Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- Growth has slowed and challenges lie ahead
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- Figure 1: Consumer spend on furniture and furnishings, 2012-22
- Living and dining room furniture accounts for 40% of all furniture spending
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- Figure 2: Estimated consumer spending on furniture and furnishings, by segment, 2016
- A sector dominated by specialists
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- Figure 3: Estimated channels of distribution for furniture and furnishings, 2016
- Economic indicators signal a tougher year ahead
- Companies and brands
- IKEA continues to experience strong growth
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- Figure 4: Leading retailers of furniture, estimated share of all consumer spending on furniture, 2016
- Mini-stores bring furniture closer to consumers
- Advertising spend increases 3.9%
- IKEA enjoys highest levels of trust and differentiation
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- Figure 5: Attitudes towards and usage of selected brands, May 2017
- The consumer
- 62% of consumers bought furniture in the past year
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- Figure 6: What they spent on furniture in the last 12 months, May 2017
- Living rooms the most popular to buy for
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- Figure 7: Rooms they bought furniture for in the past 12 months, May 2017
- In-store purchasing still most popular
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- Figure 8: How they bought furniture in the past year, May 2017
- Argos is the most popular for furniture purchases
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- Figure 9: Where they shopped for furniture in the past year, May 2017
- IKEA shoppers love the in-store displays
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- Figure 10: Satisfaction with furniture retailers, May 2017
- 60% visit stores to carry out research
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- Figure 11: Sources used to research furniture ideas, May 2017
- Two thirds interested in space-saving solutions
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- Figure 12: Attitudes towards shopping for furniture, May 2017
- What we think
Issues and Insights
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- Challenging times ahead for the furniture sector
- The facts
- The implications
- Could Amazon ever make significant inroads into the furniture sector?
- The facts
- The implications
The Market – What You Need to Know
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- Growth has slowed and challenges lie ahead
- Living/dining room accounts for 40% of all furniture spending
- A sector dominated by specialists
- Mixed blessings in the wider economy
Market Size and Forecast
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- Growth has slowed since peaking in 2014
- Challenging times ahead
- Inflation pushing up value sales
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- Figure 13: Consumer spend on furniture and furnishings, 2012-22
- Figure 14: Consumer spending on furniture and furnishings, 2012-22
- Retail sales growth slows in 2016
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- Figure 15: Retail sales of furniture specialists, 2012-2017
- Forecast methodology
Market Segmentation
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- Living and dining room spending dominates
- Demand for beds and mattresses more stable
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- Figure 16: Consumer spending on furniture, by segment, 2012-17
Channels to Market
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- A sector dominated by the specialists
- Online specialists still small
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- Figure 17: Estimated channels of distribution for furniture, 2016
Market Drivers
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- Number of households on the increase
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- Figure 18: UK households, by size, 2011-21
- Housing transactions remain strong
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- Figure 19: UK residential property transactions with a value over £40,000, 2012-16
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- Figure 20: Percentage change in residential property transactions over £40,000 in first four months of the year, 2012-17
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- Figure 21: Mortgage approvals for new home purchases, May 2015-April 2017
- Consumer confidence
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- Figure 22: Trends in how consumers describe their financial situation, December 2015-June 2017
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- Figure 23: Trends in current financial situation compared to a year ago, index, January 2014-June 2017
- Consumer credit increases steadily
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- Figure 24: Consumer credit excluding student loans, May 2015-April 2017
- But availability of unsecured household credit looks set to fall
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- Figure 25: Availability of consumer credit to households, Q1 2009-Q1 2017
- Deflation on furniture in 2016
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- Figure 26: Inflation: annual rate of change, 2007-16
- Figure 27: Inflation, percentage change over 12 months, April 2016-April 2017
Companies and Brands – What You Need to Know
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- IKEA leads a fragmented sector
- IKEA continues to experience strong growth
- Mini-stores bring furniture closer to consumers
- Advertising spend increases 3.9%
- IKEA enjoys highest levels of trust and differentiation
Market Share
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- IKEA leads in a fragmented sector
- Leading non-specialists look well-placed
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- Figure 28: Leading retailers of furniture, estimated share of all consumer spending on furniture 2016
Competitive Strategies
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- Reaching urbanites
- Still a space for the megastore
- Faster delivery options
- Digitising the in-store experience
- Online bed-in-a-box brands partner with physical retailers
Leading Specialist Retailers
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- IKEA continues to see strong growth
- DFS benefits from co-located stores
