In the past decade, think about the all those North American furniture manufacturers racing reflexively to China. They may be thinking again about what could have been a rash and lethal decision. Whaddyah think?
The Chinese mercantile Olympics constitute a stunning array of uncoordinated economic events best described as bone-numbing Try-athaton: Rising export prices, focus on internal demand, unfavorable currency exchange fluctuations, worker dissention, potentially explosive social tension and the ever present prospect of pandemic.
From those in the know, troubling times across the Pacific may not be pacific, and that could easily create some winners and many losers. Winning in China means possessing the financial, political and cultural means. And it helps to own and firmly control all aspects of production there.
Domestically, the winners are savvy factories maintaining sufficient and efficient production means along with institutional wisdom. They are luckier enough to get out of China's rat race and succeed from a more secure home base in America.
Unfortunately, many losers could be companies who fled and bled from real or perceived North American inefficiency, believing the sinuous Sino supply chain was a "silver bullet" survival plan. That illusive panacea may have become a thin and strange-tasting chop suey.
It’s just a matter of time. Furniture production is returning in force to North America, but in a different form.
Look for the emergence of efficient clusters, probably in the traditional furniture venues of North Carolina, Virginia and Mississippi, where the economic engine will start again. Of course, the market center and capital continues to be in High Point, where commanding creatiave class out classes all oher areas.
The best world brand in home furnishings is still Made in America.
For the rest of the world 2008 is Year of the Rate.
In China the New Year beginning on February 7 will be the Year of the Rat?
In the China's rat race, the question is: Who moved the global furniture cheese?
With the upcoming year of the rat, or should we say rat race the industry will continue to decline?
Rallying the troops to believe that manufacturing will come back to the U.S. believes things would be different if next year is the year of the rabbit.
No one is going to be able to pull anything let alone a rabbit out of our hat to save the furniture industry.
Reading the trade papers announcing bankruptcy of Levitz, Wickes, Fortunoff, Nationwide, Domain, Bombay Company, Rhodes, Sofa Express, Storehouse, Leath and others I have forgotten.
We read the declining numbers we hear of many stores in trouble, the small independents to numerous to count closing their doors.
The largest advertisers will continue to offer financing rather than pricing, we don’t believe the value exists so the only way we can sell our product is offering no payments, no interest and what ever we can think of to motivate the consumer.
When is the last time we talked about quality, features and benefits?
Shouldn’t we as an industry start to consider all the following things that are happening with product?
Starting with the decline of entertainment centers, due to the introduction of flat panel televisions, dinette sets with the introduction of the kitchen center island, home office with builders offering built-in’s even the decline of the complete bedroom set now with so many walk in closets.
Our competition is no longer just another furniture retailer, some e-com based retailers over 300 million a year and mass merchants with thousands of locations all chipping away at furniture categories.
When you travel any city in the country all the same logos, walk the aisles only to discover occasional tables, entertainment furniture, dinette sets, bedding, lamps, pictures, chairs and even bedroom.
The industry is no longer just furniture retail it’s all the big box discount retailers, it’s all the catalog and e-com retailers, it’s all the buying clubs.
The furniture industry is evolving into the disposable glut of consumer product. Furniture retailers continue to build out vignettes. Offer free coffee shop, play area and all the additional services that just add to the required markup making us less and less completive?
We shouldn’t be surprised by all the changes but what I find surprising is the lack of action or marketing changes.
Why do we discuss if High Point is the center of the furniture universe when the industry is mostly imports?
Why do we worry about the competition between Vegas and High Point when over 70% of product sold within the industry is the top 100 retail organization that mostly import direct?
Why do we structure a distribution system with layers of expense which does not allow us to compete with imports?
Why do organizations continue to chase a declining market place adding additional cost to product?
Shouldn’t we take a long look at the way the industry does business and realize in a global economy this system isn’t working anymore?
Isn’t it time for management to ask the sales force to describe the thousand of independent retail stores (the dirty window furniture retailers) that neither have the professionalism, the business plan, marketing, display, operations and financial resources to add to the bottom line?
When will except the fact that many of the retailers cannot even factor product because of such poor credit?
When if ever will this industry realize our demise was caused by too many distributors and very few qualified retailers?
Why is there so much customer dissatisfaction in the industry, only second to home remolding?
Don’t all the studies the industry has completed point to the truth the customer hates shopping for furniture? Do you think the over all system is the reason?
Who are the saviors of furniture retail are they already here and competing for the top spot or are they on the horizon?
I thought a financial group was positioning itself providing a self contained system with acquisitions of retail, import, manufacturing and distribution but they surprised us all this week with Chapter 11 filing.
Well the game is in play, where we all will be five years from now, I don’t think most of us will recognize the landscape. Who will be the wild card only an organization that realizes change is the only way to survive?
Posted by: Donna Koeneman | February 05, 2008 at 02:57 PM