Furniture | Furnishings
I) Challenges faced in furnishing and furniture industry
#1. Technology Integration
Getting integrated with new processes and technologies as per market trends is critical. Websites are increasingly delivering RTA products customers want. Digital stores offer lowered production and shipping costs and buyers get the self-service experience they crave. But integrating new technologies means streamlining the sales process, while aggregating customer data. Furniture manufacturing and supply is complex.
Integrating CRM systems and other technologies allows quick sales, fast ROI and control over sales channels. Furniture and furnishings companies need to integrate technologies for not just maintaining customer, but vendor relationships as well. ERP systems are needed for managing production, orders, and inventory so companies can minimize delays, control the manufacturing floor and back-end operations while managing inventory and logistics.
Technologies represent an investment for growing your business. To support these new technologies, furniture and furnishings companies need to consider the total cost of ownership, available support, flexibility, scalability and partner ecosystems.
#2. Management of Inventory and Selling Space
The furniture and furnishings industry carries out high volume sales. So managing inventory and selling space is always a challenge. The ready availability of stock in demand is essential. When the demand for furniture products soar, it becomes very hard to provide stock from the backend. Leading players like Godrej Interio, for example, target customers through bespoke décor. Managing inventory as sales and demand fluctuate require innovative solutions, which is why the best management consultants in the industry can help your business.
#3. Higher Labor and Technology Costs
The higher cost of labor and new technology adoption serves to minimize wastage and optimize quality. But for tapping the true potential of these opportunities, furniture manufacturers need to overcome a critical hurdle: skilled labor shortage. The greatest obstacle for furniture and furnishings companies are finding skilled workers.
As prime workers move into retirement, furniture manufacturers need to find the right staff for production floor positions. Developing critical skills for the existing workforce is also critical. Furniture manufacturing is facing price hikes due to factors external and internal to the industry. The increasing material cost can force individuals into a tight space. Cutting costs and surviving a competitive environment requires skillful interventions. Leveraging an ERP system and other data capturing technologies can help in formulating supply-chain data in real time to reconcile design choices with cost objectives. This allows furniture and furnishings companies to keep costs low and get customers the products they seek.
#4. Customer Shifts in Preferences
Customer shifts in shopping preferences also need to be identified regularly. Furniture and furnishings brand needs to identify its growth strategy and USP. Costs and rising employee wages are difficult to manage in the face of demand that fluctuates. Demand in furniture industries is dependent on consumer housing trends.
As trends shift, the focus is on small homes and apartments for the residential furniture market, which needs to focus on cost-effective products, not large, high-end ones. Furniture manufacturers need to view changes as opportunities to experiment with product and design offerings and switch their focus to meet new demands. This requires collecting and monitoring data on customer demand in real time. To better forecast when demand will change, it is important to make evidence-based decisions.
#5. Setting Up Distribution Channels
Setting up sales or distribution channels like e-commerce, franchise, and dealership also requires careful planning. This includes e-commerce- the dealership, franchises, etc. A Lectra survey found boosting efficiency is leading priority among 22.3 percent of all furniture manufacturers. To improve operational efficiency, a bird’s eye view of production across the entire supply chain is vital. This is not only within your own plants.
Continuously engage with suppliers to understand material availability and retailers in the manufacturing process and create better workflows. Turning the ERP system to get better visibility across entire supply chains improves the efficiency of ordering, inventory management, as well as other processes. Through tracking of the data, an ERP system can help identify new market opportunities, reduce costs, and act fast on demand shifts. Addressing these challenges and ensuring the furniture manufacturing company is prepared for change matters.
#6. Acquiring an Omni-Channel Approach
For the furniture and furnishings industry, acquiring an omni-channel presence has never been more important. The value of multiple channels as platforms to showcase products and services are manifold. Customers in the digital age are increasingly relying on AI, smartphone technologies and online research to make purchase decisions. Any furniture or furnishing brand must have an online as well as a traditional or offline presence, to capture clients interested in both segments. While niche customers in the e-commerce space will rely on online purchases, traditional buyers would visit the store, but still consider online reviews. Technologies like AR and VR are even being used by furniture brands like IKEA to help customers make the right buying choices. An SOP for furniture showrooms must incorporate an omni-channel perspective, therefore.
II) How YRC Management Consulting Can Help
YRC Management Consulting is known for helping furniture brands develop stringent policies and procedures organization-wide thereby facilitating growth. The best management consultant can work to build your furniture and furnishings business in different ways by streamlining operations and offering procedural support. The reason why YRC is the best management consultancy for the furniture industry has to do with our dedication and commitment to create value for your business and unlock its tremendous potential. As a furniture business consulting services provider with special emphasis on online furnishings business consulting as well as traditional brick-and-mortar or hybrid brick-and-click or omni-channel approaches, YRC will anticipate every need of your growing furniture or furnishings business and meet the challenges head on.
III) About Furniture and Furnishing Industry
The rise in disposable incomes, affordable home loans, and desirable government policies have created a climate for growth for many industries. One of the leading ones is the furniture industry in India. Furniture and furnishings industry in India is in demand, due to increased activity in the housing and infrastructure sector. The furniture industry is set to meet infrastructural needs. Due to steady and strong forces of urbanization, furniture and furnishings brands are set to meet commercial as well as residential needs. Such stellar brands are rapidly gaining ground worldwide.
Statista estimates that the furniture and homeware segment will amount to USD 2041 million revenue generation capacity in 2019. Further, the revenue is expected to grow at a yearly CAGR rate of 16.2% thereafter, resulting in market volumes of USD 3724 million by 2023. The user penetration rate is 7.9% in 2019 and will hit 13.8% by 2023. The average revenue per user is pegged at USD 18.93.
Technology advancements like high-speed internet connections including 4G and smart gadgets have boosted the e-retail sector for the furniture and furnishings industry, as well. The rise in smartphone users has led to the emergence of online furniture and furnishings players like Urban Ladder, Pepperfry and many more. The emergence of online channels is also pushing companies like Godrej and IKEA to introduce and sell furniture via the online space. Leading offline retailers of readymade furniture products are launching online shopping portals for furniture, furnishings and home decor products
Change in demand patterns has been observed as furniture continues to be a leading sector. Expanding distribution networks of furniture manufacturers is steadily growing. SOP for retail stores are the solution to multiple obstacles faced by furniture retailers and the furnishing industry.
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