5 Challenges Growing Home Brands Need to Overcome During the Pandemic

Deepak Madnani, DeepGreen Design

August 31, 2021

The furniture market’s resilience throughout the pandemic brought increased revenues for retailers. According to research firm Statista, this is expected to grow by 4.18% annually in the next five years.

However, this unexpected demand for furniture from consumers worldwide is also negatively impacting retailers who are affected by pandemic-related restrictions.

In this article, we’ll discuss the issues furniture retailers are facing right now, what’s causing these challenges and how to address them. This could help you work towards optimizing your processes that will support your expansion plans and further increase your sales potential.

Broken Supply Chain

Across all industries, supply chains were disrupted due to import and export restrictions implemented during the height of the pandemic. The furniture industry was gravely impacted by these interferences which caused a backlog of orders and delays in deliveries from suppliers and manufacturers around the globe.

In fact, a study conducted by Procurious shows that 97% of supply chain professionals confirmed that they had to deal with broken supply chains because of COVID-19.

Although the demand for furniture surged, home brands found themselves in tight situations especially when it came to procuring and shipping in new products. Retailers are faced with sourcing uncertainties, communication challenges, and concerns on production speed. The unpredictability has made it even more difficult for manufacturers and home brands to execute seamless transactions in the last year and a half.

While it is important to reinforce work relationships with manufacturers that you trust and have successfully transacted with in the past, there is nothing wrong with exploring partnerships with new suppliers. Look for manufacturers that have a proven track record of developing new products, a solid number of factories, and a good roster of clients. Do your research and rely on your own experience to distinguish the promising from the bad.

Effects of Travel Restrictions

A significant part of the B2B side of the furniture industry is being able to visit and evaluate manufacturers’ factories. This experiential step of the process played a relevant role in the decision making of procurement managers. Not only would they see how a manufacturer operates, but there was the opportunity to touch, feel and see products and materials that usually jumpstarted the creative process. Meeting face-to-face also established rapport between retailer and manufacturer and helped forge the partnership.

Because of worldwide travel restrictions, the physical visits had to be replaced with purely online correspondences. Both manufacturers and retailers have to communicate better to convey their ideas, needs, and preferences.

Home brands and manufacturers are now driven to focus on upgrading their channels of communication. They need to come up with more creative ways of presenting their brand values and capabilities to remain competitive in the next few years. Virtual showrooms, videos and teleconferencing are all good touch points, but some things still need to be handled manually, like sending over material swatches in advance of meetings.

Higher Prices of Goods and Services

Related to the supply chain challenges are issues on heightened costs of products and services. The furniture industry experienced volatile prices of raw materials, labor, and transportation, particularly retailers that employ overseas manufacturers.

Additional expenses on creating safe work conditions in factories as well as unexpected shutdowns lead to higher overhead costs which trickle down the supply chain. Some areas even experienced shortages of supplies and raw materials, which contributed to the increase in prices as the supply could not keep up with the overwhelming demand.

Fortunately for home brands, the retail market’s purchasing power increased. They have expressed the willingness to spend more if it means that they get both form and function in their homes, which helped the industry thrive throughout the pandemic.

Heightened Competition in the E-commerce Space

The entire furniture industry had to adapt to the challenges brought about by the pandemic by transitioning from brick-and-mortar establishments to the e-commerce world. This completely changed the way B2B purchasing, sourcing, and designing processes are accomplished. However, home brands and manufacturers had little to no choice but to innovate or be left out in the dark.

Now that most home brands have established their digital presence, the race is on for coming up with more creative ways to present their products to the online market. Augmented and Virtual Reality (AR/VR) platforms are growing within the industry, and the challenge is to develop more technologies that would take customers as close to the physical retail experience as possible.

Higher Consumer Standards in Quality

Online buyers have to rely solely on the information and images retailers provide on their websites and social media channels. In this day and age of flawless filters, customers can harbor unrealistic expectations about the quality of the products they buy online.

Home brands need to be careful about how they present their products in the virtual space. Transparency is key. Clear photos from different angles, detailed specifications and open lines of communication should help manage consumer expectations.

As this issue is further exacerbated with the inability to physically travel to visit the factories, retailers need to elevate their quality assurance processes with manufacturers to ensure that their products are always top-notch. This extends upward of the supply chain, as it compels manufacturers to develop more stringent means of quality assurance with their suppliers and within their factories.

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