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
- Spending on furniture continues to grow
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- Figure 1: Consumer spending on furniture, 2013-2023
- Living and dining furniture accounts for almost half the market
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- Figure 2: Furniture market segmentation, 2017
- Growing number of households underpins growth
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- Figure 3: Number of UK households, 2008-2017
- Companies and brands
- IKEA continues to expand but investment hits profits
- Argos shake-up hits furniture sales
- Tesco withdraws while Amazon steps up
- A very fragmented market
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- Figure 4: Market shares of furniture retailers, 2017
- Alternative realities make furniture shopping easier
- Total advertising expenditure increases 5.8% in 2017
- A lack of clear difference
- The consumer
- Average spend increases
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- Figure 5: What they spent on furniture in the last 12 months, May 2017 and May 18
- All age groups buy living room furniture
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- Figure 6: Rooms they buy for, May 2018
- In-store and online used in equal measure
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- Figure 7: How they shop for furniture, May 2018
- 81% of furniture buyers browse online
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- Figure 8: How they browsed for furniture in the last 12 months, May 2018
- IKEA and Argos lead a fragmented market
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- Figure 9: Where they shopped for furniture in the last 12 months, May 2018
- A reputation for quality is the most important factor
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- Figure 10: Factors important in deciding where to shop for furniture, May 2018
- The changing role of the store
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- Figure 11: Behaviours related to shopping for furniture, May 2018
- Difficulty in judging quality online
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- Figure 12: Attitudes towards shopping for furniture, May 2018
- What we think
Issues and Insights
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- Competing in a challenging sector
- The facts
- The implications
- The changing but ever-present role of the store
- The facts
- The implications
- Latest tech transforms the way people shop for furniture
- The facts
- The implications
The Market – What You Need to Know
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- Spending on furniture continues to grow
- Living and dining furniture accounts for almost half the market
- Growing number of households underpins growth
- Housing transactions start to slow
- Inflation on furniture and furnishings surges in 2017
- Retail credit market continues to grow
Market Size and Forecast
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- Spending on furniture continues to grow
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- Figure 13: Consumer spending on furniture, 2013-2023
- Figure 14: Consumer spending on furniture, 2013-2023
- Forecast methodology
Market Segmentation
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- Kitchen and bathroom sectors more exposed to market uncertainty
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- Figure 15: Furniture market segmentation, 2013-2017
Online
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- Online sales account for 18% of furniture sales
- Sainsbury’s now the largest online retailer of furniture
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- Figure 16: Estimated shares of online spending on furniture, 2017
Market Drivers
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- Continued growth in the number of households
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- Figure 17: Number of UK households, 2008-2017
- Figure 18: Average household size, 1996-2017
- Housing transactions start to slow
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- Figure 19: Number of residential housing transactions over £40,000, 2008-2017
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- Figure 20: Monthly change in the number of residential housing transactions over £40,000 compared to the previous year, January 2017-May 2018
- Inflation on furniture and furnishings surges in 2017
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- Figure 21: Inflation, 2008-2017
- Figure 22: Inflation, May 2017-May 2018
- Consumer confidence recovers in 2018
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- Figure 23: Consumers’ confidence in the state of the finances and their finances compared to the previous year, January 2016-June 2018
- Intention to spend on the home increases
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- Figure 24: Spending on the home, actions and intentions, April 2015-June 2018
- Retail credit market continues to grow
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- Figure 25: Forecast of the value of retail store and online credit, 2012-22
Companies and Brands – What You Need to Know
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- IKEA continues to expand but investment hits profits
- Argos shake-up hits furniture sales
- A very fragmented market
- Alternative realities make furniture shopping easier
- 2017 total advertising expenditure up 5.8%
- A lack of clear difference
Leading Specialists
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- IKEA continues to innovate and grow
- DFS grows through acquisitions
- Uncertainty for the Steinhoff businesses
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- Figure 26: Leading furniture specialists’ sales, 2012/13-2017/18
