By Joseph Dobrian, Contemporary Furniture Specialist
KEY POINTS — Most consumer credit companies agree that December furniture sales are good for 2023. Although this Christmas season is not a house fire, but demand for credit remained strong.
The advantage, in the coming year, lies in the vendors who offer a lot of paid products, as good as possible.
Curtis Howse, executive vice president and general manager of buildings and vehicles at Money Synchrony, says demand for furniture is high, but unemployment remains low and wages continue to rise. Synchrony hasn’t released December data, but third-quarter home and auto sales came in 11% higher than last year. year after year.
“Our customers are allowing the financing of their needs, increasing the value they seek and overall control as they navigate the pressures of climate and market uncertainty,” said Howse. “The buyer is resilient and wants to continue financing the purchase of furniture.
“The Synchrony loan solution supports purchases with lead times anywhere from six to 60 months, depending on the product category and price, while the closed-end bond is an option for sales. big-ticket and promotional periods from 12 to 180 months.”
Reid Bork, chief revenue officer c Catapult (a rental-to-own provider), noted that according to a survey by Katapult released before the December holiday, 32% of all respondents expected to spend more money on gifts than the 2021. in all areas, including furniture, consumers expect to pay for less.
“Our data showed that 78% of consumers with no credit scores or below said they would use a flexible payment option to buy gifts this holiday season,” it said. Bork. “With so many people living paycheck to paycheck due to the current economic climate, we are seeing a growing need for solutions that meet customers wherever they are in their financial journey. Other payment methods, including rent-to-own, allow customers to spread their purchases over time.
“Sixty-two percent of Americans we surveyed said that the current high prices due to climate change are causing them to delay or skip a vacation.” buy the big-ticket items they need,” he said. “As a result, consumers — especially retailers, higher-income consumers who may be living paycheck-to-paycheck, and younger consumers — are more likely to try to adjust payment options.”
I Sequence List, another LTO company, Chief Marketing Officer Mike Giordano said he saw an increase in demand for Progressive’s offers at the start of the holidays. He said it reflects a move away from in-store shopping, towards all-in shopping.
“While much remains to be seen about consumer behavior heading into 2023, it’s clear to us that consumers will continue to look for options for payment options for key purchases, and provide additional revenue to retailers with the foresight to offer LTO and other payment methods in-store, online, and in their own mobile apps,” the said Giordano. “That can be true when it comes to higher-ticket items like furniture.
“Shoppers can purchase the products they need using a payment schedule that best suits their unique situation, but retailers can see increased revenue from customers who are, in many cases, they’re already shopping with them but need more flexible options to complete the purchase.”
Consumer demand remained high in the final quarter of 2022, according to Vicki Turjan, president and CEO of Hard Credit. In particular, he noticed an increase in financing activity among customers that exceed $100,000 annually.
“Tools like cascade financing and pre-approval have been very effective in allowing customers to quickly and easily receive financing offers, regardless of their FICO score, without making it a complicated system to use,” he said. “These tools also take the complexity out of financing from buyers, leading to higher applications and better approvals.
“As we enter 2023, economic uncertainty remains a concern for many consumers who are looking for ways to stretch their budgets. Commercial, interest-free financing continues to be a popular choice for customers,” added Turjan. “The number of people is also growing strongly. sellers who buy financing loan products that can offer longer terms and fixed payments. In the first half of 2023, we expect to see more of these solutions coming in markets.
Ryan Slobodian, executive vice president of Snap Money, called the 2022 holiday “a return to normal,” with strong demand across the country. Snap’s consistent approach to credit modeling over the past few years has been successful, he added.
“We are expecting growth in 2023 for our share of the total retail furniture,” he said. “The effects of higher interest rates may lead to a reduction in some credit facilities and their affordability. Snap will be a suitable solution for some of these affected customers.
I Wells Fargo Customer ServiceSenior Vice President Steve Jermier said that the US Department of Commerce reported that the furniture market was underperforming in the third quarter of 2022.
Historically, he has seen and heard from furniture dealers that the car is failing and that customers are becoming more aware of their needs. sales force. “It’s important for retail stores to offer their customers financing options,” Jermier said. “They have to offer financing conditions that set them apart from the competition.”
Mike Rittler, head of TD Bank credit card services, yes he saw a decline in sales of furniture and home related products. As a result of the low demand and the increase in interest rates from the Fed, the financing offers for the furniture buyers are moving towards the short term, which he admitted may not be attractive to the buyers.
“Even though it seems like a drop in demand from where we were, what we’re seeing now is a resurgence of demand,” he said. “Consumer confidence in the economy – and needs – will return. For retailers, product management and diligence in managing supply will be critical to meeting demand when customers regain confidence.
“We can expect a post-holiday decline in total spending and demand, which may increase further due to economic uncertainty and concerns about the year’s inflation, but we can expect to return to normal in the second half of the year,” Rittler continued.
“Retailers who apply the lessons learned from the pandemic, such as conducting research, will continue to be popular, as well as those who prioritize customer service. Winning customer loyalty depends on your final interactions.