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SAN FRANCISCO , June 3, 2022 /PRNewswire/ -- A new market study published by Global Industry Analysts Inc., (GIA) the premier market research company, today released its report titled "Furniture - Global Market Trajectory & Analytics". The report presents fresh perspectives on opportunities and challenges in a significantly transformed post COVID-19 marketplace.
FACTS AT A GLANCE What's New for 2022?
Edition: 19; Released: April 2022 Executive Pool: 382 Companies: 1080 - Players covered include ARJO AB; Drive DeVilbiss Sidhil Ltd.; Ashley Furniture Industries, Inc.; Durham Furniture Inc.; GF Health Products, Inc.; Godrej & Boyce Manufacturing Co., Ltd.; Haworth, Inc.; Herman Miller , Inc.; Hill-Rom Holdings Inc.; HNI Corporation; Home Depot, Inc.; Inter IKEA Group; Invacare Corporation; Kimball International, Inc.; Kohler CO.; L. & J.G. STICKLEY, INC.; La-Z-Boy, Inc.; Masco Corporation; Medline Industries, Inc.; NAUSICAA Medical; Okamura Corporation; Ormatek; Steelcase Inc.; Steris Plc.; Stryker Corporation; Sunrise Medical LLC; Urban Office Interiors and Others. Coverage: All major geographies and key segments Segments: Material (Wood, Metal, Plastic, Glass, Other Materials); End-Use (Residential, Commercial) Geographies: World; USA ; Canada ; Japan ; China ; Europe ; France ; Germany ; Italy ; UK; Spain ; Russia ; Rest of Europe ; Asia-Pacific ; Australia ; India ; South Korea ; Rest of Asia-Pacific ; Latin America ; Argentina ; Brazil ; Mexico ; Rest of Latin America ; Middle East ; Iran ; Israel ; Saudi Arabia ; UAE; Rest of Middle East ; Africa .
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Amid the COVID-19 crisis, the global market for Furniture estimated at US$545.9 Billion in the year 2022, is projected to reach a revised size of US$686 Billion by 2026, growing at a CAGR of 5.4% over the analysis period. Wood, one of the segments analyzed in the report, is projected to grow at a 6.4% CAGR, while growth in the Metal segment is readjusted to a revised 5.6% CAGR. The non-essential nature of furniture industry is facing the ramifications of COVID-19 induced changes in business operations, consumer behavior, household income, manufacturing trends, technology movements, lifestyle changes, among others. Accounting for approximately 4% to 5% of global GDP, the retail industry represents an economic heavyweight. Given the diverse composition of the retail industry, different sectors have experienced varying levels of impact. There has and continues to remain massive differences in the impact witnessed by traditional brick-and-mortar versus online shops, essential versus non-essential stores, and small versus large retailers. A labor intensive industry, retail has borne the brunt of social distancing norms. The year 2020 has largely witnessed a heterogeneous impact on this industry, with essential retail remaining in the positive and also witnessing growth spikes in some sub-sectors, while non-essential retail recorded and still continues to record steep declines in demand. Non-essential retail include luxury goods, home appliances, home furnishings, luggage & travel accessories, apparel and footwear, gifts & special event items, among others. Few of these categories witnessed almost 80% decline in growth, underlining the severity of the impact.
Among the many disruptions like raw material supply and labor shortages, rising unemployment has come down especially hard on the furniture industry. Unemployment has risen dramatically in many countries. In addition to the consumer segment, the commercial segment comprising of hotels and hospitality, offices and other commercial establishments, has also been severely impacted. The complete meltdown of the travel, tourism, ad hotels industries has impacted sales of commercial furniture such as headboards, nightstands, coffee tables, vanities, entertainment units, dining tables, chairs, among numerous others. Complete recovery to pre-COVID-19 levels is not expected until the year 2023. The recovery period will be characterized by rapid adoption of digital technologies by manufacturers, increased consumer engagement with socially active brands, and increased demand for eco-friendly and sustainable products. The pandemic has highlighted the direct relationship between personal and public health and pollution and environmental habitat destruction, and consumers as a result will shift towards healthier lifestyle habits, and sustainable eco-friendly products. A behavioral change towards more thoughtful consumption will bring robust opportunities for green furniture in the coming new normal.
