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HIGH POINT — As the motion upholstery category continues to grow, the search for the winning advantage heats up as major players jockey for position against price pressures and increased demand for customization, power functions and faster delivery.
At the promotional to moderately priced levels, the mix of “bells and whistles” in power functions has been the key driver in sales this year, with suppliers moving quickly to integrate the power headrest function and, in the second half of the year, to more aggressively add value with premium leather covers as leather prices remained low.
Mike Campbell, president and CEO of N.C.-based stationary and motion supplier Leather Italia USA, said he has seen high demand for leather and distinct move away from synthetic. From importers to domestic manufacturers, the natural cover had a big presence during October High Point Market and big impact with imports using premium leather to up the ante in what has been characterized by some suppliers as a pricing war in imported motion upholstery.
“The recent price war created by China motion manufacturers will definitely cause a competitive challenge and negatively affect 2017 volume,” said Randy Spak, CEO of Mississippi-based American Furniture Manufacturing.”
Spak said American’s motion business experienced “very modest growth in 2016 in spite of difficult retail business conditions overall” and expected that the power headrest will be a factor in generating growth for the coming year.
Power functions are widespread in motion groups and recliners and continue to overtake manual mechanisms in sales and floor space, and the power headrest has been a winner in 2016. Getting honorable mention as a new or improved function that may get more attention in 2017 is the power lumbar support, found at Klaussner and Southern Motion in the spring and at Flexsteel Ind. and Franklin Corp. in the fall.
“The year is finishing up fairly well for us even as we continue to face challenges with Chinese importers,” said Chuck Tidwell, vice president of merchandising and product development at Franklin. “Our answer to those challenges and our direction is to continue selling our strengths as a vertically integrated manufacturer with a true American-made story that delivers value with the full package of better styling, cover to frame, innovation and the ability to deliver four categories of furniture on one truck. Dealers are starting to see that it’s not all about price.”
While Furniture Today’s research has estimated 2.7% category growth over last year, many suppliers said business conditions were difficult, and most of the industry tagged the Presidential election as a key factor in slow retail sales. By many accounts, retail business had been up and down and getting a lift around holiday promotions.
“Retailers want to be able to advertise motion leather with a strong quality story, very fast delivery and no quality issues,” said Campbell. “We’ve seen a more aggressive stance in expediency and holding suppliers accountable.”
The Leather Italia CEO reported double-digit growth as of Oct. 31 and attributed much of the success to the motion programs launched in March and expanded throughout the year to offer collections of six frames FOB out of the North Carolina or California warehouse with no minimums.
“My observation among midline independent retailers, particularly in the Midwest, that there has been strategic move to disengage from the traditional square footage,” said Campbell at Leather Italia USA. “For example, instead of a 10,000-square-foot store, they have found more efficiency with smaller units located in a zip code or region with higher traffic or to reach a broader span of consumers.”
The motion category continues to broaden across the spectrum of price, styling and comfort to support the increasing appeal among Millennials who respond to innovation and functions while they demand value with the full package of quality, better and customized style, and speed.
Producers with North American factories such as Southern Motion and Palliser have taken aggressive lead positions when it comes to customization and speed with their ability to provide made-to-order furniture with depth in options and delivery in three to four weeks.
An indicator of category growth is the entrance of new players. High-end upholstery manufacturer American Leather launched Style in Motion in April, and company officials said they have received positive feedback for the “stylish, clean, modern design and a mechanism that operates with a fluid motion versus one that unfurls.”
“We see value in being in the motion furniture category as it is a great way to pull consumers into a brick-and-mortar store,” said Mellora Moore, director of product marketing and communications for Dallas-based American Leather. “Manufacturers and retailers will need to continue showing the value of an in-store experience as the number of e-tailers continues to grow.”
Inherent in the category name, motion will stay on its current trajectory only if innovation moves in the direction that gives consumers reason to want it.
“I believe you can create demand when you give them something to be excited about,” said Tidwell. “Innovation comes in different forms. People buy motion for comfort and that is the direction that we at Franklin are going, extending our comfort story and remaining value-priced.”
Two potentially game changing innovations from Tennessee-based Evolution Inc. drew high interest this year: the six-base system that allows recliner action and the power kit that converts a manual recliner mechanism to power, both allowing easy installation and shippable separately and by ground for significant cost savings.
The overall optimistic outlook for motion in 2017 has dash of uncertainty and a sprinkling of “wait-and-see,” as the industry and country anticipate change across many sectors and aspects of business.
