Home and Garden 2018 Edition: Key Research Highlights
Online players look to bricks & mortar
Home and garden players continue to expand their online presence, whether that be through internet retailing, social media or augmented reality. Tapping into personalisation trends, Wayfair, Ikea and Ashley Furniture all launched augmented reality apps in 2017; offering consumers the ability to see what home furnishing products would look like in their own homes. Similarly, home and garden online sales have mushroomed since 2012 to reach USD69 billion or 6.9% of global sales in 2017. Typically, the movement has been from offline-to-online for most home and garden players, however, pure play online retailers are also contributing to industry dynamism. With its low unit prices and door-to-door delivery, e-commerce mattress company, Casper, continues to attract cash- and time-strapped urban millennials in Europe and the US. However, Casper kick-started its in-store offering through a partnership with West Elm and Target and by recently trialling pop-up stores in selected metro areas in early 2018. Omni-channel strategies are becoming increasingly important across all consumer industries and home and garden is no exception.
Why Do-It-Yourself, when you can Do-It-For-Me?
Home and garden players continue to invest marketing spend on targeting millennials; consumers that rent rather than own their own homes and tend to exhibit Do-It-For-Me (DIFM) behaviour. Recognising that millennials lack the time and skills to perform Do-It-Yourself (DIY) tasks, Ikea acquired TaskRabbit, a gig-economy start-up, in 2017. Likewise, for cultural reasons Asia Pacific consumers also continued to exhibit Do-It-For-Me behaviour, seeking out turnkey home improvement solutions and boosting demand for companies such as Tubatu.com and iKongjian.com in China. On the other hand, brand owners need to step up their game in actively engaging baby boomers, who account for a larger portion of the population in North America and Western Europe (when compared with millennials). Higher average incomes and DIY-knowledge make these consumers an attractive target market for home and garden players.
Vertical villages create urban gardening opportunities
Urbanisation rates continue to climb, boosting demand for apartment living in regions where land is scarce and therefore putting negative pressure on categories such as power tools and gardening equipment. Meanwhile, healthy eating and sustainability trends drive niche demand for urban farming and rooftop gardens. While apartment living is the norm in Asia Pacific, houses and DIY-behaviour still remain popular in less densely populated regions like North America, Western Europe and Australasia. However, rising house prices in these markets make home ownership a challenge for lower-income or younger households, turning millennials into “generation rent”.
Smart gardening grows in earnest
A shift towards apartment living means smaller living spaces and fewer gardens, boosting interest in indoor plants, including hydroponic and smart gardening systems. Smart gardening systems resonate with budding gourmet home cooks, influenced in part by TV cooking shows like MasterChef. Moreover, in Western Europe, gardens are no longer used solely for planting flowers, trees and vegetables. Increasingly, gardens are being used and perceived as an extension of the home, with consumers looking to entertain guests and cook outdoors as a result of cocooning trends.
Homewares and home furnishings: The next retail battleground
Competition is heating up in homewares and home furnishings as non-home and garden retailers muscle in on the industry. Amazon launched two new private label furniture brands and a new furniture seller programme in 2017, while Alibaba opened its Home Times store in Hangzhou, China. This is in addition to the presence of Target, Walmart and Kmart in this category, as well as fast fashion’s entrance through the likes of Zara Home and H&M Home. Homewares and home furnishings is set to become the next retail battleground in both online and offline terms.