At Transalis, we know that EDI (Electronic Data Interchange) can transform supply chain efficiency. This is especially relevant during more challenging periods and the furniture sector is no exception.
Coronavirus lockdowns were a huge obstacle for the retail industry. This unexpected shift in daily life put pressure on businesses reliant on the high-street to rethink their sales strategies. An agile business strategy had to factor in the necessary changes to business operations as well as shifting consumer behaviour.
EDI for the furniture retail sector
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Despite the challenges, total turnover for UK furniture manufacturers was up by nearly 10% in November 2020 – British Furniture Manufacturers
Some furniture brands have reaped the rewards of their agile response to the pandemic. These brands strengthened their competitive advantage, ready for the transition out of lockdown. We look at how this is made possible with digital transformation and harnessing EDI technology.
The “new normal” for furniture retailers
So what exactly changed for the furniture sector over the last 12 months?
The COVID-19 pandemic presented a number of challenges to businesses, with each industry feeling its effects slightly differently. However, it is clear that all have had to adapt in some way to survive.
Although, some forward-thinking organisations found opportunities for growth…
The challenges for the retail industry
For the furniture sector, like most other retail sectors, the last year has involved a shift of business strategy to focus on online sales channels.
Consumer behaviour changed drastically following the new government guidelines. Public spaces closed, work-from-home directive in place, and leisure travel banned. This resulted in a number of challenges for furniture retailers:
- With high-streets closed and consumers confined to their homes, online purchases were the only way to buy certain products
- The increased consumer demand for home/garden improvements and furnishings.
- COVID restrictions impacted furniture manufacturers, now running at reduced capacity.
- Furniture retailers had to source product from other suppliers due to longer lead times
All of these factors highlight the need for more agile supply chains and frictionless order processing.
Where does furniture EDI come in?
All of the above outline the significant obstacles for furniture retailers over the last 12 months. They also demonstrate how EDI can make navigating these challenges a lot easier. Ultimately, if their supply chain is not fully automated, human error and other processing inefficiencies could cost furniture retailers dearly.
The ones that got it right
The most successful furniture retailers in the sector will have supply chain automation solutions.
From the challenges outlined above, retailers have needed to be agile in their response to changing consumer demand and manufacturer lead times.
Being able to switch to other trading partners quickly is a vital component in maintaining profit margins, reducing costs, and speeding up customer deliveries.
Some brands have realised the opportunities that the situation has presented, and made the most of their supply chain automation to remain agile:
Furniture Village
With the rise in D2C sales online across the sector, Furniture Village reported a 90% uplift in online sales, with their total sales also up 25% (as reported in the Retail Gazette). These successes have allowed the business to expand further; creating another 150 roles and planning for two new store openings by the end of this year.
IKEA
“IKEA has hailed ‘resilient’ trading over the past year as soaring demand for homeware from locked-down shoppers helped it to shake off some of the impact of store closures.” (Retail Gazette)
The Swedish furniture retailer, IKEA, has also seen accelerated growth in online sales – with a 31% jump! Their online market now represents 27% of the company’s total sales in the UK, compared to 19% in the previous year (as reported in the Retail Gazette).
DFS
The UK furniture retailer has seen exponential growth during the second half of 2020. DFS emphasises that their digital channels were a key factor in their pre-tax profit, which had increased by £56.2 million to £72.1 million, with the group revenue climbing by 17.3%.
DFS chief executive, Tim Stacey, attributed much of the challenge for the company during the pandemic to their supply chain difficulties, but he also highlighted their resilience and praised employees for their hard work during this period.
“The investments we’ve made in our digital channels have generated exceptional revenue growth.” – DFS chief executive, Tim Stacey.
“Our business has proven to be resilient throughout the period, despite showroom closures and a significant amount of external disruption in our supply chains.” DFS chief executive, Tim Stacey (Retail Gazette).
How EDI improves supply chain efficiency
One key takeaway from each of these examples is that they rapidly switched their strategy focus to online markets.
Being agile in the face of a pandemic, or other difficult periods in the future, has proven vital for businesses, regardless of industry. This is something that every organisation will need to keep in mind to ‘future-proof’ their operations.
One way for furniture retailers to do this is to implement digital supply chains, supported by a robust and scalable EDI solution.
DFS has demonstrated how overcoming supply chain difficulties can impact revenue by investing in digital channels. This would not have been limited to providing a quality online service for their consumers. Digital transformation would also have been needed to effectively manage their order processing.
Automating processes undoubtedly put DFS in a strong position as they faced store closures, changing trading partners, and an influx of online orders.
Future-proof the supply chain with furniture EDI
Transalis makes all of this possible with our cloud-based EDI solutions.
As shown above, EDI software has the capacity to transform supply chain agility and efficiency. Implementing EDI software, automates supply chain management and can be tailored to suit individual business needs.
eDI Instant
As simple as 1,2,3. Buy EDI online in an instant and connect with your trading partner today
eDI Freedom
Build your own bespoke EDI solution according to your supply chain & integration needs
eDI Connect
Ideal for companies with many trading partners, high order volumes, requiring enhanced stock & sales reporting
eDI Connect+
Perfect for larger organisations requiring complete visibility across their supply chain to improve efficiencies
For more information of our EDI solutions visit https://www.transalis.com/edi-software/. Alternatively, you can buy online and be saving money & time within 24 hours with Transalis eDI Essential™, it’s as easy as 1,2,3.
You can also get in contact with our expert team on 0845 123 3746 or +44 1978 369 343 (for international callers), or reach out to us via email sales@transalis.com
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