The global pandemic provided the home furnishing industry with an unexpected boost. As people stayed at home, they spent disposable income on improving their living environments. In September 2020, US shoppers spent$10.7 billionon home furnishings––a new record.
But following two years ofsupply chaindisruption, shortages of raw materials, a housing recession, and reduced consumer spending, how is the home furnishing industry shaping up in 2023?
Given the uncertain future, retailers want to know what they can do to best attract and retain their target customers. Here we’ll share the key trends shaping the home furnishing industry in 2023 and what you can do to follow them.
What’s the state of the home furnishings industry in 2022?
To clarify what the industry includes, home furnishings covers a large variety of B2B and B2C products:
- Indoor and outdoor furniture
- Floor coverings
- Kitchen and cookware
- Appliances
- Decorations
- Upholstery and home textiles
- Cleaning products
Globally, the furniture ecommerce industry generated approximately$29 billion in 2022. By 2030, the size of the furniture ecommerce market worldwide is forecast to reach about $41 billion––a growth rate of 41%.
In June 2022, US furniture and home furnishing store sales were estimated to amount to approximately$11.91 billion.
富有成果的潜在的行业所示the consistent rise in the average value of online orders of home furniture, whichexceeded $500per order in the second quarter of 2022.
美国是最大的家具市场ob欧宝娱乐app下载地址in the world, but the Asia-Pacific region is growing in size and importance, accounting for two of the top sixleading markets.
This is likely due to several factors, including:
- Bettershippingand logistics infrastructure
- Emerging middle class
- Increased globalization
But due to the nationwide housing recession (sales of previously owned homes falling for aseventh straight monthin August) retailers are speculating that people are spending less on home furnishings.
The so-called “housing paralysis” is having a ripple effect on home goods retailers. When people move they typically buy items such as home décor, furniture, and appliances. But with more consumers staying in place, compounded with the lingering impact of inflation, fewer people are buying items for their homes. According to eMarketer,23% of consumersare cutting back on spending on home décor and furniture.
CEO of Wayfair, Niraj Shah, explained in August toeMarketerthat the brand had noticed shoppers have been cutting back as a result of rising prices in other categories.
“It is not surprising that our mass customers are being more deliberate about where their discretionary dollars are going as prices at the gas station and grocery store eat up a greater share of wallet,” said Shah. “For the past few months, we have also seen many of those discretionary dollars flow away from goods to services.”
In spite of a looming recession, the home furnishings industry still looks set to grow over the next few years.Following a particularly strong early 2022, growth is still consistently upward.
Figures from the US Census Bureau’s monthly retail trade data show that sales in the furniture and home furnishings sector hit a 20-year high of more than$12.1 billion in April 2022.
This even beats previous records set by the home goods buying surge during the early months of the pandemic, which includes the previous high from September 2020 of$10.7 billion.
The high-end furniture market is poised for even more growth too. In 2021, the global high-end furniture and housewares market was valued at about$46 billion. This was an increase of roughly 18% compared to the year before, showing signs of recuperation from the downfall caused by the COVID-19 pandemic.
While the global market remains uncertain, home décor and furniture stores can still expect growth if they tap into key industry trends.
Home furnishing industry trends to follow in 2023
马与家居行业经历jor upheavals in the past few years, it’s key for retailers to be up to date on the latest strategies and tactics.
Follow these home furnishing trends in 2023. Keeping tabs on home furnishing industry trends in 2023 will help your business stay one step ahead of the competition.
Online shopping for furniture is here to stay
The global pandemic shook up shopping habits and consumer behavior. Forced to stay home, consumers turned to online shopping to purchase furniture for home offices and other living spaces. But the real question is whether these changes will outlive the COVID-19 pandemic.
So will customers continue to shop online for home furnishings in 2023 now that they have the choice of in-store and online shopping?
In 2022, when it comes to purchasing furniture, consumers still prefer in-store shopping, withomnichannelshopping being the second most popular option.
