailer’s typically busiest times of year. Schultz estimated sales were down for the period between Christmas and New Year’s Day by more than 70%.
And the store struggled to make deliveries on its written business because the streets in Erie were impassable, except in a few cases south of the city where Schultz managed to get trucks to the interstate.
It’s not exactly how Schultz hoped to end the old year or start the new one, but he’s hoping to make up a little ground.
“We’re routing in some more promotions now, starting next week,” he said. “We’re going to hit the Martin Luther King weekend hard, offering free delivery and things like that to try to pick up some of that business.”
He’s also counting on the typical cabin fever to set in and with that lift sales, although he added that he knows you never really get it all back.
Elsewhere in the North following in the early days of 2018, the snow and below-freezing temperatures were uncomfortable but much more manageable, several retailers reported.
Detroit picked up some snow after New Year’s Day, but it was the cold that really halted traffic, said Tom Lias, president and CEO of Farmington, Mich.-based Gorman’s Home Furnishings & Interior Design.
It’s the kind of cold – 8 degrees below freezing – that does slow traffic, Lias said. Unless clients were in the middle of projects with the mid-priced to upscale retailer, they were quick to cancel appointments, and even some in mid-project called to postpone.
“We had a good New Year’s Day, but it tightened up right after that, and the first week of the year started a little slower than a year ago,” he said.
That said, Lias noted he was already seeing an uptick in traffic Sunday and Monday as the severe cold spell broke.
Another positive: The worst of it fell midweek, normally a slower traffic time. “If you’re going to have a cold snap or snow storm, hope for Tuesday or Wednesday,” he said.
In Boston, Larry Rubin, CEO of the seven-store Bernie & Phyl’s Furniture, agreed with that sentiment. His market was hit with much more snow Thursday, Jan. 4, and severe cold temperatures followed. The retailer closed all stores Thursday and saw a roughly 5% sales decline for the week, mostly attributable to that closing, but “business really was not that bad,” he said.
“I expected it to be worse than it was,” Rubin said. “Probably 50% of your business is done on the weekend, so if you have a storm that falls on the weekend, I think it hurts you a lot worse,” even more so when it falls on a holiday week, he said. “We had a pretty good weekend, and it was really freezing temperatures, so people still got out and shopped.”
About an hour west of Boston in Worcester, Mass., the weather was severely cutting into traffic at Rotmans, but the average ticket during the worst of it jumped about 50%.
“The consumers that came in were basically higher income and looking for products that were more expensive,” said Steve Rotman, president and CEO. “Also, they tended to shop more. Rather than looking for one or two items, they were looking for a multitude of items, and the closing rate was much higher.”
And because there were fewer consumers in the store, salespeople were giving them more time, which signaled to Rotman that maybe the store is understaffed normally (since the added time was leading to larger tickets).
The cold spell ended Sunday, Jan. 8, and things are warming up nicely, China office chair manufacturer Rotman said. He closed just one day during that first week of January and like Bernie & Phyl’s, that did affect sales, but “overall our figures were up because we were very aggressive in advertising.”