Table of Contents
Executive Summary
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- The market
- Growth of 8.8% by 2021
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- Figure 1: Consumer spend on furniture, 2011-21
- Living and dining is 41% of consumer spending on furniture
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- Figure 2: Consumer spend on furniture, by broad segment, 2015
- 2015 was a boom year for furniture retailers
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- Figure 3: Annual percentage change in retail sales, furniture retailers, 2007-16
- Companies, brands and innovations
- Specialists account for 71% of the market
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- Figure 4: Distribution of furniture, 2014-15
- IKEA is the largest furniture retailer
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- Figure 5: Leading retailers of furniture, estimated share of all consumer spending on furniture, 2013 and 2015
- Reaching more customers
- Realistic images of rooms and layouts
- More brand building and less focus on price
- Vertical integration – Better margins
- Deliveries getting more responsive
- The consumer
- IKEA stands out among furniture retailers
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- Figure 6: Attitudes towards and usage of selected retailers, May 2016
- 67% bought any furniture in the last year
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- Figure 7: Amount spent on furniture in the last 12 months, June 2016
- Most purchases are for living rooms and bedrooms
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- Figure 8: Furniture purchases, by room, last three years, June 2016
- Sofas are 63% of living room purchases
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- Figure 9: Consumer purchases, by volume, living room furniture, June 2016
- Tables and chairs dominate dining room
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- Figure 10: Consumer spending, by volume, dining room furniture, June 2016
- Mattresses bought by 37% of bedroom purchasers
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- Figure 11: Consumer spending, by volume, bedroom furniture, June 2016
- 22% bought in an IKEA store
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- Figure 12: Retailers used for furniture purchases, last three years, June 2016
- Websites are a key factor in store choice
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- Figure 13: Factors influencing choice of furniture store, June 2016
- Removal of the old item is a popular additional service
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- Figure 14: Interest in additional services from furniture retailers, June 2016
- Tipping points in the decision process
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- Figure 15: Factors that would influence choice of retailer, June 2016
- 60% of purchasers enjoy shopping for furniture
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- Figure 16: Attitudes towards replacing furniture, June 2016
- Four main target groups
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- Figure 17: Attitudes towards replacing furniture, target groups, June 2016
- Target groups – Key characteristics
- What we think
Issues and Insights
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- How is the rise of private renting influencing people’s purchasing patterns?
- The facts
- The implications
- How are consumer expectations of digital technology being catered for by retailers?
- The facts
- The implications
- What is the right balance of online vs in-store retailing?
- The facts
- The implications
The Market – What You Need to Know
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- Growth of 8.8% by 2021
- 11% sales growth in furniture stores in 2015
- Diverse market with many elements
- Furniture specialists gaining share
- Specialists capture 71% of the market
- House moves stimulate growth
- 25% say they have healthy finances
Market Size and Forecast
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- Growth of 8.8% by 2021
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- Figure 18: Consumer spend on furniture, 2011-21
- Figure 19: Consumer spending on furniture and furnishings, 2011-21
- 11% sales growth in furniture stores in 2015
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- Figure 20: Retail sales through furniture stores, April 2016
- Forecast methodology
Market Segmentation
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- Diverse market with many elements
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- Figure 21: Consumer spending on furniture, by segment, 2010-15
- Sofas – Key items in the living room
- Home offices vary widely
- Dining spaces
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- Figure 22: Consumer spending, by value, living and dining room furniture, 2010-15
- Upholstery accounts for 63% of living and dining room spending
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- Figure 23: Consumer spending, by value, living/dining room furniture, segmentation, 2015
- Spending on beds and mattresses dominates bedroom
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- Figure 24: Consumer spending, by value, bedroom furniture and beds, segmentation, 2015
Market Drivers
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- Buoyancy in the housing market stimulated furniture sales
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- Figure 25: Housing transactions, 2013-15
- 25% say their finances are healthy
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- Figure 26: Trends in how respondents would describe their financial situation, March 2010-March 2016
- People feel better off
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- Figure 27: Trends in current financial situation compared to a year ago, January 2011-March 2016
- Committing to big ticket purchases
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- Figure 28: Trends in activities done in the last three months and planned to do in the next three months, spend money on my home (new kitchen, redecorate, new furniture etc.), 2013-16
- Rising numbers of private renters
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- Figure 29: Housing tenure, UK, 2012-16
Channels to Market
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- Specialists edge ahead in competitive market conditions
- Home shopping specialists relatively small
- Online selling has reached 25% by value
- Multichannel retail models for the future
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- Figure 30: Distribution of furniture, 2014-15
Key Players – What You Need to Know
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- IKEA is the largest furniture retailer
- IKEA expands geographical coverage
- Many internet retailers are opening stores
- Realistic images of rooms and layouts
- More brand building and less focus on price
- Specialists add related categories
- Vertical integration – Better margins
- Expansion of ‘home’ shops
- Speedier and cheaper deliveries
- Advertising +2% in 2015
- IKEA has the strongest brand
- DFS is stylish and reliable
- Oak Furniture Land is worth paying more for
Innovation and Launch Activity
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- IKEA opens order-and-collect stores
- Internet retailers open stores
- In-town formats for multiples
- 3D reality
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- Figure 31: IKEA, Virtual Reality kitchen, 2016
- Peek & Pop from Home 24
- John Lewis’ new collaboration with Loaf
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- Figure 32: Modsy, render of a client’s room, 2016
- Images that spin
Competitive Strategies
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- Promotional strategies
- Shortening the replacement lifecycle
- CSL then Sofaworks, now Sofology
- Specialists adding to their ranges
- Concessions add to branded presence
- Vertical integration
- Digital activity is high priority
- Heading back into town with smaller shops
- Expansion of ‘home’ shops
- Speedier and cheaper deliveries
Leading Specialist Retailers
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- Sales and profit margins
- Why category specialists work
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- Figure 33: Leading furniture specialists’ sales, 2010/11-2015/16
- Ones to watch
- Independents
- Operating profits and margins
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- Figure 34: Leading furniture specialists’ operating profits, 2010/11-2015/16
- Figure 35: Leading furniture specialists’ operating margins, 2010/11-2015/16
- Stores
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- Figure 36: Leading furniture specialists’ store numbers, 2010/11-2015/16
- IKEA has the highest sales per outlet
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- Figure 37: Leading furniture specialists’ sales per outlet, 2010/11-2015/16
- Leading online pureplays
Leading Non-specialist Retailers
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- More ‘home’ shops open
- Argos taken over by Sainsbury’s
- Aldi beginning to sell more non-foods online
- DIY sector changes
Market Shares
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- Figure 38: Leading retailers of furniture, estimated share of all consumer spending on furniture, 2013 and 2015
- Blurring of online and in-store selling
- Stores remain highly relevant to shoppers
- Retailers grow online sales
- Leading online sellers
- Internet browsing features in most shopping journeys
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- Figure 39: Preferred methods in the buying process for furniture, August 2015
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Space Allocation Summary
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- Space allocation overview
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- Figure 40: Furniture retailers: Summary of estimated in-store space allocation, June 2016
- Detailed space analysis
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- Figure 41: Furniture retailers – Detailed space allocation estimates, June 2016
- Retail product mix
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- Figure 42: Leading furniture retailers: Estimated furniture sales, by product, exc VAT, 2014/15
- Figure 43: Leading furniture retailers: Implied sales density, exc VAT, 2014/15
Brand Research
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- Brand map
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- Figure 44: Attitudes towards and usage of selected retailers, May 2016
- Key brand metrics
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- Figure 45: Key metrics for selected retailers, May 2016
- IKEA has outstanding ratings for value and innovation
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- Figure 46: Attitudes, by brand, May 2016
- ScS in danger of looking unappealing
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- Figure 47: Brand personality – Macro image, May 2016
- ScS has most to do to build its brand
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- Figure 48: Brand personality – Micro image, May 2016
- IKEA has a strong identity
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- Figure 49: User profile of IKEA, May 2016
- Oak Furniture Land is worth paying more for
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- Figure 50: User profile of Oak Furniture Land, May 2016
- Dreams is authoritative and reliable
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- Figure 51: User profile of Dreams, May 2016
- DFS – Reliable and stylish
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- Figure 52: User profile of DFS, May 2016
- ScS is a brand that lags behind the competition
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- Figure 53: User profile of ScS, May 2016
Advertising and Marketing Activity
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- Advertising up in buoyant market conditions
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- Figure 54: Total above-the line, online display and direct mail advertising expenditure on furniture retail specialists, 2012-15
