“It’s not you, it’s me. I’m not ready to commit right now, and I just need to focus on me.”
Anyone who’s ever been on the wrong side of a breakup might recognize these phrases, and depending on individual circumstances, some retailers and some manufacturers may be hearing them in the coming weeks from their potentially ex-partners.
The COVID-19 pandemic has been deeply disruptive across the entire home furnishings industry, kinking or completely breaking supply chains, emptying coffers and causing some to shut their doors entirely. Don’t be surprised if that number grows in the weeks and months ahead as players on all sides and of all sizes are unable to sustain the weight of pandemic-inflicted burdens.
These challenges appear likely to manifest in a few different ways that could either serve to strengthen long-standing relationships or sever them. On the retail side, two months of closed stores and locked down customers led to cancelled or suspended orders and delayed payments.
As stores reopen and sales return — and if Memorial Day was any indication, they are returning — the need for replenishment is going to grow. In fact, the need for inventory is so significant that a pop-up, appointment-only event has emerged June 16-18 in High Point and appears likely to attract better-than-anticipated retail attendance.
This would be great except that the glut of cancelled orders and the resulting shutdown or cut backs in manufacturing can’t be undone with the flip of a switch. Factories that have been running with reduced manpower, and shorter shifts need to be ramped back up. Stockpiled orders need to work through the supply chain. Those who have goods on hand and the ability to deliver are well-positioned, and those who don’t will be counting on the strength of their relationships.
And then there is the issue of money. The effort to preserve cash during the shutdown has left some retailers carrying substantial past due balances with suppliers that are facing their own cash crunch. Working through those issues and coming to payment terms that get new orders flowing and factored will require trust and a significant level of commitment.
On the flip side, more than a few retailers may be looking to improve efficiencies and minimize costs. That could include paring back resources and concentrating on those best able to deliver, literally and figuratively, against still-evolving parameters. A new normal is going to emerge, but it’s far too soon to know exactly what that will look like. But what does seem certain is that established relationships will be put to the test.
Furniture dealers will be counting on the strength of those relationships to identify which suppliers are willing and able to meet a new and challenging set of needs. And manufacturers that have built their business across a broad channel base and can no longer deny to themselves or anyone else that e-commerce is critical to their survival, will be assessing where their business is headed, not just in the next six months, but in the next six years.
“It is you. And it is me. And if we’re going to get through this we need to do it together.”
That’s the phrase we all need to hear.
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June 08, 2020 at 05:04PM
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Blog: How will the furniture industry handle its coming commitment issues? - Furniture Today
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