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How to create a marketing plan for your small business - build a brand, target customers and set prices that will maximise sales.

The internet has transformed business marketing. No matter what you do, the internet is likely to be at the heart of your marketing strategy.

Social media is firmly established as a marketing tool. Having a presence opens up new lines of communication with existing and potential customers.

Good advertising puts the right marketing message in front of the right people at the right time, raising awareness of your business.

Customer care is at the heart of all successful companies. It can help you develop customer loyalty and improve relationships with your customers.

Sales bring in the money that enables your business to survive and grow. Your sales strategy will be driven by your sales objectives.

Market research exists to guide your business decisions by giving you insight into your market, competitors, products, marketing and your customers.

Exhibitions and events are valuable for businesses because they allow face-to-face communication and offer opportunities for networking.

Furniture shop sector trends

(last updated July 2019)

What has been happening in the furniture sector

During the past 20 years or so the number of independent furniture retailers in the UK has fallen steadily. The main reason for this is the growing dominance of the large chains like IKEA, and strong competition from department stores like John Lewis, mixed retailers like Wilkinson, and catalogue shops like Argos. Rising costs have also played a part. Supermarkets and specialist online retailers also entered the furniture market, often selling goods at very low prices. This increase in competition has made it difficult for independent retailers to compete at the cheaper end of the market - for example selling goods to first time house buyers. As a result, many independent furniture retailers have moved upmarket in the hope of attracting more wealthy customers. Despite the fall in numbers of independent furniture retailers, there is still a high proportion of micro and medium-size businesses operating in this sector. In 2017 nearly 60% of furniture retailing businesses had a turnover of less than £200,000.

The furniture sector divides into three subsectors:

  • domestic
  • contract (public spaces such as hotels, schools, restaurants, airports etc)
  • office (desks, workstations, seating, cabinets etc)

Domestic customers spend around £16 billion to £18 billion a year on furniture and furnishings, accounting for approximately 70% of the market. The contract and office subsectors account for the remaining 30 per cent of the market.

The popularity of TV programs like Changing Rooms and Home Front boosted interest in furniture, furnishings and home improvements during the first half of the 2000s. People were encouraged to redecorate rooms or even their whole house on a regular basis. This was good news for independent retailers - by specialising and offering unusual or fashionable items they were often able to attract customers away from the larger and more mainstream stores.

As with many other sectors, the huge rise of e-commerce has had a very significant effect on the furniture industry. Many retailers now sell furniture and related items online, sometimes using their own e-commerce websites and sometimes through eBay or Amazon. IKEA started selling online towards the end of the 2000s. The internet has also enabled many furniture manufacturers to increase their direct sales, cutting out the retailer altogether.

The health of the furniture retailing trade is closely linked to the state of the property market, and a strong housing market boosted demand significantly during much of the 2000s. Unfortunately demand slumped when the housing market all but collapsed in 2008. The sharp economic downturn that followed dealt a further blow to the industry as shoppers kept their money in their pockets and postponed major purchases. Furniture retailers reported that the effects of the economic downturn led to lower footfall, so fewer potential customers, and those who did spend spent less, choosing lower priced items or going to a cheaper outlet.The furniture giant MFI went into administration as a result. During the early 2010s a number of other major furniture stores ran into trouble - including Dreams, Lombok and the Walmsley furniture chain.

Government help for house buyers helped to stimulate the housing market and the number of transactions increased as a result. By 2013, there were over one million housing transactions - the first time since the late 2000s that the number of transactions had exceeded the one million mark. An improving economic situation from the second half of 2013 helped to boost the housing market and the number of transactions each year between 2014 and 2017 remained at around 1.2 million, despite a slowdown in the economy during the mid 2010s and the added economic uncertainty following the vote in June 2016 to leave the EU.

Both the economy and the property market are forecast to see only modest growth during 2018 and 2019.

High inflation and a squeeze on household budgets have made consumers wary about spending on 'big ticket' items like furniture. At the same time furniture retailers' costs have gone up because of the weak pound. According to industry forecasters, demand for furniture is likely to be lacklustre over the next couple of years and competition is likely to remain intense.

Independent furniture retailers have reported that they see the greatest threats to their business as:

  • competition from online sales (for those without an online presence)
  • 'white van man' - individuals who trade from home or lock-up premises and don't have the overheads of the high street shop
  • the level of business rates

Copyright matters

In 2016, the period of copyright protection for artistic works that have been industrially exploited (for example replica furniture) was extended from 25 years to a period ending 70 years after the death of the creator. To allow time to adjust to the extended period, the furniture industry, including retail outlets, had until 28 January 2017 to get rid of manufactured or imported replica furniture stock that contravened the new copyright law. Now, any replica furniture that comes under the new copyright protection must have a licence from the relevant rights holder.

Keeping up to date with developments in furniture retailing

Joining a trade association is an excellent way of staying up to date with developments in your industry.

The Furniture Industry Research Association (FIRA) represents all businesses involved in the furniture industry supply chain, including retailers. Retail members are entitled to display the FIRA logo on their premises, receive a listing in the suppliers directory on the FIRA website and access a range of industry research and business advice. Visit the FIRA website for more information.

The British Independent Retailers Association (BIRA) represents many different types of retailer, including furniture retailers. BIRA provides its members with a free legal advice service as well as help and guidance on matters like fire safety, pensions and using social media. Members are also entitled to discounts on services like insurance and card processing and can benefit from several training programmes. You can find out more on their website.

If you plan to manufacture any furniture in-house, you might benefit from joining British Furniture Manufacturers (BFM), the trade association for domestic and commercial furniture manufacturers and distributors. Visit the BFM website for details.

Subscribing to a trade journal is another good way of staying up to date. Relevant trade journals include:

  • Furniture News
  • The Furnishing Report
  • Cabinet Maker

Visit their websites for more information.

Trade shows

You can get a lot of useful information by visiting a trade show, where you will be able to meet manufacturers, suppliers and importers and plan your future stock buying. Information about various other forthcoming trade shows is available on the Exhibitions UK website.

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