Table of Contents
Overview
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- Key issues covered in this Report
- COVID-19: market context
- Economic and other assumptions
- Products covered in this Report
Executive Summary
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- Huge disruption in mid-2020 is followed by a quick recovery
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on Furniture Retailing, 20 June 2021
- The market
- Market size and forecast
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- Figure 2: COVID-19 scenario forecasts, consumer spending on furniture, 2016-26 (prepared on 21 June 2021)
- Big-ticket sectors hit by disruption in mid-2020, lining up a windfall of new demand moving forward
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- Figure 3: Furniture market segmentation, 2016-20
- Specialists hit by disruption both online and in-store
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- Figure 4: Estimated channels of distribution for furniture, 2020
- A year of unprecedented growth online
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- Figure 5: Estimated shares of online spending on furniture, 2019 and 2020
- Companies and brands
- Specialist sales drop sharply, before many recover quickly
- Amazon revenue skyrockets, as discounters, supermarkets, DIY and general retailers make gains in-store
- Disruption fragments an already fragmented market
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- Figure 6: Estimated market shares of furniture retailers, 2020
- Increase in beds and mattresses advertising insufficient to offset almost 35% collapse in total sector advertising
- Significantly differentiated from its competitors, IKEA is the standout brand
- The consumer
- COVID-19 has seen a fundamental shift in shopping behaviours
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- Figure 7: Changes in shopping behaviour
- 64% of consumers engaged in the market; near one third spent £500 or more
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- Figure 8: Furniture expenditure, 2020 and 2021
- Flexible living sees consumers reimagine their living spaces
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- Figure 9: Rooms purchased for, 2020 and 2021
- A year of unprecedented online growth
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- Figure 10: Channel of purchase, 2020 and 2021
- Closures and anxiety see browsing decline in-store
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- Figure 11: Furniture browsing, 2020 and 2021
- Disruption sees major changes in the retailer landscape
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- Figure 12: Retailers used, 2020 and 2021
- Non-specialists come to the fore for smaller and frequent purchases
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- Figure 13: Highest spend, 2020 and 2021
- COVID-19 has given rise to new triggers to purchase
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- Figure 14: Triggers to purchase, 2021
- Disruption elevates the home, changes the way consumers shop and paves the way for new technologies
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- Figure 15: Furniture shopping behaviours, 2021
Issues and Insights
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- Furniture spending fragments with COVID disruption
- Store closures see specialists lose out in-store
- The redirection of demand online drives pure player’s sales
- How can specialists regain momentum after a year of disruption?
- Specialists must leverage stores to cater to specific trends
- And build improved cross-channel propositions to combat online pure players
The Market – Key Takeaways
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- Furniture spending drops by 0.8% in 2020, before a quick 4.7% recovery in 2021
- Disruption sends shockwaves across the retail sector
- Big-ticket sectors hit by disruption in mid-2020, lining up a windfall of new demand moving forward
- A year of unprecedented growth online
Market Size and Performance
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- Huge disruption in mid-2020 is followed by a quick recovery
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- Figure 16: Short-, medium- and long-term impact of COVID-19 on Furniture Retailing, 20 June 2021
- Furniture spending slips by 0.8% in 2020
- A very eventful 2020 for furniture
- Fragmentation of spending in the retailing landscape
- A year of unprecedented online sales growth
- New windows to the market with the rise of flexible living
- But demand grew increasingly polarised
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- Figure 17: Market size for furniture retailing, 2016-21
- Figure 18: Market size for furniture retailing, at current prices and constant prices, 2016-21
Market Forecast
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- A bumper three years before stabilising
- Record figures in the housing market
- Recovery of bigger-ticket projects moving forwards
- But demand will remain polarised
- The net-long-term benefit for online
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- Figure 19: Market forecast for the UK furniture retailing, 2016-26
- Figure 20: Forecast for consumer spending on furniture, at current prices and constant prices, 2016-26 (prepared on 21 June 2021)
- Market drivers and assumptions
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- Figure 21: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared 21 June 2021)
- Forecast methodology
COVID-19 Scenario Performance
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- Mintel’s approach to predicting the impact of COVID-19
- Fundamental differences in how COVID-19 is affecting consumer markets
- COVID-19 uncertainty remains a decisive factor
- But this also represents a double-edged sword for furniture
