Friday, January 22, 2016

Most Consumers Shop Online for Furniture

As furniture companies are gearing up for the Las Vegas Market which opens this Sunday, Furniture Today reported that according to a recent survey seven out of ten consumers shop for furniture online.  But don't worry, the key word to keep in mind here as you are busy preparing for the Las Vegas Market is "shop".  The vast majority, just over seven in ten, still buy their furniture from traditional brick and mortar stores.  Nevertheless, it is very important that you have your merchandise available both at brick and mortar stores as well as online.

What this means is that approximately 30% of consumers still shop and buy their furniture at traditional brick and mortar stores.  Another 40% will shop and do price comparisons online, but still purchase their furniture from a brick and mortar store.  These numbers do vary slightly based on the age of the consumer, but this shouldn't come as much of a surprise.  It was found that only 24% of Millennials, ages 18 to 35, do their shopping and buying all at brick and mortar locations, while 47% will shop online but purchase at a brick and mortar location.  For Baby Boomers, ages 52 to 70, 38% will both shop and buy at brick and mortar stores, while only 36% shop online but buy from a brick and mortar store.  Generation X, ages 36 to 51, falls right in the middle with 31% both shopping and buying at brick and mortar stores, while 40% will shop online but make their purchase at a brick and mortar location.

Of course this still leaves three in ten consumers purchasing their furniture online.  About 12% of consumers will shop in traditional brick and mortar stores, but then purchase their furniture from an online store.  While 16% of consumers will do all their shopping as well purchasing from online retailers.  What is interesting is that age has no impact on how you shop for furniture that you buy online.  These percentages don't change much when you break them out for Millennials, Generation X, and Baby Boomers.

Another important thing to consider about online shoppers is how they do their shopping.  The biggest change comes from where they do it.  In 2010 only 5% of internet users used a mobile device to do their shopping, this number has steadily risen and in 2015 over half of online shoppers are using mobile devices.  Then there is how they do their shopping.  It was found that eight in ten internet users will use the internet to compare prices before they make their purchase.  Finally, there are the sites that internet users visit when doing their online shopping.  56% of shoppers will visit online-only retailers, 51% of shoppers will visit stores that also have a brick and mortar counterpart, 35% will visit the manufacturer's site, 16% will use deal comparison sites such as Google Shopping, while only 10% will visit social media sites.

It is important as a furniture manufacturer that your furniture is available both at brick and mortar and online stores, and with over a third of internet users visiting manufacturer sites, you too need a strong online presence.  This can be difficult to do if you are too busy making collection calls and have all of your money tied up in receivables.  Let DSA Factors help, we have been factoring for the furniture industry for 30 years.  Give us a call today at 773-248-9000 and if you'll be at the Las Vegas Market keep a look out for Ben as he will be visiting the market and will be able to answer questions you may have about our factoring program.

Tuesday, January 12, 2016

Color is Most Important Factor in Choosing Outdoor Fabrics

When it comes to choosing an outdoor fabric, 98% of retailers and 100% of designers consider color to be very important to the customers according to a recent study by Casual Living.  But what colors people choose depends on the type of chair and who you ask.  According to retailers, just over three quarters of consumers like grays when it comes to cushions, while two thirds like blues, and slightly less than half like browns.  When it comes to slings, just over seven in ten consumers like browns, and just less than seven in ten like grays, while not quite three in ten consumers like blues.  When it comes to pillows things get a bit more colorful.  A bit more than three quarters of consumers like blues, while slightly less than six in ten consumers like oranges, with reds trailing oranges by just a few percent.

However, if you ask designers, they feel fairly confident that blue is the most popular color for cushions, slings, and pillows, and expect blues to be the best selling color of 2016.  Regardless of who you ask or what color you choose, customers are staying away from light fabrics that get dirty easily.

Given the fact that color is such an important factor in choosing a fabric, it should come as little surprise that consumers biggest concern with fabrics is fade resistance.  96% of retailers state that customers ask about fade resistance.  The next biggest concern is how quickly the fabric dries, followed by stain resistance, mildew resistance, and then water resistance.