- Operating profits and margins
- IKEA profits hit by investment costs
- DFS profit drops
- Made.com losses stem from international expansion
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- Figure 27: Leading furniture specialists’ operating profits, 2012/13-2017/18
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- Figure 28: Leading furniture specialists’ operating margins, 2012/13-2017/18
- Stores and outlet data
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- Figure 29: Leading furniture specialists’ outlet data, 2012/13-2017/18
- Sales per store
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- Figure 30: Sales per store, 2012/13-2017/18
Leading Non-specialists
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- Argos shakeup hits furniture sales
- John Lewis furniture sales continue to grow
- Tesco stops selling furniture
- Amazon makes moves towards the furniture market
Market Share
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- A very fragmented market
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- Figure 31: Market shares of furniture retailers, 2017
Space Allocation Summary
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- Space allocation overview
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- Figure 32: Furniture retailers: summary of estimated in-store space allocation, June 2018
- Detailed space allocation estimates
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- Figure 33: Furniture retailers: detailed space allocation estimates, June 2018
Innovation and Launch Activity
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- Amazon launches first own furniture brand
- Try-before-you-buy
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- Figure 34: IKEA Place app
- Local sourcing
- IKEA debuts streetwear designer collection of home accessories
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- Figure 35: IKEA: Spänst collection, wardrobe and skateboard, June 2018
- Micro-living furnishings
- Making it easier to find specific furnishings
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- Figure 36: Wayfair Search with Photo
- Creating a starting point to searching for a sofa online
Advertising and Marketing Activity
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- 2017 total advertising expenditure up 5.8% year on year
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- Figure 37: Total above-the line, online display and direct mail advertising expenditure on furniture, 2014-17
- DFS is the biggest advertising spender …
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- Figure 38: Total above-the line, online display and direct mail advertising expenditure on furniture, by retailer, 2014-17
- … and accounts for over a fifth of total sector advertising spend
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- Figure 39: Share of total above-the line, online display and direct mail advertising expenditure on furniture, by retailer, 2017
- TV attracts the lion’s share of advertising spend
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- Figure 40: Total above-the line, online display and direct mail advertising expenditure on furniture, by media type, 2017
- Leading advertisers favour TV over any other media type
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- Figure 41: Total above-the line, online display and direct mail advertising expenditure on furniture, by retailer and media type, 2017
- Campaign highlights
- DFS puts speed of home delivery and comfort in the spotlight
- Dreams pushes UK manufacturing credentials
- Hollywood actor fronts Sofology’s ‘Feel at home on the sofa you love’ campaign
- Relaxing qualities of the living room
- Harveys pushes customisable sofa collection
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 42: Attitudes towards and usage of selected brands, April 2018
- Key brand metrics
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- Figure 43: Key metrics for selected brands, April 2018
- Brand attitudes: Oak Furniture Land worth paying more for
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- Figure 44: Attitudes, by brand, April 2018
- Brand personality: IKEA makes furniture shopping fun
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- Figure 45: Brand personality – macro image, April 2018
- DFS risks being seen as impersonal and overrated
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- Figure 46: Brand personality – micro image, April 2018
- Brand analysis
- IKEA’s reputation for innovation and value makes it popular with the young
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- Figure 47: User profile of IKEA, April 2018
- Oak Furniture Land delivers a quality message
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- Figure 48: User profile of Oak Furniture Land, April 2018
- DFS: trusted but lacks differentiation
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- Figure 49: User profile of DFS, April 2018
- Harveys is authoritative but lacks excitement
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- Figure 50: User profile of Harveys Furniture, April 2018
- Furniture Village lacks trust and differentiation
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- Figure 51: User profile of Furniture Village, April 2018
The Consumer – What You Need to Know
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- Average spend increases
- All age groups buy living room furniture
- In-store and online used in equal measure
- 81% of furniture buyers browse online
- IKEA and Argos lead a fragmented market
- A reputation for quality is the most important factor
- The changing role of the store
- Difficulty in judging quality online
What They Spent
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- Shift to higher value purchases over the past year