- Online sales
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- Figure 29: Leading furniture specialists’ sales, 2011/12-2016/17
- Operating profits and margins
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- Figure 30: Leading furniture specialists’ operating profits, 2011/12-2016/17
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- Figure 31: Leading furniture specialists’ operating margins, 2011/12-2016/17
- Stores and outlet data
- IKEA expansion begins again
- Shrinking to demand
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- Figure 32: Leading furniture specialists’ store numbers, 2011/12-2016/17
- Figure 33: Leading furniture specialists’ sales per outlet, 2011/12-2016/17
Space Allocation Summary
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- Furniture – Instore space allocation
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- Figure 34: Furniture retailers: summary of estimated in-store space allocation, June 2017
- Detailed space allocation estimates
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- Figure 35: Furniture retailers: detailed space allocation estimates, June 2017
Innovation and Launch Activity
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- Mini-stores shows emergence of showroom
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- Figure 36: Mini-Habitat
- Urban appeal
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- Figure 37: Mini-DFS
- Compact furniture
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- Figure 38: Burrow sofa delivery, June 2017
- Connected furniture
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- Figure 39: IKEA’s TRÅDFRI range, June 2017
- Visual search tool
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- Figure 40: Sofasizer search engine
- Augmented and virtual reality
- Hangover café
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- Figure 41: Matt Sleeps’ hangover café
Advertising and Marketing Activity
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- Advertising slightly increases since last year
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- Figure 42: Total above-the line, online display and direct mail advertising expenditure on furniture, 2013-16
- DFS continues to lead advertising spend
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- Figure 43: Above-the line, online display and direct mail advertising expenditure on furniture, by retailer, 2013-16
- Figure 44: Share of total above-the line, online display and direct mail advertising expenditure on furniture, by retailer, 2016
- Television dominates advertising expenditure
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- Figure 45: Above-the line, online display and direct mail advertising expenditure on furniture, by media type, 2016
- Leading advertisers even more focused on TV
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- Figure 46: Above-the line, online display and direct mail advertising expenditure on furniture, by leading retailer and media type, 2016
- Campaign highlights
- IKEA’s Wonderful Everynight
- Dreams emphasises customer service
- DFS reflects on quality
- Sofology appeals to those in smaller dwellings
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 47: Attitudes towards and usage of selected brands, May 2017
- Key brand metrics
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- Figure 48: Key metrics for selected brands, May 2017
- Brand attitudes: IKEA seen as most innovative
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- Figure 49: Attitudes, by brand, May 2017
- Brand personality: ScS considered unappealing and boring
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- Figure 50: Brand personality – Macro image, May 2017
- Dreams and DFS regarded as reliable and authoritative
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- Figure 51: Brand personality – Micro image, May 2017
- Brand analysis
- IKEA stands out from the crowd
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- Figure 52: User profile of IKEA, May 2017
- Dreams is relied upon to deliver a great experience
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- Figure 53: User profile of Dreams, May 2017
- Oak Furniture Land enjoys a strong brand image
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- Figure 54: User profile of Oak Furniture Land, May 2017
- DFS appeals to a broader demographic
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- Figure 55: User profile of DFS, May 2017
- ScS struggles to define itself
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- Figure 56: User profile of ScS, May 2017
The Consumer – What You Need to Know
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- 62% of consumers bought furniture in the past year
- Living rooms the most popular to buy for
- In-store purchasing still most popular
- Argos the most popular for furniture purchases
- IKEA shoppers love the in-store displays
- 60% visit stores to carry out research
- Two thirds interested in space-saving solutions
Expenditure on Furniture
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- 62% of consumers bought furniture in the past year
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- Figure 57: What they spent on furniture in the last 12 months, May 2017
- Highest spending by 25-34-year-olds
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- Figure 58: What they spent on furniture in the past year, by age group, May 2017
- Highest spend reserved for homeowners
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- Figure 59: What they spent on furniture in the last year, by housing tenure, May 2017
- Highest spenders prefer to order in-store
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- Figure 60: What they spent on furniture in the last year, by how they shopped for furniture in the last year, May 2017
Rooms They Buy For
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- Living room the most popular to buy for
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- Figure 61: Rooms they bought furniture for in the past 12 months, May 2017
- 57% of homeowners buy for more than one room in first three years
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- Figure 62: Repertoire analysis of rooms that homeowners bought furniture for in the last 12 months, by how long they have lived in their current home, May 2017
How They Buy Furniture
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- In-store purchasing still most popular
