Furniture Retail Market Trends and Statistics

Posted 26-04-2017 by Tim

The Furniture Retail Market is a vital part of the wider economy and an important indicator of trends in the wider consumer retail markets. According to Marketresearch.com, the global market for furniture and floor coverings is forecast to reach $695 billion by 2019.¹

Demographic and lifestyle changes are impacting buying habits and preferences

Online Furniture Shopper — Source: Ana C

Home office furniture

The growth in home working, not just caused by the ongoing rail disputes, is driving the demand for home office furniture with a forecast global market growth of 5.58% between 2014 and 2019.¹

Small households

The growth of one and two person households means that there is more demand for small and easily portable furniture.

in 1981, 20% of the 20.2 million UK households were single occupancy
in 2016 there were 27 million households in the UK Of these, 28% consisted of just one person

The impact of the growth of renting

The same trend away from large, long lasting purchases is fuelled by the shift in housing tenure. Over the last five years there has been a 28.3% growth in the UK private rented sector. ² The typical owner occupier stays in their property for an average of 13 years ⁴ compared to a private renter who stays for 17 months ⁵. It follows that people with a longer-term view of their housing are more likely to invest in higher value items than those who anticipate packing their belongings into a van and squeezing them through an undersized doorway every few years.

Furniture Retail Sales 2016

According to Anthony Creaby of gfk.com in April’s edition of Furniture News, the last 13 weeks of 2016 saw:

-3% decline in value in UK sales of upholstered furniture with
-7% decline in living room and dining room furniture sales
-4% decline in bedroom furniture sales

On the positive side,

17% growth in outdoor living furniture sales
4% growth in home office furniture

While sales by value declined, sales by volume increased, overall by 2%, with upholstered furniture growing by 4% year on year. Drilling down, gfk found the growth was largely driven by;

44% increase for corner sofas
32% growth for three seater sofas

After all, people need somewhere comfy to relax after all that time spent in the home office.⁶

Furniture Retail Sales 2017

The first two months of 2017 saw a downturn of both;

volume 6.6%
value 6.2%

There was, however,growth for seasonal items including;

garden benches up 53%
garden tables up 21%

Apparently, consumers are more optimistic about the weather than the economy.^6>

Luxury Furniture Market

The global market for luxury furniture is expected to grow at over 4% between 2015 – 2019. According to Marketresearch.com, Europe is the largest market for luxury furniture.

Marketing high end furniture to high net worth individuals requires a different mid set and a different set of rules. ⁷

The continuing growth of online retail

Online is the main driver of growth in European and North American retailing.

Year	Year on Year Online Retail Growth for Europe & North America
2016	15.6% (actual)
2017	14.2% (predicted)
2018	13.8% (predicted)

The UK and Germany have the greatest share of retail online but other European Countries are predicted to show strong growth in the share of retail which is conducted online. ⁸

Online share chart — Source: Centre for Retail Research

In contrast, the annual growth rates for all types of retailing (from stores and online) have ranged between an average of 1.5% and 3.5% per year. ⁹

Changing the Channel Mix to Reflect the Buying Journey

Furniture retailers are increasingly aware of the complex consumer decision making process that makes up the buying journey when it comes to large ticket items.

While online continues to grow in importance, consumers combine online research with shop visits on their way from research and consideration through to buying. According to Pragma Consulting:¹⁰

48% Consumers researched in store
49% Purchased instore while
45% Researched online and
24% Purchased online.

A significant number of consumers are doing at least part of their research in store and buying online. There is a research stage which takes place on mobile while the buy now button tends to be hit on a laptop. ¹¹

Price and Reviews Critical to the Buying Journey

Price comparison is an increasingly important stage in the buying journey. Asked to agree or disagree with a series of statements

81% of consumers confirmed that; “I always compare prices online before I buy”
71% agreed that; “Once found in store I try to find cheaper online.”

Price is not the only factor. For example, there is a great deal of evidence that online reviews make a real difference to driving sales:

68% agreed that they are; “more likely to purchase if I can find reviews online” ⁶
Google state that the 5 star ratings can increase click through rate by 17%

It’s the sale that matters, not the channel it’s made through

According to MINTEL retail multiples including Oak Furniture Land, DFS and ScS are growing furniture sales through a combination of store openings and online.¹²

John Lewis, have recently completed a £14 million investment into refurbishing their flagship London Oxford Street store, with much of it spent on the home department. Further investment of £4 million has been made in equipping its partners with iPhones installed with a custom app to enable them to research stock availability and track orders. All with a view to being able to respond, in store, to shoppers asking about their online transactions.¹³

Online stores opening showrooms

While traditional high street stores are investing in making their shop floor staff responsive to eCommerce customers, some pure play online retailers are investing in physical space. Home Living Direct converted part of their warehouse into a showroom while previously pure play furniture retailer Loaf have opened what they call ‘Slowrooms’ offering free ice creams and films in Battersea and Notting Hill. Charlie Marshall, Loaf’s founder is quoted in Furniture News saying “old school is the new school, with physical retail back in fashion” confirming that “our own recent research, which shows that two-thirds of consumers prefer to see, touch or try furniture in store before buying.”⁶

The Certainty of Uncertainty, Brexit, Currency and a Surprise Election

With a surprise, early election in June and Brexit negotiations producing little reassurance, uncertainty is the only certainty. That tends to mean a slowing down and stalling of the property market. It also feeds through to currency markets. The impact that has on prices of goods manufactured outside of the UK and on raw materials for UK will become more apparent over the next twelve months. For furniture exporters there will, however, be a price or profitability advantage while the pound struggles against the Dollar and Euro.

Home is still where the heart is

We love our homes. In the UK, Good Homes Magazine circulation increased by 45.2% and TV shows such as The Great Interior Design Challenge continue to prove popular attracting 1.9M viewers.

Consumers buy online, in store and by mixing the two. Our furniture retail research has shown that digital marketing is a critical part of the mix to increase brand awareness, website traffic, in store footfall and multi-channel sales whatever the complexities of the buying journey.

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