Consumer Trends, Attitudes and Spending Habits for the Home - UK - January 2019

OVERVIEW
What you need to know
Products covered in this Report
Definitions
EXECUTIVE SUMMARY
The market
Consumers are planning to carry on spending on their homes in 2019
Figure 1: Consumer spending on the home, 2013-23
Strong housing market has helped growth
Diverse market with large spread of segments
Figure 2: Consumer spending on the home, by segment, 2018
Furniture spending fuelled by styling and better functionality
The garden as a ‘room’
Furniture and homewares specialists capture 41% of spending
Figure 3: Channels to market, goods for the home, 2018
Online shopping for the home will double in the next five years
Growth in household numbers and strong housing market drive demand
Figure 4: Number of households in Great Britain, by tenure, 2013-16
Robust housing market
76% of households have a garden
Consumers are confident
Companies and brands
Stimulating interest with pop-ups
Apps to visualise products in your own home
Developing new store formats
B&Q closes fitting services, while others bolster their offer
Fashion retailers adding homewares
Development of low-cost housing
Amazon adds a click to order handyman service
Smart home developments
IKEA has introduced a very low-priced kitchen
The consumer
41% did some decorating last year
Figure 5: Consumer spending on the home, November 2018
Optimistic outlook for spending on the home
Figure 6: Intentions to spend on the home, November 2018
Enjoying the place where they live
Figure 7: Reasons for spending on the home, November 2018
Visiting stores is top for providing inspiration
Figure 8: Looking for inspiration for the home, November 2018
People look for quality and range
Figure 9: Factors influencing choice of retailer for the home, November 2018
Home is a place for leisure
Figure 10: Attitudes regarding the home, November 2018
Four main target groups for spending on the home
Figure 11: Customer typologies, the home, November 2018
What we think
ISSUES AND INSIGHTS
Is there a boost to spending on the home because of smart connected 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
Will there be an ‘improve not move’ trend if economic uncertainty influences consumer confidence?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending on the home will continue to grow
Strong housing market has helped growth
Diverse market with large spread of segments
Furniture spending fuelled by styling and better functionality
The garden as a ‘room’
Furniture and homewares specialists capture 41% of spending
Online shopping accounts for an 18.5% market share
Growth in household numbers and strong housing market drive demand
Robust housing market
76% of households have a garden
Consumers are confident
MARKET SIZE AND FORECAST
Robust market growth continued in 2018
Interest-free credit will encourage consumers to spend
Figure 12: Consumer spending on the home, 2013-23
Figure 13: Consumer spending on the home, 2013-23
Forecast methodology
MARKET SEGMENTATION
46% of spend is on furniture and floorcoverings
Figure 14: Consumer spending on the home, by segment, 2018
Appliances have seen the highest levels of growth
Figure 15: Consumer spending on the home, by segment, 2013-18
CHANNELS TO MARKET
Furniture and homewares retailers capture 41% of spending
Figure 16: Channels to market, goods for the home, 2018
Online selling is growing fast
MARKET DRIVERS
0.9 million more households by 2023
Figure 17: UK households, 2013-23
Gradual decrease in average household size
Figure 18: Average household occupancy, UK, 2012-22
Encouraging first-time buyers
Patterns of home ownership are changing
Owner-occupiers account for 63% of households
Figure 19: Number of households in Great Britain, by tenure, 2013-16
31% of 25-34s are in privately rented property
Figure 20: Household tenure, by age, 2018
23% of private renters moved in the last year
Figure 21: Length of time in current home, by tenure, November 2018
Owner-occupiers feel better off
Figure 22: Household financial situation, by tenure, November 2018
The housing market has plateaued
Figure 23: Property transactions with value £40,000 or above, UK, 2013-18
Easy to find second-hand items
Potential for rental market for household goods
Surplus space at home creates opportunities for a wider range of interiors and usage
