by David McMahon, PerformNow
Actionable strategies & predictions to help your retail business thrive and expand market share in 2025.
As we step into a new year filled with possibilities and uncertainties, it’s clear that the home furnishings industry has grown accustomed to navigating unpredictability. The COVID years taught us that resilience and adaptability are not just important—they are essential for survival and growth. The ability to pivot in response to changing conditions, from supply chain disruptions to shifting consumer behaviors, has become the hallmark of successful furniture businesses.
In this spirit, I offer key predictions for the upcoming year and actionable strategies to leverage these changes. By preparing for these challenges and opportunities, you can position your business to thrive and even expand market share.
The Overall Economy
Economic forecasts remain uncertain. Interest rates are ticking downward, and the economy shows resilience and moderate growth. If this trend holds, the home furnishings market will likely mirror this strength. Regardless of economic conditions, furniture and mattress sales will continue, driven by essential and recurring needs such as new home purchases, remodeling, and replacements.
It’s also worth noting that the impact of economic trends can vary significantly by region. A strong local economy can buffer national slowdowns, while weaker areas may face headwinds. Regardless, remember that the economy is beyond your control. Your focus should remain on what you can influence—your operations, marketing, and customer experience. Expect neither a windfall from a booming economy nor a collapse from a downturn.
Inventory Supply and Costs
Inventory costs may rise due to possible supply chain challenges, increased import taxes, and potential labor shortages. Therefore, you’ll need to evaluate pricing strategies carefully to maintain gross margins.
One option is to adjust prices strategically to reflect rising costs. However, if maintaining price points is critical in your market, consider sourcing alternative suppliers or product lines. If demand remains robust, rising costs may actually boost revenue through higher average transaction values. Stay vigilant and flexible, and leverage tools like inventory management systems to monitor trends and respond quickly.
Employees
Finding and retaining skilled employees remains one of the most pressing issues for the home furnishings industry. The available labor pool is not expected to expand significantly in 2025. To compete for top talent, retailers must offer competitive wages alongside a positive and supportive workplace environment.
A favorable work environment includes more than just pay—it also means fostering a culture of growth, recognition, and collaboration. Investing in technology, tools, and training can differentiate your business as an employer of choice.
Due to this ongoing challenge of finding and retaining talent, outsourcing will likely continue. Aside from retail selling, display and warehousing roles, most other positions can be remote or hybrid. There are opportunities to hire skilled employees from outside your market area. Consider using agencies to help fill roles, especially in marketing, lead management, accounting, and other office duties.
Marketing
The shift away from traditional advertising methods like TV, radio, and direct mail is accelerating. Consumers now rely heavily on digital channels to research products and make purchasing decisions. Digital marketing offers targeted, cost-effective ways to reach potential customers when they are active in the market.
Building a strong online presence is essential. Create engaging digital content to connect with your audience, such as videos, blogs, and social media posts. Invest in search engine optimization (SEO) to ensure your business is visible when consumers search for products you offer. Consider using tech to engage website visitors and focus on providing clear calls to action to convert leads into in-store sales.
Customer Expectations
Companies like Amazon have redefined consumer expectations, setting a high bar for convenience, speed, and transparency. Today’s customers want to quickly find the information they need, access products without delays, and resolve post-purchase issues efficiently.
To meet these expectations, retailers must invest in streamlined operations and robust customer service systems. Make it easier for customers to research products, check stock availability, and track orders. If problems arise, offer multiple channels for resolution, such as live chat, email and phone support, to ensure prompt and helpful responses. The more effortless you make the experience, the more likely you are to earn customer loyalty and positive reviews.
Competition
Home furnishings remain an essential category, ensuring ongoing competition from traditional and digital players. In 2025, national brands and e-commerce platforms will increasingly encroach on local markets, offering convenience and competitive pricing. At the same time, smaller, traditional brick-and-mortar retailers may exit the market, creating challenges and opportunities for businesses that remain.
