According to FIRA’s latest Statistical Digest, US furniture and furnishings account for around 8% of the UK’s imports, while the US remains a key destination for UK exports, accounting for 14% of the UK’s total in 2011. The level of trade between the two is unsurprising – the degree of shared cultural identity alone makes the US a relatively straightforward prospect for UK exporters, and, although the market has taken a hit, it is recovering fast, writes Furniture/Today’s Raymond Allegrezza …
As is the case with any industry whose drivers include housing, solid employment, readily-available credit and consumer confidence, the US home furnishings industry has faced challenges since the Great Recession of 2007.
However, historically, this sector has been very resilient, and the domestic home furnishings sector has made slow but steady inroads as it, along with the nation, recovers. For example, in 2009, consumer spending on furniture and bedding was US$75.6b. In 2010, it grew by just under 4%, with a market value of US$78.5b. In 2011, it posted an additional 1.9% increase, placing the market at US$80.1b. Last year, the US Department of Commerce estimated the domestic industry at US$84.2b.
With an eye toward the future, Furniture/Today predicts that in 2016, consumers will spend US$96b on furniture and bedding, representing a 20.1% increase over 2011’s US$80.1b market.
In terms of where consumers are buying their furniture and bedding, traditional furniture stores are still the channel of choice with shoppers, accounting for 40% of those sales transactions.
However, it should be noted that in 2008 traditional furniture stores had accounted for 50% of all those sales. As with other types of retail, traditional furniture stores are being challenged by online retailers, lifestyle stores, big-box stores such as Costco and Sam’s Club, as well as from manufacturer-branded stores such as Ashley HomeStores, La-Z-Boy stores, Bassett stores and others.
“To entice consumers, many home furnishings retailers have fallen back on events-driven marketing”
While there are scores of sub-segments, the major categories in the US home furnishings market are upholstered furniture (which includes stationary and motion furniture) and case goods (which includes wooden furniture for the bedroom, dining room, home entertainment areas, home office areas, and so on).
Furniture/Today’s Get Smart Quick Guide indicates that in 2011, stationary sofas/sofabeds represented a share of US$12.1b, and about 15% of all furniture sales. Those numbers rise when one adds in motion sofas, representing another 5% of sales and US$43.6b. Case goods, including adult bedroom furniture, children’s furniture, dining furniture (both formal and casual), office furniture, entertainment furniture, curios and occasional tables represent over US$30b and about 49% of the total sales picture.
Even so, in recent years, upholstery has continued to show stronger sales patterns than case goods. Observers agree that this is because upholstered furniture is largely used in the more public rooms of the home, such as the living room and dining room. Also, these products are covered in either fabric or leather, and these materials’ colours, patterns and styles tend to change more often than with case goods. Most recently, perhaps as a measure against perceived uncertainty in China, there has been a renewed interest in upholstery made in the US.
However, colours, patterns and a growing interest in domestic upholstery are not the only things changing in the home furnishings sector. Consumers, armed with seemingly endless information found on the internet, have become better informed – and often more demanding – as they shop for furniture and bedding.
Technology, in the form of smartphones, has helped to escalate this era of the warrior-consumer, who often uses a smartphone while in one retailer’s store to compare prices with its competitors.
“Furniture/Today predicts that in 2016, consumers will spend US$96b on furniture and bedding, representing a 20.1% increase over 2011’s US$80.1b market”
To entice consumers, many home furnishings retailers have fallen back on events-driven marketing, which, simply put, seeks to drive shoppers into the store in response to specific sales events. This has proven to be a double-edged sword for many retailers. While events sales do tend to boost traffic, retailers have struggled to get the shopper back in the store during non-sale times. To create more of a constant traffic pattern in the stores, many retailers have recently remodelled and refreshed their stores in hopes of creating more appealing in-store experiences for and with their customers.
Raymond Allegrezza is the editor-in-chief of Furniture/Today, the leading newspaper for the US furniture and furnishings industry, and a member of the International Alliance of Furnishing Publications (IAFP).
2012, month by month
According to Dana French, in the Furniture/Today Retail Planning Guide 2012: “The US consumer spent at retail last year, even amid the contentious presidential election, the imminent fiscal cliff, stubborn gas prices and too high unemployment rates.
“Furniture/Today is estimating solid furniture and mattress demand at retail for 2012 as a whole, hitting US$84.2b for the year. That represents an increase of 5.1% from US$80.1b in 2011 and an increase of 8.8% from 2010’s total sales of $77.4b.
“Retail sales started the year strong in January and February, dipped in March and rebounded during the early summer months. Retail sales in August and September, buoyed by back-to-school sales, Apple’s iPhone 5 and new car sales, had their best consecutive sales months since late 2010. Consumer confidence was up – the housing industry finally started to show signs of recovery, and holiday sales forecasts, released in September and early October, were cheery, too, ranging between increases of 3-4% for the year.
“Then came Hurricane Sandy. US Census Bureau figures pegged October overall retail sales down 0.3% from September. October’s sales in furniture and home furnishings stores decreased 2.6% for the month, while total non-store retailers, online and via catalogues, rose 7.2% for the month.