- DFS is the largest advertiser
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- Figure 55: Total above-the line, online display and direct mail advertising expenditure on furniture retail specialists, 2012-15
- Figure 56: Share of above-the line, online display and direct mail advertising expenditure in the furniture retail specialists sector, 2015
- Television takes 60% of spending
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- Figure 57: Share of above-the line, online display and direct mail advertising expenditure in the furniture retail specialists sector, by media type, 2015
- Campaign highlights
- What we have seen in 2016
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Households with mortgages buy the most furniture
- Most shopping is for living rooms and bedrooms
- Online vs in-store purchasing
- IKEA is the most used retailer
- Low prices dominate reasons for purchase
- Factors in store choice
- Those with a mortgage most inclined to use IFC
- Four main target groups
Expenditure on Furniture
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- House moves stimulate purchases
- 9% of households had spent over £2,000
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- Figure 58: Amount spent on furniture in the last 12 months, June 2016
- Private renters are buying furniture
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- Figure 59: Spent on furniture in the last 12 months, any purchases, by tenure, June 2016
- Households with mortgages are most active in the furniture market
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- Figure 60: Amount spent on furniture in the last 12 months, by tenure, June 2016
- Higher spenders shop in-store
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- Figure 61: Amount spent on furniture in the last 12 months, by bought online or in-store, June 2016
Furniture Purchases by Room and by Type of Furniture
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- 39% buy for one room
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- Figure 62: Furniture purchases by room, last three years, June 2016
- Living and bedroom purchases dominate shopping patterns
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- Figure 63: Furniture purchases by room, last three years, June 2016
- Sofas – 63% of living room purchases
- Households with mortgages most likely to buy
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- Figure 64: Consumer purchases, by volume, living room furniture, June 2016
- Tables and chairs dominate dining purchases
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- Figure 65: Consumer spending, by volume, dining room furniture, June 2016
- Mattresses are the most frequently purchased bedroom furniture
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- Figure 66: Consumer spending, by volume, bedroom furniture, June 2016
Retailers Used for Furniture Purchases
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- In-store online mix
- Argos outruns IKEA online
- IKEA has a young shopper profile
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- Figure 67: Retailers used for furniture purchases, last three years, in-store and online, June 2016
- Shifting shopping patterns
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- Figure 68: Retailers used for furniture purchases, in-store, October 2014 and June 2016
- Argos, Amazon and eBay dominate online
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- Figure 69: Retailers used for furniture purchases, online, October 2014 and June 2016
- 51% use one store
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- Figure 70: Repertoire of purchasing in-store, June 2016
Reasons for Choice of Furniture Store
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- Private renters most interested in low prices
- Older and wealthier customers want to judge in-store
- Showrooms appeal more to those with mortgages
- Accessories appeal most to younger consumers and private renters
- Interest-free credit appeals to households with mortgages
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- Figure 71: Factors influencing choice of furniture store, June 2016
Interest in Additional Store Services When Shopping for Furniture
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- 49% like removal of the old item
- Assembly can be a hassle
- Comfort ratings are popular
- Apps please
- Interior designers
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- Figure 72: Interest in additional services from furniture retailers, June 2016
- People are interested in a range of services
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- Figure 73: Factors influencing choice of furniture store, repertoire, June 2016
Factors that Would Influence Choice of a Specific Retailer
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- The price/value equation
- Quicker deliveries please
- Loyalty rewards
- Faster fashions
- Apps giving additional information
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- Figure 74: Factors that would influence choice of retailer, June 2016
Attitudes towards Replacing Furniture
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- Figure 75: Attitudes towards replacing furniture, June 2016
- Target groups
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- Figure 76: Attitudes towards replacing furniture, target groups, June 2016
- Target groups – Key characteristics
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- Figure 77: Attitudes towards replacing furniture, by target group, June 2016
- Which rooms the target groups buy for
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- Figure 78: Rooms bought furniture for, by target group, June 2016
- Shopping in-store or online by target group
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- Figure 79: Bought in-store or online, by target group, June 2016
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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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