Over the past year, stuck at home, many of us started upgrading our living spaces. To do this, we used ‘fast furniture’ – that is, convenient, ready-to-assemble furniture. With ‘fast furniture’, raw material costs tend to be low, keeping the final product cost-effective. It’s perfect for anyone wanting a quick furniture refresh.
"Unprecedented demand and increased inventory levels meant supply chains faced increased pressures to produce enough furniture raw materials to meet customer needs."
The COVID-19 pandemic saw furniture sales skyrocket. British furniture brand Made.com’s office and garden furniture increasing by 33% and 50% respectively, while revenues doubled at US furnishings heavyweight Wayfair. According to England’s Office for National Statistics, the retail price of furniture sold in the UK, including imports, rose by 3.3% compared to February 2020 - the second largest rise in 3 years.
Yet this has brought its own challenges. Unprecedented demand and increased inventory levels meant supply chains faced increased pressures to produce enough furniture raw materials to meet customer needs.
At the same time, external forces impacted industry production and trade.
Due to COVID-19, many manufacturers were forced to shut down production lines, lowering the amount of stock made. Then, in March 2021, the Suez Canal was blocked for six days, bringing global trade to a halt.
This has led to a global shortage of furniture raw materials. It’s something consumers are now beginning to notice, as they go to purchase new items for the house, only to find major suppliers have entirely sold out.
How does this affect furniture manufacturers?
With demand for furniture at an all-time high, many manufacturers increased capacity in warehouses by taking on new staff. Now, due to the furniture raw material shortage, raw material costs have increased.
"To make matters even more difficult, a global shortage on shipping containers has seen container prices increase five-fold in 12 months."
In the United Kingdom, for example, the British Furniture Manufacturers (BFM) Association has reported a sharp increase in costs. One item affected is polyurethane foam, which was the subject of product shortages in late 2020, and is now only available at a record-high price, according to this Furniture News article.
The cost of other furniture raw materials – including springs, fabrics and board materials, mechanisms, feathers, fibres and packaging goods – are also increasing, according to the article. To make matters even more difficult, a global shortage on shipping containers has seen container prices increase five-fold in 12 months. As a result, furniture manufacturers are having to increase prices.
What effect will this price increase have on consumers’ purchasing habits?
Faced with a furniture price increase, consumers may now look sustainable solutions, such as used or upcycled furniture. We may also see a drop in demand, as consumers wait a few years before upgrading their furniture again.
What does the future look like for the furniture industry?
Increasing costs and consumer demand for better, more sustainable products, means furniture manufacturers need to prepare for a very different furniture landscape.
Manufacturers with a strong supplier partnership are best equipped to face these challenges head on. A respected supplier with an extensive portfolio can help manufacturers with everything from ecommerce advice to how to best prepare for a potential drop in consumer demand. They can also offer market research to ensure manufacturers are best placed to meet consumer needs.
To discuss ways to prepare for a (potentially) very different furniture landscape, feel free to reach out on LinkedIn.
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