“Even with the October slowdown, consumer confidence inched even higher in November and the National Retail Federation (NRF) reported retail sales for the four-day Thanksgiving holiday weekend up 12.8% over 2011. One fifth of all Black Friday shoppers purchased home decor or home furnishings, per the NRF.”
Urban growth
“The top 15 major markets in the US garnered furniture and bedding retail sales of US$27.2b in 2012 and accounted for nearly one third of total sales,” writes Dana French in the Furniture/Today Retail Planning Guide 2012.
“The US Office of Management and Budget defines a major metropolitan statistical area as one containing a core urban area with a population of 50,000 or more. The New York City metro, the nation’s largest, sold US$5.1b worth of furniture and bedding last year, and alone accounted for 6.1% of all sales. New York pulled in nearly US$2b more in sales than the second largest market, Los Angeles. 2012 sales for greater LA were US$3.1b and are projected to grow by 20.3% over the next five years to hit US$3.8b.”
Distributor share
“The manufacturer-branded furniture store channel, led by number one retailer Ashley Furniture HomeStores, maintained its market share last year, accounting for 7% of all furniture and mattresses sold,” writes Dana French, in the Furniture/Today Retail Planning Guide 2012.
“In 2011, Ashley garnered $2.58b in furniture and bedding sales through 434 stores, up 12.2% from 2010 sales of $2.30b. Lifestyle furniture stores experienced a market share increase in 2011, going from a 6% share in 2010 to 7%. Ikea led the charge with furniture and bedding sales of $1.75b, followed by Williams-Sonoma, selling $1.10b worth of product under the banners of Pottery Barn, Pottery Barn Kids, PBteen, West Elm, Williams-Sonoma and Rejuvenation.
“Traditional furniture stores lost one percentage point of share over the past year, decreasing from 40% in 2010 to 39% in 2011. While the largest players within this channel, including Rooms To Go, the Berkshire Hathaway stores and Raymour & Flanigan, continue to grow, the smaller independent stores still struggle.
“In 2008, traditional furniture stores owned a 50% market share. The industry’s largest furniture stores, Furniture/Today’s exclusive Top 100, accounted for 34% of all furniture and bedding sold in 2011, together selling $27.26b. The Top 100 ranks the leading players within the traditional furniture, manufacturer- branded and lifestyle furniture channels.
“The direct-to-consumer channel, including retailers with primary distribution through the internet, catalogues, television and home parties, accounted for an estimated 10% of all furniture and bedding sales in 2011, selling product worth approximately $8b. The direct channel’s 10% share is a one percentage point gain from its 9% share in 2010.
Online-only heavyweights include Wayfair, with 2011 furniture and bedding sales of $300m, as well as Hayneedle, Amazon and Overstock, and growing flash sales sites such as Gilt Group, Rue La La, One Kings Lane and HauteLook.
“Designers also experienced a bump in share last year, moving from 8% of all furniture and bedding sales in 2010 to 9% in 2011. The design channel includes direct sales through national, regional and local designers, as well as design centre sales.
“Discount department stores maintained its overall 7% market share. Wal-Mart, the number two retailer and second only to Ashley Furniture HomeStores, pulled in nearly $2b in 2011 furniture and bedding sales. Target sold $1.34b worth of furniture last year and Big Lots sold $883m worth of furniture and mattresses.
“The department store channel’s market share slipped one percentage point from 3% to 2%, mostly due to JC Penney’s downturn. Penney’s furniture and bedding sales decreased 19.5% in 2011 to $475m. The Plano, Texas-based department store closed its catalogue and outlet operations and has struggled to connect with consumers since the recession.
“The largest department store, Macy’s, realised 2011 furniture and bedding sales of $1.08b, an increase of 5.9% over 2010 sales. A rising star within the ‘other’ channel is Indianapolis-based hh gregg. The appliance and electronics specialist sold an estimated $40m worth of mattresses in 2011 and this November added Ashley-branded furniture, including upholstery, occasional tables and consoles, to all of its 228 stores,” concludes Dana.
Imports/exports
According to Furniture/Today, the largest source countries of US household furniture imports in 2012 were China (up 8% from 2011 to US$9869.2m), Vietnam (up 24% from 2011 to US$1932.6) and Canada (up 2% from 2011 to US$874.7m).
The largest buyers of US household furniture exports in 2012 were Canada (down -2% from 2011 at US$1291.2), Mexico (up 23% from 2011 at US$132.8m) and China (up 10% from 2011 at US$74.4m). The UK was the fourth largest importer (up 2% from 2011 at US$52.3m).
Events
The largest US exhibition, High Point Market, takes place in High Point, North Carolina biannually in the spring and the autumn – the next editions will take place between 19-24th October 2013 and 5-10th April 2014
Las Vegas Market is another biannual event which takes place at World Market Center Las Vegas between 29th July and 2nd August 2013, then 26-30th January 2014
The design-oriented International Contemporary Furniture Fair (ICFF) will take place at New York’s Jacob K Javits Convention Center, between 17-20th May 2014
Organisations
Sustainable Furnishings Council (SFC)
North American Home Furnishings Association (NAHFA)
American Home Furnishings Alliance (AHFA)
International Furnishings and Design Association (IFDA)
