Retail Observer

RETAILOBSERVER.COM APRIL 2016 52 L ike a fine wine, 2015 was a good year for the furniture and bedding industry. December 2015 completed 18 months of strong consistent growth which is something we have not experienced since 2007. Leading the pack in growth is bedding which accounts for 15% of the total industry with estimated sales of $15.1 billion in 2015. In the upholstery arena, stationary is predicted to grow at a rate of 4.2% with estimated sales of $17.77 billion. Motion upholstery accounted for 11% of total industry sales with estimated 2015 sales of $10.95 billion. Leather upholstery is expected to grow 4.1% and estimated sales are $11.74 billion. And last but not least is case goods which is estimated to grow 3.7% with estimated sales of $28.29 billion. I almost forgot about one other category that has been experiencing tremendous growth as well in our industry and that is outdoor. If you are not in this category you need to take a close look because outdoor is poised to grow 4.4% with estimated sales of $4.4 billion. So what does that mean for you? It represents tremendous opportunity for growth and increased profitability. Bedding represents 15% of the total industry and should be the most profitable category in your store with margin opportunities of 50% plus! This is a category in which a tremendous amount of appliance and electronics dealers have entered into with overwhelming success. One of the greatest areas of growth in bedding today is the addition of adjustable power bases. Think about how much time you spend in bed reading, watching television and working on your laptop. And while doing so you are propping pillows up behind you trying to get comfortable. Adjustable bases eliminate those issues but more importantly they improve your sleep with slight adjustments to the head and foot position. They can also help eliminate snoring! The attachment rate for power bases is double digit and increases the overall ticket meaning greater dollars per square foot and increased profitability. Stationary upholstery accounts for approximately 17% of total industry sales with leather representing 38% of total upholstery sales. The key here is a good, better, best offering with a clear reason for the steps in terms of quality. For years, the color palette on retail floors has been a sea of brown, tan and gray. Don't be shy and show a vibrant color palate. The popularity of HGTV types of programming are inspiring consumers to think outside the box and take more risks. Motion upholstery has moved from big bulky frames to more upscale styling and added functionality of USB ports, battery packs and power headrests. Couple all of that with quality seating and you have a winning combination to drive your motion upholstery business. In the world of casegoods (bedroom & dining room) which represents approximately 28% of total industry sales the key is… casual. We have become more casual in every aspect of our lives and the interiors of our homes are a reflection of who we are. In bedroom, the addition of upholstered headboards is huge and has become a category of its own. Formal dining has truly taken a backseat to casual dining as the kitchen has become the gathering place in today's home. Speaking of kitchens, are you offering barstools in your product mix. Virtually every home today has a kitchen island and barstools are a natural product offering that takes up virtually no floor space which means greater dollars per square and once again increased profitability. Now let's take a look at occasional tables (5% of total industry sales), home entertainment where consoles are king (7% of total industry sales) coupled with area rugs, accessories and lamps and you now have all the components needed to become the master of bundling. Take a look at a sofa, love seat and chair on their own… boring! Now combine that upholstery with occasional tables, how about lamps on those end tables, let's now throw an area rug under all of that and watch that upholstery really come to life. Like icing on the cake, add the accessories, pictures, home entertainment center and presto, you have given your consumer what they want, the perfect room package they have been looking for and while doing so you increased your average ticket, dollars per square and overall profitability. And as the weather warms we all look forward to getting outdoors to spend quality time with family and friends. Remember that the outdoor category is poised to grow 4.4% in 2016 and represents another opportunity. When thinking outdoor, remember that there are 3 key components, Eat (grilling), Heat (fire pits) and Seat (furniture). So think outside the box and get outdoors. THE SKY'S THE LIM IT FOR FURNITURE AND BEDDING IN 2016 AND BEYOND RO Bill Bazemore is the Vice President of Furniture for Nationwide Marketing Group. Call (770) 442-9726 or visit furniture@nationwidegroup.org. Bill Bazemore Furniture Trends

• Cover