Marketing Holds the Hope for Revival
As has been stated, many furniture companies will not survive this recession. Those that have a chance to survive should look to sales and marketing to get out in front while most of their competitors are still in a foxhole.
In every recession, companies that continued with their marketing and advertising activities through the worst times stood out from competitors, since marketing is often the first area that is cut when budgets need to be trimmed. History has shown that those who keep focusing on marketing often gain market share that persists for years, if not decades, after the economy rebounds.
In furniture companies, of course, marketing has traditionally been weak. Leaders in the industry have long been reluctant to try to grasp the consumer’s perspective or to try to improve the customer experience. Even dire circumstances have not induced furniture companies to try to learn from other consumer goods sectors.
It’s time for furniture manufactures to take the blinders off. Furniture companies determined to stay alive will need to be open to change – in technology and in what information they capture and make use of, in manufacturing and distribution, and most of all in marketing and branding.
Furniture executives would do well to study the fashion industry, and to learn why women will pay $500 for a plain black dress when quite similar garments are to be had for $100 or even $50. The answer of course is branding. The company that can sell the dress for $500 has created a perception in the consumer’s mind of what the label stands for. The company has found a way to add value to a product. It is not weakness for furniture executives to look at Proctor & Gamble, VF Corporation, Unilever, Toyota Motor Corporation, Colgate Palmolive, Ralph Lauren and others to learn new marketing techniques for their own brands.
Companies that have the cash reserves to attack the market as the recession ends should also be looking closely at their product lines and their people. This may be the time to scrap certain lines and to think about introducing new products. It is definitely the time to scrutinize the sales and marketing workforce, eliminating marginal performers and hiring the most skilled people to be had. Needless to say, very good people are on the market now, not only in sales and marketing but in every other discipline as well.
This is a time to put a management team together that is focused on building a brand that will withstand the ups and downs of the economy and give the consumer of their products a reason to buy. The alternative is to compete with the low-cost producer and private label brands. In that type of scenario, the company’s destiny will forever be dictated by others such as suppliers and retailers that will put margins under continuous pressure. The ability to make money will be diminished and may mean the eventual liquidation of many within the furniture sector.
FURNITURE INDUSTRY WATCH REPORT SEPTEMBER 2009