Demand for leather furniture has been steadily growing for many years. Expects estimate that the market will grow at a rate of 3.9% compounded over the 2020 to 2027 period. More optimistic reports suggest that the industry will grow at a rate of 5.9% compounded over the 2021 to 2028 period, achieving a value of some $626 billion by 2028. Millenials and the emerging cohort of Gen Z buyers, have developed an affinity for leather furniture, and the quality of the product has many things in its favour. Leather is one of the most durable materials out there, and that, coupled with its texture and looks, means that when it comes to conserving value, there is no better product out there on the market. A key driver of growth is that over the forecast period, consumers are expected to enjoy rising disposable income, allowing them to take advantage of the benefits of owning leather furniture. With growth predicted to continue for the next few years, it is no surprise that many entrepreneurs have entered the market to compete for their slice of the market. Increased competition in the market is not the only problem that manufacturers face. We are living in an age of supply chain disruptions, labor shortages, and a consumer that is more price conscious than ever. Competing in this industry is one of the big questions facing upholsters and a question that I will try to answer in this article.
Manufacturers will have to embrace a new way of doing business. A decade ago, venture capitalist Marc Andressedn declared that, “software is eating the world”, and since then, his declaration has proved prophetic, with industry after industry increasingly mediated by software. The leather furniture industry is not outside of this movement. Manufacturers have to realise that they have to embrace the use of digital technology to generate efficiencies, improve the customer experience, unearth insights to improve their product quality, and ultimately, to earn higher economic profits. With 30% of consumers who purchase leather furniture being between 25 and 34 years of age, there is certainly a massive opportunity to capture consumers who will be on the market for decades to come.
Process optimization and automation are two of the most powerful ways that manufacturers can use to improve their profitability. For instance, the Lectra Versalis 4.0-ready digital cutting solutions enables manufacturers to improve their competitiveness through four improvements:
- Increased product quality
- Higher yield, reducing costs and optimising pricing
- Greater productivity at a time of labor shortages and where time-to-market has to be slashed
- More efficient processes thanks to data leveraging
Manufacturers need to leverage such solutions, as well as work with innovators who can provide them with adequate support and guidance to deliver the efficiencies that technology promises. The result of an approach that is open to innovation can be seen in products such as the Bradington Young recliner, which is made in the most efficient way possible, while delivering value to the customer.