Table of Contents
Executive Summary
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- Total sales drop despite new opportunities
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- Figure 1: Short, medium and long-term impact of COVID-19 on consumer trends, attitudes and spending habits for the home, 4 February 2021
- The market
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- Figure 2: Consumer spending on the home, 2015-2025, 9 February 2021
- Home improvement and household appliances sit at the forefront of growth
- Online pureplayers spearhead new growth
- Companies and brands
- Retailers continue to target sustainability
- Harnessing social media
- The consumer
- COVID-19 has seen a fundamental shift in shopping behaviours
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- Figure 3: Changes to shopping behaviour, 21-26 January 2021
- Three quarters of consumers spent on the home in 2020
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- Figure 4: Consumer spending on the home, 2018-2021
- Growth is matched in spending intentions over the next year
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- Figure 5: Intentions to spend on the home, 2019 and 2020
- Extended periods inside open new sources of demand
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- Figure 6: Triggers to purchase, October 2020
- Online just peaks in-store at the start of the purchasing journey
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- Figure 7: Sources of inspiration, October 2020
- AR tech comes to the fore, as virtual design services could be here to stay
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- Figure 8: Most important factors online, October 2020
- Wellbeing and sustainability continue to offer opportunities
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- Figure 9: Behaviours in spending on the home, October 2020
- A third expect to boost spending in the next year
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- Figure 10: The impact of COVID-19 on spending in the year ahead, October 2020
- Ongoing uncertainty will maintain the spotlight on communal and outdoor areas
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- Figure 11: The impact of COVID-19 on spending in the year ahead, October 2020
- Those spending less look to be more savvy
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- Figure 12: The impact of COVID-19 on spending in the year ahead, October 2020
Issues and Insights
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- The short-term impact from COVID-19
- The long-term impact from COVID-19
- How retailers can cater to the lower end of this polarised demand
The Market – Key Takeaways
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- COVID-19 disruption ends a decade of growth
- Uncertainty will polarise demand in the market
- Home improvement and household appliances sit at the forefront of growth
- Online pure players spearhead new growth
Market Size and Forecast
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- Total sales drop despite new opportunities
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- Figure 13: Short, medium and long-term impact of COVID-19 on consumer trends, attitudes and spending habits for the home, 4 February 2021
- COVID-19 disruption ends a decade of growth
- Spending falls sharply between March and May
- Reduced appetite for big-ticket purchases for much of the year
- New opportunities amid extended periods inside
- A polarisation of demand
- Before steadily recovering speed from 2021
- Opportunities to upscale expenditure…
- …but demand will remain polarised
- Purchasing for the home online moving forward
- Continued COVID disruption
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- Figure 14: Consumer spending on the home, 2015-2025, 9 February 2021
- Market drivers and assumptions
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- Figure 15: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared 15 December 2020)
- Learnings from the last recession
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- Figure 16: Consumer spending on the home, 2008-2012
Market Segmentation
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- Big-ticket furniture sales drop
- Home improvement sales surge
- Household appliances outperform as consumers remain housebound
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- Figure 17: Consumer expenditure on the home, by category, 2020 (est)
Channels to Market
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- Homewares and furniture stores hit by store closures
- Online pureplayers spearhead new growth
- Specialists hold their own
- Discounters, supermarkets, DIY stores and garden centres gain from non-closures
- A year of turmoil for department stores
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- Figure 18: Channels to market, goods for the home, 2020 (est)
Market Drivers
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- The impact of the January 2021 lockdown
- House moves fall by 56.8% in April 2020…
- …before picking up sharply
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- Figure 19: Monthly UK residential property transactions, January 2018-December 2020
- Many younger consumers continue to rent
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- Figure 20: Household tenure, by age, October 2020
- Low inflation eases disruption
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- Figure 21: Consumer price inflation index, December 2019-December 2020
- Home cooking and baking surges with restrictions
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- Figure 22: Changes to home cooking, 26 March-16 April 2020
- Christmas
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- Figure 23: What consumers give as Christmas gifts, 2018-20
- Uptake of credit falls amid uncertainty
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- Figure 24: Consumer credit excluding student loans, January 2018-November 2020
- The UK agrees a late post-Brexit trade deal
Companies and Brands – Key Takeaways
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- Retailers continue to target sustainability
- Harnessing social media
Competitive Strategies
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- Sustainability remains a key differentiator
- IKEA buys back old furniture
- Homebase launches Green Aisles
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- Figure 25: Homebase Green Aisle, October 2020
- Product recycling
- Technological innovation to bridge the gap between stores and housebound consumers
- In-store videoconferencing
- Virtual design services
- Augmented Reality
- Advancements in mobile purchasing
- First-of-its-kind kitchen purchasing app
- Apps to make shopping in-store easier
