Table of Contents
- Introduction
- The Current State of the Home Furnishings Industry in 2024
- Ecommerce Furniture Trends to Follow in 2024
- Conclusion
- Home Furnishing Trends FAQ
Introduction
The global pandemic provided the home furnishings industry with an unexpected boost as people focused on improving their living spaces during lockdowns. By September 2020, spending on home furnishings in the US surged to an unprecedented $10.7 billion. However, the aftermath has been turbulent, with supply chain disruptions, raw material shortages, a housing market recession, and reduced consumer spending impacting the industry significantly. Prominent retailers like Z Gallerie, Noble House Home Furnishings, and Mitchell Gold + Bob Williams have even filed for bankruptcy.
Despite these challenges, 2024 offers a landscape full of opportunities for retailers who can adapt to shifting consumer demands and market trends. This blog post delves into the key ecommerce trends shaping the home furnishings industry in 2024 and offers insights on how retailers can attract and retain their target customers.
The Current State of the Home Furnishings Industry in 2024
The hit to the housing market in 2023 had a profound impact on the home furnishings industry. Mortgage rates peaked at nearly 8%, and single-family home prices saw a median increase of 8.5% within a single quarter. Some regions even experienced a 25% spike in home prices, leading to the lowest home sales figures in 13 years. This had a ripple effect on home goods retailers, with big names like Ashley Furniture reporting a 21% decrease in gross merchandise value in the early months of 2023.
However, by the end of 2023, mortgage rates had slightly decreased, and house prices began to stabilize, leading to a modest recovery for furniture sales. Wayfair, for instance, recorded a 0.4% sales increase from the previous quarter. Experts are cautiously optimistic that 2024 will bring more stability to the housing market, which should positively affect the furniture and home furnishings sector.
Ecommerce Furniture Trends to Follow in 2024
Multifunctional Furniture
As urban living continues to lean toward smaller spaces, multifunctional furniture is gaining traction. This category, valued at $8.7 billion, is projected to grow at a compound annual growth rate (CAGR) of 7.5% from 2024 through 2031. Multifunctional furniture incorporates design elements that maximize versatility and utility, catering to consumers' need for flexible living environments. Popular examples include modular sofas, extendable tables, and storage-integrated beds.
Smart Furniture
Technology's integration into everyday life has paved the way for smart furniture, combining functionality with digital convenience. This market is expected to reach $4.26 billion by 2030. Smart furniture features range from charging ports and built-in speakers to more sophisticated options like Sleep Number’s biometric sensor-equipped mattresses. These innovations not only enhance user experiences but also provide brands with valuable data to refine their products.
Personalized Product Recommendations
Artificial intelligence continues to revolutionize customer experiences by offering personalized product recommendations. Around 90% of companies leverage AI for customization, enhancing customer loyalty and sales. Retailers like Mustard Made have successfully used AI-driven personalization to increase their average order value and overall revenue. By understanding consumer behavior through browsing and purchase histories, retailers can offer curated shopping experiences that resonate with individual customers.
Sustained Growth of Online Home Furnishings Shopping
Despite an overall dip in the furniture market, online sales for home furnishings have remained strong. In 2023, consumers spent $15.4 billion on online home furnishings, and this trend shows no signs of slowing down. As brick-and-mortar sales decline, the convenience and often lower prices of online shopping continue to attract consumers. Retailers can capitalize on this by ensuring seamless, personalized, and omnichannel shopping experiences.
Augmented Reality (AR) for an Engaging Shopping Experience
Augmented Reality (AR) bridges the gap between online and offline shopping. AR allows consumers to visualize products in their own spaces, enhancing the shopping experience. Magnolia Market’s AR app, for example, provides high-fidelity 3D renderings of products, enabling customers to see exactly how items would look in their homes. This not only boosts customer confidence but also helps in reducing return rates.
Direct-to-Consumer (DTC) Brands Gaining Ground
The home furnishings market remains fragmented, with only a few major retailers dominating a significant share. This presents an opportunity for DTC brands to disrupt the market. Brands like Casper have shown how a focused approach, even with limited SKUs, can capture significant market share by offering quality and innovation. DTC brands often excel in delivering exceptional customer experiences, a critical factor in cultivating brand loyalty.
Sustainability and Purpose-Driven Goods
Consumers are increasingly prioritizing sustainability, driven by environmental concerns. Brands that focus on eco-friendly practices and transparent supply chains are more likely to attract conscientious buyers. For instance, Fabuliv emphasizes sustainability and social responsibility by using upcycled materials and supporting artisan communities. These practices not only appeal to eco-conscious consumers but also differentiate the brand in a crowded market.
Mobile Shopping Experiences
With over 65.8% of global smartphone users expected to use retail apps in 2024, mobile optimization is crucial. Retailers must go beyond mere mobile responsiveness to create intuitive, engaging mobile experiences. Monte Design's success—evidenced by a significant increase in web traffic and revenue after enhancing its mobile site—illustrates the importance of prioritizing mobile shopping.
Subscription Models
Subscription services offer a practical solution to the challenge of maintaining customer engagement and generating recurring revenue. Home furnishings retailers can create subscriptions for smaller, regularly purchased items like décor or plants. Rooted, a plant retailer, offers monthly subscription boxes tailored to customer preferences, ensuring a steady revenue stream and fostering customer loyalty.
Conclusion
The home furnishings industry, though challenged by recent economic conditions, is brimming with opportunities in 2024. By focusing on trends like multifunctional and smart furniture, personalized recommendations, sustainable practices, and advanced ecommerce technologies like AR, retailers can navigate the shifting landscape and thrive. Understanding and adapting to consumer preferences will be key to staying competitive and ensuring long-term growth.
Home Furnishing Trends FAQ
Is the home furnishing industry growing?
Yes, the home furnishing industry in the US is projected to grow, recovering from a recent downturn. In 2023, consumer spending on home furnishings was around $133.6 billion. This figure is expected to increase significantly in 2024, especially as housing market conditions stabilize.
How big is the online home furnishings market?
Online sales for home furnishings reached $15.4 billion in 2023. The global market for online home decor is expected to grow to $313 billion by 2031, indicating continued robust demand for purchasing home goods online.
What is happening in the furniture industry?
The global furniture industry is in a recovery phase, with larger retailers facing competition from agile DTC brands. Consumers are increasingly shopping for furniture online, and brands are focusing on enhancing mobile shopping experiences to cater to on-the-go shoppers.
What trends are taking place in the furniture market?
Key trends include the rise of multifunctional and smart furniture, the use of AI for personalized shopping experiences, the sustained growth of online shopping, the integration of AR to enhance the buying process, the rise of DTC brands, and a strong focus on sustainability.
What are some of the furniture industry predictions for the future?
Future predictions include better online shopping experiences powered by AI and AR, an increased focus on multifunctional and tech-integrated furniture, and continued growth of DTC brands disrupting traditional markets while emphasizing sustainable practices.
