Premarket activity reflects industry’s slow path to recovery | Bill McLoughlin

The question of “traffic” always arises in the aftermath of a market or even Premarket. It remains the most common, if imperfect, measure of a market’s perceived success. The more meaningful measure is of course buying activity.

By both measures, the most recent Premarket was fair.

To misquote Dickens, it was not the best of markets, it was not the worst of markets. Major retailers were in attendance and were working the market aggressively, looking for the key items and lines that can jumpstart what remains a challenging consumer selling environment.

Many smaller retailers, those who give the streets, halls and elevators the kind of bustling activity that makes a market feel busier, opted to stay home to do whatever they can to lure consumers back into the store.

At the same time, there was more looking than buying, as store traffic remains slow and retail inventories remain stubbornly high. The result is a challenging environment in which to place new products or open new slots on retail selling floors.

There was also a growing sense that world events are intruding on the furniture business again, as several manufacturers noted the challenge of getting samples on time given the shipping disruptions caused by military activity around the Red Sea and environmental disruptions to transiting the Panama Canal.

To date none of this is existentially threatening, nor is it rising to the level of previous shipping disruptions. Instead, it’s the latest indicator that the rapid-response-reflex, developed during the pandemic, remains as important as ever.

On a more positive note, the new product activity we’ve seen over the past few markets continues to gain momentum, with manufacturers working overtime to give consumers a reason to come back into stores. Perhaps reflecting consumers’ reticence to part with their discretionary dollars, the term “value” is popping up with increased frequency across all segments of the business.

That does not mean that the entirety of the business is shifting to lower price points, although there is a clear effort to strengthen the depth and breadth of assortments at low-to-mid pricing tiers. What it does mean is that, whatever the price point, the value proposition of features, benefits, materials, construction and, yes, price, have to deliver more for the money in order to catch the consumer’s eye.

Another, and likely short-term, reaction to the logjam on retail selling floors appears to be increased manufacturer development of aggressively priced promotional items. At a time when the replenishment of existing slots or the capturing of new inline slots is being stymied by inventory backlogs, retailers are showing a strong appetite for hero items to draw consumers into stores and drive cashflow.

Overall, Premarket retailers and manufacturers expressed relative optimism for the longer term while acknowledging that any return to sustained growth remains, at a minimum, a quarter or more away.

For now at least it appears the furniture business, like Little Orphan Annie, is setting its sights on “tomorrow.”

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