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HGO survey to determine priorities for Canadian retailers

13 October 2020
Retail, Opinion

BRIGHTON, Ontario – Those who have been following this publication know Home Goods Online (HGO) has always been interested in presenting the highest quality market research and articles on best practises for Canadian home goods retailers, particularly those selling furniture, mattresses, major appliances and home theatre electronics. The opinion of our readers is critical in helping guide those efforts, which is why we are conducting the first of what will hopefully become a series of nationwide surveys about your business priorities, interests and challenges.

Your participation in this anonymous survey will help HGO develop and share highly valuable information and analysis everyone in our industry will find useful in achieving their business goals.

The first two questions of this – the first survey – are dynamic and designed to qualify the respondents to ensure each fit the scope and intent of this research, who are independent furniture, mattress and major appliance retailers.

A caveat, this survey is fairly and, at times, will feel a little bit repetitive. The first section, for example, asks respondents to answer 21 different questions by selecting the most and least important options from a choice of five fields. Some of the answer fields are repeated under different questions. They have much the same feel as your last eye exam, when the optometrist asked if the lens you are peering through is ‘better or worse’ than the prior one. I heard that ‘better or worse’ for a week after my last exam. But here, as during that eye exam, repetition bring clarity.

I’ll admit many busy store owners might abandon the survey but I urge you to power through and get to the fun questions that come later as you will be asked to rank your perceptions on several issues as well as your opinions of the buying groups.

The survey shouldn’t take more than 10 to 15 minutes to complete. When compared to a lot of other surveys I’ve seen and participated in, that’s fairly long. But I believe this is an important survey and the length is necessary. This is, after all, a rare opportunity for retailers to share what their business goals and priorities are, particularly in the wake of what may well be the first wave of an unprecedented global experience that has permanently altered the way we all live and work.

HGO believes it’s important to properly identify and define the priorities of Canadian furniture, mattress and major appliance retailers. We need to see where they have shifted and what gaps need to be filled. I’m confident the results of the survey – which will be released later this year – will be able to determine what types of contents and services will be most useful to these vitally important Canadian retailers. The survey will be available until the close of business (5pm Eastern) on Friday, November 6, 2020.

Click here to participate in the survey. 

Health concerns drive closures of High Point showrooms

13 October 2020
Events, Furniture

HIGH POINT, North Carolina – The majority of the 66 permanent showrooms operated by Canadian home furnishings resources won’t open for fall 2020 edition of the High Point Market, which gets underway for an unprecedented nine-day run here on Tuesday (October 13). While company executives expressed concern about the wellbeing of both staff and attending retailers they also reported business has been brisk in recent months and prospects remain positive for the short term at least.

According to its organisers, the market has some 2,000 exhibitors from about 100 countries. The largest group of exhibitors from outside the United States comes from Canada, which also produces the largest non-U.S. delegation of attending retailers and designers.

The High Point Market Authority (HPMA) originally rescheduled but then cancelled the spring edition of the twice-yearly furniture trade event, meaning these companies haven’t hosted current and potential retail customers since October 2019. And, unless the restrictions imposed by health authorities in both Canada and the United States are lifted, most are resigned to being unlikely to do so for quite some time.

The Cove bed (seen here) from contemporary furniture specialist G. Romano is a distinctly modern platform bed with elegant flange seams. The angled plush headboard is designed to provide comfort while reading or watching television. It is offered in a choice of high-performance fabrics and is made-to-order at the company’s Montreal factory.Indeed, several Canadian factory execs noted the inability to open has been costly. “We had paid our rent in full and were offered a small abatement by the landlord, but it wasn’t equitable by any means,” said Theodore Homa, general manager of contemporary upholstery specialist G. Romano. “The lack of April market cost us financially a great deal.”

When asked why her showroom won’t open for market, Diana Sisto, creative director for stationary upholstery producer Brentwood Classics, gave a typical response. “For the health and safety of our staff and independent reps, we do not believe traveling to the U.S. is safe right now, we don’t feel that the reward outweighs the risks,” she told Home Goods Online.

Luke Simpson, chief executive officer of solid wood bedroom producer Durham Furniture, gave a similar reply. “This decision came about as the result of many factors, including the ability to travel and the health and safety of staff and reps,” he said. “With the current Canada-U.S. border closure, any trip to High Point would require an additional two weeks of quarantine upon return, largely making the trip untenable.