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- Figure 22: COVID-19 scenario forecasts, consumer spending on furniture, 2016-26 (prepared on 21 June 2021)
- COVID-19 market disruption: risks and outcomes
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- Figure 23: Summary of Mintel scenario expectations and the impact on the furniture retailing market, June 2021
Market Segmentation
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- Extended periods inside see an emphasis on communal rooms
- With living and dining rooms often at the forefront
- Big-ticket sectors hit by disruption in mid-2020
- However, a windfall of new demand moving forward
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- Figure 24: Furniture market segmentation, 2016-20
Channels to Market
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- Specialists hit by disruption
- Non-specialists make gains in-store
- DIY Retailers boost sales across home retail markets
- General retailers and supermarkets grow share
- Department stores suffer a year of turmoil
- An unprecedented redirection of demand online
- Online pure play non-specialists among the greatest benefactors
- … as pure player specialists also grow share
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- Figure 25: Estimated channels of distribution for furniture, 2020
Online
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- A year of unprecedented growth online
- Online-only among the greatest benefactors
- Although specialists see double-figure ecommerce growth
- The turn to multichannel non-specialists is replicated online
- Net long-term benefit for the online channel
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- Figure 26: Estimated shares of online spending on furniture, 2019 and 2020
Market Drivers
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- The impact of the 2021 lockdown
- House moves continue to underpin much demand
- Although homeowners remain paramount
- House moves fall by 56.8% in April 2020…
- …before picking up sharply
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- Figure 27: Monthly UK residential property transactions, January 2019-April 2021
- Increasing numbers of homeowners
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- Figure 28: England housing tenure, 2015-19
- Inflation could limit potential uptake
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- Figure 29: Annual rate of inflation, CPIH & furniture and furnishings, August 2020-April 2021
- Uptake of credit remains down with uncertainty
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- Figure 30: Consumer credit excluding student loans, January 2018-April 2021
- The shift to working from home
- Home cooking and baking surges with restrictions
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- Figure 31: Changes to home cooking, 26 March-16 April 2020
Companies and Brands – Key Takeaways
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- Specialist sales drop sharply, before many recover quickly
- Amazon revenue skyrockets, as discounters, supermarkets, DIY and general retailers make gains in-store
- Disruption in an already fragmented market
- Disruption underpins new wave of technological innovations, while sustainability and ethics move up the agenda
- Increase in beds and mattresses advertising insufficient to offset 35% fall in total sector advertising
- Significantly differentiated from its competitors IKEA is the standout brand
Leading Specialists
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- IKEA sees sales drop but remains standout
- DFS announces a restructure as sales drop 27%
- Although trading picks up in latter 2020
- Disruption hits latest years’ sales more broadly
- But some specialists rebound quickly
- A new opportunity for online-only specialists
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- Figure 32: Leading furniture specialists’ sales, 2015/16-2020/21
- Operating profits and margins
- Tempur Sealy purchase of profitable Dreams
- Store closures hit ScS profits
- DFS ups its profits forecast after boom in orders
- Made.com sees improved profits at the group level
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- Figure 33: Leading furniture specialists’ operating profit, 2015/16-2020/21
- Sharps grows double-figure operating margins
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- Figure 34: Leading furniture specialists’ operating margins, 2015/16-2020/21
- Stores and outlet data
- Furniture Village commits to physical expansion amid disruption
- Wren Kitchens opens 105th store with virtual reality studio
- Dreams remain committed to current business strategy under new ownership
- Sofa Workshop store numbers could drop after sale
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- Figure 35: Leading furniture specialists’ outlet data, 2015/16-2020/21
- Figure 36: Leading furniture specialists’ sales per store, 2015/16-2020/21
Leading Non-specialists
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- Amazon revenue skyrockets with redirection of demand online
- The Very Group steal a march online
- Innovation at John Lewis underlines resilience despite difficulties
- B&Q and Homebase see gains in-store
- Next focuses on its home ranges
Market Share
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- Disruption in an already fragmented market
- Multichannel specialists still take the lion’s share despite disruption
- Online pure players make their presence known
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- Figure 37: Estimated market shares of furniture retailers, 2020
Launch Activity and Innovation
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- Disruption underpins new wave of technological innovations
- Furniture Village’s Virtual Village
