Blog: What will the furniture business look like on the other side?
Not since the Great Depression has the U.S. seen unemployment at levels likely to be caused by the coronavirus. Last week — less than a month since the first widespread efforts at shelter-in-place and social distancing took hold — unemployment filings had topped 10 million.
Some of that will disappear once people are allowed to leave their homes and stores, and "non-essential" businesses can reopen. However, some companies simply won't recover, and it will take time before unemployment returns to anywhere near the levels experienced before the outbreak.
Additionally, furloughed or laid off consumers who received immunity from foreclosure or who simply put off paying non-critical bills during the height of shelter-in-place orders will need to catch up. As a result the recovery and the return to major discretionary purchases will come later to some than to others. Upper income consumers and those in sectors less impacted by shutdowns are likely to recover far more quickly than those at lower income levels and those whose positions no longer exist.
There are many implications to this for the furniture industry, not the least of which are those related to pricing and credit. Some of this has already been seen in the auto industry, where car makers very early moved to dramatically extended payment periods and mitigation terms for those impacted by coronavirus-related issues.
In the short term some of the pricing issues may be resolved by the need to clean up inventories and work goods through a supply chain clogged by the sudden shut down. In the mid-term, as we move through the end of 2020 and into 2021, it will take more than simply low prices, something consumers have been trained to expect for a generation or more when it comes to furniture.
It will take more creative financing approaches and communicating them in a way that aligns with the concerns of consumers who have just come through a period defined by fear of basic human contact, threats to the availability of basic necessities and a concern around their presence in even the most familiar physical locations.
It will require rethinking every touchpoint with the consumer through the entire sales funnel. From the first time they come in contact with your brand until the product arrives in their home, most likely by someone whose presence communicates safety and a thought for their health.
Those who wish to be successful in the post-coronavirus economic environment will need to address a new set of consumer needs and employ much more sophisticated strategies for identifying potential shoppers. We are currently in a period of dramatic physical and economic uncertainty in which the home is a literal safe haven.
Not all of that is going away simply because people can leave their homes. The ability to build trust, create reassuring forms of engagement and engage in authentic interaction that feels less like a sale and more like a life assist will go a long way with post-COVID-19 consumers. And it will also likely go a long way to revitalizing a business that has been so badly hit by this current crisis.
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