Figure 24: Usable floor area, by tenure, England, 2015
76% of homes have a garden
Figure 25: Presence of gardens, balconies and allotments, April 2018
Consumer confidence fairly steady despite concerns about the economy
Figure 26: How consumers describe their financial situation, October 2015-2018
Credit card debt continues to rise
Figure 27: Monthly amounts outstanding of monetary financial institutions' Sterling net credit card lending to individuals, seasonally adjusted, January 2014-September 2018
Interest in the smart home is growing
Figure 28: Ownership of smart/connected devices, April 2018
Households show enthusiasm for smart home devices
Figure 29: Interest in buying smart/connected devices, non-owners, April 2018
Figure 30: Functions that consumers interested in voice-controlled speakers are most likely to use, any interest, April 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Stimulating interest with pop-ups
Apps to visualise products in your own home
Developing new store formats
B&Q closes fitting services, while others bolster their offer
Fashion retailers adding homewares
Development of low-cost housing
Amazon adds a click to order handyman service
Smart home developments
IKEA has introduced a very low-priced kitchen
COMPETITIVE STRATEGIES
New ways to engage with shoppers for the home
Visualising a purchase in your own home
Figure 31: IKEA Place app, 2018
Developing new store formats…
…Argos and Habitat moving into Sainsbury’s…
…IKEA’s new planning studios…
Figure 32: IKEA, Tottenham Court Road planning studio, 2018
…DFS has a small store trial
Engaging with real shoppers
Figure 33: DFS, example of sofa in a real home, 2018
Figure 34: IKEA, products in real homes, 2018
Promotional strategies
The endless aisle
Fashion retailers adding homewares
The value customer
End-to-end services
Looking after the planet
LAUNCH ACTIVITY AND INNOVATION
Modular housing that can grow
Low-cost modular housing
Figure 35: L&G prefabricated 1-bed flat, Richmond, 2018
Figure 36: L&G 2-bedroomed modular home, 2018
Amazon adds a click to order handyman service
Smart home developments
IKEA has introduced a very low-priced kitchen
Figure 37: IKEA, kitchenette, 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
High level of engagement with spending on the home
Moving house stimulates spending on the home
Plenty of plans to keep on spending
Personality and enjoyment shape spending patterns
Wide variety of sources of inspiration
People want quality and choice
A place to feel proud of
CONSUMER SPENDING ON THE HOME
41% decorated their home last year
Targeting social tenants
Even private renters decorate their homes
How the time after a move affects spending
Figure 38: Consumer spending on the home, November 2018
INTENTIONS TO SPEND ON THE HOME
Slightly more spending expected in 2019
Figure 39: Intentions to spend on the home, October 2017 and November 2018
Optimistic outlook for spending on the home
Figure 40: Intentions to spend on the home, November 2018
REASONS FOR SPENDING ON THE HOME
Different feelings for men and women
How attitudes of private renters differ from owner-occupiers’
Making it feel like their own
Figure 41: Reasons for spending on the home, November 2018
LOOKING FOR INSPIRATION FOR THE HOME
Visiting stores is top for providing inspiration
Retailers’ own websites more used than Pinterest
Shoppers seek assurance
Visualising items in your own home
Figure 42: Looking for inspiration for the home, November 2018
FACTORS INFLUENCING CHOICE OF RETAILER
People look for quality and range
Figure 43: Factors influencing choice of retailer for the home, November 2018
ATTITUDES REGARDING THE HOME
Home is a place for leisure
Figure 44: Attitudes regarding the home, November 2018
TARGET CUSTOMERS FOR SHOPPING FOR THE HOME
Four main types of consumer
Figure 45: Customer typologies, the home, November 2018
Characteristics of each target group
Social – Young, sociable adults in private rented property
Private – older, less well off and uninterested in their homes
Proud – over-35s, love their homes and enjoy TV time together
Creative – young families, making, growing and decorating
Figure 46: Reasons for spending on the home, by target group, November 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology