Table of Contents
Executive Summary
-
- The impact of COVID-19 on furniture retailing
-
- Figure 1: Expected impact of COVID-19 on the Furniture Retailing market, short-, medium- and long-term, July 2020
- Opportunities still exist
- Disruption has profoundly changed the way that consumers shop
- The market
- Spending set to fall sharply in 2020, before gradually recovering
-
- Figure 2: Consumer spending on furniture, 2015-25
- Room expenditure set to shift significantly moving forward
-
- Figure 3: Furniture Market Segmentation, 2014-19
- Acceleration in online sales
- Companies and brands
- IKEA continues to gain share
- Amazon continues to consolidate
- Greater competition ensures a fragmented furniture market
-
- Figure 4: Market shares of furniture retailers, 2019
- 2019 advertising expenditure slumps by 8.6%
- The consumer
- COVID-19 underpins a significant shift in shopping behaviours
-
- Figure 5: Changes in shopping behaviour, 16 July – 22 July 2020
- Heavy engagement in the market, but low-ticket purchases dominate
-
- Figure 6: Furniture expenditure, May 2019 and April 2020
- Living and bedrooms drive demand
-
- Figure 7: Rooms purchased for, April 2020
- Online extends its lead as the most popular channel of purchase
-
- Figure 8: Channel of purchase, May 2019 and April 2020
- In-store browsing slips as younger consumers migrate online
-
- Figure 9: Furniture browsing, May 2019 and April 2020
- IKEA retains its leading position as DIY retailers lose ground
-
- Figure 10: Furniture retailers, May 2019 and April 2020
- Non-specialists steal a march in frequent, smaller purchases
-
- Figure 11: Highest spend, by furniture retailers, April 2020
- Price and product quality drive choice
-
- Figure 12: Key Purchase Drivers, April 2020
- Sustainability moves up the agenda
-
- Figure 13: Attitudes towards Furniture, April 2020
- Spending will fall amid COVID-19, but there are opportunities
-
- Figure 14: Furniture behaviours and COVID-19, April 2020
- What we think
The Impact of COVID-19 on Furniture Retailing
-
- The market
- Spending set to fall sharply in 2020, before gradually recovering
- The structure of this spending will change significantly
- Online pure players and multi-channel retailers set to consolidate in 2020
- Online penetration will grow sharply in the coming year
- Uncertainty hits the housing market, while credit use drops
- Companies and brands
- COVID-19 disruption leads to opportunities for innovation
- Bringing housebound consumers in-store amid COVID-19 caution
- Retailers adapt during lockdown
- The consumer
- Disruption has profoundly changed the way that consumers shop
- The current climate offers an opportunity to boost mobile engagement
- Uncertainty could give a renewed focus on value and sustainability
- Furniture retailers will be hit by delayed, redirected and downscaled purchasing
- But there are opportunities for furniture amid extended periods inside
- Office furniture sales set to surge in 2020
- An increased sense of localism
Issues and Insights
-
- Shift in working habits due to COVID-19 brings opportunities for household specialists
- The facts
- The implications
- Sustainability moves up the agenda
- The facts
- The implications
The Market – What You Need to Know
-
- Spending set to fall sharply in 2020, before gradually recovering
- Room expenditure set to shift dramatically moving forward
- Store-based specialists take the lion’s share, as online grows
- Online sales grow again, with a big year ahead
- Sustained price inflation eased by wage growth and a stable housing market
Market Size and Forecast
-
- Furniture spending set to fall sharply in 2020 amid COVID-19 disruption
-
- Figure 15: Expected impact of COVID-19 on the Furniture Retailing market, short-, medium- and long-term, July 2020
- Lockdown
- Re-emergence
- Recovery
- Decline ends a decade of growth
- Limited appetite for big-ticket purchases
- A slowing housing market
- But there will be opportunities for growth
-
- Figure 16: Consumer spending on furniture, 2015-25
- Figure 17: Consumer spending on furniture, 2015-25
- Demand will start to recover from 2021
- The legacy of COVID-19 will remain clear for years to come
- Lessons from the 2008 economic crisis
-
- Figure 18: Spending on furniture, 2008-2013
Market Segmentation
-
- Living and dining room expenditure continues to lead the way
- Kitchen expenditure picks up
-
- Figure 19: Furniture Market Segmentation, 2014-2019
- How could this change with COVID-19?
- Kitchen and Bathroom hit by big-ticket losses
- Living and dining room expenditure lesser affected by uncertainty
Channels to Market
-
- Store-based specialists take the lion’s share
- Growth across online markets
- DIY retailers lose share
- Generalist retailers boost share at lighter end of market
-
- Figure 20: Estimated Channels of Distribution for furniture, 2019
Online
-
- Leaders make gains among heavy competition
- Online-only boosts share again in 2019
-
- Figure 21: Estimated shares of online spending on furniture, 2018 and 2019
- Significant change lies ahead with COVID-19 disruption
- Opening opportunities for online pure players
- Net long-term benefits for the channel
- COVID-19 fast-forwards furniture retailers’ e-commerce strategies
Market Drivers
-
- Sustained price inflation over the past year
-
- Figure 22: Consumer Price Inflation, Furniture and furnishings, April 2019- May 2020
- The housing market has stabilised recently, but uncertainty lies ahead
-
- Figure 23: Quarterly UK residential property transactions, Q1 2015-Q1 2020
- Private rental remains prevalent among middle age bands
-
- Figure 24: Household tenure, by age bands, April 2020
- Home improvements pick up in 2019
-
- Figure 25: Trends in home improvement work done in the last 3 months and plan to do in the next 3 months, April 2017-April 2020
- Consumers continued to take on credit in 2019…
- …but the appetite for risk falls with the onset of COVID-19
-
- Figure 26: Consumer credit excluding student loans, April 2017-April 2020
Companies and Brands – What You Need to Know
-
- Competition intensifies among new entrants and abundant innovation
- Amazon continues to consolidate
- Heavy competition ensures a fragmented furniture market
- Innovation remains rife
- 2019 advertising expenditure slumps by 8.6%
- IKEA is the stand-out brand in furniture
Leading Specialists
-
- IKEA making furniture shopping more accessible and convenient
- Harveys collapses into administration and Bensons for Beds bought back by its owner
- DFS capitalising on e-commerce trend
- Jysk’s record-breaking year and ambitious store expansion plans
- Upmarket MADE.com considering furniture rental service
- Magnet’s more trade-focused repositioning helps boost Nobia revenue
- Soaring online sales offset lacklustre store performance at ScS
- Wayfair statement of intent with affordable furniture launch
-
- Figure 27: Leading furniture specialists’ sales, 2015/16-2019/20
- Operating profits and margins
- Hammonds back in profit
- Online bathroom retailer Victoria Plum under new ownership
-
- Figure 28: Leading furniture specialists’ operating profits, 2015/16-2019/20
- Sharps enhanced online experience helps drive uptick in revenue and profitability
-
- Figure 29: Leading furniture specialists’ operating margins, 2015/16-2019/20
- Stores and outlet data
- Oak Furniture Land future secured, but new owners don’t rule out store closures
- Wren rapid store expansion and rollout of interior design studio concept
- Heal’s bricks-and-mortar investment and app-less augmented reality experience
- Better Bathrooms moves online after acquisition
- Loaf opens more showrooms
- Homebase rescues Bathstore out of administration
-
- Figure 30: Leading furniture specialists’ outlet data, 2015/16-2019/20
- Sales per outlet
-
- Figure 31: Leading furniture specialists’ sales per store, 2015/16-2019/20
Leading Non-specialists
-
- Amazon continues to gain share
- Argos a generalist favourite
- John Lewis targets innovation as sales slip
Market Share
-
- Heavy competition ensures a fragmented market
- With a significant role for non-specialists
-
- Figure 32: Market shares of furniture retailers, 2019
Launch Activity and Innovation
-
- Pop-up work from home solutions
-
- Figure 33: Ministry of Makers, collapsible furniture, May 2020
- Virus-free wardrobe
- On-demand furniture
- Furniture with the Internet of Things functionality
- Immersive showroom experiences
-
- Figure 34: Made.com apartment in Amsterdam, June 2020
- Eco-store with hanging gardens
- Virtual reality furniture shopping
- Bringing housebound consumers in-store amid COVID-19 caution
- Enhanced app that makes it easier for consumers on-the-go to shop furniture
- Online-only furniture and sofa specialists pop-up stores
- IKEA branching out into building houses in the UK
- Drive-thru COVID-19 testing centre
Advertising and Marketing Activity
-
- 2019 total advertising expenditure slumps 8.6% year-on-year
-
- Figure 35: Total above-the-line, online display and direct mail advertising expenditure on furniture, 2016-19
- DFS by far and away the sector’s biggest advertising spender
-
- Figure 36: Total above-the-line, online display and direct mail advertising expenditure on furniture, by retailer, 2016-19
- DFS share of total sector advertising spend increased in 2019
-
- Figure 37: Share of total above-the-line, online display and direct mail advertising expenditure on furniture, by retailer, 2019
- Lounge and dining furniture account for biggest share of product category advertising expenditure
-
- Figure 38: total above-the-line, online display and direct mail advertising expenditure on furniture, by product category, 2016-19
- TV and press attracts 86% of total sector advertising expenditure
-
- Figure 39: Total above-the-line, online display and direct mail advertising expenditure on furniture, by media type, 2019
- TV is the dominant medium among the sector’s leading advertisers
-
- Figure 40: Total above-the-line, online display and direct mail advertising expenditure on furniture, by retailer and media type, 2019
- Campaign highlights
- DFS TV campaign to mark 50th anniversary
- Sharps Bedrooms campaign to encourage people to kick the habit of buying freestanding wardrobes
- Wren Living TV advert starring real customers
- IKEA launches first-ever UK Christmas advert
- Sofology teams up with actor Owen Wilson for a second time
- Wickes’s ‘Cure Housebarrassment’ campaign
- Nielsen Ad Intel coverage
Brand Research
-
- Brand map
-
- Figure 41: Attitudes towards and usage of selected brands, April 2020
- Key brand metrics
-
- Figure 42: Key metrics for selected brands, April 2020
- Brand attitudes: Made.com stands out in online service
-
- Figure 43: Attitudes, by brand, April 2020
- Brand personality: Dreams and DFS present an accessible gateway to the market
-
- Figure 44: Brand personality – macro image, April 2020
- IKEA stands out as the key innovator
-
- Figure 45: Brand personality – micro image, April 2020
- Brand analysis
- IKEA’s fun brand image and value ensure a mass-appeal
-
- Figure 46: User profile of IKEA, April 2020
- Dreams is trusted as a reliable and accessible brand
-
- Figure 47: User profile of Dreams, April 2020
- Oak Furnitureland deemed an exclusive brand worth paying more for
-
- Figure 48: User profile of Oak Furnitureland, April 2020
- DFS is an authoritative brand in sofas
-
- Figure 49: User profile of DFS, April 2020
- Made.com’s exclusive brand appeals to the aspirational online shopper
-
- Figure 50: User profile of Made.com, April 2020
The Consumer – What You Need to Know
-
- COVID-19 underpins a significant shift in shopping behaviours
- Heavy engagement in the market, but much of it low-ticket purchasing
- Living and bedrooms drive demand
- Online extends its lead as the most popular channel of purchase
- In-store browsing slips as younger consumers migrate online
- IKEA retains its crown as DIY players lose ground
- Non-specialists steal a march on frequent, smaller purchases
- Price and product quality drive choice
- Sustainability moves up the agenda
- Spending will fall amid COVID-19, but there are opportunities in this new landscape
Impact of COVID-19 on Consumers
-
- Significant concern remains
-
- Figure 51: Extremely worried about exposure to COVID-19/coronavirus, 28 May-1 July 2020
- A fundamental change in shopping behaviours
- Older consumers lead the shift in behaviour
-
- Figure 52: Changes in shopping behaviour, by age, 16 July - 22 July 2020
- A fifth of consumers expect to spend less on the home
-
- Figure 53: Planned spend on Home products in the coming month, 16 July – 22 July 2020
- But 12% expect to spend more
- The sector could be buoyed by redirected spending
