HIGH POINT — The furniture industry is making progress in closing a widespread "buying gap" that cost it more than $21 billion in lost sales last year.
The gap has narrowed in 11 product categories, with substantial progress in home office, futons and stationary and motion upholstery. It has grown larger in only two categories: entertainment centers/armoires and lamps.
Analysts credit the gains to a variety of factors, including consumers' growing use of the Internet as an education tool, the proliferation of home furnishings design programs on cable and satellite television networks, and an industrywide public relations program.
The buying gap refers to the percentage of consumers who shop for a particular product in a calendar year but do not buy in that same year. It is significant because it reveals that large numbers of consumers shop for furniture but then decide not to buy, for one reason or another.
Those lost opportunities, or untapped sales, last year added up to $21.3 billion. That's how much additional business the industry would have generated if every consumer household that shopped for a particular category went on to buy in that category in the same calendar year.
A major opportunity
That isn't likely to happen, of course. But the size of the buying gap presents a major opportunity to furniture marketers.
Furniture/Today first documented this gap in 1998, after a survey of more than 20,000 U.S. households that shopped for home furnishings in 1997. The gap then ranged from a low of 28% for bedding to a high of 62% for motion upholstery. That means that nearly one-third of the consumers who shopped for bedding in 1997 did not buy that same year, while almost two-thirds of the consumers who shopped for motion upholstery did not buy.
Industry making progress
A national consumer study of more than 27,000 households, completed earlier this year by Furniture/Today, shows the industry is making progress on several fronts. Two hot product categories — home office and futons — show double-digit improvements. The buying gap in home office other than desks — 49% in 1997 — was down to 38% in 2000. That improvement of 11 percentage points was matched by futons, where the gap dropped from 54% to 43%.
Substantial gains were also recorded in a number of upholstery categories: chairs that swivel, rock or glide improved 9 percentage points, motion sofas/loveseats improved 8 points and stationary sofas/loveseats improved 4 points.
Two wood furniture categories, desks and occasional tables, each posted gains of 3 percentage points.
Jerry Epperson, an analyst with Mann, Armistead & Epperson, said the gains show the industry is making progress in meeting consumer needs. He also said a public relations campaign conducted by the American Furniture Manufacturers Assn. is creating more awareness of home furnishings with consumers.
And he noted that consumers are making greater use of the Internet to "pre-shop" for home furnishings. When those consumers begin shopping, they have a better idea of what's available and are more likely to find products that meet their expectations.
In addition, he said, retailers like Ethan Allen are effectively selling the benefits of home furnishings with their high-quality, broadly distributed consumer catalogs.
Ken Smith, national director of furniture industry services for BDO Seidman, said he would like to see more than just one year of gains to know for certain that the industry is indeed closing the buying gap. But he agreed that the better numbers in 2000 suggest progress.
He cited several positives for the industry, including the growing number of design programs on cable and satellite television networks. "Those shows are creating more public awareness of home furnishings," he said. "That would have some impact. It has to have helped some."
Another plus for consumers, he said, is the emergence of retailers like Crate & Barrel, Pottery Barn, Storehouse and Z Gallerie. "Specialty retailers have made the shopping experience more comfortable," he said.
Last year was a strong growth year for the industry, with U.S. consumer spending on furniture and bedding climbing 6.9% from the previous year to $64.1 billion, according to the Department of Commerce.
The industry's growth was almost as healthy in 1997, when consumer spending rose 6.2% to $53.8 billion.
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