Ken Smith uses a couple of reliable exhibitors to help him evaluate the High Point Market.
“Unless it’s a really good market, they’re usually in a sour mood,” Smith said after the October show. “They were in a good mood, and one said it may have been the best market he’s ever had.”
Smith, assurance partner for the High Point accounting and business consulting firm Smith Leonard, doesn’t have the numbers yet to back up his positive assessment. His latest Furniture Insights survey of home furnishings manufacturers and distributors found a 3 percent decline in orders in August 2019 compared to the same month in 2018. Year-to-date orders were down 2 percent.
While that’s unwelcome news, Smith noted that orders of new furniture were 7 percent higher in August 2018 than they had been a year earlier, and that 2018 in general was a strong year.
“It’s hard to keep growing year after year after year,” Smith told the Home Furnishings Association. “We had several years of pretty good growth.”
Slow growth may continue in 2020
Still, there’s little question that furniture sales are sluggish.
“Most everybody feels like it’s been slower at retail,” Smith said. More of the same is likely for the immediate future.
“Most economists seem to feel we’re expecting 2020 to see slower growth than usual,” Smith said. “If that’s true, I would expect furniture to be in the same boat.” So, if Gross Domestic Product increases in the 2 percent range, furniture sales should advance by a similar margin.
Some companies will do better than others, however.
Smith’s source who had a great market had “repurposed themselves to some extent,” he said. “Their showroom looked great. They had hired a new designer who gave it more color.”
In the comments he added to his monthly survey, Smith noted that market’s appeal is the opportunity to see “great product shown the way it is supposed to be shown.”
Market presents ideas for retailers
Manufacturers help themselves when they display furniture at markets in attractive settings. The same is true for retailers, who should use market not only to see new products but to gain ideas for presenting them effectively in their own showrooms.
Smith, whose practice specializes in the furniture industry, always finds market “a pretty cool thing to go to.” Shoppers also should find it a “pretty cool” experience to visit a well-designed furniture store.
Retailers also need to cut through all the distractions that can swamp marketing messages.
“Basically, there’s just bad news by the media all the time,” Smith said. “If we could cut off the TV and radio and internet for three months, we could get back to normal.”
Politics clogs advertising lanes
Unfortunately, with the 2020 presidential campaign underway already, politics will clog the advertising lanes. Retailers will have to work harder to connect with customers. They will be helped by some positive indicators. The latest jobs report was better than expected. Home sales and new housing starts rose in September compared to a year earlier, and sales at furniture and home furnishings stores also were up from September 2018.