After color, the next most important factors in choosing a fabric according to retailers are durability, coordinating fabrics with a group, and design and pattern, all of which are important to 90% or more of consumers.  Fabric softness and fell along with care and maintenance are both important to more than 80% of consumers.  Surprisingly affordability is near the bottom of the list of important factors, with less than two thirds of consumer concerned about the price tag.

While only nine in ten retailers stated that design and pattern are important to consumers, all designers surveyed stated that design and pattern are very important to their customers.  When it comes to cushions and slings, solid patterns are far and away the most popular.  Stripes come next, for cushions they're popularity is about half that of solids, while for slings they're popularity is about a third that of solids.  Abstract and geometric patterns are just about the only other design that get a modest amount of interest for cushions and slings.  However, when it comes to pillows consumers are looking a lot of different patterns.  Over three quarters of consumers consider abstract and geometric patterns for their pillows.  Two thirds consider botanical, leaf, and flower patterns for their pillows.  While just over half consider paisleys and scrolls, and just under half consider stripes.  Animal prints, which receive interest from a little more than a third of consumers, also are more popular than solids which receive interest from one third of consumers who are buying pillows.

Off the floor fabrics and custom or special-order fabrics pretty much split the fabric market evenly.  Retailers report that just over half of sales are for off the floor fabrics, while designers report that just over half of sales are for custom or special-order fabrics.

If you are in the casual furniture industry and are getting ready for a busy casual season ahead of you, now would be a great time to give DSA Factors a call at 773-248-9000.  You will no longer need to worry about seasonal cash flow problems, and will have the confidence of working with a partner that has been factoring for the furniture industry for 30 years.

Thursday, December 31, 2015

So Long 2015 - A Great Year for the Furniture Industry

The furniture industry had a wonderful year in 2015, topping $100 billion in sales for the first time since 2007.  According to Furniture Today, furniture sales for the year are estimated at $102 billion, a 3.9% increase over 2014, and even higher than 2007's $100.8 billion.  Furniture sales have been rising fairly consistently since 2009 when they reached a low point of only $83.2 billion, and there is no reason to believe that this trend won't continue.  Furniture Today is predicting that sales will continue to rise over the next 5 years and will reach $122 billion in 2020.  The categories that experienced the highest increase in sales this year where rugs with a 4.8% increase over last year, followed by bedding with a 4.5% increase, and casual furniture with a 4.4% increase.

The larger categories also did well in 2015.  Stationary upholstery experienced sales of $17.8 billion, a 4.2% increase over 2014.  Motion upholstery experiences sales of $10.9 billion, a 3.9% increase over 2014.  With a 38% share of the overall upholstery market, leather upholstery sales reached $11.7 billion, a 4.1% increase over 2014.  The other large category, case goods, had sales of $28.3 billion in 2015, a 3.7% increase over 2014.

One factor that is leading to higher furniture sales is an improving housing market.  Construction of single family homes have been on the rise since 2011 when construction spending was at $108 billion.  Last year construction spending reached $193 billion, and 2015 appears to be even better.  For the first nine months of 2015 construction spending on single family homes were $160 billion, a 13.8% increase over the same period in 2014.  Construction of single family homes accounted for 57% of residential construction spending in 2014.  Another third of residential construction spending comes from home improvements, with the remainder coming from multi-family dwellings.

With continued growth expected over the next 5 years, its important that you are able to handle increasing sales volumes.  Let DSA Factors help you by factoring your accounts receivables.  We can provide you wish the cash flow you need while also handling your collection work and offering you insurance on your receivables.  Give us a call at 773-248-9000 and make 2016 your best year yet!

