In last week’s HFA Live webinar, furniture retailers heard a sobering report about the industry’s new (read: sluggish) supply chain. A pair of supply and logistics experts told viewers the current delays won’t improve for another seven to eight months. But in the same breath, Riaz Husein and Garrett Bowman offered strategies retailers can enact now to help with those delays and unknowns to come.
“Normalcy is several months away,” said Husein, CEO of Profit Chain, a Home Furnishings Association Solution Partner offering retailers supply chain, logistics and warehouse consulting. “But in the meantime, there are plenty of things you can do to come out ahead. It doesn’t have to be all doom and gloom.”
Furniture retailers are typically not experts at supply chains and logistics but, given the times, they are quickly adapting, said Bowman, president of Gulfstream Shipper’s Association, another HFA Solution Partner that helps retailers secure and maintain competitive rates from ocean carriers.
Bowman said with the pandemic in China at its peak during the early months of the year, many furniture manufacturers had to halt production temporarily and others simply moved to other Asian countries like Vietnam. Some factories didn’t reopen until March or April, significantly delaying the arrival of furniture in the U.S. “And when stores opened up after months of being forced to close, the demand only made things worse,” said Bowman.
If it were merely an issue of a seismic shift from offline to online shopping, the current supply issues might have had a quicker fix. But behind every sold-out sofa, there’s a vast supply chain linking raw materials to factory floors to distribution centers, and the fallout from the pandemic is impacting them in ways retailers are still coming to understand, said Bowman.
In fact, Bowman said there’s a lot of product already manufactured and waiting to be shipped from Asia. “The problem is getting it on the water to the U.S.,” he said. “Every ship coming here is 80 to 90 percent full, but the countries where all this is coming from simply don’t have the (infrastructure) in place to get these ships loaded with containers and on their way with the speed we need.”
When containers do reach a West Coast port like Long Beach, Calif., there’s the matter of loading everything on rail cars for movement to distribution centers and then to trucks for transport to stores across the country. “Our current setup can only handle so much,” said Bowman. “We’re seeing the strain – and the customers are experiencing it in delays.”
Barring future pandemic-related shutdowns, Husein and Bowman predicted an uneven supply chain until the second quarter of 2021. Until then, said Husein and Bowman, retailers are not helpless. They offered several strategies for retailers to employ in the coming months:
- Be prepared by proactively planning, while staying agile.
- Expand available products and your supplier options. “Most retailers go narrow and deep when it comes to product,” said Husein. “Think about going wider and shallow to give you more options on product you can get in your store.”
- Improve your vendor relationships to improve your supply priority. Husein and Bowman said it’s largely a myth that giants like Amazon and Wayfair get preferential treatment for delivery over smaller retailers. “But you should be having more conversations with your vendors right now, communicating with them anyway,” said Bowman.
- Resell returned or damaged products. Instead of writing it off or returning it to the manufacturer, find a buyer. Given the current demand for furniture, there’s a buyer out there for that scratched desk.
- Manage communication and expectations with customers. It’s the same retail practice of under promise and over deliver. “If you tell them three months and you deliver in two weeks, they are thrilled,” said Husein. On the other hand, if you tell them a certain date and keep having to call the customer back with bad news, you might have to offer them money back. And your reputation takes a ding.