Q: What do you see as the most important issue in 2008 as it relates to your business, and why?
Gary Evans -- Furniture Today, February 18, 2008
High Point — By far, the greatest issue facing the home furnishings industry in 2008 is staying alive for another year.
That's keeping a lot of people awake at night, and retail technology vendors are among those reaching for the Ambien. With money tight, prospective stores are hesitant to plunk down thousands of dollars for new software platforms, even knowing that the return on investment could add up to a bundle over the long run.
Business is clearly tough for everybody. Here's what some software execs have to say about the challenges that face the industry in the coming year.
"I'm probably not alone in being anxious about the economy in 2008. Increasing inflation, declining housing sales and a decrease in consumer confidence have created an environment of apprehension. In addition, there is a profound element of change within the furniture industry. Manufacturers are becoming distributors, retailers are becoming importers, offshore suppliers are becoming wholesalers and big discount stores are selling furniture as a commodity. Given this economic climate, many furniture companies are responding by pulling back new expenditures, especially investment in technologies.
"Our challenge in 2008 lies in identifying organizations that are interested in finding the opportunities inherently created in times of change: opportunity to analyze and streamline systems and procedures; opportunity to promote and retain their best and brightest people; opportunity to form new relationships and alliances. By focusing on our customers' needs and our users' ideas, we can contribute to their success. Our experience developing Web-based applications for the furniture industry concentrates on providing key data and collaboration tools for sales representatives, buyers and customer service workers. Existing clients are well aware that our flagship program, FurnishWEB, saves them time and money, but identifying new clients that have the vision to make the investment in this environment is certainly a challenge."
Barry Welch, president, Internet Databases
"The most important industry issue that I expect will affect our business in 2008 will be the state of the economy. With many of the indicators pointing to a recession, we can expect that many retailers may look to cut costs and be more reluctant to invest in technology than they normally would be. That will become our challenge, to do an even better job of communicating the importance of utilizing technology to create a competitive edge and control costs by improving operational efficiencies. As with any challenge, this one represents an opportunity for us to demonstrate to retailers in the home furnishings industry that our software system is the part of the solution and we intend to be successful in this endeavor."
Doug Culmone, COO, Storis Management Systems
"Lowering operational costs while increasing customer service for our customers. The pullback in the housing market has created a fierce competitive battlefront for winning new customers and maintaining margins. The retailers that can guarantee in-stock availability and deliver in less than 24 hours while reducing warehousing manpower are going to take market share and better position themselves for the economic turnaround. Invariably, the retailers that survive and thrive in this type of market are those that run world-class distribution operations because their operations ensure customer satisfaction and lower costs."
Brian Smith, vice president of sales and marketing, RedPrairie
"Clearly, the health of our clients' businesses in a tough economy is a concern. Obviously, our health and future is tied to theirs. We are getting the same mixed reaction to the economy as everyone else is getting. Some of our clients are worried and tightening their belts to ride out the storm. Others are taking advantage of the slower times to implement new processes in their stores, or to even expand and open new locations. They believe that the economy will turn around by the end of the year and want to be prepared for it when it happens.
"Since the economy is an area that none of us has any power over, we are working to help our clients work smarter — not harder — at this time. We now have over 430 clients that participate in our freight group buying program. To date as a group they have saved over $2 million on their freight. One store alone saved over $62,000 last year. By being able to help our clients save where they can, and spend where they need to in order to prepare for the future, we are doing what we are able in this economy.
"Even though we do believe that a turnaround is coming soon (we have never been in a recession during a presidential election year, ever) our fear is that people will delay a turnaround by holding back on their own purchases. Obviously, a long spell of a tough economy is tough on everyone from the vendor to the retailer and their clients as well."
Shelley Parlin, vice president of professional services, ProfitSystems
"Customer service is paramount to the home furnishing industry and essential to differentiate companies' offerings. That being said, managing costs in this economic slowdown is also important. Finding ways to reduce operating costs while improving customer service through low-cost, quick time to value solutions are among the most important initiatives for home furnishing retailers.
"Few industries have been more adversely affected by the downturn in the housing and financial markets than the retail home furnishing industry. Companies that historically enjoyed wide profit margins are seeing these profits being significantly eroded.
"The rate of adoption and aggressive use of readily available technology that can significantly reduce operating costs is still low. Many of these technologies result in quick time to value and can provide companies with the capital needed to maintain and grow their businesses, even in these challenging times.
"With the right logistics management solution, organizations can gain quick time to value and competitive advantage by improving on-time performance, reducing transportation costs and creating revenue-generating opportunities by enabling premium levels of customer service."
Nicole German Coulter, vice president of marketing and communications, Descartes Systems Group
"I believe the No. 1 issue for 2008 will be how the small to mid-size retailers react to the current situation. It will be challenging for many to successfully navigate their way through a perfect storm of reduced sales, price deflation and increased costs."
Ren Baker, CEO, CDS Solutions Group
