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For the first time since the financial crisis, Danish furniture companies' sales abroad have fallen. After several years of uninterrupted growth, exports fell by 11% last year. So from the record high level of over $3.3 billion in 2022, the furniture exporters' sales in 2023 fell below $2.89 billion – news from this week.
Jimmi Mortensen, who is CEO of Lars Larsen Group's Actona, which is Denmark's largest furniture company, does not see a turnaround in furniture exports as imminent.
In 2023, furniture industry in various countries faced similar consequences (I wrote in previous newsletter about this). Can this be averted by furniture industry SMBs? Let's dive in today.
Why Does Danish Furniture Export Industry See a Downfall?
Markets Saturated: Chief consultant Mads P. Gede, Timber and Furniture Industry under DI, states in an email that the corona kept sales growth going in large local markets. People prefer to buy from local markets to support local communities ( a nice trend started since covid time).
Competitor Industry Growth: Did you know that furniture industry's biggest competitor is the travel industry? Apparently since last year, the travel industry is booming again, causing slow down in furniture purchase.
Financial Sensitivity while Buying Online: People are more sensitive now a days while buying high priced products online. It's no difference with the furnirure industry since if the product is not as advertised, the headache of product return is even higher.
Some Other Examples
In 2023, several furniture companies are facing constant revenue dip. Mitchell Gold & Bob Williams, a $197M furniture company with 69 stores, had been shut down.
Many are losing revenue e.g. Wayfair, West Elm, Ottery Barn, Hooker Furnishing etc.
Can Furniture Industry Improve the Situation?
In all of the above stories, there is a strikingly similar agenda. Companies are facing issues in selling furniture in non-native countries. Yes, they do have retail stores in the exporting countries. But people often look at furnitures online now a days. Looking at high priced items does not ensuring their imminent purchase. The pattern of shopping is changing fast and companies who do not get on top of it, will left behind eventually. This paradigm shift has started now.
However, furniture companies can change this notion and aim for higher sales in foreign countries (where the sales workforce is less) by adopting 3D ecommerce. 3D visualization and WebAR can provide a much better way for the customers to evaluate high priced luxury lifestyle furniture products and consider them buying more.
How 3D Ecommerce Can Help Here?
Here's a good read on the same topic.
Although we are looking specifically at furniture industry, the challenge is more or less same for the rest of the ecomm industry. 3D ecommerce can act as a bait for a bigger segment of SMBs' survival strategy (yes, many ecomm companies get bankrupt every year).
Bonus Tip
3D visualization has 3x more profound effect than videos. Imagine, with millions of contents getting generated daily, perhaps only a few understand the power of 3D. Adding an opportunity for the audience to interact with the advertised product in 3D can maximize its chance for a virality easily. Along with that if you add a WebAR link, audience can launch the product at their space to try them virtually. This can retain your audience on your content for even 180 seconds or more. This is a huge win for your brand above thousands of your competitors. Experiment with A/B testing for various contents types while using 3D/WebAR and see how the engagement grows within a short period of time.