Whatever challenges stand in the way, new markets, whether overseas or online, represent growth opportunities for ambitious furniture professionals, writes Jonathan Staker, CEO of Vanquish Commerce Group …
In recent years, the British furniture industry has faced numerous challenges, including shifting consumer trends, rising production costs, and increased competition from both domestic and foreign brands. The uncertainty brought on by the pandemic has only intensified these challenges, with brands in many instances losing market share and reducing profitability.
Whilst recovery long term is a certainty for those willing and able to ‘batten down the hatches’, I believe there are exciting opportunities for manufacturers and importers to grow exponentially despite the current climate by looking to new markets.
Go global
Expanding globally, for example, is a powerful way to access new markets and customer segments. The US and Europe are particularly attractive markets due to their large size and high consumer demand. According to a report by Statista, the furniture and home furnishings market in the US is projected to reach $357b in 2022, while the European furniture market is expected to grow to €128.5b by 2023. By tapping into these markets, British furniture manufacturers and importers can significantly increase their revenue and profitability.
There is a perceived high level of quality, history, tradition and luxury toward British brands in the hearts of the American consumer, which often allows for higher margins and greater demand across the pond. And in reference to our closer neighbours, whilst it may seem a logistical nightmare to sell in Europe post Brexit, we’ve now lived with it for three years, which is time enough to have got to grips with the associated challenges. Organisations with the determination to succeed and maintain sales in Europe have a distinct advantage and dramatically reduced competition.
However, expanding globally requires careful planning and execution. Companies need to understand the local market dynamics, customer preferences and regulatory requirements in order to succeed. This may involve adapting products and marketing strategies to suit local tastes, establishing partnerships with local distributors or retailers, and investing in logistics and supply chain infrastructure. But for those that can successfully navigate these challenges, the rewards can be substantial.
Embrace online
Another way for British furniture and homeware companies to grow is by pivoting to sell online. The category is still very old fashioned compared to many others, and there is a stalwart community who believe entirely in maintaining the traditional supply chain hierarchy. Whilst this is honourable, and I do champion the supporting of bricks-and-mortar retailers, I believe that the omission of a direct-to-consumer (D2C) strategy today is incredibly risky. Most major brands across all industries now incorporate this dynamic, and the furniture industry should be no exception. Carefully considered pricing and marketing positioning can allow for an all-inclusive strategy for the most forward-thinking brands.
Covid-19 has accelerated the shift towards ecommerce, with more consumers shopping online than ever before. According to a report by eMarketer, UK ecommerce sales are expected to reach £141.33b in 2022, up from £105.26b in 2020, whilst the US and EU combined will reach almost £2t this year! By embracing ecommerce, furniture companies can reach a wider audience, reduce their reliance on physical retail channels, and create new revenue streams.
Of course, pivoting to sell online is not without its challenges. Companies may need to invest in new technologies and processes, such as ecommerce platforms and logistics systems, and may need to train employees to adapt to new ways of working. But for those bold enough to embrace change, the revenue and margin rewards can be immeasurable.
Calculated risk
While the British furniture and homeware industries are facing challenging market conditions, the outlook is far from bleak, and there are many ways for companies to grow and thrive. By expanding globally, or indeed pivoting to sell online, companies can access new markets and customer segments, reduce their reliance on physical retail channels or traditional wholesale routes, and create new revenue streams.
Whilst these strategies require careful planning and execution, the key is calculated risk, and finding the right partner will help you to navigate new markets, and should offer a 360° view of the entire market, sales and supply chain process to define the correct placement strategy to optimise your brand’s success.
Jonathan has been building and acquiring companies in the furniture and homewares industry for over 20 years. Notable achievements include the sale of Keypak to The Colson Group in 2016, and his role in building the Maine Home brand in the US. His portfolio companies sell online and through major retailers throughout Europe, North America and Australia. He is also CEO at Vanquish Commerce Group, partnering with emerging and established brands to launch and expand internationally, as well as to implement multichannel digitalisation.
