The Big Bounce Back Begins

Time spent at home, time to reflect, and pent up demand are driving spectacular sales

Strong Memorial Day weekend sales propelled a healthy uptick in revenues reported by many retailers in June. “It’s too early to forecast our recovery from the pandemic recession as a perfect “ V,” but business is coming back better than most expected,” said Ken Smith, Assurance Partner and Editor of Smith Leonard Accountants and Consultants’ Furniture Insights newsletter.

“There’s no historical precedent to help us anticipate the months ahead,” said Smith, “but anecdotal responses from our network are very encouraging.” In part, this optimism is based on indications that consumers have taken a fresh and often critical look at their surroundings as they spend more time at home. “Sitting on uncomfortable, outdated sofas for two months made people rethink their furniture choices,” he said.

For Christi Barbour, Founder and Partner with Barbour Spangle Design, this fresh look has translated into new business. “We heard a lot of ’I can’t take it anymore’ from clients who had delayed renovations before the pandemic. Once it was safe to do so, we’ve been meeting to get started because after weeks in lockdown, those projects have become their top priority.”

Optimism at retail

“While the decline was rapid, deep, and devastating, many of my retail contacts are bewildered by the speed and consistency of their stores’ rising revenues,” said Epperson. Pent up demand is a key factor. Consumers who were enjoying their ‘best May ever!’ are also benefiting from the government stimulus money and the disposable income that they aren’t spending on travel, concerts, sports events, or – given all the sweatpants purportedly worn during ZOOM meetings – apparel.”

The shutdown forced retailers to pivot, most focusing on three areas of activity. Sales teams were encouraged to reach out to clients with support and concern. Digital marketing programs were enhanced, and they developed safety protocols. As stores opened, several buying trends emerged.

“Even my most pessimistic retail friend is saying ‘this might be our time,’ and I’m inclined to believe him.”

“Consumers are updating their entire homes, foreseeing a future where they travel less. Home offices are popular as working from home supports social distancing. In living rooms, we’re selling replacement furniture for pieces damaged by active kids,” said City Furniture President, Andrew Koenig, in an On the Record with Furniture Today podcast.

It’s not surprising that outdoor furnishings specialty retailers are reporting a high level of consumer traffic in their now open stores. Jackie Hirschhaut, Executive Director of the International Casual Furnishings Association, said, “Many of our members say they’re seeing up to twice as many shoppers as they did this time last year. After eight to 10 weeks of closed operations, they have proclaimed the month of May as ‘outstanding’. We anticipate the ‘Staycation’ will be the choice for the majority of households, as families continue to stay close to home throughout the summer months.”

Innovation in manufacturing

“Our industry met the challenge by leveraging technology, relying on strong partnerships, and quickly integrating safety precautions,” said Andy Counts, CEO of the American Home Furnishings Alliance. “We strategically positioned ourselves for a strong recovery.”

“The demand is clear, and the supply is coming back strong.”

“It was a real test of crisis leadership,” said John Iasiello, Sr. VP of Strategic Planning for Riverside Furniture, “We all felt the pain – from management to every department in our company. We threw out our budget and worked a new 90-day plan. We adjusted and adapted. After unprecedented cancellations in March, our May was close to projections, and, so far, June is spectacular!”

New ideas and new solutions expected at Fall Market

Epperson imagines his October State of the Industry presentation will include third-quarter statistics continuing the robust growth experienced early in the recovery. “Don’t miss Market! It’s a valuable opportunity to learn how others succeeded and what to expect in 2021,” he said.

As she looks forward to Market, Christi Barbour said, “I expect to see new products that address pandemic concerns with antimicrobial features and extreme durability to withstand stringent cleaning.”

Designer Jessica Dauray wants to reconnect with her colleagues from around the world. “I gather my most valuable business insight over drinks at Market parties. I can’t wait to see everyone again!”