Furniture manufacturers have dealt with more change since the pandemic started than in the previous two decades. Unfortunately, the persistent problems with supply chains and the spike in inflation continue to pose obstacles.
But, despite the current economic uncertainty, the furniture manufacturing market is expected to grow 5.2% by 2028. Additionally, the online furniture sector could reach a CAGR of 10.6% by 2028 as a result of the rising demand for home furnishing and décor and the increased use of the Internet.
Those interested in finding out more about the furniture manufacturing landscape should buckle up because this article provides useful information.
An Outlook of the Furniture Sector over the Recent Period
The pandemic brought a tectonic shift in consumer behavior, which is easily noticeable in all sectors, not just the furniture industry. People discovered that they love to shop online at stores like Kitchen Warehouse Ltd because it’s easy and they can choose from a wide selection of products. And while they can revisit brick-and-mortar stores, they continue to direct their attention to online stores when they want to spend money on upgrading their houses.
However, it doesn’t mean furniture businesses don’t face issues anymore now that the pandemic is left behind. They still face some turbulent conditions because they deal with labor shortages and a global crisis in the supply chain. And while it’s not all sunshine and roses in the sector, the market still registered a sales boost of 21.8%.
In August 2022, the inflation rate for household items and maintenance reached 8.2% in the European Union. The high demand for home furnishings and décor collided with supply chain issues, which caused businesses to struggle to meet the market’s requirements. People seem to have an increased appetite for new home items, leaving retailers with a low to no inventory.
What Trends will Impact the Furniture Manufacturing and Retail Sectors in the following months?
Now that the sector is dealing with major changes, new trends will gain more traction, and manufacturers and retailers must be aware of them.
The Furniture Sector can hold off Inflationary Pressure
The furniture industry is closely connected to the real estate sector, which has seen better days in the past. The real estate market has dealt with increasing interest and mortgage rates over the last two years. Buyers no longer find it affordable to invest in the housing market, and the lack of affordability will impact furniture sales in the future. However, specialists agree that the industry could withstand the challenging conditions if businesses turn their attention toward digital innovation.
The market will advance, but at a slower pace than before, and it’s paramount that manufacturers invest in purchasing the latest equipment to meet the market’s requirements. Upgrading equipment and using innovative technology would enable companies to increase supply chain efficiency, decrease operational costs, and provide their public with value. These factors could make a difference in the present competitive environment.
Buyers Demand Sustainability as more of them Embrace an Eco-Friendly Lifestyle
Companies able to lower their carbon footprint could attract more clients because sustainability is one of the main requirements of the public for businesses from all industries. As the public becomes more educated on the sustainability subject, 1 in 5 buyers wants to learn more about the manufacturing process. Unfortunately, many furniture producers fail to adopt sustainable practices due to the misconception they cost more and that the buyers wouldn’t want to incur extra expenses.
The truth is that investing in equipment that would automate particular manufacturing processes and digitize some operations would enable businesses to lower waste, cut down material consumption, extend the lifespan of machines, and reduce energy consumption.
The Public Requires Personalized Products
More homeowners are looking for customizable furniture, so it’s crucial that producers use the necessary technology to meet this market need. Furniture producers must be able to incorporate the features the buyers ask for and deliver meticulous designs that match the market’s needs. Companies that rely on automated equipment can benefit from affordable customization services and provide their public with personalized furnishing.
The rise of e-commerce has brought this new trend where people are interested in unique items to reflect their individual tastes and style. Custom pieces allow manufacturers to tap into this trend and gain a competitive edge. They also enable businesses to command higher prices than mass-produced items because they deliver exclusive products. This could help them boost their gross profit margins and attract new customers.
Online Sales could bring Significant Opportunities to the Furniture Manufacturing Sector
The Internet has brought great sales opportunities for companies in all sectors. The rise of e-commerce has encouraged the public to turn to online shopping for all their needs, including furniture. Businesses can tap into this trend by establishing a robust online presence and relying on digital marketing to reach their target customers.
Online sales are beneficial for businesses of all sizes because they allow them to reach buyers outside their local audience. Furniture providers can expand their customer base and address a global audience when selling products on the Internet. When selling products outside the local market, companies can increase their revenue.
Additionally, suppose furniture manufacturers decide to address solely an online audience. In that case, they can reduce overhead expenses by reducing the costs of carrying an inventory and managing a physical store. Besides, companies can offer buyers a wider range of products and personalization solutions when selling products through a website.
Companies that offer smart furniture can benefit from unique opportunities. Smart home technology has gained more popularity in home design over the years, and customers have become more interested in buying furniture that integrates smart features and offers additional functionality.
By tapping into this trend, businesses can cater to a new audience, savvy for technology and who is willing to pay more for items that offer them increased convenience and features.
What to Expect from the Future?
The furniture sector should be open to embracing the latest trends to increase its resilience in the present challenging economic context. Prioritizing investment in automated solutions and digital marketing could help businesses stand apart and remain profitable.