- Wren stores feature virtual reality studios
- Wickes launches virtual design service for housebound customers
- DFS offers in-store video communications
- John Lewis launches affordable Anyday range
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- Figure 38: John Lewis & Partners Anyday home range, June 2021
- Sustainability and ethics move up the agenda
- Vegan furniture
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- Figure 39: John Lewis & Partners EcoMattress, October 2020
- John Lewis launches furniture rental scheme
- IKEA unveils BuyBack scheme
- A rise in second-hand
- COVID-19 concerns create new product development opportunities
- Virus-free wardrobe
Advertising and Marketing Activity
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- Near-35% collapse in total advertising expenditure in 2020
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- Figure 40: Total above-the-line, online display and direct mail advertising expenditure on furniture, 2017-20
- DFS launch its first Christmas brand campaign and switches creative agency
- Dreams launch TV ad featuring TeamGB and ParalympicsGB ahead of Tokyo Olympic Games
- Bensons scrap Black Friday promotions
- Emma Matratzen achieve record sales on back of Black Weekend campaign
- Victoria Plum appoint new advertising agency to spearhead TV push
- Wickes ‘Housebarrassment’ campaign
- Furniture Village ‘Sleep Well, Live Well’ campaign
- Actress Helena Bonham Carter fronts latest Sofology TV advertising
- B&Q brand building campaign to reflect the role it has played in transforming homes for the past 50 years
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- Figure 41: Total above-the-line, online display and direct mail advertising expenditure on furniture, by retailer, 2017-20
- Wren Living Ltd doubles share of total sector advertising spend in 2020
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- Figure 42: Share of total above-the-line, online display and direct mail advertising expenditure on furniture, by retailer, 2020
- Beds and mattresses account for biggest share of product category advertising expenditure
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- Figure 43: Total above-the-line, online display and direct mail advertising expenditure on furniture, by product category, 2017-20
- TV attracts the lion’s share of total sector advertising expenditure
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- Figure 44: Total above-the-line, online display and direct mail advertising expenditure on furniture, by media type, 2020
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 45: Attitudes towards and usage of selected brands, 2021
- Key brand metrics
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- Figure 46: Key metrics for selected brands, 2021
- Brand attitudes: Oak Furnitureland a brand worth paying more for, IKEA innovative and offers good value for money
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- Figure 47: Attitudes, by brand, 2021
- Brand personality: Buoyed by their extensive store networks, DFS and Dreams considered accessible
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- Figure 48: Brand personality – macro image, 2021
- Furniture Village authoritative, IKEA cutting edge, stylish and aspirational
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- Figure 49: Brand personality – micro image, 2021
- Brand analysis
- IKEA trustworthy and highly recommended
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- Figure 50: User profile of IKEA, 2021
- Dreams accessible and reliable, but lacks aspirational appeal
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- Figure 51: User profile of Dreams, 2021
- Oak Furnitureland expensive, but a brand worth paying more for
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- Figure 52: User profile of Oak Furnitureland, 2021
- DFS second highest usage but low customer satisfaction
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- Figure 53: User profile of DFS, 2021
- Furniture Village authoritative but unreliable
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- Figure 54: User profile of Furniture Village, 2021
The Consumer – Key Takeaways
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- Younger consumers, young families and new movers key to the market
- Disruption shakes the retailing landscape
- Flexible living opens a new of furniture demands
- But demand has grown polarised
Impact of COVID-19 on Consumer Behaviour
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- Anxiety eases slightly following third lockdown spike
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- Figure 55: Extremely worried about exposure to COVID-19/coronavirus
- A fundamental change in shopping behaviours
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- Figure 56: Changes in shopping behaviour
- Older consumers lead the shift in behaviour
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- Figure 57: Changes in shopping behaviour, by age
- The sector is buoyed by redirected spending
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- Figure 58: Spending, by sector
What They Spent
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- 64% of consumers engaged in the market
- Almost one third spent £500 or more
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- Figure 59: Furniture expenditure, 2020 and 2021
- Middle age bands spearhead higher spending
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- Figure 60: Furniture expenditure, by age, 2021
- Homeowners invest more
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- Figure 61: Furniture expenditure, by housing situation, 2021
- House moves provide a long-lasting source of demand
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- Figure 62: Furniture expenditure, by housing situation, 2021