It is more likely that the departure of the COVID-19 induced recession will be as sudden and as sharp as the arrival of recession itself was. Such sharp recovery would aid furniture brands to get back into business swiftly, and initiate full-scale production as soon as the economy is restored to normal. Furniture companies, who retained most of their employees during the recession period, would be in a better position to re-commence full-fledged operations and reap the benefits in the post-recession scenario. By retaining most of their workforce, furniture firms can be assured that the business would be ready to commence production to match the high demand, most likely to emerge from residential, commercial, and institutional consumers in the post-recession period.
Delivery lead times becoming longer has been one of the significant impacts on the furniture industry, due to the pandemic. The longer-than-usual lead times are due to the fact that the global furniture industry depends a great deal for materials on suppliers located across the world. Tanneries and mills in countries that faced repeated lockdowns and other restrictions failed to supply materials to furniture manufacturers in time. Not just fabric but foam and timber were also extremely in short supply. It took a while before foam and timber became easily accessible once again but the interim short supply due to the repeated lockdowns adversely impacted furniture manufacturers increasing their lead times for product deliveries.
Furniture companies also had to face new changes in demand patterns. As consumers got to stay more at home, their focus shifted towards decorating their homes which increased demand for home furniture and also office furniture needed at home for facilitating the increased trend of working from home. The sudden surge in home furniture orders, even though was considered good for business especially when demand for furniture from the commercial segment lulled, proved to be tiring for manufacturers due to shortage of raw materials.
Pandemic restrictions also resulted in a shortage of skilled labor required for furniture manufacture. When facilities re-opened after the restrictions were lifted, manufacturers experienced shortage of workforce due to various reasons including mandatory isolation, illness, and death among others. The norms set for maintaining distance also led to major operational challenges. Staggered work hours and the mandates for creating bubbles for ensuring safety of workers delivered less amount of furniture for the same workhours as earlier, and this extended order delivery times further. Furniture companies struggled to hire skilled and specialist labor because such workers are always in shortage pandemic or not. Developing such labor takes many years of extensive training. Nonetheless, the furniture industry was able to wade through all those pandemic-induced difficulties, quickly, by adopting smart strategies of increasing focus on eCommerce and embracing technologies for running business.
Online retailing platforms are witnessing growth. Though many furniture retailers closed their stores, some received increased online orders. While stores remained closed, some retailers started offering curb-side pick-up or delivery to customers. Some others introduced online showrooms. For example, the virtual showroom introduced by BoConcept allows customers to view the items in the way they are styled in store, examine them closely, and even ask questions about the products. Online retailers such as Overstock.com and Wayfair are witnessing considerable increase in sales. While the early days of the pandemic witnessed huge increase in demand for home-office furniture, over the past few months, there is growing demand for outdoor furniture as well as indoor recreational products such as pool floats as people start planning to spend their summer holidays at home.
In the coming years, physical furniture stores are likely to continue witnessing a steady drop in footfall, while the majority of retail sales would be derived from online sales. Apart from established brands, the move towards an online model is providing new entrants with a tremendous opportunity to carve out a niche in the industry. With physical stores losing foot traffic, they would be left with no other option but to either expand to online sales or shut down their business. One such example is Warren, Michigan -based Loves Furniture, Inc., which was once a leading furniture and mattress retailer in the northeast region of the US, and filed for bankruptcy in early-2021, attributed to a significant decline in sales because of the company's inability in locating, obtaining, and timely delivering merchandise to its customers. In 2021, the retail sector is likely to remain volatile, with operators continuing to take all the steps they can for remaining in business. This could include discounting products for attracting more buyers, which in turn would result in lesser profits. However, the prospects for the furniture industry are positive on a near- to medium-term basis. The possible approval of the latest stimulus package in the US would provide most Americans with stimulus checks for discretionary spending, which could also be utilized for buying furniture. In addition, with workers returning to offices, the demand for office furniture is anticipated to grow, while the consumption of home office furniture would likely continue with a considerable number of workers continuing to work from home. More
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