“In terms of operating the showroom without Durham corporate staff, discussions with our showroom co-ordinator led us to the decision that the possible upside of opening was overshadowed by the health and safety risks of doing so,” he continued, adding, “Additionally, of our rep network across North America, only two are even planning to attend market.”

“Despite the market authority’s efforts to make it as safe as they can, we feel it was not the right move to show at market,” noted Mathieu Roy, sales director for casual dining powerhouse Canadel, who also expressed concern about having to go into isolation after returning home from market. “Being a manufacturer, we cannot bring this virus inside our walls.”

He also noted the U.S. has more cases of the novel coronavirus than any other country in the world and travel health insurance doesn’t cover persons who contract it.

“Going to the Canadel showroom in High Point is all about the full experience, taking your time, having lunch, a coffee or a refreshment – this year, none of these are possible,” he said, adding “The majority of our Canadian customers said they were not going to attend market. For those in the U.S., it was about 50/50, but for our major partners, there were more on the ‘not going’ side.”

“As a Canadian company, our Canadian sales staff is not allowed to travel to the fall market as the border remain closed,” said Nicole Basenach, vice-president of consumer experience for ready-to-assemble producer South Shore Furniture. “The safety and security of our employees, partners and community was and is always centre stage for us.”

Romano’s Homa also believes attendance at the fall High Point Market won’t be stellar. “We did a survey of our customers and found that practically no Canadians and perhaps only 10% to 20% of U.S. buyers will be attending fall market,” he said, adding, “The border remains closed with the U.S. and COVID-19 cases continue to rise in the U.S.A.” 

Business is good
Despite the ongoing operational setbacks caused by the pandemic – including factory closures that went on for as long as eight or ten weeks, in some cases – all of the Canadian furniture execs surveyed for this story reported business has been brisk in recent months. Many are also anticipating it will remain so, at least in the short term.

They’ve made a lot of changes to their operations and implemented new procedures to help combat the spread of the virus. “We put all of the necessary measures in place when we reopened our factory in late May,” Sisto said.

For some, hiring labour for the factory floor has been an issue. “Upon reopening, we experienced a surprising surge in demand for our products,” Homa said. “We thought it was just the pent-up demand during the shutdown, but in actuality the strong demand for locally made furniture has been sustained.

The Helsy collection is a part of a new Scandinavian-inspired home office/small office furniture collection from South Shore. Seen here is the L-shaped desk with power bar and removable hutch, one of the numerous potential configurations available for both the professional and the entrepreneur. “Although all our employees have returned to work, due to the CERB (Canada Emergency Response Benefit) it has been impossible to hire new employees,” he continued adding, “Strong demand coupled with labour shortage means we can’t keep-up and delivery lead times have gone from six weeks to twelve week.”

“Business is really strong,” reports Canadel’s Mathieu Roy. “Week after week, we have record breaking order entry. We, as everybody else, have supply chain challenges to overcome and our team is working hard with our suppliers to bring us the components we need just in time. As everybody expects, delays are a little longer due to the supply chain and the effect of the virus.”

He notes that retailers need product delivered before Christmas need to place their orders before the end of the month.

Markets such as High Point provide logical platforms for new product introductions – something that the pandemic has wreaked havoc on for a new of companies. Romano, for example, has found itself with such a backlog it has opted to postpone new product launches until early next year. Brentwood Classics launched its new collections this past summer using a combination of social media and store visits by their sales force.

South Shore will introduce their latest offerings during a virtual launch set to be hosted on dedicated platform on October 21.

“The pandemic has certainly created some business issues operationally,” Durham’s Luke Simpson said. “Enhanced health and safety protocols, ongoing screening and the required isolation of potentially exposed individuals has made staffing an ongoing issue.

That said, business has been very brisk for the last couple months,” he continued. “The conversations I’ve had with retailers and other manufacturers lead us to believe consumers still have an abundance of spending power but fewer discretionary spending opportunities. With travel and entertainment largely off the table, consumers have been turning to retail goods and home improvements, significantly driving up demand.”

Durham is currently experiencing a 12-week backlog, something the company hasn’t seen in some time. “So, business for the short term, certainly through Q1 of 2021 is very stable,” Simpson said, adding the new product launch Durham was planning for this past April’s market was postponed and will now take place sometime in the next few weeks.

While Canadian furniture makers are optimistic about the next few months, they have learnt anything can happen during a pandemic and the key is to be ready as possible for it.