And according to another survey conducted in the United States, more than half of respondents(53%) reportedthat they shopped for furniture in-store.
In comparison, around 43% reported they shopped for furniture online: 25% opted for an ecommerce platform, while 18% opted for buying furniture directly on the brand's website.
While consumers still choose physical stores to make furniture purchases, people are increasingly aware of the benefits of shopping for home furnishings products online.
When asked about the main reasons for buying furniture online,48% of respondentssaid ease of purchase. Free delivery was also a main driver for online purchases of furniture according to 31% of respondents.
Shoppers also cited lower prices (34%) and more available inventory (24%) as other reasons for purchasing furniture online.
To encourage consumers to shop online, home furnishings retailers need to consider how to tap into customer preferences for an easy, convenient, and omnichannel shopping experience. Shoppers want the convenience of purchasing online while enjoying apersonalized experience.
Speaking witheMarketer,Duncan Blair explained howDTC (direct-to-consumer) brandArticleuses its online site to showcase products in ways it can’t in-store.
“A lot of consumers’ default desire is to want to sit on a sofa, but we like to turn it around and ask, ‘What are the things that we can do online that you can't do in-store?’” he said. “One thing that we work really hard on is showing off user-generated content, in particular photography. Photos from our customers showing our products in their spaces gives customers a sense of the variety of styles that the product suits.
“Our reviews are another piece of user-generated content that we work really hard on. Some of our products have more than 2,000 reviews. We treat that review system really carefully and make sure that we are collecting honest feedback from customers.”
Use AR to provide an engaging shopping experience
Once a concept of the far-off future,augmented reality (AR) is becoming a popular way for brands to showcase their products in a personalized way. Instead of relying on shoppers browsing generalized online images, videos, and product descriptions, AR brings products to life in front of customers so they can visualize what they would look like in their home space.
Since many people prefer the physical experience of purchasing home furnishings products in-store, augmented reality can help bridge the gap between in-store and online shopping.
And while AR remains a relatively new way to showcase products, consumers are showing a growing interest in the technology.
According to a survey run byeMarketer, the majority of US adults have used or are interested in using AR and VR while shopping––particularly those in the 18 to 34 age group.
Take Shopify merchant homewares storeMagnolia Market. Its Texan brick-and-mortar store had always boosted its overall brand experience. Based in Waco’s iconic retail complex in the Silos, visiting the store felt like a pilgrimage to some shoppers.
But for the shoppers who couldn’t visit its store in Waco, the brand wanted to create an experience that allowed shoppers to better interact with its products.
To help shoppers experience products from the comfort of their own homes, Magnolia Market created an AR appwith the help of Shopify. Chosen products would be rendered using the highest-possible 3D photo-realism through Apple’s ARKit, which would allow for something of a transformative consumer adventure.
Through the app, shoppers could visit a product page and then hold up their phone to watch the items appear in front of them. Using augmented reality, Magnolia Market could simulate how a product would look if it were in the shopper’s own home.
Knowing that not all shoppers could visit their physical store in Texas, AR helped Magnolia Market bridge the gap to simulate the personal experience of their store as if shoppers were actually there interacting with the products in person. The likeness of the products rendered through Apple’s ARKit was surprising even to Magnolia Market’s staff.
We’ve seen videos of an ARKit product next to an actual product. And there are times where I don’t even know which one is real and which one isn’t.”
—Stone Crandall, digital experience manager, Magnolia Market
Increase in DTC brands to compete with big box retailers
On the enterprise scale, only11 brands currently dominate 55%of the home furnishings market. For example, household names Walmart and Target command an 11% and 7% market share of the US home furnishing market.
Other brands like Ikea and Williams-Sonoma only command a 2% and 3% share of the industry respectively.
This fragmentation in the home furnishings market shows a lack of clear brand loyalty and plenty of opportunity for market disruption. This is ripe for DTC brands to jump in and offer new competitively priced innovative products.
Semisupervised’s 2021study of 1,111 DTC brands identified 164 in the home space––14.8% of the total. It also scored each category’s saturation level by dividing the number of startups by market size.
The study found that home and garden was the least saturated category, particularly when compared to categories like luggage and online fashion.
Low barriers to entry and a lack of strong retail competition make the home furnishing industry ideal for DTC brands. By cutting out the retail middlemen and leveraging low-cost digital ads to reach consumers, DTC brands can sell goods at lower prices.
Plus, there are plenty of sales up for grabs––US digital D2C sales are expected to reach $175 billion by 2023, according toeMarketerestimates.
Mattress-in-a-box brandCasperis a great example of a DTC disruptor, not just in the home furnishing space but the wider retail market too.
With a hyper-focused approach, Casper launched with just a few SKUs. This focus and discipline let Casper deliver the best possible customer experience before expanding its range. And this approach paid off––the DTC disruptor is a clear market leader, with recorded annual revenue of$497 million.
Duncan Blair, SVP of Marketing, Support, and Sales at Article,explainshow the brand has managed to stand out from the crowd by providing better shipping and delivery options than their traditional retail competition.
“我们在我们自己的delive的投资ry team is an important part of the shopping experience in a way that makes us pretty different from going into a High Street retailer or furniture retailer and having a guy six weeks later in a white truck show up with a sofa in a plastic bag,” he says.
“We’re making a lot of investments in that after-sale piece of our promise. We’re one of the few furniture companies that will give you a delivery ETA at the point of purchase before you check out, and we take that promise extremely seriously. It sounds like a really small detail, but particularly in the last two years, consumers have reported horror stories of people waiting two months, which then became six months changing to an 18-month wait all for a sofa.”
Sustainable purpose-driven goods
Shoppers continue to care about a brand’s sustainable values. Right now,44% of global consumersare more likely to buy from a brand with a clear commitment to sustainability. As we head into Q1 of 2023, consider how your brand can prioritize sustainably produced goods and show customers how it puts the environment first.
Knowing how and where goods are produced has become increasingly important to customers. They’re not just interested in the final product they receive but also in the process that has gone into making the items.
在巴勒斯坦权力机构st six years, there’s been a71% increase in online searches globallyfor “sustainable goods,” especially in high-income countries like the United Kingdom, the United States, and Canada.
But actions haven’t necessarily matched intentions—until now. In 2021, our survey found that44% of customerschose to buy from brands that have a clear commitment to sustainability, while 41% chose to buy from brands that have a clear commitment to social causes. Overall, the consumers we surveyed want brands to have “actions that match their values.”
Consumers are no longer just virtue signaling. They’re finally putting money behind their beliefs. As a result, brands are responding––in 2022,53% of companiesmade improved sustainability one of their top priorities, and 39% chose to improve efficiency in manufacturing processes.
For example, home décor brand andShopify merchant Fabulivis known for their clear environmental and social values. Their founder, Ishita Singh, explains how their sustainable values also tie into their design ethos too.
“We upcycle a lot. We recycle a lot. Our goal is to minimize wastage. We have a design philosophy of being minimalistic and our goal is to marry functional with décor-oriented styles. Each of our home décor pieces are a mix of global trends and the crafts of Indian culture.”
She adds that by selling home décor handcrafted by artisans, the brand has been able to provide its employees with a stable lifestyle, make a positive impact on the wider community, and give artisans the opportunity to show their artwork on a national level.
“If the people you work with are happy, you’re happy. We’re not just running a business here to make money. We want to make a positive difference in society and the lives of these artisans who haven’t been given the opportunity to showcase their art and craft at a nationwide level before.”
To encourage customers to learn more about Fabuliv’s values, they share them upfront on their brand website. Customers can click on its Our Commitment page and better understand the brand’s fair labor and sustainable policies.
Throughout the brand’s product descriptions, Fabuliv also highlights that each of its products is handmade by artisans without the use of mass machinery. For that reason, shoppers shouldn’t expect ultra-fast shipping and delivery.
By sharing its environmental and social values with customers, Fabuliv provides an opening for potential shoppers to connect with their beliefs.
Loyalty programs
Loyalty programs are a powerful way to drive and maintain long-term customer relationships. This is especially true in the home furnishings market, where shoppers tend to make fewer big-ticket item purchases.
Over half (56%) of consumerssay they’re more likely to buy from a brand with a loyalty program.
When asked why consumers would use a loyalty program more often,61%cited automatically applied rewards, and 55% of consumers said that personalized rewards would encourage them.
During a time of lower demand in the home category, home furnishing retailers are using loyalty programs to attract and retain customers. Just like other retailers in the same category, Bed Bath & Beyond experienced a surge in demand at the start of the pandemic, as people looked for ways to improve their living environments during lockdowns.
But following the boom, the retailer later saw a dip in sales. To help attract and retain customers, in June 2022 it re-launched a tier-based loyalty program to offer perks and benefits to its loyal customer base.
The first tier, Welcome Rewards, is free to join and offers members 10 points for every dollar spent andfree shippingfor the first seven days after joining. After that period, those members can receive free shipping on orders of $39 or more.
The second tier, Welcome Rewards+, has an annual membership fee of $29, and offers 15% off purchases and free shipping on all orders, among other perks.
The third tier is for Welcome Rewards credit card holders and offers a one-year membership to Welcome Rewards+ for free, 15% off purchases, and free shipping.
“Our new Welcome Rewards program allows our customers to get even greater value, benefits, and perks whenever and wherever they shop with us,” Rafeh Masood, executive vice president and chief customer officer,told Retail Dive. “More than 80% of our customers shared that they would be excited for a program that would allow them to earn rewards across all of our banners.”
Global home décor and furniture brand Crate and Barrel also runs a loyalty program. Tapping into consumer preferences for personalized rewards, the brand uses an annual points-based system with access to perks like complimentary interior styling sessions, priority event access, and discounts on in-store items.
Stephen Wright, the brand manager of Crate & Barrel, explains that by switching toShopify Plus, the brand was able to better customize the shopping experience and encourage more sign-ups.
“The early signs are promising, and we have seen a 350% average increase in new sign-ups for our loyalty program. This is a direct result of people engaging more with our loyalty platform, which is available both offline and online—a direct benefit of switching to Shopify Plus.”
Virtual consultations
When asked what virtual experiences shoppers would most like to participate in during the holiday season,29% of respondentssaid they’d like video consultations with personal shoppers.
Sofa in-a-box brand Snug uses a combination of Livestream shopping and virtual consultations to educate customers about its products. In the brand’s livestreams, Snug first provides a quick overview of its sofas and shows real people sitting on them in real time.
Next, a showroom consultant virtually talks through the Snug range and helps customers compare different models.
A combination of livestreams and personalized consultations helps Snug bridge the gap between online and in-store shopping. That way customers don’t feel like they’re missing out so much on in-person shopping experiences.
Stephen Wright, ofCrate & Barrel, explains how virtual consultations have helped customers get a better feel for products before purchasing online.
“When it comes to buying big-ticket items such as sofas or beds, people are a bit more hesitant to make that purchase online. They want to check it out for themselves, but if they can’t physically visit a store, we have now added virtual consultations. This allowed customers to talk to our associates or request for them to examine the products live—whether that’s sitting on the sofa or touching the fabric. It’s almost like having a personal shopper.”
Personalized recommendations
Consumer expectations around personalization are on the rise––73% of shoppersexpect brands to understand their unique needs and expectations.
Home furnishings retailers can boost sales and improve customer relationships by offering personalized deals and product recommendations according to purchase history.
In fact,49% of consumerssaid they would likely become repeat buyers if offered a personalized experience by a retail brand. Plus,80% of business leaderssay customers spend 34% more (on average) when offered personalized shopping experiences.
For example, the premium locker brandMustard Madeprovides personalized recommendations based on customers’ browsing history.
