The economic growth of the last few years has enriched the Millennial generation, giving them more money to spend on furniture and more sway over the industry in general. In 2015, Richard Fry, a senior economics researcher at the Pew Research Center, published data showing that Millennials (individuals born between 1981 and 1997) now comprise the largest demographic in the US labor force. Eighty million strong, the group currently accounts for more than 33 percent of all workers in the country, surpassing the Generation Xers (people aged 35-50 in 2015) and the Baby Boomer generation (people aged 51-69 in 2015) by nearly 1 million workers.
Increase in employment opportunities for Millennials has resulted in an average annual household income of $60,000. When compared to previous generations, they are less frugal, spending nearly $600 billion yearly and donating more freely to charitable causes. Furniture sellers have noticed this growth in discretionary spending and the fact that Millennials are now the primary target for home decor and interior design marketing campaigns.
More and more recent college graduates are quickly securing jobs and looking for their first homes—and their first furniture. In fact, according to a study by Accenture, Millennials are anticipated to spend roughly $1.4 trillion (30 percent of the retail market) each year by 2020.
Another reason why Millennials are spending more on furniture is that they’re having lots of babies. In 2014, women on the older end of the Millennials age spectrum gave birth to more than half of the citizens born in the US. Accordingly, these women and their families are investing in nursery furniture. Recent surveys have revealed that gray is the most popular neutral color selected by Millennials, and blue serves as the top choice for adding accents around the home.
Along with the Boomer generation, Millennials are looking for downsized pieces. Boomers are leaving their larger homes for smaller abodes, and Millennials are entering the bottom of the housing market, with its requisite space limitations. Thus, downsizing has emerged as a trend in the furniture industry.
In addition to expanding their scaled-down selections, leading purveyors of home décor, such as Crate & Barrel and Pottery Barn, have adapted their marketing efforts to connect with Millennials on the points that matter to them: namely design and functionality. This shift includes carefully planned product catalogues of photographed display rooms, as well as more concentrated efforts to post creative and effective social media campaigns.
This focus on the shopping experience, as opposed to prioritizing a price or payment plans, is characteristic of Millennials, who grew up in the age of significant technological innovations, many of which their opinions as shoppers have influenced. As a result, Millennials have different expectations than their predecessors when it comes to buying furniture and other goods, especially online. If one retailer’s website presents a more personalized and satisfying shopping experience, Millennials are more likely to do business with it than with a competitor that has a similar product but a less user-friendly storefront.
In 2015, furniture e-commerce platform Blueport Commerce observed a 100.1 percent increase in online sales for its clients on Cyber Monday, along with a 35 percent growth in the conversion rate, or the number of website visitors that actually made a purchase. Combined, these figures outnumber the sales and conversion percentages achieved in brick-and-mortar stores on Black Friday, thus supporting the preference consumers of all demographics are gaining for online shopping.
Although the trajectory of online shopping continues to point upward, Millennials have not completely abandoned shopping in physical stores. Many consumers within this demographic have developed a system that utilizes both online and in-person modalities. For some, they look to company websites as a way to shop before actually shopping. They identify price ranges and product features in the comfort of their homes. After they have gleaned this information, they enter the retail center equipped to make the most informed purchase possible.
Within this model, furniture sellers and other businesses are expected to provide a seamless transition from the website. Changes in sale prices or availability between the website and the store itself can quickly turn customers away. Overall, Millennials are looking to make the most efficient purchase they can, while taking into consideration price, quality, and shopping experience.