2020 to Finish Strong
In early October, many home furnishing retailers were feeling confident about a relatively strong fourth quarter. Our HFA/Piper Sandler special Black Friday Weekend Furniture Retailer Survey shows they are now feeling even more optimistic.
The Black Friday/Cyber Monday weekend turned out to be incredibly robust for our industry. That is a bit confounding when there are still profound gaps in the supply chain, and consumers face long waits. Still, they’re buying, and they’re buying more.
The numbers tell the tale. Sales on Black Friday weekend were robust, up as much as 30% year over year. This fuels growing confidence among retailers in our survey that 2020 will finish strong. According to the study, “retailers expect 26% sales growth in the fourth quarter, which is up from their estimates at the end of the third quarter that year-end sales would increase roughly 15%.”
What conclusions can we draw from this? Demand continues to rise, even with long waits for delivery. Does this mean consumers are accustomed to the delays? Hard to say. It may only mean they are willing to wait, which does not necessarily take retailers’ pressure to set expectations and work with the customer.
According to our survey, online sales took a significant jump on the Black Friday weekend, growing 75% year over year. In-store sales are up as well, a more modest 24%. The research report concludes, “strength is broad-based across channels. Online sales remain strong and are poised to remain elevated in the fourth quarter.”
One fascinating takeaway from the report is that the percentage of customers financing their transaction is essentially flat from 2019 to 2020. Demand is up, sales are up as well, yet the way consumers are buying has not changed that much. As industry analyst Jerry Epperson told me, “even in this pandemic, Americans are cutting down on their debt and saving more.” Please make no mistake, while financed sales are flat as a percentage of transactions, they are a piece of a much larger pie.
The survey noted continuing supply chain concerns and point to that as the critical risk to sales growth. Still, as we move toward the end of 2020, there is a sense that this challenging year will end on a high note. Take a look at the complete survey here.