Conclusions

by Joe Tatulli

First of all, the simple fact that futon furniture actually delivers what it promises when the consumer gets it home insures the futon category's overall success. Futons will be around for a while, no matter what happens at Manufacturer A or at Retailer B. Our initial discussion, though, was about the futon growth curve. As long as new futon retailers are coming on board, business levels at existing futon dealers may be off. More competition means a tougher business climate, where only the best survive. If the larger (Top 100) retailers succeed, and the futon category becomes part of the "main stream" mix, then the overall curve will continue to soar. These larger retailers have ad budgets, and they will expose the futon category to an even wider consumer audience. Mattress manufacturers, because they have a shorter learning curve, will be able to keep up with the pace. Offshore, lower to mid-priced futon frame manufacturers should be able to keep up their end of the flow. This imported futon furniture does keep the retail price points much lower than what people are used to spending on a conventional sofa-bed. I would also question the long term wisdom of selling a futon frame, futon mattress, and futon cover that retails at $249. Domestic producers of oak and other hardwood furniture, because of their size and production limitations, may not be able to consistently deliver the quantities needed by national chains. This fact may keep futon price points lower than they could be. The domestic manufacturers, if they can consistently deliver quality and value, albeit, at higher prices, will help hold up the top of the price pyramid. Without the higher end producers, average futon retail prices will tend to drop below the level where better, high-margin retailers want to be. As a consequence, promotional to low-end futons will dominate pricing in the conventional stores that stick with the futon category. Whether the national, larger retailers succeed or not the specialty futon stores will continue to hold on to the middle to higher end.