-
- Figure 54: Consumers who expect to spend more on sector over the next month, 16 July – 22 July 2020
What They Spent
-
- Two thirds of consumers engaged in the market
-
- Figure 55: Furniture purchasing, by age, April 2020
- But only one quarter spent over £500
-
- Figure 56: Furniture expenditure, May 2019 and April 2020
- Homeowners spent the most
-
- Figure 57: Furniture expenditure, by housing situation, April 2020
- New movers lead both involvement and purchasing
-
- Figure 58: Furniture expenditure, by duration in current home, April 2020
Rooms They Buy For
-
- Living and bedrooms drive demand
-
- Figure 59: Rooms purchased for, April 2020
- The opportunity for home office furniture
- Flat owners prioritise the living room
-
- Figure 60: Rooms purchased for, by housing situation, April 2020
- Over a third buy for more than one room
-
- Figure 61: Repertoire analysis of Rooms purchased for, April 2020
How They Buy Furniture
-
- Online extends its lead as the most popular channel of purchase
-
- Figure 62: Channel of purchase, May 2019 and April 2020
- The store grows in importance as price increases
-
- Figure 63: Channel of purchase, by Furniture expenditure, April 2020
- Computers remain paramount in this
- Mobile purchasing slips in 2020
-
- Figure 64: Smartphone purchasing of Furniture, April 2020
How They Browse Furniture
-
- In-store browsing slips
-
- Figure 65: Furniture browsing, May 2019 and April 2020
- As the purchasing journey moves online for younger consumers
-
- Figure 66: Furniture browsing, by age, April 2020
- Consumers still go in-store for big-ticket purchases
-
- Figure 67: Furniture browsing, by furniture expenditure, April 2020
- Smartphone use is on the up
-
- Figure 68: Smartphone browsing, by age, April 2020
- Consumers migrate across these browsing channels during purchasing journey
-
- Figure 69: Repertoire analysis of Furniture browsing, April 2020
Where They Shop for Furniture
-
- IKEA retains its leading position
- Smaller specialists account for significant levels of demand
- DIY retailers lose ground
- A growing role for specialist online pure players
-
- Figure 70: Furniture retailers, May 2019 and April 2020
- Leading retailers enjoy a mass-appeal
-
- Figure 71: Furniture retailers, by age and socio-economic group, April 2020
- Near half of buyers purchased from more than one retailer
-
- Figure 72: Repertoire analysis of Furniture retailers, April 2020
Where Most Money Spent on Furniture in Last Year
-
- IKEA popular for multiple purchasing
- Amazon and Argos popular for frequent, smaller purchases
- John Lewis, DFS and Oak Furnitureland popular for big-ticket purchasing
-
- Figure 73: Highest spend, by furniture retailers, April 2020
Key Purchase Drivers
-
- Price and product quality drive choice
- The need for convenience and experience underpin the call for new store propositions
-
- Figure 74: Key Purchase Drivers, April 2020
- Younger shoppers increasingly conscious of the environment and ethics
-
- Figure 75: Key purchase drivers, by age and socio-economic group, April 2020
- But this varies by expenditure
-
- Figure 76: Key Purchase Drivers, by Furniture Expenditure, April 2020
Attitudes towards Furniture Shopping
-
- Sustainability moves up the agenda
- Many still hold reservations about purchasing via smartphone
-
- Figure 77: Attitudes towards Furniture, April 2020
- Consumers want furniture that does more
-
- Figure 78: Furniture attitudes, by age band, April 2020
- This demand will grow as more consumers work from home
Furniture Shopping and COVID-19
-
- Uncertainty and a suppressed appetite for big-ticket items will see spending fall
-
- Figure 79: Furniture behaviours and COVID-19, April 2020
- This could have a disproportionate impact on new movers in 2020
-
- Figure 80: Furniture behaviours and COVID-19, by duration in current home, April 2020
- But there are opportunities amid extended periods inside the home
- … the surge in working from home
- … and increased localism
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Consumer research methodology
Back to top