Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2022 54 T here are 365 days in a year and a lot can happen during that time. Think about where you were just a year ago. For retailers in the Home Goods industry, store traffic was not an issue. Your sales associates were essentially order takers trying to keep up with the consumers who were coming into your store ready to make a purchase. You likely (but I hope not) pulled back on your marketing spend because demand was already so high. From June 2020 to the end of last year, the Home Goods industry saw unprecedented growth. But nothing lasts forever. Fast forward 365 days and the retail landscape looks quite different. I'll be the first to say it – things are challenging in today's landscape. But it isn't all doom and gloom. You just need to have perspective. If you're comparing this year to 2021, then, yes, you probably aren't happy with what you're seeing. But if you're comparing 2022 to 2017, 2018 and 2019, you're probably somewhere between flat and up in sales. Omitting mid-2020 and 2021 sales data, the Furniture and Bedding industry would be happy to see a 3 percent to 5 percent lift each year. What we're seeing right now is an inevitable course correction – it was only a matter of time. The buying cycle is returning to normal. Consumers are waiting for the holidays to buy, and they're being more cautious about how they spend their money. As stimulus cash dries up and household savings rates come back to pre-COVID levels, it's only going to become harder to drive that consistent level of traffic to your business. That said, the swinging doors are there. Consumers are buying, and they're buying big-ticket items. The average ticket in 2022 continues to outpace last year. And while that's driven by inflation, the data show the above-$2,000 retail price points are performing well. The International Sleep Products Association (ISPA) reported that the average ticket for the mattress industry in Q1 grew 20%. I expect to see ASP remain strong for the remainder of this year. The rise in average ticket goes hand in hand with consumers' willingness to tap into new lines of credit to help them make those major purchases. Nationwide Marketing Group's data show a continued increase in consumers' usage of retail credit through the first half of 2022, and it's a trend that we see extending into the back half of the year. That presents a major opportunity for you to leverage those programs in your advertising, which could bring some of that traffic back to your store. Another positive – we're finally starting to see the supply chain sort itself out. Manufacturers are catching up on the backlogs that built up over the past 18 months, and they're cleaning up issues of quality control. In addition, we're finally starting to wake up from the shipping nightmares that have been a focus of conversation over the past few years. For their part, manufacturers truly had too much business, and in most cases, not enough labor to help keep up with the demand. As a result, new-product introductions were few and far between over the past year and a half. For 18 months we saw very few product introductions or innovations, as manufacturers were focused on trying to keep up with demand. The Furniture and Bedding team here at Nationwide recently attended Las Vegas Furniture Market, and we're excited to report that from what we saw and experienced, the focus for a lot of manufacturers at the show was on either showing new products or offering a glimpse of what's coming later this year. As manufacturers focus on getting back to normal, I've spoken with many retailers who are using this time to look at their own businesses. They are evaluating their sales team, and they're looking to see how to evolve their marketing to reach today's consumer. These retailers know the in-store experience must be perfect. If you aren't evolving with your message, both on the marketing side of things and when the consumer walks in your store, you're doing a disservice to your business. Consumers are out there, and they want to purchase product. Lean on your group to find the best ways to reach them and give them the best experience possible. Remember, a lot has happened in the last 365 days. Take time to work on your business and do what you can to make the next 365 days as fruitful as possible. PUTTING PERSPECTIVE AROUND THE PAST YEAR IN RETAIL Jeff Rose Furniture Trends Jeff Rose, Sr. Director of Merchandising Furniture & Bedding, Nationwide Marketing Group RO

• Cover