• Sun. Dec 10th, 2023

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Outdoor insights: Companies strategize to capture market share in 2023

HIGH POINT — The outdoor industry has a new home for showrooms in 2023 with the official move of Casual Market Chicago to Atlanta in July, but optimism for the category extends far beyond the city’s boundaries. Buoyed by ongoing popularity of outdoor living spaces, the casual category is in a competitive position for discretionary consumer dollars at every price point, including those found in first-time homebuyer budgets.

In a National Assn. of Home Builders study, 78% of respondents reported that a patio was one of the Top 10 most wanted features in a new home. Additionally, in its 2022 Outdoor Living Trends 2022 report, fixr.com suggests that creating year-round usable spaces of all types remains a top priority for many consumers, a continuation of pandemic-related lifestyle shifts that resulted in a boon of home furnishings buying activity.

Suppliers in the outdoor category are expressing cautious optimism for the coming year. Acknowledging the potential impact of a recession while also looking toward consumer demand, representatives from four companies with distinctly different business models have developed individualized strategies that allow them to pivot as needed.

Summer Classics

“In the past five months, business has dropped off pretty substantially in the wholesale end of our business, but the retail and contract remain relatively strong,” said Bew White, founder of Summer Classics. “Fortunately, we still have a backlog from orders placed months ago, and we will have the best year in our history in 2022. The problem is figuring out what happens in 2023 because many of the dealers are over-inventoried.”

Summer Classics is opening a new 8,800-square-foot showroom at Atlanta Market, a space that White said allows the company to “showcase an amazing assortment of our offering.” He added that Summer Classics will bring new product to the Casual Market in July as well.

“We will have several new collections, line extensions and an updated selection of fashion-forward new fabrics,” White said. “Our showroom is always a destination for hospitality and events during the Casual Market.”

Key product focuses for Summer Classics in 2023 include wicker, teak and aluminum pieces, as well as Ndura, the company’s response to demand for polyethylene or polystyrene products.

When asked about economic concerns, White added that he believes “we have been in a recession for several months and will continue at least till April of 2023” and noted that Summer Classics’ inventory is at an “all-time high.”

“Our ship times are approximately two to three weeks on product that we have in stock, which is almost everything in the line, with the possible exception of teak,” he said. “We are a product-centric company and will be coming out with a substantial number of new products in July.”

White said that the company is opening two new Summer Classics and Gabby stores within the next six months in Annapolis, Md., and Scottsdale, Ariz. in response to “great demand for our products.”

However, he acknowledges that 2023 is likely to bring with it both wins and losses for the outdoor industry.

“I believe that this latest downturn will have some unintended consequences,” White said. “Specifically, Asian, and even American, companies may go out of business because of this huge swing up and then a huge swing down after shipments arrived, causing many factories to either cut back dramatically or close for extended periods. I hope that’s not the case, but it looks inevitable.”

Universal Furniture

Company officials are still considering attendance at the July Casual Market, but promotion of Universal’s outdoor line will be a key part of the overall business strategy in 2023, said Neil MacKenzie, vice president of marketing.

Universal Furniture entered the outdoor category in 2020 and is planning for continued growth in 2023.

“Universal is in the outdoor business, and we’re in stock,” MacKenzie said. “We have more than 100 SKUs that make up the assortment in materials like Grade A teak, weathered teak, aluminum, wicker and cast concrete, and we have the ability to customize cushions.

“We are in stock on 95% of our SKUs, and we’re in a good position to support our customers should there be an issue with lead times. We are also now at eight to 10 weeks for our special-order upholstery out of Conover, N.C., which includes outdoor cushions.”

Inflation and higher mortgage rates could certainly impact consumer activity in the early part of 2023, MacKenzie said, but he is optimistic about the year based on initial reactions to Universal’s outdoor line.

“In our opinion, the outdoor category was growing prior to the pandemic,” he said. “It’s one of the reasons we decided to enter the space in 2020 with the launch of Coastal Living Outdoor. The pandemic then accelerated the growth and demand for goods in this category.

“In many cases, goods at our price point are just now being fulfilled, in large part due to the impact COVID had on global supply,” MacKenzie continued. “It’s still early for us in outdoor, but the response to the offering has been very positive. We believe there is still demand from the consumer who is looking for better-end outdoor products, and we are happy to be in stock with these items to meet this demand.”

