The Furniture Sector: Challenges Past & Present Need Radical Solutions

There is no escaping the fact that the furniture sector (like most other global sectors) has numerous challenges to deal with as it navigates a barrage of fluctuating global economic issues. I believe we need to confront these issues and look for solutions and/or workarounds for the present — and the future as far as possible.

The problems that we currently face as an industry often over-lap with each other and while some are the result of circumstances that are beyond human control others can be attributed to erroneous human choices — one only has to recall the Suez Canal debacle of 2020. Okay, so that was a bit of a cheap shot, but that incident remains an easy target for illustrating my point.

In my view, fluctuation, or fast-changing circumstances, is perhaps the overarching headline problem that the furniture sector continues to face right now.

One example of how fast circumstances can change can be illustrated by supply & demand since 2019. 2019 was a year of anticipated growth, however, during the height of the pandemic years (2020-21), the furniture industry saw a very high increase in demand for furniture products. This was largely prompted by consumers buying more during this time driven by less travel and more home improvement. This invariably — and obviously — increased demand right across the sector for raw materials, material processing capacity, components, shipping/freight and so on.

I can also personally testify to this, with Henkel’s Adhesive Technologies seeing an increase in demand for our products by 30% during those two years. Moreover, at Henkel we have been operating at a high load level for a long enough time and have seen that the demand for adhesive products for furniture has been much higher than anticipated.

As we head towards Q4 of 2022, circumstances have shifted dramatically. Demand has dropped and some of our furniture producing customers are now reporting full warehouses and readily available raw materials and components as well as available production capacity.

Economic Influences & Costs

The global economic situation is another serious challenge that the furniture industry faces. Costs of raw materials, distribution and transport/shipping costs are still very high, not to mention the world-wide rise in energy prices. Moreover, this is compounded by the effects of climate change and the rise in the number of emergency incidents across the globe that are not limited to hurricanes, tornadoes, flooding, earthquakes, fires and storms, which are affecting logistical considerations for many manufacturers both locally and in terms of exports.

Of course, all of these problems affect many different sectors, including automotive, semi-conductors, microchips and metals to name a few, but the furniture sector is in no way immune.

So, we need to consider real Solutions

Furniture manufacturers can and should look at more localized manufacturing. I’m not talking about at the point of sale or anything like that, but certainly within regions. So, while a supply chain is still a pre-requisite, particularly for raw materials and where they can be sourced, it greatly shrinks the supply chain and minimizes potential disruption. Eastern European manufacturers are leading the way here, and they can continue to do so.

Increase investment and expansion – again this is a solution that the Eastern European and CIS region can lead. At Henkel we are also taking this approach.

Energy prices are out of control across the world, but these are largely being addressed at national government level to support industries and businesses. This is a good thing and furniture manufacturers can benefit.

Work with customers and consider a multi-pronged approach to furniture solutions, including ready-to-assemble (RTA) furniture. While some may recoil due to a perception in a drop in quality of the final product — this solution can offer a win – win – win outcome. More readily available, RTA furniture is also easier, faster and cheaper to ship — not only contributing to improved carbon footprints and sustainability strategies, but meeting customer demand.

Embrace recycle and reuse initiatives across the industry. Again, this improves sustainability strategies and reduces reliance on new raw materials.

The return to more in-person events through the latter part of 2021 and into 2022 further highlights how the furniture industry across Europe and the world is continuing to grow. This is great news, and we shouldn’t downplay the positivity here, just because we face challenges. As just one example, the Meble Polska event in May reported record attendances, with more than 50% international attendees, while the upcoming season of events is vast. I hope to see some of you at some of these shows, for example the Ligna exhibition in Germany in 2023.

I don’t pretend to have all the answers, but there are definitely discussions to be had, and if we can have them in-person then so much the better. Alternatively, feel free to reach out to me here or directly if you would like to carry on the conversation.