Consumer Trends, Attitudes and Spending Habits for the Home - UK - January 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Robust market growth in 2017
Figure 1: Consumer spending on the home, 2012-22
Living and dining room furniture is a priority for shoppers
Figure 2: Consumer spend on the home, by segment, 2017 (est)
The housing market has plateaued
Figure 3: UK Housing transactions, 2012-17
Financial situation is weakened by concerns about the economy
Figure 4: How consumers describe their financial situation, January 2013-September 2017
Smart connected devices pose new challenges for retailers
The consumer
Intentions for spending in 2018 similar to 2017, although furniture is down
Figure 5: Spending on the home in the last year, and intentions to spend on the home in the next year, October 2017
High level of confidence about spending on the home
Figure 6: Confidence about spending on the home, October 2017
Households spend to enhance enjoyment of their homes
Figure 7: Reasons for spending on the home, October 2017
21% will tighten their budget for the home in 2018
Figure 8: Intentions for spending more or less on the home in the next year, October 2017
Range and quality must compete with special offers to attract shoppers
Figure 9: Factors influencing choice of retailer for major purchases, October 2017
72% take pride in their homes
Figure 10: Attitudes regarding the home, October 2017
What we think
ISSUES AND INSIGHTS
Will there be an ‘improve not move’ trend as economic uncertainty influences consumer confidence?
The facts
The implications
Are consumers buying into smart home products?
The facts
The implications
What impact is the rise in private renting having on demand for products for the home?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Spending on the home remained strong in 2017
Flat market conditions ahead
Market segmentation
1.3 million more households by 2022
Patterns of home ownership are changing
Owner-occupiers feel better off
The housing market has plateaued
Owner-occupiers most likely to have gardens
MARKET SIZE AND FORECAST
Robust market growth in 2017
Figure 11: Consumer spending on the home, 2012-22
Market share growth will be an important strategy
Figure 12: Consumer spending on the home, 2012-22
Forecast methodology
MARKET SEGMENTATION
Market segmentation
Figure 13: Consumer spending on the home, by segment, 2017 (est)
Living and bedroom furniture have been strongest
Figure 14: Consumer spending on the home, 2012-17
MARKET DRIVERS
1.3 million more households by 2022
Figure 15: UK households, by size, 2012-22
Patterns of home ownership are changing
Figure 16: Number of households in Great Britain, by tenure, 2011-15
30% of 25-34s are in privately rented property
Figure 17: Household tenure, by age group, 2017
23% of private renters moved in the last year
Figure 18: Length of time in current home, by tenure, October 2017
Owner-occupiers feel better off
Figure 19: Household financial situation, by tenure, September 2017
The housing market has plateaued
Figure 20: UK Housing transactions, 2012-17
Easy to find second-hand items
Surplus space at home creates opportunities for a wider range of interiors and usage
Figure 21: Usable floor area, by tenure, England, 2015
The nation’s gardens
Figure 22: Presence of gardens, balconies and allotments, March 2017
Consumer confidence weakened by concerns about the economy
Figure 23: How consumers describe their financial situation, January 2013-September 2017
Interest rate rises cool demand for consumer debt
Interest in the smart home is growing
Figure 24: Ownership of smart/connected devices, December 2016
High level of interest shows that the market for smart home devices will take off
Figure 25: Interest in smart/connected devices, December 2016
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Big changes in the DIY sector
Trade-focused outlets growing strongly
Intense competition among sofa retailers
Omnichannel retailing works best
High growth homewares retailers
IKEA puts on a growth spurt
The smart home market enters a new phase
IKEA continues to innovate
Help with visualising items in your own home will become a key battleground for retailers
COMPETITIVE STRATEGIES
Big changes in the DIY sector
Bunnings’ rollout begins in the UK as Homebase is realigned as a low-price DIY chain
B&Q now every-day-fair price and repositioning the stores
Wickes benefits from softer approach
Trade-focused outlets growing strongly
Intense competition among sofa retailers
Fabb Sofas expands
DFS will acquire Sofology
Other sofa news
Omnichannel retailing works best
Retailers that began online are opening shops
Amazon considering opening furniture shops
High growth homewares retailers
Dunelm is setting the pace
Oak Furniture Land now over 90 outlets
Wren Kitchens has boosted sales per outlet
IKEA puts on a growth spurt
Concentration of the garden sector
Acquisition has driven growth of garden chains
Importance of in-store restaurants and cafés
LAUNCH ACTIVITY AND INNOVATION
Home hubs evolve to add new skills, including those developed by third parties
Amazon Echo was first on the scene
Google launched its home hub in 2017
Microsoft has developed its own personal assistant
Retailers embrace the connected home
Furniture retailers continue to innovate
IKEA’s click-together furniture is simpler to assemble and move
Figure 26: IKEA’s wedge-dowel furniture, 2017
IKEA considers furniture rental packages
Help with visualising items in your own home will become a key battleground for retailers
Figure 27: Benchmarx, 3D image of kitchen plan, 2017
Figure 28: IKEA Place app, 2017
A room that can automatically reconfigure itself
Figure 29: Ori, micro-apartment that automatically reconfigures, 2017
Figure 30: John Lewis, furniture for small spaces, 2017
Retailers embrace social media
THE CONSUMER – WHAT YOU NEED TO KNOW
63% have spent on their homes
Homeowners with a mortgage are a key shopper group
High level of confidence about plans to spend
Reasons for spending on the home
Wide variety of reasons for spending on the home
21% will tighten their budget for the home in 2018
Range and quality must compete with special offers to attract shoppers
Stores remain relevant to shoppers
Leisure time spent at home
SPENDING ON THE HOME 
Decorating and free-standing furniture top the list of purchases
Figure 31: Spending on the home in the last year, October 2017
House moves influence demand for spending on the home
Scottish households do the most decorating
How important are private renters?
INTENTIONS TO SPEND ON THE HOME
36% of households will do some decorating in 2018
Figure 32: Intentions to spend on the home in the next year, October 2017
Intentions for spending in 2018 similar to 2017, although furniture is down
Figure 33: Spending on the home in the last year, and intentions to spend on the home in the next year, October 2017
CONFIDENCE ABOUT SPENDING ON THE HOME
High level of confidence about spending on the home
Figure 34: Confidence about spending on the home, October 2017
REASONS FOR SPENDING ON THE HOME
A combination of emotional and practical reasons drive demand for the home
Figure 35: Reasons for spending on the home, October 2017
Replacement is a major driver of demand
Home is a happy place
Time to update the style
Storage matters most to younger households
The home as an investment
Improving not moving is a factor behind some home spending
More space please
SPENDING MORE OR LESS ON THE HOME IN THE NEXT YEAR
21% will tighten their budget for the home in 2018
Figure 36: Spending more or less on the home in the next year, October 2017
FACTORS INFLUENCING CHOICE OF RETAILER FOR MAJOR PURCHASES
Shoppers demand quality, range and price
Figure 37: Factors influencing choice of retailer for major purchases, October 2017
Range and quality must compete with special offers to attract shoppers
Omnichannel shopping is here to stay
Broad appeal of interest free credit (IFC)
Relevance of the specialist
Planning services
ATTITUDES REGARDING THE HOME
Today’s homes fulfil a wide range of functions
Figure 38: Attitudes regarding the home, October 2017
Leisure time and watching TV at home is popular
72% take pride in their homes
Meal time habits influence demand for furniture
The kitchen is a home hub
Younger people enjoy inviting friends into the kitchen
Working from home places different demands on space
DIY can be an engaging pastime
Practical hobbies at home
Gardening more popular as people age
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology