The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
The International Home + Housewares Show [IHHS] is one of the most ambitious events of its kind, providing buyers and media from around the globe a sneak peek into the new products and innovations that will be driving the conversation in the industry for the rest of the season. While attending the conference and other media events timed to coincide with the show, Erika Sirimanne, Head of Home and Garden Research at Euromonitor International, observed a number of trends that are likely to have a big impact on the homewares and home furnishings industry in the future.
Asia Pacific overtook Western Europe as the leading region for homewares and home furnishings in 2016, and together with North America, these three regions are the largest globally. The top five markets for homewares and home furnishings in 2016 were the US, China, Germany, Japan and the UK. China represents the major engine of growth behind Asia Pacific’s dynamism. While China has been the second ranked market for a number of years, over time the market will account for a larger and larger portion of the US’s sales, more than 80% in 2021. While housing affordability issues impact demand in North America, the “middle class retreat” in Western Europe drives interest in private label homewares brands. On the other hand, growth in real incomes has resulted in premiumisation in Asia Pacific, with consumers trading up to higher value products.
Global urbanisation rates continue to rise, with roughly 63% of households living in an urban setting in 2017. Along with rising urbanisation, more and more households are residing in apartments, i.e. more than one third of the world’s population in 2017. Apartment living means smaller living spaces and demand for storage solutions, driving positive growth for indoor plants, sofa beds and storage furniture. In contrast, apartment living means fewer gardens and less storage space for bulky items, putting negative pressure on lawn mowers, outdoor furniture, power tools and garden sheds. Capitalising on rapid urbanisation in India, e-tailers such as Pepperfry, Furlenco and Rentickle offer furniture rental services to urban millennials. These companies are tapping into the nomadic nature of millennials, as well as their demand for portable and versatile products.
Globally, household access to the internet has grown exponentially, with 51% of households having broadband internet access in 2017. Similarly, smartphone possession has mushroomed, with 65% of the world’s population possessing a smartphone in 2017. Digital innovation continues to disrupt homewares and home furnishings, in the form of augmented reality (AR) and online sales. Online sales for homewares and home furnishings grew by a 17% CAGR between 2011 and 2016 to reach USD 45.5 billion. More and more players are expanding their online presence, while key players such as Wayfair, Ashley Furniture and Ikea introduced augmented reality apps in 2017. It is clear that omni-channel strategies are quickly transitioning from a nice-to-have to a necessity. US e-commerce sleep products company, Casper, recognises the importance of reaching consumers in-store and has recently introduced its own pop-up stores and partnered with Target for in-store mattress sales.
Millennials accounted for 28% of the global population in 2017, while baby boomers accounted for 19%. Millennials are more prevalent in developing regions, such as Asia Pacific, Latin America and Middle East and Africa. Conversely, baby boomers feature more strongly in North America, Western Europe and Eastern Europe. Unlike their parents, millennials are digital natives, representing the major push behind the demand for online sales. Cash- and time-strapped millennials also drive Do-It-For-Me trends. Millennials typically face housing affordability issues and are more likely to rent their homes, rather than own them (aptly labelled Generation Rent). In 2017 Ikea partnered with Virgil Abloh to produce a collection targeted at millennials moving into their first homes, tapping into the nomadic nature of and the value placed on art and design by millennials. Moreover, Ikea acquired gig economy start-up, TaskRabbit, in 2017. TaskRabbit allows users to hire contractors for basic tasks, such as cleaning homes and assembling furniture. Ikea recognises the shift towards Do-It-For-Me behaviour and is taking steps to mitigate this through its TaskRabbit acquisition.
Homewares and home furnishings brands might be concerned with looking old-fashioned and therefore continue to hold the attention of marketers. Nonetheless, while millennials are a key consumer segment, brands should not ignore baby boomers. Baby boomers exhibit higher incomes and therefore a desire to spend on higher value items. Unlike consumer industries like electronics and apparel, baby boomers are also likely to be influencers when it comes to kitchen and cookware products. Often baby boomers possess cooking and kitchen knowledge that millennials simply lack, making them an attractive segment for brand owners and retailers alike.
To download Euromonitor’s ““Path to Purchase Around the World: How Consumers Shop for Housewares” presentation from the International Home + Housewares Show, visit: http://go.euromonitor.com/EV_18_03_11_ChicagoIHHS_FormPage.html.