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- Figure 63: How they bought furniture in the past year, May 2017
- In-store preferred for larger purchases
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- Figure 64: How they shopped for furniture, by how much they spent, May 2017
- Online purchasing helps reach rural customers
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- Figure 65: How they shopped for furniture in the past year, by where they live, May 2017
- Londoners most likely to visit stores
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- Figure 66: Furniture shoppers making a purchase in-store, by where they live, May 2017
Where They Buy Furniture
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- Argos is the most popular furniture retailer
- Amazon’s dominance makes it popular for small purchases
- Long tail of furniture retailers
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- Figure 67: Where they shopped for furniture in the past year, May 2017
- Amazon and Argos appeal to the less affluent
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- Figure 68: Where they shop for furniture, by age and affluence, May 2017
- Furniture Village appeals to financially comfortable consumers
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- Figure 69: Where they shopped, by financial confidence index, May 2017
- Majority of consumers stick to a single retailer
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- Figure 70: Repertoire of retailers used to shop for furniture in the past year, May 2017
- The young are most likely to shop around
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- Figure 71: Repertoire of retailers used to shop for furniture in the past year, by age group, May 2017
- B&Q and John Lewis used alongside others
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- Figure 72: Repertoire of retailers used to shop for furniture in the past year, by where they shopped for furniture, May 2017
- IKEA and Argos attract majority of spend
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- Figure 73: Where they spent the most on furniture in the past 12 months, May 2017
- Two thirds of IKEA shoppers spent the most with the retailer
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- Figure 74: Proportion of those that shopped at each retailer for furniture who said it was the retailer they spent the most with, May 2017
Satisfaction with Furniture Retailers
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- Overall satisfaction is high
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- Figure 75: Satisfaction with furniture retailers, May 2017
- IKEA shoppers enjoy the range and displays
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- Figure 76: Satisfaction of IKEA furniture shoppers compared to the average, May 2017
- Argos strong for ease of returns
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- Figure 77: Satisfaction of Argos furniture shoppers compared to the average, May 2017
- Cost and speed of delivery helps Amazon stand out
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- Figure 78: Satisfaction of Amazon furniture shoppers compared to the average, May 2017
- DFS shoppers love personalisation options
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- Figure 79: Satisfaction of DFS furniture shoppers compared to the average, May 2017
Key Driver Analysis
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- Quality has the greatest correlation with overall satisfaction
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- Figure 80: Correlation (R) values with overall satisfaction key driver output, May 2017
Sources Used to Research Furniture Ideas
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- Furniture stores as showrooms
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- Figure 81: Sources used to research furniture ideas, May 2017
- Blogs and social media preferred by the young
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- Figure 82: Sources used to research furniture ideas, by age and socio-economic group, May 2017
- Offline sources still slightly more popular
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- Figure 83: Offline and online sources used to research furniture ideas, by where they purchased furniture in the last 12 months, May 2017
- Over half of Amazon shoppers research in-store
- John Lewis shoppers love magazines and exhibitions
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- Figure 84: In-store sources used to research furniture ideas, by where they bought furniture in the last 12 months, May 2017
- Retailer websites most popular online source
- John Lewis and DFS shoppers most engaged on social media
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- Figure 85: Online sources used to research furniture ideas, by where they bought furniture in the last 12 months, May 2017
- John Lewis shoppers draw on the highest number of sources
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- Figure 86: Repertoire of sources used to research furniture ideas, by where they shopped for furniture in the last 12 months, May 2017
Attitudes towards Shopping for Furniture
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- Quality is crucial for furniture shoppers
- Two thirds interested in space-saving solutions
- Influentials guide choice
- Alternative realities
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- Figure 87: Attitudes towards shopping for furniture, May 2017
- The young and affluent expect faster delivery
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- Figure 88: Attitudes towards shopping for furniture, by age and affluence, May 2017
- DFS shoppers think British-made is important
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- Figure 89: Attitudes of DFS shoppers, May 2017
- Space-saving appeals to IKEA shoppers
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- Figure 90: Attitudes of IKEA shoppers, May 2017
- John Lewis shoppers are passionate about furniture
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- Figure 91: Attitudes of John Lewis shoppers, May 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Key Driver Analysis
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- Methodology
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- Figure 92: Overall satisfaction with furniture retailers – Key driver output, July 2017
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 93: Best and worst case table for market forecast, 2017-22
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