The COVID-19 pandemic has wreaked havoc in the global furniture trade and industry. During its initial phase retail sales fell leading to many trade buyers requesting either the cancellation of orders or to stretch delivery dates. At the same time, production was disrupted with many factories having to shut-down during to various forms of lock-down measures implemented. While production stopped, so did the supply of raw materials.
The impact on the supply situation in Asia, the furniture production hub of the world, was especially pronounced. As economies recovered from the first wave and Work-From-Home became a new normal, consumers returned and so did demand for furniture. However, orders overwhelmed the supply of freight containers causing shipping costs to skyrocket. In many instances, the costs of freight went up 4-5 times to pre-pandemic levels. Wholesalers and retailers are faced with the dilemma of passing the difference to customers, to absorb the amount or find something in between.
During the pandemic, with safe distancing measures put in place by many governments, occasional shutdown and fear of catching the virus, a significant number of consumers have switched to shopping online. This has accelerated the growth of ecommerce for the furniture trade.
To find out more about the impact of the COVID-19 pandemic on furniture business, we reached out to Arie Wissmann, the President of Wissmann holdings and winner of International Furniture Leadership Awards 2020/2021 in the Outstanding Leader category. Despite his busy schedule, Arie has been kind to spare time to share what his business went through and some of his strategies for continued success.
FurnitureAndFurnishing (F&F): Hello Arie, congratulations on winning the Outstanding Leader Award and thank you for your time. Please give our global readers a brief of your business and its scope.
Arie Wissmann (AW): Wissmann Holdings is the largest furniture group in Israel. We are active in the fields of retail, wholesale, projects and international trade. Our strengths are in furniture sourcing, product development, design, quality-control, financing and supply chain solutions for wholesalers worldwide.
The furniture brands in the Wissmann Group cover furniture for all rooms in the house except kitchens. The categories served include: furniture for dining areas, seating systems, bedroom furniture, children’s rooms, baby furniture, wall systems, wardrobes, carpets and complementary accessories and furniture for projects.
All the products of all the brands in the group can be obtained in stores spread all over Israel and they are also available online except furniture for projects that is sold only in physical stores.
We have a strong network of furniture manufactures in Europe as well as in the far-east with more than 80 modern and reliable factories handling large range of furniture categories.
F&F: Based on the performance of your business since the start of the COVID-19 pandemic until now, has your business been impacted by it and if yes, in what way?
AW: The Wissmann Holdings brands actually flourished during the Corona virus period. This is due to the huge demand created as customers spend a lot of time at home and they discover a need for furniture for all the rooms in the house.
F&F: Were there any changes in your marketing strategy comparing the periods between before and during the pandemic?
AW: Our chain of stores is spread all over Israel in ten locations in prime areas. And in one of the companies in the group we market to over 120 private stores. End customers can also purchase our brands in over 15 online stores and some market place.
During the Corona virus period, our marketing strategy has not actually changed but the tactics were tweaked in such a way that most of the efforts have been directed to advertising the online store. This is because of the increase in demand brought about when customers spend a lot of time at home and exposed to online information. In short, we strengthened our online marketing presence to create greater awareness more effectively.
F&F: We understand many factories around the world have a growing backlog of orders. There is also a shortage of shipping containers worldwide. Together they have disrupted the flow of supply to international buyers. As a company that taps on global sources, how were you able to continue your sourcing and logistics strategies?
AW: We have ample supply as we are able to finance a large amount of stock. This is backed by the advantage of having a huge logistics centre that we store hundreds of containers of goods at any given time. So while the pandemic may have disrupted the flow of goods to many companies, we are little affected.
Most of the fulfilment is done through our logistics center located in the north of Israel with direct and quick access to the Trans-Israel Highway. Choosing the geographical location was a challenging task due to important considerations such as: where most employees live, land costs, travel distance to common areas and transportation accessibility. I am proud to say that currently we have the ability to deliver within about 7 days to our customers.
With regards to QC, our decades of experience in the field of furniture, accumulated knowledge and the regularly high volume of orders allow us to employ a quality manager in any country we work with. We know the importance to minimize production failures and take all necessary steps to implement them.
F&F: With COVID-19, most major fairs around the world originally scheduled for 2020 and 2021 were either cancelled or postponed. Do international trade fairs play an important role in your sourcing strategy?
AW: Wissmann Holdings brings the best furniture products from around the world to our customers and international fairs are very helpful platforms. I personally travel to many shows to source as well as to stay up-to-date on trends and product development.
In addition to sourcing, we also tap on fairs to promote our brands and services. For example, we signed up to exhibit in INDEX Dubai 2021. However I had to take a decision to postpone our participation to 2022 as most of the business partners are still under Corona virus restrictions.
F&F: Many fair organisers have embarked on online fairs and business-matching during the 12 months. What is your take on this development?
AW: We believe that every important fair that was supposed to take place in the corona year will be postponed until the end of the plague, and we are fine with that. Yes it is possible to hold fairs online but in the furniture business it is still better to rely on traditional fairs because of the need to examine products closely.
F&F: What is your outlook/projection for your business for the remaining half of 2021 and 2022?
AW: The forecast for the rest of 2021 is a continuation of the trend of an increase in the consumption of products. We expect growth for all the companies in the Wissmann Group through the online business. The public will return to visit the physical stores gradually.
F&F: Any parting tips to share with fellow entrepreneurs in the furniture trade worldwide?
AW: The future of furniture business is always bright. Those who have managed to survive the difficult period can expect prosperity. Our life experience shows that after an epidemic or war there is always renewal and growth. We can expect prosperity in business in most areas and especially in furniture and design.
