Covid’s Effects on the Design Industry
As we make our way through another year of Covid taking up far too much of our everyday conversations, pre-pandemic life feels like a distant memory. Every industry has been affected by this virus in one way or another. The interior design community is no different. The key to our survival, and sanity, is dealing with each obstacle as it comes with grace and humility. Our guiding light through this continued transition into the “new norm” is kind and constant communication with our clients and vendors.
PSA- If you are experiencing covid symptoms such as frustrations from your backordered sofa or fatigue from trying to track down an available tradesman, you are not alone. Please allow us to shed some light on where these setbacks stem from and how we are trying to (as Ross would put it) “pivot”.
While factories had to shut down due to Covid regulations, new orders did not slow. In fact, our vendors said that they saw increased demand in product of over 75% in some cases. Demand that no one could have predicted. Once factories opened back up, there were backlogs of orders, and new orders did not stop, they continued to pour in while facilities were operating at 50% capacity with periotic shutdowns from Covid positive team members. Our manufactures are still trying to recover from loss of workforce and too many folks wanting new sofas. Hence the reason you can “grow a human” faster than you can order and receive a sofa.
So many of the items that we specify for our clients are highly customized. Custom orders have multiple steps from start to completion. This process generally consists of multiple parties having to coordinate during production. For example, if you are waiting for a chair with custom upholstery, the chair frame manufacturer must wait to receive the specialty fabric before the chair goes into production. Typical lead times for customized items are 24-40 weeks right now. This timeframe does not start until the specialty fabric is received. So, if there is any hold-up with the fabric, that domino effect results in a delay of the entire piece being ready for shipment. Then we have the whole trucking fiasco going on right now…don’t even get us started on how long it takes to get a piece of furniture from California to Colorado.
It would be great if the fabrication of items was the only obstacle, but post-production transit is now also posing major issues. If any of you have visited the California coast in the past couple of years, you know there is a major back up within the overseas shipping industry. The Pacific is littered with large cargo ships just waiting for their turn to enter the ports. There is also a back log of empty containers taking up way too much real estate near shipping yards not allowing for new containers to reach land without a serious on- water wait. Then we have a shortage of truck drivers that are available to bring our precious treasures to us. Whether our items are near or far, it all just takes time. We have all had to put on our patience hats waiting for our product to arrive with fingers crossed they arrive in perfect condition. Trust us, if we had our own semi-trucks and could pick up your dining chairs, we would do it! We would however need a rather large credit line with Shell gasoline as the fuel prices have gone through the roof causing major fuel surcharges to our freight bills.
4. Supply vs. Demand
When the pandemic began, no one knew what the repercussions would look like. In preparation for the worst, many companies limited their workforce and production. Not sure anyone could have predicted the surge in demand for interior design services. This unanticipated surge in demand crippled manufacturers who expected the opposite trajectory. Many are still making up for the lost time.
This rise in demand and lack of supply resulted in severe material shortages across the board. From nails to wood, to foam, there is almost no aspect of design that has not been hindered by the lack of available parts and pieces necessary for production. Guess what this means… price increases.
6. Price Increases
If we take a trip back to economics class, you might recall that lowered supply paired with increased demand results in price inflation. We now see price increases along with surcharges at every step of the process and multiple times a year. Additionally, manufacturers are not honoring quoted pricing past 30 days and because the process from selection to client approval, to ordering takes more than 30 days we are unable to guarantee pricing for our clients.
As previously mentioned, when companies started considering how to cut costs in anticipation of the worst, many furloughed or laid off employees to survive. Once the companies opened back up, not every employee returned. So, there was plenty of work, but far fewer qualified people to do it. Along with the employees who voluntarily did not return to work, many countries put strict regulations in place that required companies to operate at half-capacity and shut down if they experienced a Covid outbreak. We don’t have to tell you what happens when there is too much work and not enough people or hours in the day to complete the workload. Hence the reason an average project start to finish pre pandemic was 6-8 months. Post pandemic it is a minimum of 12 months.
The newest disrupter within our industry and obviously around the world is the Russian-Ukrainian War. We have all seen the increase in gas prices, but that is just the tip of the iceberg. This devastating dispute has severely impacted the global supply chain resulting in a disruption in the flow of goods, additional material shortages, and withholding of energy.
All of these unavoidable factors have made “pivot” our most used word these days, and of course we say it as Ross did “PIVOT” loud and multiple times. Luckily, our amazing team is now well-rehearsed and equipped on how to get projects from frustration to fruition. We have implemented many new communications and touch points throughout our process to help alleviate our client’s frustrations and set proper expectations with regards to timelines etc. There are still bumps along the way, but know we are in this together. Remember we are your advocate and partner in this journey, and we do appreciate kind and respectful interactions. Keep your seatbelts on folks, with all arms and legs inside the moving vehicle, and all will arrive safely at your final installation!