Introduction and Market Trends
The Furniture industry is changing and spreading across nations through online stores. It is adapting to new world technology and changing its traditional approach towards business. Through all of this, one thing remains constant, it is not losing its core value. It’s still focused on customer demand and customer expectations. You can say, that is one of the main reasons, the transition for the traditional market to the online market was eventually possible. Now, being in the furniture industry, you need to have stock (for faster delivery). Also, going worldwide means you have to stock more inventory. In this situation, furniture inventory management software plays an integral role. It helps companies segregate between stocks, track inventory, and manage the inventories flawlessly.
What do our market trends say? According to Statista’s Digital Market Outlook, the overall growth of e-retail furniture sales of nearly $200 billion is expected to be seen in 2019. Also, according to the statistics, these countries are doing exceptionally well in the furniture e-retail market.
Inventory Challenges in Furniture Market
Furniture companies have huge inventories (size, shape, and width vise), which are challenging to manage, count, and transport. Thus, they tend to calculate their inventory manually. And after every sale and adding new stock, they have to recount the entire inventory. As stated by Maegan Huber, forecasting and inventory optimization supervisor at Ashley Furniture,
“As our business continued to grow [with a] larger product portfolio and [more] customer locations, the number of inventory rules grew along with the potential for error and became harder to manage.”
So, let us begin with the inventory problems faced by the Furniture industries:
- Consumption of Space
As previously discussed, furniture products occupy a lot of warehouse space. Thus, the traditional manual-count approach becomes very complex when the company operations are expanding. Jenna Weaver of Sageworks Analyst for furniture retailers had said,
“They can inspect their existing inventory to liquidate any surplus or obsolete inventory, and there are solutions, like inventory management systems, to help retailers evaluate what product lines do and don’t work for them.”
2. Accumulation of Dead Stock
Furniture Industries have idle stock in their warehouses as the stock keeps changing due to changing trends. Without properly registering in the furniture inventory management software, the idle stock has higher chances of becoming obsolete. According to Jenna Weaver, Spageworks Analyst,
“In the furniture industry, in particular, sales are very influenced by tastes and trends and even seasonality, so it’s important to make sure existing inventory is fitting the current tastes and trends of the market.”
3. Predicting Sales
Every industry struggles with predicting sales, yet, it is one of the most important aspects of a company’s growth. A wrong prediction leads to losing customers, delay timely deliveries, and affect customer expectations. As said by Andi Owen, CEO of Herman Miller,
“Second quarter sales were impacted by lower than anticipated order levels, which reflected the uneven demand patterns we’re seeing across the broader industry and the natural variability in a project-driven business.”
4. Manufacturing time
Manufacturing time is a constant challenge for the furniture industry. They have to regularly manufacture new designs according to demand. Moreover, manufacturing is a time-consuming process, as the size, shape, and design differ through each piece. Also, the shortage of talented laborers, unavailability of raw materials, and delay in transportation of material, strongly affects the manufacturing time.
5. Scheduled Delivery
Unlike many other industries, where customers require products immediately (like apparel, shoes, cosmetics, etc). The furniture industry is very different than the rest! Customers generally require late deliveries on a particular date (also known as Scheduled Delivery). This way, the stock keeps piling in the warehouse, and thus, space consumptions further rise.
For e.g.: XYZ Company manufactures sofa sets. Their customer, Dhara, is renovating her residence and requires the sofa set to be delivered after 2 months. Thus, she will buy the sofa set and opts for scheduled delivery. This eases Dhara’s worries as XYZ company has to keep it with them. Thus, they have to keep the product at their warehouse for the next 2 months, making that space unavailable for other products.
6. Multi-Piece Shipping
Multi-Piece shipping can be defined as the shipment and delivery of more than one piece or product. It consists of one ‘main’ package, under which there are various ‘sub-packages’. This usually happens when customer orders in bulk. Customers expect their orders to be delivered as one entire package. Thus, this is a challenge for companies as they believe in immediately dispatching as per stock availability; rather waiting for the customer’s entire products being ready for shipment.
For eg: Nitin ordered a few products together, such as dining chairs (6), dining table (1), and revolving chairs (6). Nitin is expecting these products to be delivered as ‘one package’ as they are a part of the dining table set. XYZ company is ready to ship the dining table and dining chairs as they are already available in the warehouse. But, as the revolving chairs are not manufactured, they require a few days. Thus, till the time, the revolving chairs are manufactured and ready to transport, the rest of the products will also remain in the warehouse. These situations are a challenge for the companies as they occupy the warehouse space and inventory keeps stockpiling in the warehouse.
