This is the first article in a 2-part blog series focused on the obstacles that have countless home and furnishings retailers at a stalemate. While many were convinced that the demand for furniture and home goods would subside once consumers got back into business as usual following the pandemic, recent sales projections prove that this is not going to be the case.
In 2021, furniture sales jumped by 35.6% over the 12 months between July 20 – June 21 over 2020 numbers. The demand is there. However, the current state of the manufacturing, retail, and shipping industries means that many home furnishings retailers aren’t prepared to step up to the challenge.
We aren’t talking about “a new normal” anymore in the retail industry. In truth, the word “normal” has all but disappeared from our vocabulary –– except when The New York Times said that a “normal supply chain” is “unlikely in 2022.” That we remember. The past two years have forced home and furnishings retailers to contend with an unprecedented rate of bottlenecks from numerous sources.
Issues such as employee turnover, skyrocketing shipping costs, and dropped communications with external suppliers have made many furniture retailers unable to cope with growing consumer demand. The industry is in a phase of disruption, so it’s time for new best-in-class furniture retailers to emerge from the rubble to take their rightful place in the sun.
Large retailers are deploying massive resources to recruit and retain supply chain workers. But what about those home retailers that can’t afford to follow in Walmart’s footsteps by hiring 20,000 new supply chain associates? Here’s the good news: you can ease some of the supply chain bottlenecks you are experiencing in your home furnishings business and increase your speed to market and customer service in the process. It starts with targeting the pain points in your business operations.
What do “Bottlenecks” Mean to You?
Let’s whip out the ole dictionary here for a sec. In retail, bottlenecks can be defined as a delay at any point in the product ideation, production, and shipping phases. Bottlenecks can result from a wide range of inefficiencies, such as:
- Not enough employees to handle demand
- Mechanical errors
- Delay in the arrival of production materials –– textiles, nuts and bolts, etc.
- Inefficient communication with external vendors
- Inadequate or improperly utilized internal communication tools
Wondering about the impact of bottlenecks on the global supply chain? Drive to your local gas station. Like the oft discussed rise in global gas prices, every single vertical within the retail industry has been significantly altered in recent years. Prices for container shipping are now ten times what they were just two years ago. The infrastructure necessary to ship pre-assembled furniture and the weight of shipping containers make the rising costs of shipping particularly cumbersome in the home furnishings industry.
No retailer wants to alienate customers by passing on the rising cost of shipping, staffing, and production materials. Fortunately, there is a way to prevent skyrocketing inflation by implementing a few targeted actions to reduce bottlenecks on the front end.
Let’s take a look at 5 core causes of retail bottlenecks and how to make sure they don’t happen in your business.
1. Inaccessible Product Information
It’s incredible how often we see next level retail institutions trying to keep up while still using dated, ineffective communication methods. No organization built on creative collaboration should still have employees juggling Excel documents, emails, spreadsheets, and texts to access information. Especially not in the ever-evolving home furnishings industry, where a two-week delay to product launch can lead to a total change in consumer sentiment… and lost profits.
Suppliers and buyers incur suffering and stalemates when trying to operate on archaic communication technology.
Each retailer needs to receive and review product assortments from suppliers in its own unique way. The process by which vendors present assortments to their potential buyers can quickly become complex when they are forced to reenter product information for each unique retailer. Vendors are left having to track down unique product details to create assortments, quotes and orders for every prospective business they’re trying to work with.
It doesn’t have to be like this. There’s no reason that vendors should spend their time tracking down extensive emails and texts with manufacturers to get the information they need, not to mention time manually entering product information to meet the needs of potential customers. The next phase of PLM evolution allows suppliers to customize and export quotes to retailers in a single click. Data export that used to take two weeks will take three hours, saving time and valuable mental resources when reaching out to new retailers.
It’s gotten really, really complicated for buyers to get the full story of a product. The communication process between buyers, suppliers and manufacturers lacks structure. This can present challenges such as incorrect or lost orders, late shipments, strained relationships and missed opportunities. Buyers want to spend their time researching new products, not juggling spreadsheets.
The amount of data that it’s necessary to store for each PO varies by vertical. A buyer making an order for polo shirts needs up to 50-55 data points. A buyer creating a PO in the furniture industry needs 100-150 data points for each product. But that’s not all: each retailer likes to have that information in a different order. With a centralized PLM, buyers can publish what their data and qualifications are up-front. This removes hurdles to set up new products, so they can send out initial purchase orders more quickly. No more harassing vendors. No more inaccessible data.
The right PLM software can bring the thrill back to the buying process. It gives buyers fast access to essential product data. They can see the actual product, its components, and all of the features that make it stand out using real in-system product images, rather than messing around with a bunch of forms to obtain the most basic product information. They can also collaborate and communicate within the system – on specific products – which means they have historical, contextual product communications at their fingertips.
2. Inadequate Staffing
A staffing shortage is permeating every level of the retail industry, but not just at the top of the production funnel. A whopping 74% of retailers expect shortages in customer-facing positions this year. This means that the employees who are on the floor need fast access to product training and demos to get up to speed. But retailers can’t always access product data in time to adequately train their frontline staff. All too often, essential product data is in a stalemate between manufacturers, suppliers, and the buyers who make purchase orders happen. This can be the kiss of death in the home furnishings industry, where customers do extensive research before making their high-ticket home purchases and expect in-store associates to know their stuff.
How can retailers get access to product data in time to train a rotating array of frontline associates? An agile product lifecycle management solution that’s centralized in the cloud can help retailers take charge of their data. The right PLM solution will ensure that the people who need access to product data to create training materials can find it BEFORE the furniture hits the shelves. For better training, better employee retention, and a more streamlined retail operation.
Click here to learn how Surefront’s Product Lifecycle Management software can help your business achieve up to 10x ROI today!
We’ve covered two of the five aforementioned bottlenecks in this article. Tune in next week for the next three bottlenecks (and their remedies) in our second installment of “5 Bottlenecks in the Home Furnishings Industry (and How to Avoid Them),” where we will talk about how the right PLM can give your team the ability to map SKUs to any template, in seconds.
Product lifecycle management is a quickly evolving industry with a lot of moving parts. We do all of the research, so you don’t have to. Stay ahead of news & trends by subscribing to our Product Lifecycle Management Blog.
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