At the largest international event that brought together more than 400 professionals of the home and repair industry, the commercial director of “Maria”, Vadim Abramov, talked about how the real estate market and the country's economy affect furniture production, what will happen to the industry during the next year and how to lead a successful business in such conditions.
That is the largest fall in the last seven years.
- The volume of residential real estate introduced in 2016 declined by more than 5% compared to 2015. And the forecasts for 2017 suggest a continued negative trend, the volume of furniture consumption will continue to decline. According to Rosstat, in 2016 the share of household furniture fell to 1.5% in the structure of retail turnover. This is a record low since 2000. The reason for this was a general change in the balance of spending of the population towards the food sector. Preservation of the outstripping growth of food prices does not promise an easy life for the producers of the non-food group of goods, because consumers have no opportunity to refrain from buying products, as in a crisis situation it happens with the purchase of, for example, new furniture.
Who will win?
- As the experience of the company "Maria" shows, in such circumstances it is especially important to monitor development of the partnership business and, in particular, increase the effectiveness of each studio, opened by a franchise. Enhanced measures to develop and support the franchise brand “Maria kitchens” allow a monthly opening of 2-3 new studios, while the sales of operating shops are growing at an average of 15% year-to-year, and due to local shares and flexible pricing they provide a growth of income. With the new franchise of the company - "Kitchen Furniture Workshops "Edim Doma!" that was launched in 2015 as a response to the demands of the changed market, the product is offered at more democratic prices. It turned out that this practice is very demanded in modern realities - the first 100 studios were opened in less than 600 days, a huge success in terms of partner investments in the crisis market.
- Any crisis, especially a long one, leads to an aggravation of competition and ultimately removes the least flexible companies that are unable to respond quickly to the changing requests of the consumers. 20 years of active market development have taught large players to clearly monitor the behavior of their buyers and try to meet his expectations. Now we are going through a period when it is necessary to be able to very well forecast tomorrow's inquiries of our target buyer, who every day, these are the realities of the stagnant market, become more and more demanding of what they are ready to pay for. At the same time it is not enough to follow the formed needs, it is necessary to expand the segment of your consumers with new price niches. The place on the market will remain only for the most visionary and efficient companies, to which the "Maria" factory undoubtedly belongs.