Furniture companies have aggravated logistics problems. Starting with loading and unloading goods, long-distance furniture delivery, shortage of drivers, and hefty freight charges. But to top it all, furniture sizes and quantities make it very difficult for transportation. Due to their large and usual shapes, they cannot be sent through normal delivery services (FedEx or UPS). Moreover, furniture products require special care. The chances of even a small scratch may damage the product, and may also be sent back to the company.
8. Quality Control
Furniture products are challenging, as they have a lot of entry points and are very delicate. Thus, the quality control gets tougher. The inspection lies with the size of the product; it cannot be an inch bigger or smaller than the requisite size. Also, quality control measures the performance and performs the material check. To receive an ‘OK’ in Quality Control is highly crucial, as manufacturing these products need a lot of time and material. For any reason, if the product does not pass the Quality Control, it is dead stock lying in the warehouse until repair.
9. Difficulty in Returns
When a product returns, the costs associated with it rises. This includes freight charges, repair/remodeling charges, and storage charges. Also, we are aware that furniture occupies a lot of storage space. Thus, these unexpected returned products cause an unrealistic burden to the warehouse. Thus, the furniture inventory management software records all the returned goods to ease the process and register the unexpected returns.
How can Furniture Inventory Management Software help?
Inventory Management Software eases the inventory process by managing the stock and streamlines the entire process. Also, furniture inventory management software helps reduce costs and increases profit margin. It reduces labor costs and easily adapts with company changes, new stock, and changing trends. To name a few of the most important uses of Inventory Management Software:
- Know your Inventory
What if I say, you just have to add your stock details in the Furniture Inventory Management Software. The rest is taken care of on its own! Yes, it is that easy! Inventory Management Software calculates your Stock In-hand, Sales, Return Merchandise, and also, various options to select shipping details.
- You see, you can view all the products on one single page and also opt for adding products in Simple, Bundle, Configurable, or Linked products.
- Also, you can view the necessary details by selecting a particular product.
2. Set Low-Stock Alert
A highly handy-tool in an inventory management software, also known as the Reorder point. When you set a threshold, and once the stock reaches a specific number, you will need to reorder and replenish your stock. With the help of real-time tracking of stock, a furniture inventory management software can actually alert you when you have reached the Re-Order level.
For eg: XYZ Furniture has 42 Chairs and Tables set in stock. They have set a low stock level alert at 12 pieces. Thus, as soon as the stock level reaches 12 or below, the inventory management software will send you an alert asking you to restock!
3. Automation Alerts
Did you know, automation is the talk-of-the-town for an inventory management software? Also, you can automate your store with a few simple triggers. Let me say with a simple and easy example:
XYZ Furniture Store receives various orders in a day and cannot personally respond to all the customers. Thus, they set an automation alert when customers place an order. Wherein, the inventory management software sends an email saying, ‘Thank you for shopping with us. Your order has been placed.’ – This is Automation.
Basically, it is a set of triggers that make an action. So, with the help of inventory management software, you need not put in the time and effort to send messages, emails, or any notifications to your customers. Just set triggers!
- When you have created an Automation trigger, you can choose triggers from a range of options, as shown below.
- As shown in the above image, there are three automation actions. Here, I have shown the trigger details of the third automation in the list – ‘Send Email.’
4. Integrate Marketplace
An inventory management software helps you see all significant marketplaces under one page. This way, you don’t have to multi-task and it is easier to view different marketplaces under one roof.
5. Generate Reports and Predict Sales
After all your hard work and putting your efforts under one platform. What’s left is to make sure it generates reports. A good inventory management software will surely produce reports, and did you know?
- You can use these reports to predict your future sales as well! If not, well, a new thing to learn!
- You can take a quick look at the most selling products through graphs and figures.
- You can check out the most selling products and your top suppliers as well. Hey, by the way, this, too, can help in forecasting.
The Furniture market is expanding each day, and competition is growing as well! To stay in the game, it is always advisable to stay updated with the latest trends and make use of technology. Because it will always reduce your tedious work and make things simple. Orderhive specializes in giving stress-free comfort to its clients and aces its software at the most unbeatable price. The Inventory Management Software provided by Orderhive is a one-stop solution to all the problems which also customizes itself as per customer requirements.