Rooms They Buy For
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- Flexible living sees consumers reimagine their living spaces
- The shift to working from home comes to fruition
- Dining Room sales grow with the rise of home cooking and dining
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- Figure 63: Rooms purchased for, 2020 and 2021
- Consumers with more space look to dining rooms and home offices
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- Figure 64: Rooms purchased for, by house type, 2021
- 35% purchase for two or more rooms
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- Figure 65: Repertoire for Rooms purchased for, 2021
How They Buy Furniture
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- A year of unprecedented online growth
- As in-store suffers heavy losses
- Paving the way for a net-long-term benefit for the online channel
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- Figure 66: Channel of purchase, 2020 and 2021
- Computers paramount; but a growing role for smartphones
- Younger consumers look to mobile purchasing
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- Figure 67: Channel of purchase, by age, 2021
- But the need for stores continues to grow with expenditure
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- Figure 68: Channel of purchase, by furniture expenditure, 2021
How They Browse Furniture
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- Closures and anxiety see heavy losses in-store
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- Figure 69: Furniture browsing, 2020 and 2021
- Age differences are mirrored in browsing
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- Figure 70: Furniture browsing, by age, 2021
- Consumers more likely to still browse in-store when spending £1,000 or more
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- Figure 71: Furniture browsing, by furniture expenditure, 2021
Where They Shop for Furniture
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- Disruption sees major changes in the retailer landscape
- Online pure players make gains
- Many specialists lose out amid store closures
- DIY retailers made gains across home retail
- John Lewis holds its own as other department stores struggle
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- Figure 72: Retailers used, 2020 and 2021
- Amazon, IKEA and Argos gain from mass-appeal
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- Figure 73: Retailers used, by age and socio-economic group, 2021
- How specialists can recover momentum
- 49% of buyers purchased from two or more retailers
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- Figure 74: Repertoire analysis of Retailers used, 2020 and 2021
Where Most Money Spent on Furniture in Last Year
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- Consistent changes seen in where they shop
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- Figure 75: Highest spend, 2020 and 2021
- Non-specialists come to the fore for smaller and frequent purchases
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- Figure 76: Highest spend, by furniture expenditure, 2021
Triggers to Purchase
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- COVID-19 opens a wealth of new triggers to purchase
- However, the majority remain the result of necessity
- The rise in flexible living
- Consumers turn to furniture to reimagine living spaces
- The shift to working from home and home schooling
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- Figure 77: Triggers to purchase, 2021
- Newer triggers to purchase were led by younger shoppers
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- Figure 78: Triggers to purchase, by age and socio-economic group, 2021
- Motivations vary by duration in current home
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- Figure 79: Triggers to purchase, by housing type, 2021
COVID-19 and Shopping Behaviours
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- Extended periods inside elevate the home
- But uncertainty splits the consumer base
- Although this could line the market up for a windfall of newer demand
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- Figure 80: Furniture shopping behaviours, by socioeconomic status, 2021
- Disruption changes how consumers buy furniture
- The net-long-term benefit for online
- Disruption fragments expenditure
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- Figure 81: Furniture shopping behaviours, 2021
- Younger consumers turn to newer sustainable behaviours
- Disruption paves the way for new technologies
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- Figure 82: Furniture shopping behaviours, by age, 2021
- Newer behaviours trigger higher spending
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- Figure 83: Furniture shopping behaviours, by furniture expenditure, 2021
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Central Forecast Methodology
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- Market forecast and prediction intervals
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- Figure 84: Consumer spending on furniture, best and worst case forecast, 2021-26
- Market drivers and assumptions
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- Figure 85: Key drivers affecting Mintel’s market forecast, 2020-25
- Forecast methodology
Appendix – COVID Scenario Performance Methodology and Assumptions
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- Scenario performance
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- Figure 86: Consumer spending on furniture, scenario forecast, 2016-26
- Rapid COVID recovery, central and extended COVID disruption scenarios outline
- Scenario methodology
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