By providing a more personalized shopping experience, theShopify merchantincreased their average order value by 15% and their revenue by 158%.
Loyalty programs are also a great place to offer personalized rewards––55% of consumerssay they’d use loyalty programs more often if the rewards were personalized.
Prioritize mobile sites
In 2023, it’s estimated that8% of all retail transactionswill happen on a mobile device. That number is expected to exceed 10% by 2025.
As more people shop using their mobile devices, home furnishings retailers need to prioritize creatingmobile shoppingexperiences that are convenient and easy to use. Shoppers expect easily accessible information, and the ability to discover new products and enjoy a mobile experience that’s relevant to them.
Furniture retailerMonte Designhas a clean, intuitive, and easy-to-use mobile site. The brand makes it easy for customers to navigate their mobile site and better understand its products. Product descriptions are detailed, providing relevant information about dimensions, care and cleaning, and shipping.
To help customers visualize how the furniture item will look in their home, the brand has a “View in my room” feature.
Prioritizing its mobile site has paid off for Monte Design too. While upgrading its site with Shopify Plus, the brand found that70% of its overall trafficwas coming from mobile. By optimizing the site for smartphones, the retailer enjoyed a 15% increase in web traffic and year-over-year revenue growth of 12%.
It’s clear that mobile commerce is here to stay. To stay ahead in a competitive landscape, home furnishing retailers need to tap into customer preferences for shopping on mobile devices.
Subscriptions
Customers don’t purchase large furniture items that often. That can sometimes create a customer lifetime value issue for retailers. How can brands maintain profitability if a bed or table is only purchased once or twice in a lifetime?
As home furnishing retailers look for new ways to retain customers, businesses are creating subscription bundles. Subscription packages have the key benefits of providing brands with recurring revenue and boosting customer loyalty.
From the customer’s point of view, subscriptions are often seen as a chance to try new products or enjoy their regular items at a better price point. According to aMckinsey & Company survey, 62% of subscribers signed up because of “good value for price,” while “41% signed up as a result of a good variety of items or experiences.”
Retailers can tap into these customer preferences by consistently delivering innovative or popular products at lower price points in their subscription bundles.
As for product types, smaller home products can help brands increase LTV by letting customers consistently buy lower-priced items. Home furnishings categories like décor, cleaning products, and plants are ideal for this approach.
For example, plant retailerRootedcurates monthly plant subscription boxes based on customer preferences. Monthly subscriptions for its Mystery Jungle box start at $20. There’s also an app so customers can easily see plant care tips or shop on the go.
What will the home furnishing industry look like in 2023?
As we plan for the year ahead, keep these key home furnishing trends in mind so you can start implementing them throughout Q1. Staying on top of the main home furnishings marketing and ecommerce strategies will help your business provide the best possible shopping experience for customers and remain ahead of other retail competition.
Home furnishing trends FAQ
Is the home furnishing industry growing?
Following a pandemic-fueled boom, the home furnishing industry is still growing. Globally, the furniture ecommerce industry generated approximately$29 billion in 2022. By 2030, the size of the furniture ecommerce market worldwide is forecast to reach about $41 billion––a 41% increase.
How big is the online home furnishings market?
In the United States, the home furnishings industry represented roughly17.3%of the total ecommerce market share.
What is happening in the furniture industry?
Following the global pandemic, consumers have continued to shop for furniture online. Shoppers are looking for more personalized experiences, virtual consultations, more sustainable options, better mobile sites, and loyalty programs.
What trends are taking place in the furniture market?
When it comes to online shopping, consumer expectations are higher than ever. When it comes to shopping for furniture, consumers expect mobile-friendly sites, virtual consultations, personalized recommendations, and relevant loyalty programs.
What are some of the furniture industry predictions for the future?
Retail experts predict that the furniture industry will continue to grow, in spite of the looming recession. Both DTC and big box furniture retailers are likely to prioritize better online experiences like virtual consultations, personalized recommendations, and augmented reality.
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