Industry Highlight: Home Goods/Housewares Industry
The shifts caused by the pandemic have been felt by just about every industry, leading to some sudden and substantial shifts in consumer habits and market trends. Not coming as a surprise, the household-goods industry is one area that’s been particularly impacted, seeing dramatic growth in the last year.
As COVID-19 restrictions kept people indoors and isolated, many chose to put more time and money into their homes which led to an 11.9% increase in containerized imports of household goods in 2020.
Growth in Household Good Sector
The dramatic growth seems to be more than just the surge caused by the pandemic. After a number of years of steady growth, there was a decline in sales in 2019 and as a result, a couple of years of pent-up demand has added to the current numbers.
Within the industry, the fastest-growing segment has been tableware imports, which have grown by 36.4%, this is likely due to the fact that people are eating more meals at home.
The industry’s growth has been spurred on by the increase in new home construction and in rising home prices. Additionally, the boost from stimulus spending and house appreciation has led to more homeowners investing in their living spaces.
Experts in the industry anticipate that the current trends will be long-term. Clarence Smith, CEO of Havertys, acknowledges that he does not know how long increased sales will last but that “they believe that the importance and the value of the home has risen dramatically in the last year” and that “the elevated importance of home is a longer-term sustainable trend in America.”
What It Means for Logistics
After the Trump administration’s tariffs, it was expected that exports from China would decrease and that American businesses would more heavily rely on exports from other Southeast Asian countries. While these countries did see double-digit growth in furniture exports last year, China still accounted for 55.8% of the country’s exports. Vietnam was the second largest exporter of home goods, accounting for 19.4% of the market.
Even as sourcing has shifted some, retailers have continued to face logistical challenges with supply-chain disruptions, shortages, port delays and increased shipping costs. Interestingly, these delays have not impacted demand. Smith notes that Havertys “has not seen a slowing of orders or significantly higher cancellation rates even with the longer wait times.”
Retailers anticipate that the increased demand will last through 2021 and are working to find efficient ways to meet this demand and to deal with the logistical challenges. As supply chain issues decrease and production increases, many retailers are looking to add inventory and warehouse space to better meet the expected demand of the next year.
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