Last week, we kicked off 2026 with the first part of our State of the Industry report, talking with casual category leaders about how they see the business now, and what they anticipate for the coming year.
This week, we give you Part 2 of the report, which explores challenges and opportunities for the casual industry in 2026. Want to weigh in? Reach out to me with your thoughts at jennifer@homenewsnow.com.
What’s the biggest challenge your business and the industry as a whole face this year?
Once again, many in the industry see tariffs and economic uncertainty as the biggest challenges for 2026.
“The biggest challenge is the uncertainty around what goods will actually cost by the time they land. Tariffs make planning tough,” said Todd Wingrove, vice president of sales, Agio. “To help our partners, we’ve shifted to tariff-inclusive pricing so there are no surprises. The only variable left is freight, which everyone already understands.”
After a year of absorbing increases and finding workarounds, pricing may be a larger issue in 2026, with importers looking for ways to minimize increases while still making a profit.
“In terms of pricing, we placed a lot of thought on keeping steady inventory numbers while handling pricing carefully to best protect our retail partners,” said Telly Varga, marketing director, Three Birds Casual. “As of now, we have still not initiated any pricing increases and have been absorbing most tariff-related costs to give our retail partners the best opportunity to succeed and fuel demand as best we can. When we saw that tariff increases were on the horizon, we decided to bring in some pre-tariff inventory so that we might, once again, pass those savings on to our retail partners and final consumers.”
Even domestic manufacturers have faced cost increases, forcing them to work harder to manage pricing.
“Definitely tariffs are a big challenge to the industry. We are more insulated from that as a domestic manufacturer, but our costs are still going up,” said Leisa McCollister, vice president of marketing, OW Lee. “I would say the biggest challenge for us is rising costs. We are being very proactive in managing this area of our business right now.”
Bew White, executive chairman, Gabriella White and Summer Classics, said that he hopes to see more stability in tariffs, because last year’s chaos made it incredibly difficult to find solutions.
“If you try to move your business away from China, then you get tariffs from the country you tried to move to,” said White. “A perfect example would be India — although we don’t buy much from that country. It was a logical step (at first). So I would say the biggest problem is lack of clarity.”
Along with tariffs, the soft housing and building market continues to be a concern for many in the industry.
“Until housing turns, there is no high tide,” said Tom Murray, CEO, NorthCape. “You could have no tariffs right now, and I’m not sure we’d really be seeing a much different situation on demand. The housing’s really what drives our industry. Recession is nowhere near as damaging to us as a slow housing market, and the housing market’s just slow.”
Murray said that means retailers have to work harder to draw customers and close sales.
“There’s a lot less traffic. So the people who do come into the store or go on your site — you’ve got to figure out how to close and identify those real buyers,” he said.
Jensen Outdoor President Bryan Echols said that with capturing consumer attention growing more difficult, it’s critical to offer a strong retail presence both in-store and online.
“Walk-through traffic is not what it used to be because so many people are doing pre-shopping, which makes it incumbent upon everybody to have a really good website and start the experience there, and then continue the good experience when they get into the store,” he said. “I think that is going to be the biggest challenge — getting people’s attention. And I only see attention spans getting shorter, not longer.”
Castelle President Rory Rehmert agreed, but added that simply catching a consumer’s attention won’t lead to sales.
“Visibility to consumers on the availability of better and best outdoor furniture is important,” he said. “And that must include knowledge and education at the consumer level as to what makes premium outdoor furniture a must-have. So many consumers are unaware of the level of products that are available to them and what the benefits are.”
That focus on mid- to upper-end furnishings is key, allowing retailers to stand apart from an increasingly cluttered lower-price market. But doing that requires more than just carrying premium product.
“For casual furniture specialty retailers, the ongoing challenge is meaningful differentiation. Success increasingly depends on offering superior design, quality and customization tailored to the middle- and upper-tier consumer,” said Laura Dudley, national sales manager, Frankford Umbrellas. “Equally important is creating a compelling shopping experience— both online and in-store — that encourages younger, design-focused shoppers to engage with the product and recognize the tangible differences in materials, craftsmanship and performance.”
What’s the biggest opportunity for the casual industry this year?
Younger consumers present a major opportunity for brands and retailers who understand how to reach them. According to Consumer Insights Now’s 2025 consumer shopping survey, Gen Z and millennial shoppers far outpace Gen X and boomers in planning to purchase outdoor furniture. And those younger customers think of home design and furniture differently than the generations that came before them.
“Younger generations are increasingly shifting from consumers to curators. They’re not just buying products, they’re shaping environments,” Varga said. “Social media has raised the bar for inspiration, with people sharing how they thoughtfully curate spaces that reflect a distinct mood and point of view. Alongside that is a growing appreciation for longevity and patina. We see it across categories, from raw denim that improves with wear, to aluminum luggage that shows its journeys, to antique furniture that carries generations of history. Consumers want investment pieces that tell a story over time, not products that need replacing every few years.”
These customers want something distinctive that they can imbue with their own personal style, making customization an important plus for appealing to them.
“Special-order capability is a big opportunity,” McCollister said. “There are definitely still people who want what they want and will pay for it. I think for most specialty shops, those customers should be their bread and butter.”
Many see this year as an opportunity to really think outside the box when it comes to both form and function, offering customers — particularly tech- and style-savvy younger consumers — product they can’t find elsewhere.
“Innovation drives sales, no matter the environment — if you’ve got something cool and interesting, it finds homes,” Murray said. “So I’d say the opportunity is being more innovative. I think that bringing interesting products and programs in to the market, along with customization, gives people what they want.”
Mike Fredrichsen, vice president of sales at smart shade brand Pasticallo, said that being innovative can sometimes be daunting, but today’s customer wants fresh looks and functionality like we’ve seen in smart home design. And those tech-focused customers also want to engage with furniture brands online, just as they do other product categories. Consumer Insights Now’s survey backs up that sentiment, finding that 70% of younger millennials (age 29-36) visited a website to shop for furniture, and more than half of younger millennials and Gen Z browsed social media and websites for inspiration.
“Consumers (particularly younger ones, although not entirely) continue to get their inspiration from what they see online,” Fredrichsen said. “Influencers on all social media platforms are driving trends (and traffic) more effectively than any other medium in recent (even not-so-recent) history. Suppliers and retailers who are embracing this are reaping the benefits.”
Next week, we conclude the State of the Industry report with a look at the evolution of retail in 2026 and what industry leaders expect for the coming year. See Part 1 of our report here.
