The slowdown in demand that first hit home furnishings manufacturers and retailers may be beginning to affect interior designers, according to a recently released survey.
That’s not surprising, right? The Covid-19 pandemic caused a surge in spending on furniture and accessories as consumers spruced up the homes where they were suddenly spending so much time. Home furnishings sales surged — and then sank when people finished their updates and started spending on dining out, travel and other experiences instead. But custom builds and major renovations operate on much longer time frames, so interior designers have mostly stayed busy.
Topline results of the 2023 Interior Design Business Survey fielded by the Pearl Collective, a Denver-based interior design business consultancy, show a fairly rosy picture. Two out of three firms say business was “very good” or “good” in 2022, and more than eight in 10 say they believe 2023 will end up being the same or better than last year.
“Yet, within this optimism, there are signs that demand may be starting to soften,” according to the report. “Revenues were down slightly from 2021 for firms that earned between $250,000 and $2.5 million in annual revenues in 2022. Additionally, fewer firms hired new staff in the previous 12 months, and even fewer plan to hire additional staff within the coming months.”
There are other signs of a slowdown within the results. In the Pearl Collective’s 2022 survey, the No. 1 business challenge facing designers was landing new ideal projects of a desired size. In the 2023 survey, the No. 1 issue worrying designers is attracting enough ideal clients. Other worries also point to challenges in sustaining or growing a design business: landing new ideal projects of the desired size (No. 2), setting fees/earning more revenue from projects (No. 3), not sure how to grow my business to the next level (No. 4), rising cost of products and services (No. 5), and inefficient processes and procedures. Problems with scheduling delays and product availability — No. 3 and No. 4 on the 2022 list — disappeared from the top 6 in 2023.
The survey also notes that some designers are beginning to spend more time on marketing. “Perhaps most telling is the greater proportion of firms planning to increase their social media presence and marketing efforts,” the report says. “In previous surveys, most firms have relied more heavily on repeat business from current and former clients, referrals and networking to get new business. It would appear, however, that more firms now are having to cast their net wider.”
Some home furnishings manufacturers appear to have been unprepared for the steep drop-off in consumer demand they experienced since the pandemic-era buying boom ended, and we’ve seen a rash of layoffs, bankruptcies and company closures.
Can the design sector move gracefully adapt to a slowdown?
The recent survey shows designers are already taking practical steps to boost their businesses, including, as noted above, increasing their social media presence to reach new clients. The top six business strategies designers report using this year:
1. Increase social media presence
2. Increase networking with local professionals
3. Increase marketing efforts (up from No. 5 in 2022)
4. Maintain contact with clients
5. Raise fees/change billing practices
6. Partner with other professionals
As part of the report, Courtney Thomas, principal of Courtney Thomas Design in La Cañada Flintridge, California, shares some of her firm’s strategies:
“Our current marketing strategy is centered around amplifying the experience of working with us. On social media, we showcase our personalities and our work and try to engage with industry partners, fans, and friends,” she says. “Our grid is a deep dive into our projects, our day-to-day, and also our services and testimonials, whereas our reels are a mix of fun and informative. … Our leads usually funnel in from a variety of touch points, but social media always seems to be a factor in the client’s decision process. In our experience, advertising on social media can produce a lot of new leads, but the quality of the leads is widely mixed, and we found that maybe one in 10 is actually qualified. Word-of-mouth referrals are still our largest lead source. So, we’re creating email campaigns to stay in touch with potentials, clients and industry partners. We’re also increasing our participation in industry events. Anytime we can meet in person, make a connection and form a real relationship, that’s always our best marketing strategy. … For us, things like influencer marketing and SEO aren’t a fit for our business right now.”
Joey Conicella, president of Soco Interiors in Winter Park, Florida, sees value in using social media in other ways. “Don’t underestimate the power of engagement via comments and direct messages, which gives you a way to connect with potential clients in real time,” he says in the report. “(And) traditional forms of marketing are still very powerful when it comes to interior design – it is a visual business at the end of the day and if someone can see your work, they have a greater chance of becoming a client.”
This is a busy time, with many designers rushing to get current projects finished before the next round of holidays, but it’s also a key time for planning for the year ahead.
At Design News Now, we want the design community to be busy and profitable — creating the spaces of their clients’ dreams. What steps are you and your firm taking to help ensure a successful 2024?
About the survey: The Pearl Collective’s 2023 Interior Design Business Survey, hosted on Survey Monkey, was conducted between May 15 and July 31. Members of the interior design community were invited via email, social media and other outreach efforts to complete the survey. A total of 1,137 people responded and, of those, 886 who currently practice interior design or interior decoration were qualified to complete the survey. Respondents represent all regions of the United States.