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- Figure 52: What they spent on furniture in the last 12 months, May 2017and May2018
- Spending peaks among 25-34 year-olds
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- Figure 53: Spending on furniture in the past year, by age group, May 2018
- And in the period a year after moving in
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- Figure 54: Spending on furniture in the past year, by years lived in their current home, May 2018
Rooms They Buy For
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- Living room and bedroom purchases dominate
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- Figure 55: Rooms they buy for, May 2018
- Bedroom becomes less of a focus with age
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- Figure 56: Rooms they buy for, by age group, May 2018
How They Shop for Furniture
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- In-store and online level-pegging
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- Figure 57: How they shop for furniture, May 2018
- Online shopping more popular among the young
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- Figure 58: How they shop for furniture, May 2018
- Shopping in-store increases with spend
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- Figure 59: How they shop for furniture, May 2018
How They Browse for Furniture
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- 81% browse online
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- Figure 60: How they browsed for furniture in the last 12 months, May 2018
- Almost half of under-35s use smartphones to look for furniture
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- Figure 61: Browsing for furniture by smartphone, by age group, May 2018
- 76% of in-store purchasers browsed online
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- Figure 62: How in-store shoppers browsed for furniture, May 2018
Where They Shopped
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- Huge number of furniture retailers
- The online pureplays remain niche
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- Figure 63: Where they shopped for furniture in the last 12 months, May 2018
- IKEA surges ahead …
- … while Argos drops behind
- Amazon continues to expand
- Homebase troubles impact furniture business
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- Figure 64: Where they shopped for furniture in the last 12 months, May 2017 and May 2018
- IKEA and Amazon battle for the middle ground
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- Figure 65: Where they shop for furniture, by age and socio-economic group, May 2018
- Smartphone browsing peaks among eBay shoppers
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- Figure 66: Browsing online via a smartphone, by where they shopped, May 2018
Important Factors in Deciding Where to Shop
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- Quality is the most important factor
- Importance of reputation opens the way for branded stores to expand
- Unique styles can make all the difference
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- Figure 67: Factors important in deciding where to shop for furniture, May 2018
- Credit appeals to young, less affluent households
- Showrooms hold less appeal to the young
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- Figure 68: Factors important in deciding where to shop for furniture, by age and socio-economic group, May 2018
- Price, speed and credit are more important to online shoppers
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- Figure 69: Factors important in deciding where to shop for furniture, by how they shopped for furniture, May 2018
- IKEA shoppers look for unique styles and a reputation for quality
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- Figure 70: IKEA shoppers’ important features in deciding where to shop, May 2018
- John Lewis shoppers value quality, style and UK-made
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- Figure 71: John Lewis shoppers’ important features in deciding where to shop, May 2018
- Credit appeals to DFS shoppers
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- Figure 72: DFS shoppers’ important features in deciding where to shop, May 2018
Shopping Behaviours
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- The changing role of the store
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- Figure 73: Behaviours related to shopping for furniture, May 2018
- Young people most likely to buy on credit
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- Figure 74: Proportion saying they bought furniture on credit, May 2018
- B&Q shoppers are most likely to have regretted a purchase
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- Figure 75: Agreement with the statement: ‘I purchased an item of furniture I later regretted’, by where they shopped for furniture, May 2018
Attitudes Towards Shopping for Furniture
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- Stores essential to judge quality …
- … but high-pressure selling tactics can deter people
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- Figure 76: Attitudes towards shopping for furniture, May 2018
- Augmented reality app holds interest for younger shoppers
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- Figure 77: Interest in smartphone app to show how a piece of furniture would look in the home, by age and gender, May 2018
- Economic uncertainty most likely to impact 25-34-year-olds
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- Figure 78: Concerns about the economy have led me to delay buying a large item of furniture, by age, May 2018
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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