Wednesday, December 16, 2015

Outdoor Furniture Market Projected to Finish the Year Up 4.5%

In a study performed by Casual Living, the outdoor market will have total sales of nearly $6.9 billion for 2015, up 4.5% over 2014's $6.6 billion.  This is good news for the furniture industry and economy as 2014 saw a 3.9% increase while 2013 only saw a 1.3% increase.  Leading the way our grills which hold a 36% share of the market followed closely by dining sets at 30%.  Other important categories include chat groups with a 16% market share, shading with a 9% market share, and other seating options with a 5% share of the outdoor furniture market.

Grill sales are projected to total $2.5 billion for 2015, up 4.6% from 2014's $2.39 billion.  Dining sets will reach $2.1 billion, up 3.3% from last year's $2.03 billion.  The largest jump came from chat groups whose sales are up 6.4% over last year, they are projected to reach $1.09 billion for 2015.  Shading also experienced a big boost with projected sales to reach $592 million, a 5% jump from 2014's $564 million.

This year, 4% of all American households either have or plan to purchase an outdoor dining set, that translates to roughly 4.7 million households, with the median price point for a new set being $150.  By region, dining sets are most popular in the Midwest where 4.4% of households purchased a new set this year, followed closely by the West where the number was 4.3%, in both these regions the median price point on a set was $100.  The South was even with the national average with 4% of households buying a new dining set but ahead of the national average with a median price point of $200.  While in the Northeast only 3.2% of households bought a new dining set, those that did spent more money with a median price tag of $300.  When it comes to what people are looking for in a dining set, the most important feature is price, this is especially true in the Midwest where 78% of consumers mention price as an important feature.  Price is also the most important feature in the West where 62% of consumers look at it, and in the South where 59% of consumers consider it.  The other important features in these three regions are quality and durability as well as style and design.  In the Northeast where 57% of consumers consider price an important feature, it falls behind quality and durability which is important to 71% of consumers and style and design which is important to 79% of consumers, perhaps explaining why fewer people in the Northeast are buying outdoor dining sets but are spending more money on them.  The least important feature to consumers was brand, which less than 10% of consumer find important nationwide.

Chat groups were purchased by 1.5% of American households this year, which translates to 1.7 million households with a median price tag of $300.  However, unlike dining sets, the richer you are, the more you spend on a chat group.  For households making less than $100,000 a year, the median price for a chat group was $225.  For households making between $100-150 thousand, the median price jumps up to $1500, and for those making over $150,000 the median price is $2325.  While these affluent households might only account for 19% of the households that purchased a chat group, they account for 65% of dollars spent on them.  For these affluent buyers, nearly all of them are consider the style and design to be the most important factor when purchasing a chat group.  For middle and lower income households quality and durability along with price are the most important factors in choosing a chat group.

While these cold winter months may not be the best time for the casual furniture industry, they offer suppliers the time they need to prepare themselves for the busy season ahead of them.  If you are have seasonal cash flow problems, or you are experiencing higher sales volumes and need help keeping up with higher demand, now would be a great time to give DSA Factors a call at 773-248-9000.  We have been factoring for the furniture industry since 1986 and have the experience and know-how you need to take your business to the next level.

Thursday, December 10, 2015

Upholstery still dominating furniture sales in 2015

So far upholstery has accounted for 41% of sales at furniture stores this year, with case goods coming in at 35% and bedding at 14%.  Accessories only accounted for 5% of sales, while outdoor furniture only accounted for 2% of sales.

Leading the pack for upholstery was the stationary group which made up 24% of sales for furniture stores this year, a 1% increase over 2014.  The big change however has been in the motion category, while only holding a 6% share of furniture sales in 2010, it holds an 11% share today, with recliners holding another 6% share of sales.  For upholstery, custom orders account for a quarter of all stationary sales, 10% of motion sales, and 6% of recliner sales.

When it comes to case goods, master bedroom holds a 12% share of all furniture sales, which is over one third of all case goods sales.  Youth bedroom only accounts for 4% of all furniture sales.  For dining, casual is more popular than formal.  Casual dining takes a 6% share of furniture sales, while formal dining only has 4%.