Outdura’s Virage Tranquil Heroes is among the company’s most popular outdoor lines along with textured fabrics.

Outdura

The permanent showroom of fabric supplier Outdura will be open during Atlanta Market, said Ulrich Tombuelt, Sattler Outdura USA CEO and director of sales for the casual furniture division. As with many other companies in the outdoor category, Outdura experienced an uptick in business during the past three years, and the focus for 2023 is on maintain and growing the momentum.

“The pandemic gave Outdura by Sattler a groundswell of business with opportunities that we were happy to take advantage of at the time,” Tombuelt said. “Business is still trending upwards for us, and we’re settling into this phase. In addition, we are moving forward with new marketing initiatives that will be rolled out this year, including in the contract and hospitality markets.”

Outdura made “significant changes” to the company’s supply chain in 2021 to ensure stability, Tombuelt explained, noting the shifts are starting to pay off. “Our current lead times are six to eight weeks for non-stock fabrics, and we do not expect significant issues as long as nothing new — pandemic, wars — arise.”

Currently, the most popular fabrics in Outdura’s line are textured body fabrics, the Virage Design line, and the global collection that combines a quality story with an attractive price point. When asked about recession concerns, Tombuelt points to the new marketing initiatives as one counter strategy.

“We will be laser-focused on the retail level of consumer awareness,” he said. “We look forward to continuing to increase awareness of the Outdura brand and making our outdoor fabric more relevant to retail sales associates.

“Nobody wants to see or experience a market cool-down after the past two years, and we do worry for our employees about the effects of high inflation,” Tombuelt said. “For many reasons, we are closely monitoring the business environment, and while some recession talks are imminent, we do not expect a recession like we saw in 2008/2009. We are gearing towards growth in 2023 and beyond.”

Agio

The January market will be Agio’s first in Atlanta, and the company’s 20,000-square-foot permanent showroom will feature new concepts including unique Resysta material designs and fire pits, along with a designer workspace. Company officials say that the January market is the time when the team reviews new concepts and finalizes plans for the July market, where new collections will be introduced for 2024.

Agio anticipates continued growth in the outdoor category in 2023 and is showing both seating and dining groups including the Sonata line.

Company officials state that the Agio team “really stepped up to the plate” during the past two years of pandemic disruption.

“We had to regroup and do many things remotely, such as product design and sample creation, which was a big adjustment for us because our design team was previously traveling to China every few months,” said Agio President Doug Peppler. “It all worked out for the best in the end. I can confidently say that the communication level and the relationship with our partners in China is as good today as it’s ever been in the 27 years of our company.

“To survive, we all had to be willing to do whatever it took to get the job done,” he continued. “Now that the industry is ramping back up, we have permanently adopted a lot of the changes. Many of them allow us to work smarter, as well as save time and money for our operations.”

One of the proactive measures Agio put into place is a strategy for “fashionable design” that officials say increases flexibility and revolves around selecting four popular base cloths and inventorying them in China, eliminating many fabric supply chain challenges. Agio customers can accessorize their collections with 10 throw pillows, four soft ottomans and three accent tables, offering opportunities for different interpretations at retail.

“For the past few years, we were forced to be reactive instead of proactive, so it was difficult to focus on the basics,” Peppler said. “Our priority right now is to get back to the basics and to be good at it. That means designing products that people want to buy, making sure we are on the forefront of trends and ensuring all the goods we are presenting are going to be at a price point that’s attractive for consumers yet still works for our retailers.”

Collections that will be shown in Atlanta include Sonata, Havana and Dylan. Sonata features distinctive shapes and thin, porcelain tabletops, while Havana offers a cube-friendly sectional with built-in design flexibility. Dylan is a mixed media collection with a variety of dining and deep seating options.

“Two of the most notable trends are a continued interest in sectionals for their flexibility and the growth of fire,” said Peppler. “Fire creates an ambiance and gathering spot that people love. Consumers want it and are buying it, so it will continue to be at the forefront of everything we do.”

When looking ahead to the next 12 months, Agio is planning for success, regardless of recession conversations, and Peppler thinks the future of outdoor is bright.

“Right now, outdoor is a steady growth industry; over the coming years, we could easily see a respectable percentage increase,” he noted. “As housing continues to gear up, we anticipate that people will purchase more quality outdoor furniture that reflects the style of their indoor décor.

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