Jerry Epperson is a trusted researcher and analyst for Mann, Armistead, & Epperson with more than 40 years of furniture industry experience and a great friend to the Home Furnishings Industry.
We always look forward to hosting his standing-room-only seminars in our HFA Resource Center. As you are all aware, due to the COVID-19 restrictions, we were unable to host any High Point Market seminars this fall. Still, we weren’t about to let that prevent us from having Jerry share his insights on the furniture industry’s outlook and what it means for furniture retailers in 2021. The 11 top takeaways were:
1. New and existing home sales are doing well
Regarding how the COVID-19 crisis affects retailers, Jerry said, “This is a great time to be in any industry related to the home,” and his message was loud and clear that new home buyers are a hot demographic to target right now.
2. New home sales
20% of furniture sales comes from customers moving to a new home. The home furnishings industry’s high-level demand should remain robust throughout 2021 because mortgage rates are likely to stick around through next year.
3. Consumers are saving more
Statistically, the U.S. shows consumers are saving more than any time since the 1950s, while credit card and household debt is lowering at the same time. Discretionary income is up, and a shift in spending habits have consumers purchasing furniture for the home.
“The other thing that’s true,” Jerry points out, “is that people are coming into furniture stores with a purpose.” No one is just looking around. They are coming in for a specific need.
4. Raise prices
The supply chain cost issues that are pressuring our industry need to be acknowledged and embraced. Jerry advises that “now is the time to raise your prices. The consumer will still buy furniture.”
5. E-commerce is critical
Consumers have learned to shop online. “They may not buy online, but they shop online,” Jerry said. “They want to know what’s available, and that’s why you’ve got to have a website that shows the selection.” An e-commerce website that shows customers the lines and assortment you carry isn’t just a good idea; it’s critical.
6. Honesty is the best policy
When communicating supply chain delays to consumers, be transparent and honest. These issues are global, and the message will be similar across retailers. “Explain to them. These are issues that are out of your control.”
7. Sell what’s in stock
Jerry cautions against selling more than you can deliver. “We’ve had lots of times [in the past] when we could deliver, but nobody was buying.” Today, people are coming in to buy products, but getting those delivered is difficult until the supply chain catches up.
8. Time to recruit
With the variety of diverse retail businesses closing their doors, this may be an excellent time to recruit great people. “They’re best salespeople are out there looking for a job. You can upgrade. You can add some people that have got some real experience and have proven themselves.” They could be a great asset to your business.
9. Get the word out
Don’t stop advertising. One thing Jerry stresses is that you need to keep up your advertising. “You advertise to get those people who haven’t been in your store or the person who just moved to town.” Advertising will always be the best way to let people know who you are, where you are, what you offer, and that you’re open for business.
10. Make your mix match
It’s not enough to only get merchandise from the vendors with whom you’re comfortable. You need to “make sure your merchandise mix matches your customer.” Pay attention to your community and evolve your offering to match the customer base.
Jerry encourages each retailer to differentiate themselves in some way. “Don’t copy anyone else. Have things in your store that are memorable.”
11. Do not get overextended
“Be careful not to get overextended. It’s not a good time to go to the bank for a lot of help,” Jerry warns. “The Fed is watching the banks and other lenders to make sure that they’re not going too far afield and they’re going to co-operate to make the economy grow.”
HFA’s CEO Mark Schumacher spoke with Jerry during a live HFA webinar on December 10, 2020, which ran the entire gamut of topics of concerns on every retailer’s mind as we head into the new year. For the full in-depth discussion and to hear Jerry Epperson field direct questions from retailers, view the on-demand webinar here.