Despite ongoing economic uncertainty for many businesses and consumer markets, the furniture market is expected to grow 5.2% between 2023-2028. While key drivers include changing customer preferences, fluctuating e-Commerce and economic volatility, there are some interesting trends that will continue to be top of mind for furniture retailers and manufacturers.

The furniture industry will withstand inflationary pressures, even with a rocky real estate market.

While the market’s trillion-dollar debt is slated to mature over the next two years, mortgage and interest rates in the housing market continue to increase. The lack of affordability for homeowners, who are likely to purchase furniture, will negatively impact furniture sales this year. Companies that are investing in digital innovation now will be able to weather the storm and come out on top. While the market is slow-moving, it’s imperative for manufacturers to start upgrading their equipment to the latest industrial technology. Upgrading to technology with 4.0 capabilities will lower operational costs, increase supply chain efficiency, and offer more customer value, which is a key differentiator in the competitive landscape.

Furniture customization will continue to be in high demand.

As consumers look for brands that allow them to purchase customizable furniture, manufacturers will need to integrate automated AI processes to ensure profitability and supply chain efficiency. Furniture manufacturers will need to be able to incorporate meticulous designs of the consumers’ choice or even heritage pieces in an error-free and timely manner. Automated technology will allow personalized furnishing logistics to be easier and inexpensive. To reach maximum efficiency, manufacturers will have to adopt an agile process flow that allows production to quickly maneuver from one custom option to another.

Consumers will focus on a more conscious lifestyle, with an emphasis on sustainability. 

Being able to minimize the carbon footprint on the environment is a key element within the furniture industry. As consumers are becoming more educated on sustainability issues, nearly 1 in 5 consumers want to know how and where their products are produced. However, furniture manufacturers continue to hesitate to implement more sustainable practices due to the impression that they cost more and that consumers wouldn’t want to incur those costs. Investing in technology that can digitize and automate production enables manufacturers to minimize material consumption and waste, reduce energy consumption, and extend the lifespan of their equipment.

Delivery visibility will make or break companies.

Approximately 93% of consumers want to know the status of their item from the second their order is placed. Businesses that do not have a reliable tracking process set in place for consumers will experience lower levels of customer loyalty. By adopting a solution that automates, streamlines and provides traceability throughout the entire manufacturing process, you will increase customer retention.

Direct-to-consumer brands will continue to grow.

US digital D2C sales are expected to reach $51 billion by 2024. Low barriers to entry and a lack of strong retail competition make the home furnishing industry ideal for DTC brands. As the omnichannel consumer demands a more customizable experience, DTC brands are cutting out the retail middlemen and taking intelligence control over the strategic use of customer data while leveraging low-cost marketing. The opportunity, however, comes with the challenge of reviewing the entire business model and addressing a more granular and specific end-customer market. It will require manufacturers to show a good deal of agility in their production processes.

Looking Ahead

To ensure its resiliency in this increasingly challenging economic market, the furniture industry, already consolidated around 200 major suppliers, must focus on extending re-localization and nearshoring initiatives to reduce risk and logistic costs and build flexibility. Its viability will depend on access to raw materials, production agility, and logistical capacity.

In addition, furniture players will have to prioritize investments in marketing, retail and digital manufacturing solutions to be more proactive in breaking down the barriers of the customer omni-channel journey. Lastly, a better awareness of trends, such as connected furniture or eco-responsible materials, and the ability to share a customer’s furniture journey from sale to delivery, and the capacity to anticipate their impact on production processes and product profitability, will be key to seizing early market opportunities. 

Investing in new technology is critical for avoiding supply chain disruption and staying resistant during unprecedented times. Slower markets provide the opportunity to evaluate performance and get the right solutions that will equip your team to better manage when sales accelerate.

Source: https://www.furnituretoday.com/