“Like everyone else, we are just trying to live in the moment because we don’t know what is going to happen tomorrow,” Diana Sisto observed. “Anything can change at a moment’s notice, so we need to stay on our toes and be ready to pivot in any direction. I certainly hope this volume will last through next spring but as I said, anything can happen.” 

Related Story: 27 Canadian showrooms open for fall High Point Market

Open High Point showrooms putting safety first

13 October 2020
Events, Furniture

HIGH POINT, North Carolina – Fewer than half of the 66 Canadian furniture and home furnishings resources with permanent showrooms here are expected to open for the fall edition of the High Point Market (HPM), which kicks off today (October 13). All are promising to observe all protocols laid down by the organisers and local health authorities during the event’s nine-day run.

Most are expecting to see few, if any, Canadian retail buyers and aren’t expecting record numbers of their U.S. network to attend either. Many also said the showrooms will be manned, for the most part, by each company’s U.S. sales force as rules governing travel across border require travelers to self-isolate for two weeks upon returning home.

The reasons for opening were surprising consistent among those furniture executives surveyed by Home Goods Online and, like those who choose not to open, reported business has been brisk over the past few months.

Roger Friesen, chief revenue officer for Palliser, said Canada’s largest furniture manufacturer had a successful pre-market last month. “We saw more retailers than any previous pre-market. Although many retailers who attended pre-market will not attend market, we felt it was important for retailers making the effort to attend market. We have appointments from 20 of our 26 territories in the U.S.,” he told HGO.

The Ridge upholstered bed from Palliser is offered in two heights, 43-inches and 53-inches and is available in all the company’s fabric and leather options (seen here in Bela Rouge) as well as in all four popular sizes. It also offered in both adjustable and slat base options.“We expect attendance to be 20 to 25% of normal,” he continued, adding they aren’t expecting attendance from Canada or other international retailers. Palliser’s efforts will be overseen by KC Greenwald, vice president of sales for the U.S. and the U.S. sales team. “Executives and management from Canada or Mexico will not attend market.”

Palliser will also produce a virtual showroom tour for those retailers who won’t be attending.

J.R. Marzilli, president of upholstery house Décor Rest, is also expecting to see only members of their U.S. retail network, who have booked appointments so they can be hosted in what he describes as “a socially distant manner.”

He also anticipates attendance will be, at best, 50% of normal. “Considering the lockdown, we are not counting on any Canadian dealers,” he said.

"We chose to open because our American customers and reps will be attending,” said Eric Abecassis, president of motion upholstery specialist Elran. “The showroom is setup, and we will follow all the strict guidelines put in place by the High Point Market Authority.”

“It’s really a combination of two things,” Mike Saby, chief operating officer of Mercana Furniture & Décor, said when explaining why they chose to open. “Our team felt the safety protocols in place for High Point Market are adequate to conduct business safely for all. Secondly, we’re seeing unprecedented growth this year and have more appointment requests than we’ve ever experienced. With hundreds of new product additions to our line-up and some of the highest in-stock levels forecasted for this fall, we will be able to provide goods to our customers where many other suppliers can’t.”

Sundeep Baga, president of Sunpan, noted the contemporary furniture resource will open a newly expanded 40,000 square foot showroom at the fall market and in collaboration with their landlord – International Market Centers (IMC) – will operate under some strict provisions which include wearing masks and daily temperature checks. They will also limit the number of visitors allowed in the showroom at any one time.

“It wasn’t easy to make the decision to open,” he explained, adding, “but we just finished an expansion that doubled our space. We had committed to this expansion pre-pandemic. We are also introducing over 700 new items and new categories such rugs, lighting, luxe art, domestically made upholstery and our very first outdoor collection.” 

Business is good
Most of these execs said business has been brisk over the past few months and most anticipate the pace will continue, at least in the short term.

Friesen said Palliser put safety measures in place across all operations in Canada, Mexico and Asia – such as distancing, temperature checking, sanitisation and masks – early on. Employees with symptoms were required to self-isolate until it was safe to return to work.

The new 7000 series sectional is part of the Art of Options collection from Elran, which will be one of the few Canadian showrooms open for this week’s fall edition of the High Point Market.“These measures did result in labour shortages impacting production in each factory, which is a key challenge,” he said, adding incoming orders have stretched delivery time to ten to twelve weeks at this point. “We anticipate the current demand levels will continue well into next year. We are monitoring business at retail closely to anticipate and changes in demand.”

This was common theme among those execs HGO spoke with. “We foresee business conditions growing until consumers are no longer in lock down, working from home and are able to travel once again,” Décor-Rest’s Marzilli opined.

