Ron’s Thoughts: 2020 Year in Home Furnishings
2020. What a year.
In home furnishings, we came into 2020 with the vigor of a new era, a new decade. We had already determined it was going to be a great year, and the first quarter started off very strong, perhaps stronger than most in recent memory. Transactions were increasing as businesses prepared for the Las Vegas market, and the market itself showed high attendance and market orders.
But in March everything changed, not just at home, but worldwide. Within a few weeks, 99% of furniture stores in the US were closed. April High Point didn’t happen at all, and purchase orders went from a river, to a stream, to drips from a faucet.
At TrueCommerce-ecUtopia, we were trying to figure out, “How can we help retailers and manufacturers continue to do business?” The first idea we had was to talk to our customers about drop ship direct from vendor. It was already growing in other industries, so there was no reason home furnishings brands couldn’t take advantage. It turns out we were right; drop ship has played a huge role by giving consumers a different way to get furniture from their favorite brands.
A great example of that is RC Willey, who doubled their online business this year by leveraging drop ship options. The shift was striking; at the same time everyone was stuck at home, they looked at their customer needs and decided to make changes. Drop shipping from home furnishing brands let them do that, and in turn, consumers kept furniture retail alive.
We knew from what we’d already seen in eCommerce in other industries that technology was going to be pivotal for home furnishings. The companies that kept writing purchase orders by hand or receiving them by email weren't getting the visibility or the information fast enough to survive in this new economy. Technology, and more importantly integrated technology like EDI, gave businesses the speed and accuracy necessary to keep up with the sheer number of changes we’ve dealt with.
When things started opening back up, we had a situation that related, somewhat, to the post-9/11 economy. At that time, all the airplanes were in the wrong place. They'd been grounded to keep people safe, but now the plane that was supposed to fly from San Diego to Chicago was stranded in Dubuque, Iowa, because it never left there. That’s essentially what’s happened with shipping containers, tractor trailers, even ships in 2020—when everything got shut down, they were stranded, and now there’s a huge impact on shipping because we have to locate and move and get all the pieces where they need to be.
The supply chain is still a problem today because we haven’t gotten everything back in place. Retailers still can’t consistently and reliably get products from many vendors, and they are adjusting to get similar products from other suppliers so they can sell to consumers. It’s the same as going to the store and buying a different brand of beer because your favorite is out of stock. If the whole shelf is empty, you’re in trouble. But if there’s an alternative, you can get by, and that’s what furniture retailers are doing.
Again, having the right technology was key there; the faster you could move data, the faster your business could switch gears. Recently when we talked to Stuart Peterson, the Vice President of Supply Chain at RC Willey, he put it perfectly. “In the COVID market, it’s become a race for product. The faster you get orders in, the faster you go to the head of the line,” he said. Likewise, the faster you can process incoming orders from customers, the more you can sell and the happier those customers are.
We've seen a huge uptick in interest for TrueCommerce-ecUtopia's solutions and we’ve had a record year because of all these things—because it’s faster, it’s accurate, and it’s accessible. And, for the first time in several years, companies who were shut down had the time (or perhaps, were forced to have the time) to look at their processes and their technology and make the investment to stay in the game.
None of us understood, at the start, what this worldwide pandemic was going to do to us as an industry. If you didn’t change or adjust, you’re probably not reading this, because you’re no longer in business.
We’re facing more potential shutdowns in the coming weeks with the recent COVID spikes. While lobbyists fight to make home furnishings essential businesses so we can stay open, having the right systems in place to move data will continue to be critical. Furniture retailers need to know where product is, which items are available, and where they are in transit, and be able to give that information to consumers. It’s more important than it’s ever been.
About the Author: Ron Sellers, co-founder and chief revenue officer of TrueCommerce ecUtopia, is a technology advocate and leader for the home furnishings industry. With more than 25 years of industry-related experience, he offers significant expertise as a committee member of the Home Furnishings Association (HFA) and sits on the Executive Advisory Council for WithIt, a women’s leadership development network for the home and furnishings industries. When Ron is outside of the office, he can be found on his Harley Davidson cruising the streets.