In 2025, differentiation will be key. Whether through superior customer service, unique product offerings, or innovative marketing, retailers must find ways to stand out. Look for gaps in the market you can fill and consider expanding into related product categories or services to diversify revenue streams.
Technology
Technology is evolving faster than ever, largely driven by advancements in AI and automation. Keeping up can be daunting, but chasing every new trend is counterproductive. Instead, focus on technologies that align with your strategic goals.
Invest in tools that improve customer experience, such as CRM systems, mobile-friendly websites, and point-of-sale solutions. Automation can also streamline operations, from inventory management to marketing workflows. Partner with technology providers that offer scalable solutions and ongoing support to ensure you maximize the value of your investment.
Strategies for Success
1. Elevate the Customer Experience.
The cornerstone for success in 2025 and beyond is to deliver an exceptional customer experience. Map the entire customer journey, from initial engagement to post-purchase interactions, and identify areas for improvement. For example:
- Enhance lead management to engage potential customers early.
- Simplify in-store sales processes for a smoother experience.
- Automate follow-ups for open orders and post-delivery surveys.
By addressing every touchpoint, you can create a seamless experience that delights customers and builds loyalty.
2. Enhance Information Access.
Customers expect immediate access to accurate information. Equip your staff with tools like tablets or mobile apps to efficiently answer questions and complete transactions. Having the right information at their fingertips improves the customer experience and increases the likelihood of a sale.
3. Accelerate Transactions.
In a fast-paced world, customers value efficiency. Streamline the shopping experience by:
- Digitally creating wish lists during the sales process.
- Automating order creation and payment processing.
- Scheduling follow-ups with customers using digital calendars.
These steps reduce friction and make the shopping experience more enjoyable for customers and staff.
4. Automate Order Updates.
Automation is essential, given the high volume of delayed or follow-up transactions in the home furnishings industry. Tools that notify customers about order status, delivery updates or product availability without requiring manual intervention save time and enhance transparency and trust.
5. Turn Service Issues Into Opportunities.
While service challenges can be frustrating, they present an opportunity to build loyalty. To resolve issues quickly and efficiently, implement digitized ticketing systems that integrate with your CRM. Proactive communication and timely follow-ups can turn dissatisfied customers into brand advocates.
6. Leverage AI and Automation.
Workflow automation is no longer optional—it’s necessary to stay competitive. Examples include:
- Marketing automation: If a customer comes into your store but does not buy, send an automated text and e-mail to thank them for their visit. At the same time, automate a follow-up notice to remind an associate to touch base with that prospect.
- Sales automation: If a customer doesn’t add accident protection, send them an automated reminder offer prior to delivery.
- Open sales follow-up automation: Send an e-mail every two weeks to customers with an open sale that includes a link to check their order status.
- Post-delivery automation: Upon delivery, simultaneously send a branded e-mail with a thank you message and next purchase survey. Include photos of the delivery and copy the salesperson.
- Past purchase follow-up automation: Trigger a salesperson follow-up reminder six months after purchase.
- Related item automation: Use for popular brand introductions and products with followings.
- Marketing automation in AI: One of the greatest uses of AI is to generate and refine content. Connect your marketing resources with your CRM to help expand and use content to increase relevance with your audience.
- Loyalty and VIP programs: If you have a subscription service, VIP service or loyalty program, trigger monthly messages to these segmented parts of your database. This will lead to higher rates of media engagement.
By focusing on these predictions and strategies, your business can navigate the challenges of a dynamic market and seize new growth opportunities. Success lies in being proactive, adaptable, and committed to delivering value at every step of the customer journey.
HIGHLIGHTS
“Your focus should remain on what you can influence. Expect neither a windfall from a booming economy nor a collapse from a downturn.”
“There are opportunities to hire skilled employees from outside your market area. Consider using agencies to help fill roles.”
“One option is to adjust prices strategically to reflect rising costs. However, if maintaining price points is critical in your market, consider sourcing alternative suppliers or product lines.”
“In 2025,differentiation will be key. Whether through superior customer service, unique product offerings, or innovative marketing, businesses must findways to stand out.”
