VERTICAL FOCUS | Furniture
Sofa So Good
What is the outlook for the U.S. furniture market moving forward? Here's what to expect, according to Coresight Research's U.S. Furniture Report, May 2019:
- A steady growth curve for the U.S. furniture industry is being driven by a strong economy. Consumer spending on furniture reached $114.2 billion in 2018, up 6.7% from the previous year, according to the U.S. Bureau of Economic Analysis.
- Uncertainty in the housing sector is represented by a decline in housing permits and starts.
- Millennials, the largest U.S. consumer group, have become a key target market for furniture retailers who are shifting offerings to more effectively reach this group.
- E-commerce as a channel for furniture shopping is becoming increasingly popular, especially among millennials. Companies such as Amazon and Wayfair have capitalized on this trend to become formidable players in the sector.
- Brick-and-mortar stores remain the format of choice for the majority of U.S. furniture consumers, but establishing a strong omni-channel presence has become imperative in a sector where research online, purchase offline is commonplace.
Stores, inventory, and promotional saturation are not keys to sustainable success in the furniture industry. Look to Sears and Mattress Firm as two recent examples. Upscale home furnishings company Restoration Hardware is taking a different approach. It recently opened a New York City gallery complete with a rooftop restaurant/wine bar and showroom intertwined with art, architectural inspiration, and interior design. It also opened a luxury hotel in the area. This strategy solidifies Restoration Hardware's brand identity and appeals to its core consumers in an out-of-the-box way. It also enhances brand recognition for non-consumers through socially driven marketing.
"While the web has shined a bright light on stores that are dying from lack of innovation, history will demonstrate thatthe physical manifestation of a brand will be themost compelling way to engage customers. "
Sleep On It
Almost one-third of mattress retailers expect stronger sales trends in the remaining months of 2019, reveals Piper Jaffray's August Mattress Survey.
- 14% expect sales trends to get much stronger in the last four months of the year, compared with the first eight months of the year.
- Another 14% expect sales trends to get somewhat stronger.
- 57% of retailers expect sales trends to remain the same for the rest of the year
- While 14% of respondents say they expect sales trends to get somewhat weaker.
None of the retailers surveyed say they expect sales trends to get much weaker.