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Tue. Jul 23rd, 2024

Hidden Strengths: How is bedroom as a category performing in a tough business environment?

By Vaseline May27,2024
Hidden Strengths: How is bedroom as a category performing in a tough business environment?

HIGH POINT — Like all furniture categories, the bedroom has had its ups and downs in recent years. The category has thrived during the pandemic, with many citing its increased importance as a safe space in the home. Then, like other categories, price weakened as consumer demand plummeted.

There is a commonly held belief that consumers who have little money to spend will spend what little they have on other categories before upgrading their bedroom. The upholstery often comes first, because it wears out faster and is clearly visible to guests. Occasional and dining will probably be the next step, also because of their greater visibility.

The problems of high interest rates and expensive housing affect the furniture industry as a whole, but it seems even more apparent for the bedroom category.

“The bedroom has been slower than other categories over the past 12 months,” said Rodd Rafieha, chief sales officer at Abbyson, which offers furniture for every room of the house. “We think this will continue for the next year to 18 months. Now that fewer houses are being bought, fewer people are moving and filling the new bedrooms with new things.”

Case goods supplier Martin Svensson agreed.

“There’s a cycle happening, and it’s as reliable as the sun sets and rises,” says Pat Watson, the company’s vice president of product development. “The first thing to deteriorate in difficult times is the bedroom, followed by eating and then occasionally. When things start to look up, it’s the same. Bedroom is the last to improve.”

Places that add value

Lower-end, more promotional companies still believe the category is strong, but only if consumers feel they are getting great value for their money. That “value” is often realized in construction integrity and more features.

The new Valerie upholstered bed from Elements features built-in Bluetooth speakers.
The new Valerie upholstered bed from Elements features built-in Bluetooth speakers.

“We’ve always been known to have hidden drawers and hidden storage, but we’ve introduced more products than ever with lighting, Bluetooth speakers, power and functionality,” said Paul Comrie, CEO of Elements International. “Historically, we see case goods hit harder than soft goods when the furniture industry faces headwinds. But our sales as a business have increased year to date, and we’re very proud that our bedroom sales have increased in a tough, good environment.

The driving force behind that success is the company’s ability to produce “trendy-right” products at prices that draw people into a furniture store. This is done by producing a lot of product.

“Our plan for the future is to remain obsessed with quality and continue to introduce more products than ever before,” he continued. “We had a nightstand converted into a vanity last market, as well as a nightstand with a fingerprint lock option. We had over 60 bedrooms on display. We were pleased that some of these were very well received.”

Like Elements, finding opportunities to add value is key for fellow promotional supplier Lifestyle Enterprises, which also sees the bedroom as its key category.

“While current purchasing trends are driving increased demand for promotional products, we face many competitors vying for the same market share,” said Michael Hsieh, CEO. “There is a fierce price war going on, with each competitor striving to offer the most attractive products at the most competitive prices.

“People want value,” he continued. “One contributing factor is increasing customer preference for container products, driven by lower warehouse inventory levels and more affordable freight costs.”

Lifestyle's four-piece Porterlito bedroom is made of wood and okume veneer and is available in two finishes: black and toffee brown.  The recommended retail price is $699.
Lifestyle’s four-piece Porterlito bedroom is made of wood and okume veneer and is available in two finishes: black and toffee brown. The recommended retail price is $699.

Value is not only important at the bottom. It is also crucial for the more mid-range solid wood supplier A-America.

“People want better-built items that have value,” said Christian Rohrbach, president. “Value is the absolute king. If a customer feels like their expenditure is worth it, they will spend money. For us, that value is the story of solid wood, loaded with properties and benefits. For the bedroom, these features are storage capacity and lighting.”

RTA e-commerce supplier Walker Edison cited a challenge in keeping costs down.

“Finding the right value equation can be difficult,” says Cassie Begalle, senior director of product management. “Bedroom items have some inherently expensive components (long nightstands, heavy or complex mechanisms to meet ASTM requirements, etc.), but these costs do not always translate into the value for which a consumer is willing to pay more. That is why we focus on creating items that, in addition to these elements, also have a clearly communicated value: trendy style, high-quality materials and ease of assembly.

“We are also starting to see increased demand for custom cabinetry and bedroom furniture,” she continued. “This poses a challenge for companies that rely on profitable growth that needs to be scaled. Retailers and companies need to look at how they can give bedroom furniture a personal or unique feel, even if it is just a small part of the furniture or gives the customer the opportunity to change the furniture.”

Begalle is optimistic about the category, calling it the strongest of the past year.

Dressers and chests drive this demand, she said, followed by nightstands, beds and then bunk beds. She expects the category to grow about 3% per year until 2028.

“Lifestyle changes, such as the trend toward larger homes and more spacious bedrooms, will contribute to increased demand for bed frames and high-quality cabinets, bedside tables and dressers,” she said.

Customization and design

At high-end domestic manufacturer Sherrill, the category is strong, but there are also challenges.

“Bedroom is an extremely competitive category,” said Tom Zaliagiris, senior vice president of sales for all brands. “Consumers demand unique design and the ability to customize and want us to meet these demands at an affordable price. There is tremendous upside potential for this category, and for manufacturers to gain market share, if we can meet those demands.

“Bedroom is a category that is quickly becoming mainstream,” he continued. “The price pressure puts pressure on the category, but also stimulates innovation.”

Sherrill's custom Nocturne bed program offers customers a variety of options in headboard shapes and height, panel treatment and hidden storage.
Sherrill’s custom Nocturne bed program offers customers a variety of options in headboard shapes and height, panel treatment and hidden storage.

Zaliagiris said the category is influenced by design trends in the living room. This includes organic shapes, mixed materials with natural elements and a warmer color direction.

On the luxurious side, the bedroom remains what it has always been about: aesthetics and comfort.

“First, the bed has to really engage the consumer and is the key driver,” said David Koehler, president of AICO. “We create different design aesthetics to help consumers live a lifestyle of luxury and comfort. Some want very glamorous, elegant styles, others want modern, glamorous, traditional, transitional, industrial, coastal styles, etc. – we cater to different lifestyles in our product range.

“Many consumers live in smaller spaces, such as a townhome, condo, apartment or studio. Smaller scale and functionality appeal to this consumer and we will address this in the coming October market.”

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