- Home retailers target renewed interest in health and wellbeing
- A new spotlight on sleep
- The focus on diet benefits small appliances
- DIY retailers target the younger generation
- Kingfisher targets speed, social media and service
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- Figure 26: Made.com and Pinterest, October 2020
- New opportunities moving forward
Launch Activity and Innovation
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- Pop-up work-from-home solutions
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- Figure 27: Ministry of Makers, collapsible furniture, May 2020
- Garden rooms move up the wish list
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- Figure 28: SteelPad Container, January 2021
- Vegan furniture
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- Figure 29: John Lewis & Partners EcoMattress, October 2020
- A rise in second-hand
- COVID-19 concerns create new opportunities
- Virus-free wardrobe
- New air purifier formats
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- Figure 30: LG PuriCare Wearable, September 2020
- Figure 31: Airpool Smart Reindeer (portable), December 2020
The Consumer – Key Takeaways
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- COVID-19 sees spending and spending intentions grow significantly…
- …but demand remains polarised
- New opportunities from polarised demand
- New opportunities online to engage housebound consumers
- Flexible living shines the spotlight on communal and outdoor areas
Impact of COVID-19 on Consumer Behaviour
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- Anxiety spikes with the onset of a third national lockdown
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- Figure 32: Extremely worried about exposure to COVID-19/coronavirus, 2 November 2020-26 January 2021
- A fundamental change in shopping behaviours
- Older consumers lead the shift in behaviour
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- Figure 33: Changes in shopping behaviour, by age, 21-26 January 2021
- The sector could be buoyed by redirected spending
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- Figure 34: Spending, by sector, 21-26 January 2021
Consumer Spending on the Home
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- Three quarters of consumers spent on the home in 2020
- A clear uplift in lower-ticket sectors in the past year…
- …but the immediacy of this limits bigger projects
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- Figure 35: Consumer spending on the home, 2018-2021
- New movers still underpinned activity
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- Figure 36: Consumer spending on the home, by duration in current home, October 2020
Intentions to Spend on the Home
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- Growth is matched in spending intentions over the next year
- COVID-19 will continue to push the home to the fore
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- Figure 37: Intentions to spend on the home, 2017-21
- Interior changes top spending intentions
- Gardens move up the agenda
- The appetite for bigger projects could grow in the coming year
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- Figure 38: Intentions to spend on the home, 2019 and 2020
- Spending plans vary by demographic
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- Figure 39: Intentions to spend on the home, by age and socio-economic group, October 2020
Triggers to Purchase
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- Replacements top purchasing
- The rise in flexible living opens new demand
- To create a space to work from home
- The need for rooms to do more drives the need for storage
- To maximise the space in communal areas…
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- Figure 40: Triggers to purchase, October 2020
- …but motivations vary by housing type
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- Figure 41: Triggers to purchase, by housing situation, October 2020
Sources of Inspiration
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- Online just peaks in-store at the start of the purchasing journey
- Store visits and websites sit neck-and-neck
- New opportunities online to engage housebound consumers
- A window of opportunity for retailers on social media
- Visualisation technologies bridge the gap
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- Figure 42: Sources of inspiration, October 2020
- Sources differ by category
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- Figure 43: Consumer spending on the home, by sources of inspiration, % difference, October 2020
Most Important Factors Online
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- Consumers look at costs
- Reviews and demonstrations add assurance
- AR tech comes to the fore
- Virtual design services could be here to stay…
- …offering an opportunity for smaller, more nimble home retailers
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- Figure 44: Most important factors online, October 2020
- Older consumers seek more tangible factors
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- Figure 45: Most important factors online, by age and socio-economic group, October 2020
Behaviours in Spending on the Home
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- The rise in flexible living
- Uncertainty highlights the importance of the home for wellbeing
- Risk of exposure sees many consumers take on tasks themselves
- Sustainability remains on the agenda despite uncertainty
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- Figure 46: Behaviours in spending on the home, October 2020
COVID-19 and Spending on the Home
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- A third expect to boost spending in the next year…
- …but demand will remain polarised
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- Figure 47: The impact of COVID-19 on spending in the year ahead, October 2020
- Ongoing uncertainty will maintain the spotlight on communal areas…
- …and outside spaces
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- Figure 48: The impact of COVID-19 on spending in the year ahead, October 2020
- Those spending less look to be more savvy
- With a push for upcycling
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- Figure 49: The impact of COVID-19 on spending in the year ahead, October 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix - Market Size and Forecast
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- Forecast methodology
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- Figure 50: UK Value of spending on the home, best and worst-case forecasts, 2015-2025 [prepared 9 February 2021]
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