Overall furniture sales were up 4.6% in 2014, and thru August of this year are up another 6.2% over the first eight months of 2014.  Stores report that their best sales month is December, followed by November, August, May, and March.  However, despite increased sales volumes, stock turns and close ratios are both down.  The average store reported a stock turn of 4.3 times this year as compared to 4.5 times last year.  Close ratios dropped by 1% to 25% this year.  This of course doesn't make much sense when overall sales on the rise, but that is due to the fact that the best selling price points are on the rise.

The largest price point jump this year came from entertainment centers, with a median sales price of $799, the category experienced a 33% increase over last years $599.  After that leather upholstery has experienced experienced the most change.  Leather sectionals have gone up in price by 23% this year with the average sectional costing $3699 as compared to only $2999 last year.  Leather stationary sofas are up 14% in price from $1399 to $1599, leather motion sofas are up 11% from $1399 to $1549, and leather recliners are up 12.5% from $799 to $899.  Despite the rising prices in leather upholstery, fabric upholstery prices have remained fairly stable over this last year.  The other large jump this year came in the dining category.  A casual dining set with 4 chairs is up 12.5% this year with the average set costing $899, while formal dining sets with 6 chairs are up 20% with the average set costing $2399 this year.  The only category that experienced a drop this year is the youth bedding category, down 10% from last years $499, the average twin size bed only cost $449 this year.

Data for this article was collected from a survey by Furniture Today.  Companies representing more than 10,000 storefronts responded to the survey.

It's important to stay up to date on industry news.  If you are spending all your time making collection calls, you don't have time to be staying on top of the industry and attending the trade shows that the stores are attending.  The average furniture store attends four trade shows each year, and if you aren't at these shows, then you aren't making sales.  Let DSA Factors handle your receivables, we have been specialists in the furniture industry since 1986, and have the knowledge and resources you need to grow your business.  Give us a call at 773-248-9000 today to find out how we can work for you.

Monday, November 23, 2015

Home Sizes on the Rise

With so much interest in tiny homes and urban living, it may come as a bit of a surprise that new homes are actually increasing in size. According to a study by Furniture Today and the US Census Bureau, the average home built in 2014 was 2,657 square feet, a 2.3% increase over 2013's 2,598 square feet.  Of the 620,000 new homes built in 2014, 45% of them had 4 or more bedrooms, 36% had 3 or more bathrooms, and 31% were over 3,000 square feet.

While the average home size for the entire country is increasing, it is interesting to note that different regions are growing at different rates.  Leading the pack is the Midwest which experienced 7.3% increase in size last year and a 13.6% increase since 2010.  However, despite such large growth, especially in the last year, the Midwest still has the smallest homes in the country.  The average new home in the Midwest last year was 2,574 square feet, up from 2,398 square feet in 2013 and 2,265 square feet in 2010.

Following the Midwest comes the South, which now has the largest homes in the country at 2,711 square feet for homes built in 2014.  While this is only a 0.8% increase over 2013's 2,689 square feet, it is a 13.2% increase over 2010's 2,393 square feet.

Out West houses have been growing at a much more stable rate with the average new home in 2014 at 2,603 square feet.  This was a 3.2% increase over 2013's 2,523 square feet, and a 9.1% increase over 2010's 2,386.

While the Midwest, South, and West are seeing much larger houses getting built each year, it may come as a surprise that the Northeast, which had the largest homes being built in 2010 at 2,613 square feet, has pretty much stayed level.  In 2014 the average new home was 2,617 square feet, a 0.7% drop from 2013's 2,635 square feet.

With home sizes getting larger in 3 out of 4 regions of the US, this can translate to consumers buying more furniture while also looking for larger individual pieces of furniture.  According to data collected by Furnituredealer.net in the first six months of 2015, the most popular dimensions for a sofa are 87" long, with a depth of 39.4", and a height of 37.6".  When it comes to sectional sofas, consumers are looking for a footprint of 116.1" by 98.3" with a height of 37.7".

