Rising Demand Boosts 2017 Forecast

Millennials start shopping for basics while Boomers fit homes for thriving in place

“We are forecasting 2017 as the best year in the decade for the furniture industry,” said Jerry Epperson, Partner with Mann, Armistead, & Epperson, Ltd. Investment Bankers and Advisors, and publisher of the monthly Furnishings Digest Newsletter. Kyle Johansen, Executive Director of Merchandising at HOM Furniture, with fifteen stores in the Midwest, shared Epperson’s optimism. “We anticipate growth on a same store basis of 3-4% in the new year.”

“We expect to exceed our 2016 numbers.”
- Dianne Ray, president, Garden City Furniture

“By all normal indicators like interest rates, inflation rates, housing and the market, we’re in good shape,” said Ken Smith, Audit Partner with Smith Leonard Accountants and Consultants and publisher of Furniture Insights. “Consumer confidence climbed after the election and a recent University of Michigan survey indicated nearly half of all consumers expected good times in the economy as a whole in the year ahead.” Smith’s November issue of Insights included results from a survey of residential furniture manufacturers and distributors that showed orders up 14% in September 2016 over September 2015, a double-digit increase that bodes well for the months ahead.

“The pent-up demand is there and getting stronger.”
- Jerry Epperson, partner, Mann, Armistead & Epperson, Ltd.

“We were pleased to see products at Market that will resonate well in our coastal area,” said Dianne Ray, president of Garden City Furniture near Myrtle Beach, SC. “We sell a lot of the less formal fun fabrics like coral, light green and aqua, as well as the distressed and driftwood look in all wood presentations. This Market gave us many exciting options to introduce to our customers.” As was the case with Olinde’s, weather-related factors, like the flooding and high winds due to Hurricane Matthew, resulted in a spike in replacement buying at Garden City Furniture in the third quarter.

“As a result of the recession, Millennials delayed major steps in their lives,” said Epperson, “including further education, marriage, childbearing and establishing their own homes independent of their parents. Now, they need someplace to sit, sleep, and dine, and they are out there shopping for unique signature pieces that reflect their individual tastes. This is a great opportunity for retailers to offer something different for them. With 1400 showrooms, and only 300 of those with high quantity purchasing requirements, Market provides an enormous array of innovative vendors to explore!”

According to HOM’s Johansen, who spent a week at Market accompanied by eleven colleagues, “Trends that resonate with the Millennials include transitional, mid-century to modern and a vintage/reclaimed style. The traditional looks are becoming more simple, with fewer over the top features, and they’re taking on lighter finishes than in the past. We show a vast assortment of product, so we aren’t focusing on just one or two trending lifestyles. Market gives us the opportunity to visit vendors that span all the major trends.”

While the Millennials’ demand for home furnishings gives the industry a new boost, Baby Boomers still represent a major opportunity. Fitting their homes with livable products that offer enhanced safety and convenience, they could spend as much as $7.9 trillion in the coming years.

“Older people are the core market for motion furniture."
- Roger Hancock, owner, Town and Country Furniture

“Seniors control vast resources,” said Randy W. Fiser, ASID CEO, in his presentation at the ASID President’s Forum 2016. “As a group, the 55-plus population in the U.S. would be the third-largest economy in the world, after the United States as a whole and China. Aging in place is clearly their preference, with more than 75 percent of those age 80 and above living in their own homes.”

Roger Hancock, owner of Town and Country Furniture in the Buffalo area, attributes the changing needs of older people as the key to his 420% growth this November over last November. “I sell a lot of motion seating and while it appeals to all age groups, streamlined power motion chairs are extremely popular with ladies of a certain age. Whether they want to replace outdated or stained furniture, are physically weakened, or just find that it is easier to get out of a power recliner, they are buying. ”

As we head into the new year, today’s two largest demographics are on the hunt for new furnishings. More Millennials are ready to satisfy their long-pent-up demand for pieces to fill their new homes, and Boomers are seeking products that support their desire to thrive in place. For the retailers and designers who offer the right mix of merchandise, the prospects for continued sales growth are looking bright.