The German furniture industry has so far come through the corona crisis robustly compared to other economic sectors.
“The industry expects sales to decline by a maximum of 10% for 2020 as a whole. This means that the losses will in all likelihood be manageable and will be less for companies than feared at the beginning of the crisis,” Jan Kurth, managing director of the Association of the German Furniture Industry (VDM), reported.
This assessment is supported by a current study commissioned by the VDM together with the Arbeitsgemeinschaft Die Moderne Küche eV (AMK). Accordingly, demand has picked up again since the reopening of the furniture trade.
"Many people renovated their homes during the lockdown and subsequently developed a desire for new furniture," says Kurth. "They come to the store well informed and buy purposefully and decisively."
The German furniture and kitchen industry reacted quickly and flexibly to the corona crisis. In this way, disruptions in the supply chains could often be remedied by increasing our own added value or with the help of new suppliers. Home office solutions were found for employees, or shift schedules shifted, and production processes were adjusted accordingly. Many manufacturers also introduced short-time work.
In the furniture trade, meanwhile, a number of suppliers were able to keep in touch with customers and realize initiated sales even during the forced closure of their shops. For example, kitchen dealers continued the planning that had started earlier, for example by video conferencing with consumers at home. During this time, measurements could also be taken from customers and kitchens installed - because manual work was still allowed. "Most kitchen manufacturers therefore had a relatively good order intake at the beginning of the lockdown," reports AMK Managing Director Volker Irle.
The negative consequences of the business closures only became apparent later. A peculiarity of the kitchen branch is the higher dependence on international supply chains, especially with the electrical appliances. If ordered devices were not available in the Corona crisis, higher quality products were installed at the same price.
"The industry used the lockdown to put itself in a strong position for the period after the crisis and the recovery of the economy," Irle states.
The competitive advantages he has achieved include more flexible work processes, revised production systems and product innovations, such as hygiene stations or special surfaces for special hygienic requirements. In his opinion, the broader positioning of the supply chain and the increased cooperation with regional suppliers will also have a positive impact, in the form of short delivery times and high delivery security.
Revised production systems and product innovations, e.g. hygiene stations or special surfaces for special hygienic requirements. In his opinion, the broader positioning of the supply chain and the increased cooperation with regional suppliers will also have a positive impact, in the form of short delivery times and high delivery security.
The industry also hopes for opportunities from the change in consumer behavior in the wake of the pandemic. "With so much time at home, consumers have recognized the importance of good facilities," says Kurth. "Despite the crisis, the intentions to buy furniture and kitchens are currently at a very high level." Private households are shifting their budgets partly in favor of furniture, although there is also uncertainty in parts of the population due to the fear of losing their jobs.
In the furniture trade, the corona crisis has accelerated the shift towards online purchases. A third of the new online customers want to continue to use this channel in the future, as the study has determined. In the case of kitchens, the shift to purely online orders was less due to the high intensity of advice. Overall, it can be expected that hybrid retail formats will become increasingly established.