Cost Saving Opportunities for the Global Furniture and Furnishing Market: Technavio – Yahoo Finance
According to the latest procurement intelligence report from Technavio, the global furniture and furnishing market is expected to grow at a CAGR of 4.5% over the next five years due to the growth in buyers’ awareness that led to an increase in demand for eco-friendly and ergonomic furniture.
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The research report titled ‘Global Furniture and Furnishings Market – Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The increasing demand for customized furniture and furnishings that help accentuate the buyer’s individuality is expected to drive market growth,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Additionally, the growing digitization will create a demand for innovatively designed desks capable of incorporating modern needs such as space for wiring and plug points,” adds Angad.
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Cost saving opportunities in the global furniture and furnishings market
The adoption of various cost-optimization levers helps buyers of furniture and furnishings realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global furniture and furnishings market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Unbundling of services
Adoption of technology
Adoption of electrical sanders and table saws minimize the effort put into each piece of furniture while providing an enhanced finish to the final products in a shorter period.
Additionally, using CAD furniture software provides increased flexibility in terms of product design, aiding the manufacturers to visualize and examine even complex furniture pieces with ease.
Adoption of negotiation strategies
Suppliers who can provide value-additions to buyers have higher chances of establishing a stronger presence in the market. Additions such as sourcing furniture not included in the portfolio, providing assistance in deciding the theme of a space and the furniture that suits the theme, and providing longer warranty periods help the suppliers to close deals.
Unbundling of services
A key strategy that suppliers from the furniture and furnishings market adopt is the unbundling of services. They source key services such as credit facilities and maintenance services to dedicated players who can help in reducing the total spend cost. Suppliers save up to 10% of the total category spend by adopting the unbundling strategy.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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