If you are a furniture manufacturer, it's important to keep up on housing trends and make sure that the furniture you are making meets the demands of today's consumers.  If you are spending all of your time chasing down past due receivables, it's hard to stay on top of what really matters.  Let DSA Factors handle your receivables for you, not only will you save time and money, but we will also improve your cash flow.

* In this study, the Midwest includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. The Northeast includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. The South includes Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Washington DC, and West Virginia. The West includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Tuesday, October 27, 2015

Patios: The Most Popular Outdoor Space

In a recent survey done by Casual Living, it was found that one third of all Americans use their patios.  Six out of ten houses have a patio, and just over half of all houses have a porch, while slightly less than half of them have a deck.  When it comes to condos, four out of ten have a patio, three out of ten have a balcony, while porches and decks each appear in two out of ten condos.  For apartment dwellers, almost half of them have a balcony, while just less than a third of them have a patio, and two out of ten have a porch.

When it comes to how people use their patios, or other outdoor spaces, nine out of ten people use their outdoor spaces for relaxing, while nearly three quarters of Americans enjoy reading outside.  Also popular are grilling, entertaining, and gardening with each activity being done by approximately seven out of ten Americans.  About half of all Americans will have family meals, use a computer or tablet, and listen to music outside.  Three in ten Americans enjoy sunbathing in their outdoor spaces, and nearly a quarter of all Americans use their outdoor spaces for playing with their children.

While just over four in ten Americans made upgrades to their outdoor spaces in the second half of 2014 and first half of 2015, six in ten Americans either have or are planning on making upgrades in the second half of 2015, with another two in ten planning on making upgrades in 2016.  The most common upgrade by far is planting vegetation with over three quarters of all people who either made or plan to make upgrades planting new trees, flowers, or other vegetation.  Next up is maintaining a deck or patio.  Nearly half of all people who already made upgrades performed maintenance work on their deck or patio, with another third planning to do so.  Other popular improvements include buying furniture and outdoor accessories, installing lighting, buying a grill, buying some sort of shade device, and performing other landscaping work.  The least popular improvement is installing a new swimming pool.

When it comes to outdoor furniture, dining furniture is the most popular, closely followed by conversation groups, and then other seating options such as benches or hammocks, and finally fire pits.  While alternative seating options and fire pits may be the least popular furniture choices, they are gaining in popularity as more people plan to purchase them than have already done so.  Fewer people plan to buy outdoor dining furniture as have already done so, while conversation groups are remaining stable with just as many people planning on purchasing them as those who have recently done so.

With outdoor accessories it should come as no surprise that the most popular items are potted plants and flowers, with nearly nine in ten consumers who accessorize purchasing these.  Just over half of people accessorizing will purchase decorative pillows, and a little less than half will purchase outdoor rugs.  Tableware and wall decor are each purchased by about three in ten people accessorizing, while two in ten purchase statues.

For lighting, strands or strings of light bulbs are the most popular with just over half of all consumers using them.  Only slightly less popular is hard-wired fixtures.  After that about a third of people use lanterns and a quarter of people use landscape lighting.  The less popular options include portable lamps, torches, candles, lighting under shading devices, and solar lights.

Finally with shading, a roof or umbrella is the most prevalent from of shade with a little less than half of all consumers using each.  For umbrellas, table umbrellas are about twice as popular as free standing umbrellas.  About one in ten Americans will use a tree for shade.  The other less popular options include pergolas, awnings, gazebos, curtains, and screens.

With all these improvements being made in front and back yards across the country, if you manufacture products for the outdoors it is important that you have the ability to handle large orders if you want your merchandise to be stocked with major retailers.  Let DSA Factors help you grow your business.  With nearly 30 years of experience in the furniture and accessories industries, we have the ability to provide you with the cash flow you need while also managing and insuring all of your receivables.  Give us a call today at 773-248-9000 and find out how we can help your business grow.