Furniture Stores
Buy This Industry Report
Get more in-depth industry information with a First Research industry report containing business challenges, trends, executive insight, call prep questions, and so much more!
Industry Overview
The US furniture retailing industry includes about 20,000 companies with combined annual revenue of $60 billion. Major companies include Ashley Furniture Industries, Ethan Allen, and Haverty Furniture Companies. The industry is fragmented: the 50 largest companies have about 30 percent of the market.
Competitive Landscape
Household furniture sales are closely linked to home sales. Office furniture sales are linked to employment growth and new business formations. The profitability of furniture stores depends on merchandising and marketing. Small stores can co-exist with large ones by carrying special goods that appeal to a particular type of customer.
Products, Operations & Technology
A typical furniture store sells living room, dining room, kitchen and bedroom furniture, and mattresses. Products are sometimes classified as "case goods" (wood furniture) or upholstered products. Most retail furniture stores sell a broad range of products, but some concentrate on one furniture type, such as mattresses, sofas, or office or children's furniture. Store operations involve sales management, merchandising (deciding which products to sell), inventory management, and (sometimes) credit financing.
Many retailers have multiple stores fed by one or several regional warehouses, which in turn receive goods directly from multiple manufacturers. Typically, smaller stores are showroom galleries with little inventory of their own; customers receive the product from a central warehouse. Larger stores with an attached warehouse are more popular in suburban locations. While some furniture, like beds and mattresses, can be directly supplied from inventory, upholstered and wood furniture are often made-to-order by the manufacturer, with delivery times that can stretch to several months. Most purchases are delivered from a warehouse to the customer's home or office. Large-volume retailers may operate a fleet of delivery trucks.
Retailers buy much of their product at trade shows, of which there are a large number. The most important US trade show is the International Home Furnishings Market in High Point, North Carolina, in the spring and fall. Retailers typically buy product from dozens of manufacturers, and may have special sections in their store dedicated to a particular manufacturer brand. Some retailers like Ethan Allen have their own manufacturing operations and sell only their own products.
Large retailers generally buy directly from manufacturers, without wholesaler intervention. Associations like Associated Volume Buyers (AVB) allow smaller companies to buy from manufacturers at volume prices.
Retailers rely heavily on part-time staffers year round, as well as temporary workers during the peak holiday season. Employees often work on commission and receive employee discounts.
Some retailers are investing in technology such as retail inventory management systems that increase the inventory flow and monitor in-stock status at stores. Retailers also are investing in technology to improve their online sites, which serve as marketing and purchasing tools for customers.
