Nobody really knows what will be the lasting consequences of the coronavirus pandemic to our society, our economy and our psyche. Predictions at this point are merely educated guesses.
That said, when it comes to the business of home furnishings, we can be reasonably sure that several results will come out of this: fewer physical stores, more business done through e-commerce and a reordering of the retail landscape hierarchy.
But there are two unintended consequences that I believe will surface once things settle down and they are going to be fundamental changes in the way the industry does business.
The first is that vendors, having reached their breaking point with retailers who aren’t paying them fairly or – worse – are out of business limiting points of distribution, are going to increasingly move to a direct-to-consumer model. We already saw the foundation of this before the pandemic: walk into any good-sized mall or shopping area and you’re as likely to see as many vendor-branded stores as ones offering multiple brands. In stores and online, there’s going to be more of this as suppliers take increasing control of their distribution fate.
The second is partially a result of the first. With vendors turning into retail competitors, stores are going to move ever more so to private label products. Again, we’ve seen the start of this process as retailers want exclusivity and products that aren’t sold elsewhere (and can’t be price-shopped online). There will be a lot more of this as we come out of the pandemic and it too will mean a fundamental change in how retailers sell.
The timetable for all of this is going to be sooner and faster than you might think and companies on both sides of the equation who don’t move quickly are going to get left behind.
As was said, it’s very difficult to predict what’s going to happen down the road. But I’ll take these unintended consequences for as good as it gets when it comes to educated guesses.
Award-winning Journalist & Consultant for the retailing and home furnishings industries with extensive business media experience in both fields.
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