From what I have read, heard and seen, the July furniture show in Las Vegas was a big success. Exhibitors were pleasantly surprised with traffic, and attendees were outspoken in praise for the new venue. In my experience, these expressions could herald another industry migration. Even if Las Vegas is just a "Western regional" show or a "promotional" show for a few years, this is how the High Point market started to grow and evolve 50 years ago. Perhaps High Point has achieved a "critical mass" that is so large it cannot be fatally damaged, but I doubt it.
Prior migrations began with much less organization and financial backing than the Las Vegas developers are applying to build the attractiveness of their new venue. Even though it seems tasteless and glitzy, Las Vegas is more exciting and more user-friendly than High Point. If this venue provides a greater chance for sales growth and profits, the migration to Las Vegas will be another gold rush.
I sense that our industry also needs inspiration. A wide swath of consumers seems to have lost interest in the understated and genteel image we have projected for the past several decades. Can they maintain their faith in baseless celebrity endorsements much longer? I hope some of our industry leaders attended the Cirque de Soleil shows in Las Vegas so they could measure the force of creative talent required to create worldwide demand in our age. These performances are outrageous and inspiring.
At about the same time that the Las Vegas show opened, the Chinese government announced a devaluation of its currency. This will make Chinese imports a bit more expensive, which may change the pace of our manufacturing migration by a degree or two. However, I doubt that a "floating" or devalued yuan will change the end result. Government manipulation has little effect on these types of shifting patterns.
Advances in communications and transportation have cinched all of the peoples of the world closely together. Even people who don't like their neighbors are nose-to-nose with new ideas, dreamy ideals and luscious temptations. The alluring winds of change float high across national and neighborhood borders. We bump into each other's culture in theaters, newsstands, TV channels and restaurants on every continent. It makes some people very angry.
Big is better, fancier finer
Free trade brings a cornucopia of delicious choices. Few people have the restraint to buy a simple pine dining table when they see a lavishly carved and veneered mahogany model for an affordable price. A few people with very discriminating taste will buy an understated authentic pine piece from a local craftsman, but this "less is more" consumer segment is small. For most Americans, big is better and fancier is finer.
Those of us who manage small furniture businesses are left with some difficult choices. If we decide not to import, we need to find a unique product and a clearly defined matching consumer segment. We need to stay small. Or, on the other hand, we can try to get very big very fast. The middle-sized companies seem to be in no-man's land.
My solution is to target the high end of the market. I think there is more profit in this segment and less capital risk. There are stores and showrooms that specialize in serving affluent consumers and interior designers. There also happens to be many more affluent consumers than ever before. Many fine homebuilders who are serving this same market need to find craftsmen who can build elaborate and exotic mantles, doorways, cabinets, floors and other architectural embellishments. The "big is better" craze has definitely influenced the residential homebuilding market in most regions of America.
I started a small business with some specialized, high-priced designs that are manufactured in Asia. Now I am finding domestic sources for specialized components that fit into our basic furniture collections. The advantage of the local sources is that they can "make-to-order" so that I do not need to take the risk of buying in quantity and maintaining another warehouse. It is also more satisfying to be able to wander into the shop every week just to see what's going on and to have the opportunity to brainstorm a better product or a more efficient design. There is energy and synergy in the combination of marketing and manufacturing.
As a wise and successful friend once pointed out, there is also one less mark-up in an organization that combines the marketing and manufacturing process. How long will it be before the market sees an influx of Asian manufacturers who can design, manufacture, distribute and market in one seamless organization? The next generation will see many such international business leaders. I know that we will also see many more American furniture companies with manufacturing assets on other continents.
The barrage of change is exhilarating. . . and bruising. It's disturbing to see old traditions fade. It is also confusing to see the world shrink so fast that our self-interests become blurred. How can our interests be served by allowing foreign manufacturers to invade our land?
Fight back but fight smart. Americans know how to thrive in a competitive business environment better than anyone else in the world.
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