How furniture retailers are addressing supply chain snags

Akin to a test drive with a new car or an open house before making an offer on a potential next home, furniture is the kind of merchandise that consumers like to try before they buy. But during the pandemic, when supply chain and shipping bottlenecks were pervasive and home furnishing shopping soared — largely due to people spending much more time at home — "try and buy" was more like "buy and wait." Due to unprecedented demand, the love seats, sofa chairs and bedroom bureaus that customers were used to getting the next day came next month —  if not later.

Numerous household name manufacturers, retailers and e-commerce giants were affected by these unusually long delays, including La-Z-Boy, Williams-Sonoma and Overstock.com. The bulky, cumbersome nature of household, home office and bedroom furniture further exacerbated these issues; items take up a lot of space and can be challenging to move.

Given these realities — which continue to plague the industry — furniture suppliers and retailers have adjusted their supply chain planning processes as well as their customers' expectations. In short, they're trying to make the best out of a series of unfortunate events. 

Overstock is stocking up
One of those organizations is Overstock.com, a Utah-based e-commerce conglomerate that specializes in home decor and bedding products. Speaking to Retail Dive, CEO Jonathan Johnson said the company has prioritized advertising the items that it has readily available rather than those that need to be imported by sea. Indeed, Johnson noted that 99% of the goods that Overstock advertises on its website are in warehouses somewhere inside the continental U.S. This has enabled the company to avoid major shipping ports like those in Los Angeles and Long Beach, where massive volumes of inventory have idled, waiting to be offloaded.

"A lot of companies historically have been able to say, 'Well, once it's on the water, we know it's six weeks to your house,'" Johnson explained. "[But] when the Port of Long Beach in Los Angeles looks like the 405 freeway, backed up out into the ocean, that 'six weeks to home' doesn't happen."

More proactive inventory management has helped furniture suppliers deal with ongoing supply chain frustrations.

Another strategy retailers and suppliers have turned to is better inventory management. Prior to COVID, just-in-time inventory — having the bare minimum amount of merchandise available to satisfy demand — was considered best practice. Now, providers are shoring up their most in-demand products in anticipation of new disruptions that could lead to shortages. They've also built more lead time into their buyers' expectations.

Rick Jordon, senior managing director for FTI Consulting, told Supply Chain Dive that uncertainty has become the norm.

"It's pretty much normalized to something that's inconsistent, which means everyone just has to build a little more time into their supply chain," Jordon said.

Despite the higher warehousing costs — and lengthy wait times for customers — the supply chain pains don't seem to have impaired suppliers' sales goals. Williams-Sonoma, La-Z-Boy, Basset Furniture and Overstock have been on firm financial footing over the past year, according to RapidRatings data obtained by Retail Dive. La-Z-Boy saw sales rise 22% to $572 million in the third quarter of the 2022 fiscal year, the company announced.