“We acknowledge we are living in a bubble and we don’t take anything for granted,” Elran’s Abecassis added. “Over the next few months with people remaining mostly at home, we believe the momentum will keep on going.”

“We’re having unprecedented growth as an organization this year,” Mercana’s Saby said. “Like many, our spring results were strong followed by a ‘pandemic pause’ – then a roar back beyond our expectations. Our biggest challenge is keeping up with outbound.  Customer demand and immediacy is at an all-time high. You can hear how much pressure retailers and designers are under as they work on their recovery plans.

“Our best right now isn’t always good enough for some customers. It’s an emotional year for our customers and our staff,” he continued, adding, “staying upbeat with amazing growth and product launches should be a slam-dunk but just isn’t so.” 

Related Story: 27 Canadian showrooms open for fall High Point Market

Confidence ticked higher last month, but the recovery isn’t over

9 October 2020
By the Numbers

OTTAWA – The Index of Consumer Confidence ticked upwards in September as Canadians reported greater optimism on all four survey questions, but is still far below its pre-pandemic peak, the Conference Board of Canada reported recently.

The private think tank, which produces the study, said last month’s index gained 5.2 points in September to 83.6 (it was set to 100 in 2014).

“Despite this month’s uptick, the pace of the recovery of consumer confidence has stalled,” board economist Anna Feng said in her commentary, noting the index has been fluctuating around the 80 mark for four consecutive months. Compared with its peak – 120.6 in February 2020 – it remains 37 points below its pre-pandemic level.

While consumers pessimism over current finances and future job prospects declined in September, both are still well above their February levels as the share of positive responses to those questions were essentially unchanged.

However, in what can be taken as good news for this country’s big-ticket home goods retailers, positive sentiments about major purchases rose slightly. “Roughly 23% of survey respondents believe that now is a good time to make a major purchase, up 2.4 percentage points from last month,” Feng reported. “Nevertheless, the share of negative views on the question still remained high at 50.7%, matching the peak level observed during the 2008–09 financial crisis.”

Regional differences continued to be significant.

Quebec and Alberta were the only provinces posting gains in consumer confidence, as the headline index saw double-digit growth in these two regions over September. Conversely, the Index of Consumer Confidence in the Atlantic region, British Columbia, and the Manitoba-Saskatchewan region fell for the second consecutive month.

Meanwhile, Ontario’s index fell 2.4 points this month, its first decline since May. Feng noted Ontarians were most worried about their future financial situation with the share of positive views on the question contracting by 2.5 percentage points, the largest drop among the provinces. “As a result, the majority of Ontarians (54%) believe that now is a bad time for a major purchase,” she said. “This is about 20 percentage points higher than February’s pessimistic level.”

Quebec’s index jumped 20.2 points in September, giving it highest confidence index. Positive sentiments about finances and employment conditions improved significantly. “Quebec had the highest increase in optimism about future employment (up 5.5 percentage points) among provinces, resulting in the strongest sentiment about making a major purchase at this time (33.1%),” Feng said.

Alberta’s index showed the fastest recovery, increasing 15.0 points in September. Its index is now only 2.9 points below its February level. Respondents expressed a significant increase in optimism about finances, future employment and had the highest share of positive views on future finances (20.5%). “Albertans’ views on making major purchases during the month have recovered to their pre-pandemic levels,” Feng said.

British Columbia’s consumer confidence index lost 1.8 points in September, building on the 10.8-point drop in August. Only Atlantic Canada has seen a steeper decline in its index since February. The board said British Columbians worried a lot about their current finances and future employment, as both questions recorded the largest decline in positive views among provinces. “As such, only 17% of survey respondents believe that now is a good time to purchase large-ticket items, the lowest share in Canada,” Feng said.

The index for Saskatchewan–Manitoba dropped by 1.5 points this month. Residents in the region were more worried about their financial situation, both current and future. “As a result, consumer confidence about major purchases eroded significantly,” she said. “Roughly 57% cent of survey respondents believe that now is a bad time for a major purchase, the highest share of pessimistic sentiments across the country.”

The Atlantic region’s index declined by 3.4 points, leading to the country’s largest gap between its September index and its pre-pandemic level. Residents are concerned most about their future financial situation, as the share of pessimistic views on the question rose by 9.0 percentage points. “Only 9.5% of survey respondents in the region believe there will be more jobs in the future, the lowest optimism on the question across regions,” Feng said.

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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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