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Point Counterpoint: The Future of Home Furnishings Retail

Furniture World Magazine


Commentary from Bill Napier adn Ed Tashjian

Bill Napier and Ed Tashjian debate whether or not the furniture industry is headed for disaster. Bill sees the glass half empty, Ed is worried that it’s not big enough.

Editor’s Note: Bill Napier and Ed Tashjian are at it again. Bill, nicknamed Darth Napier by his friend and co-debater Ed Tashjian, share their views about the future of home furnishings retail.

Bill’s Point: Unhappy Times are Here Again

Why is our industry hurting? The answer is simple: we don’t do our due diligence, we ignore the facts, and then we’re left to react, usually with excuses. I call this THE ARROGANCE OF IGNORANCE.

A recent Smith Leonard Furniture Insights® report noted that “Year to date, new [furniture manufacturing] orders were down 8% compared to the same [YTD] period in 2022.” This figure, they point out, doesn’t tell the whole story: June 2023 orders were well up over June 2022, which in turn was significantly down from June 2021. It’s complicated and the situation, they say, for the remainder of 2023 remains “murky.”

Much can be said regarding the furniture business’s current sluggish state, including inventory problems, but this is getting to be a really old excuse.

The main culprit—It’s the economy, stupid! We continue to see headwinds due to persistent problems with the housing market, consumer debt and resulting furniture-buying trends.


A record number of adults have moved back home to live with their parents. I doubt this group can afford furniture or most retail expenditures other than necessities.

According to a December 2022 PropertyManagement.com survey of 1,200 26 to 41-year-olds, nine million millennials moved back in with their parents in 2022 due to financial hardships. Their stated reasons included:

  • Saving money—50.9%
  • Couldn’t afford rent—39.3%
  • Take care of parents—31.5%
  • Like living with parents—29.6%
  • Personal health issues—22.9%
  • Lost my job—21.4%
  • Afraid of losing my job—7.1%

You might think that this is due to the after-effects of the pandemic and that high employment rates will turn this situation around. The truth is that this is a long-term problem driven in part by a disturbing trend in home ownership, a direct driver of retail furniture sales.

“And it gets worse. Total household debt increased by 8.5% in 2022 and now stands at a record $16.9 trillion. That’s $2.75 trillion higher than it was pre-pandemic.”

Our Home Ownership Problem

Ridiculously high mortgage interest rates have made people reluctant to buy homes because they are getting much less and paying more. At the same time, sellers are holding on to their current homes and legacy fixed mortgages. This is true in virtually every city and town in the U.S. and Canada.

So, what are buyers doing? The rational thing. They are renting and waiting.

Do you know that new apartment construction will reach a historic peak, with over 460,000 new units expected to come online nationwide? According to RentCafe, apartment construction last surpassed the 400,000-unit mark in 1972, exceeded that mark in 2021 and is likely to do so again. That’s a 50-year high.

The fact is that people can’t afford homes due to the economy, inflation, and interest rates. They are delaying that purchase, opting to rent. The average new apartment is about 1,200 square feet. That means less growth in the number of rooms, especially larger bedrooms. People aren’t buying whole rooms of furniture anymore. Instead, they are buying pieces, and usually small pieces at that.


Bill laments that an average new apartment is only 1,200 square feet with fewer rooms and small bedrooms to furnish.

 Ed observes that people are getting married later, creating more single households, and rejoices that everyone needs a minimum of a bed, a sofa, and a place to eat.

Disposable Income

The most troubling information in recent reports on GDP is the precipitous drop in real disposable income, which fell over $1 trillion in 2022. For context, this is the second-largest percentage drop behind only 1932, the worst year of the Great Depression. The economy is expected to only grow 1.4% in 2023, which stinks!

Student Loan Debt

Forty-five million Americans have student loan debt—about one in seven Americans (13.5%)—according to an analysis of January 2022 census data. People 25 to 34 years old are the most likely to hold at least some student debt, but the greatest dollar amounts are owed by those 35 to 49—more than $600 billion, federal data shows.

The average amount is $32,731. Monthly payments range from $333 to $1,537, depending on the degree obtained and borrowed. AND remember, most of these loans accrue interest, ranging from 5.5% to 8.05% depending on the type of loan.

These people make up the demographic sweet spot for retail furniture sales. According to U.S. Federal Reserve data, student debt rose more or less steadily (not adjusted for inflation) from $.52 trillion in the final quarter of 2006 to over $1.78 trillion in the first quarter of 2023.

Other student loan facts:

  • The outstanding federal loan balance, including federal and private loans, is $1.77 trillion, accounting for 93.1% of all student loan debt.

  • 43.8 million borrowers have federal student loan debt.

  • The average federal student loan debt balance is $37,338, while the total average balance (including private loan debt) may be as high as $40,114.

Given the recent Supreme Court ruling that struck down the Biden administration’s attempt to forgive large amounts of student debt, this situation is unlikely to change soon.

“First-time home buyers will havean even more challenging time getting mortgages. Small and mid-sized retailers will also see an uncomfortable tightening of their credit lines.”

Another Concern

Something else that might keep you up at night is the evolving situation for small and regional banks.

Small commercial banks accounted for 57.3% of the $2.752 trillion in mortgage loans and 45.2% of the $2.071 trillion in consumer loans in 2022, according to data from S&P Global Market Intelligence. “There’s likely to be less credit expansion due to this. Banks are going to be a bit stingier. They’ll want to see their loans-to-deposit ratio decline and have more cash on hand,” said Chris Varvares, co-head of U.S. Economics at S&P Global Market Intelligence.

The result will be that first-time home buyers will have an even more challenging time getting mortgages. Small and mid-sized retailers will also see an uncomfortable tightening of their credit lines.


Ed says don’t worry. In the long run, growth in furniture sales is predictable, linear, and dependent on necessity, function and fashion.

Bill warns that tough times are already here and are going to get worse due to structural economic realities.

The Debt Breakdown

And it gets worse. Total household debt increased by 8.5% in 2022 and now stands at a record $16.9 trillion. That’s $2.75 trillion higher than it was pre-pandemic. Taken together, the drop in real disposable income plus a mountain of consumer debt and credit tightening will create a drag on spending for home buying and home furnishings purchases going forward.

Focus on GMROI

So, how do we navigate these hard truths?

We can’t employ the “usual” tactics. We must find a way to cut costs and use more technology to streamline operations. I advise thinking and acting GMROI in every facet of your business! There’s no need for me to go into a detailed discussion of best practices for tracking and improving GMROI. Check out recent Furniture World articles by David McMahon visiting https://www.furninfo.com/authors/david-mcmahon/6 on the following topics:

  • Time to Refocus on GMROI
  • Traffic & Ways To Get More
  • 13 Ways to Make the Most of Your Retail Traffic
  • Retail Guest Productivity Metrics
  • Retail Metrics: Cash Crunch 2023?
  • Recession Planning

Counterpoint: Ed Tashjian

Clearly, our worldviews are not the same. As usual, we might as well be living on different planets. While Bill sees the half-empty glass, I’m worried it is not big enough. I base this on economic facts and plain old common sense.


Consumer savings are almost as high as they’ve ever been. After spending like drunken sailors on shore leave, consumers still have more money in their savings accounts than before COVID-19. They hold approximately $900 billion in excess savings, equivalent to 5% of consumer spending. This would suggest the scope for consumption to remain resilient for quite a while. Some excess has flowed into equity securities that are less likely to be converted into immediate spending but bode well for the future.

If we have a recession, which I think is doubtful, everyone predicts a soft landing. As our erstwhile President Reagan opined, “The difference between a recession and a depression is simple. In a recession, your neighbor is out of work. In a depression, you are.” Unemployment is near the lowest rate in our lifetime. Anyone who wants a job can likely obtain one. More people are working than ever before in American history and contributing to the economy.

Other economic indicators are in our favor. Declining U.S. consumer inflation, slowing wholesale price increases, and falling import prices sent the stock market soaring. Most 401(k) plans have nearly recovered (as of September 1, 2023) from mid-2022 lows. Consumer confidence is rebounding. According to the University of Michigan, consumer sentiment for the U.S. increased to 71.6 in July of 2023, the highest level since September of 2021, and well above forecasts of 65.5, preliminary estimates showed. Both current economic conditions (77.5 vs. 69) and consumer expectations (69.4 vs. 61.5) improved, attributable primarily to the continued slowdown in inflation and labor market stability.

Spending on infrastructure is likely to spike the economy. Unlike spending on wars, which goes to defense contractors, this kind of government spending creates domestic jobs and puts money in people’s pockets.

Student Debt

I do share Bill’s malaise about college debt. More than 45 million people collectively owe $1.6 trillion, according to U.S. government data. The typical undergraduate student with loans now finishes school with nearly $25,000 in debt. It may be the biggest scam in our lifetime. Nothing is more bloated or overrated than our private education system. It makes me sick to my stomach when I think about the money that could have been spent on something more tangible, like furniture. Over time, this will sort itself out, but that is another topic. What is relevant here is that despite that debt, most of these people do not have problems getting credit to buy goods and services – especially furniture.


Bill frets that first-time home buyers will continue to face challenges getting mortgages. Consumer debt, especially student debt, is and will be a huge drag on home furnishings purchases.

Ed agrees but observes that despite that debt, most of these people don’t and won’t have problems getting credit to buy goods and services – especially furniture.


Demographics are on our side. The number of households is increasing, albeit at a slower rate, both due to migration and organic increases. Moreover, people are getting married later, creating more single households. I have never been in a household without a minimum of a bed, a sofa, and a place to eat. Have you? Do you think this will ever change? Moreover, and this is another topic for debate, I believe it is likely that our immigration policy will change out of necessity in the near future, which will result in a substantial number of new households.

Other Factors

Regarding the much-maligned cohort of millennials, it may be true that nine million millennials have moved in with their parents, but 27 million, or 75%, didn’t. We are creating more multi-millionaires in this country than at any time in its history. In the U.S., there are a little over 22 million millionaires. Surprisingly, almost a quarter of these are millennials. Not to belabor a metaphor, but is the millennial glass ¼ empty or ¾ full, with a heaping portion of cream rising to the top?

At the store level, we are working our way through the retail inventory glut. Bill may be tired of hearing that as an excuse, but it is legitimate. The design trade did quite well in the first half of 2023. To be sure, the retail furniture business is not easy. Its cemeteries are littered with gravestones of outsiders coming in, believing that easy profits were available with more sophisticated approaches.

Further, the last three years have been the most unusual and unpredictable in our careers. We were whipsawed by supply chain fluctuations. COVID stimulated demand and atypical cost increases. But I cannot think of a more predictable industry than furniture. Its distribution channels may be evolving, but over the long run, its growth is linear. It is not likely to be affected by artificial intelligence or some new technology.

Common Sense

Look around your community. Do you see an increase in the construction of massive apartment buildings? Have you considered that every new apartment will need a bed, a sofa and a dining table at a minimum? Bill laments that an average new apartment is only 1,200 square feet. Where he sees a problem, I see an opportunity. Manufacturers and retailers alike should be offering smaller-scale furniture and designing it to fit into elevators.

Regarding GMROI, I mostly agree. No matter how sophisticated your analytics are, the key to success is to do more of the profitable things and stop doing or trying to fix the things that aren’t. It isn’t rocket science. One of the issues in furniture is that stores are too big. Rent, interest and inventory carrying costs are killers. The stores of the future will likely be smaller and depend more on technology.

“Bill urges furniture retailers to think about GMROI in every part of their business. Ed advises retailers not to try to be everything to everybody, then target customers with visually and verbally sophisticated stories.”


As I near the end of my career and reflect on 40+ years of experience in this industry, this is my advice to manufacturers and retailers alike. I apologize in advance that it is not more profound.

Segment your market. There are many paths to success, but the shortest route to failure is trying to be everything to everyone. It is easier to sell your customers more than to sell more customers. Try to remember that their primary goal isn’t to buy furniture. It’s to buy a lifestyle. They shop the hope of living a more comfortable and satisfying life. That is what retailers should really be selling, and it manifests in the form of furnishings.

There are many ways to segment. Pick a niche and be the absolute best at it. Get to know your ideal customer from their point of view – not yours. I recommend spending at least a day a month riding in the delivery truck. Get out of the store and the factory and into the homes of those who purchase your products. Over my career, I have invested millions of dollars in marketing research. But nothing has been more helpful than going into people’s homes.

All great marketing begins with differentiation and the ability to tell your story. If you can’t tell your stories, then differentiation doesn’t matter. Part of this is messaging, and part of it is media. It’s not enough to have great products. Your marketing must speak a verbally and visually sophisticated language that connects with consumers emotionally and communicates why your products are different and better. And, you have to reach them where they consume media. For every target, it’s different.

Furniture demand is based on necessity, function, and fashion. Fortunately for our industry, people get tired of their furniture. The inexorable desire for humans to express themselves manifests in their furnishings. We need to be fashion-forward. Status is every bit as important as function. Furniture is an expression of self and identity as much as clothing or automobiles. It is a great business.


Bill and Ed write Furniture World's popular and controversial Point-Counterpoint series.

About Bill Napier: Bill Napier is Managing Partner of Napier Marketing Group. He has been the chief marketing officer of several small, medium and large companies throughout his career, most notably Ashley Furniture Industries Inc. Bill is  a featured writer and speaker in the retail industry. His passion is to help retail brands & brick mortar retailers grow their businesses by creating, guiding and deploying successful marketing B2B/B2C solutions integrating traditional marketing with the web/social media. His FREE website www.social4retail.com includes hundreds of articles and “how To” strategies. Bill can be reached at; billnapier@napiermkt.com or 612-217-1297.

About Ed Tashjian: Tashjian Marketing provides senior marketing leadership to the Home Furnishings Industry. It specializes in business analytics and in helping its clients to segment the market, define and communicate a sustainable differentiated value proposition. Get more information at www.Tashjianmarketing.com or call (828) 855-0100.