What a difference a year makes.
At this time last year, there wasn’t enough merchandise for everyone. Vietnam and Malaysia were closing, threatening to further aggravate already massive backlogs. Finding inventory was harder than finding Waldo, and consumers were always eager to redecorate their homes, with plenty of discretionary income to do so.
On the heels of the highest attendance ever at a pre-market, the rescheduled High Point Market was ending, and a then-emerging semi-event dubbed First Tuesday raised questions about what the ‘new normal’ would look like. steps.
It’s been a long time now, hasn’t it?
It made little sense at the time that workers would soon become harder to find than containers. And talk of slowing consumer demand seemed focused on an indeterminate point in the future. I guess we now know where that point was.
Twelve months can be a lifetime in the furniture business. Decisions made a few months ago are now, in some ways, at the heart of the challenge facing retailers and manufacturers. The scramble to meet demand, the rush to build capacity and the widespread effort to build up stocks have paid off.
Unfortunately, demand has dropped, in some cases dramatically; this increased capacity has nowhere to go; and inventory is now crammed into warehouses, parking lots and sales floors. Inflation, now at a 40-year high, is limiting discretionary spending, while at the same time the pressure to use price promotions to shift the inventory glut is mounting every day.
Rock, meet the anvil.
Last year’s jargon – replete with words like “stop”, “backlog”, “request”, “delay” and “price increase” – is giving way to a new group of trending phrases. In the months to come, you will see terms such as “close,” “right size,” “resign,” “acquired,” and “filing” (as in Chapter 11) pop up in news stories with increasing frequency. .
One year. 12 months. That’s all it took.
This is worth remembering as we all navigate this next phase of the economic cycle. If you knew 12 months ago what you know now, what would you have done differently? Would your answers have been so urgent, so extreme? Maybe.
We all only have the information at our fingertips right now on which to base today’s decisions. And history shows that the pendulum always swings back and rarely swings as far in either direction as we perceive it to. Despite all the talk of falling demand and overabundance of inventory, there are still huge deals going on in the furniture industry. Many companies continue to post solid gains and not simply due to higher prices on stable unit growth.
The next 12 months will have their own set of challenges. And a year from now, the company could be very different from what it is today. But then, as now, there will be deals to be had and opportunities to be exploited. Sometimes it is worth taking a moment to reflect on what we have done. It helps provide perspective for where we are headed.