Furniture Online Average Basket Value Performance

Chart E

Chart D reveals that conversion has been a pain-point for furniture retailers in 2023. The average conversion rate for total sessions was 2.87% in June 2022 and has fallen to 1.25% in June 2023, signalling a yearly 1.6 percentage point drop in conversion. The current rate is much lower than the total market, which achieved a conversion rate of 3.23% in June this year, mostly driven by health & beauty retailers.

This data reverberates the idea that customers were much more likely to purchase from a furniture retailer during Covid-19 than they are when their home bills and necessary items, such as food, are too high. Also, owing to the rising interest and mortgage rates, there will be fewer new home buyers, so less customers will be interested in buying furniture.

It is no wonder that traffic for furniture is down, experiencing lows such as -15.4% YoY. However, there are some promising signs from a Week-on-Week (WoW – How this week’s performance compares to the week previous) perspective. For the whole month of June, each week outperformed the last, where the final week in June was up +10.6%.

Looking at WoW for orders, the final week of June also saw growth, at +15.5%, implying that by August, furniture revenue could revert to positive-territory YoY growth.

About IMRG

As shown in Chart E, the average basket value for furniture retailers has seen a substantial increase from 2022 to 2023. There are a number of reasons why this might be the case at a time when conversion rates are low, for example, the rising cost of acquisition, increased supply chain costs, inflation affecting buyers’ intent, all of which might cause retailers to deflect some of the cost onto their customers.

It could also mean that customers have switched their buying habits, such as opting for fewer, more quality items rather than multiple cheaper items that will unlikely stand the same test of time.

We help our members understand and improve their online retail performance through a busy programme of performance benchmarking, data analysis, insight, best practice-sharing, and events. We have been tracking online sales since 2000 – and now measure over 120 individual metrics in a series of indexes, providing in-depth intelligence on online and mobile sales, delivery trends, marketing ROI and channel performance.

If you’d like to benchmark your online retail performance across a wide range of metrics, visit www.imrg.org

Challenges you may face in China

Paul Wray,

Managing Director of Furntec

Ltd

and Modern

Outlook

Furniture,

shares another insight into his knowledge of the Chinese furniture landscape.

Navigating manufacturing in China can be a minefield if you have little or no experience in manufacturing abroad. As a Brit living in China, I work with many retailers across the UK, America and worldwide to ensure they are not tackling challenges alone.

The main challenges you might face include:

- Finding the right factory

- Language barriers

- Shipping

- Quality of work

- High MOQ’s

- Lead times

- Design & development

- And intellectual property risks

In China there are 50,000+ furniture manufacturers each with varying ethics and standards. I work incredibly hard to discover and vet new manufacturers. In addition to this, I spend a considerable amount of time maintaining relationships with existing manufacturers to ensure our clients receive quality product, on time and in full.

For me, it’s also very important to not only check what they are doing but to support them in their job. It can be very lonely when your based in a factory in the middle of nowhere for weeks quality controlling and checking product with no direct contact from the company. Support is always needed and trust me; you will always get the best from your staff when you show you actually care and take notice of what they do. Our teams undergo thorough training from our company and emphasise the BEST QUALITY must be achieved for each and every one of our customers, no matter how big or small.

I have heard many times that although the product looked great on a picture, when it arrived it sat like a concrete block and the materials used did not have the feel we needed. We now have a container/containers of product that will be very difficult to sell. My advice, buyers please visit your factories regularly to make sure you are getting products that are right for your market.

There are also many laws governed around the world when supplying furniture to certain countries. For example, when supplying the UK with products that will require UKFR regulations to be adhered to. Does the factory you are working with know these standards required? Many suppliers will say they do but they don’t. How do you know your product will be safe? Having local knowledge and feet on the ground offers extra assurance for your business.

Modern Outlook Furniture assists businesses of all sizes in procurement from China at any stage of your project. If you would like a no obligation conversation about how we can assist you and help you avoid any costly issues or nasty surprises, please do get in touch! paulw@modernoutlook.cn www.linkedin.com/in/paul-wray-79403935/