A profitable sector that earns hundreds of billions in revenue globally, the home furniture industry will continue to grow in the coming years. Read on to find out what trends will shape the market.
1. Ready-to-Assemble (RTA) Furniture
RTA furniture has history dating back to the 1940s when the first knockdown sitting furniture was patented, and this innovation was later followed by a table that could be assembled at home in the 1950s. The concept gained significant traction in 2010, and this type of furniture has since been in high demand because of its convenience.
RTA products offer a quick solution for homeowners and renters to furnish their homes with ease and at a fraction of the cost of traditional furniture. Because the design only requires the manufacturing of parts, furniture companies have the ability to store and display products using limited space. They also save on manufacturing time because assembly is completely removed from their process, thus reducing expenditures.
2. On-Shoring Production
In an effort to minimize expenses, many manufacturers have transitioned to on-shoring business processes, bringing production back to the United States because transportation has become more affordable. The movement initiated in 2014 and is expected to grow in the coming years, given rising labor costs in the Asia-Pacific region.
In fact, the Triad Business Journal reported that furniture companies found the change led to increased access to a skilled workforce, improved supply-chain lead time, and better proximity to customers. The hope is that on-shoring will enhance local and regional economies over an extended period of time. In 2015 alone, the switch indicated positive growth.
3. Sustainable Living
Environmental impact is a significant factor in consumers’ purchasing decisions. Furniture manufacturers should continue to anticipate consumers’ desire for eco-friendly solutions, such as materials made of engineered woods and other resources that simplify living sustainability.
Ashley Furniture Industries, Inc., for instance, takes a “green” approach by focusing on recycling, reusing, and replenishing. The manufacturer integrates engineered wood, which is 100 percent recycled, into its products, and the company has also boosted efficient use of tree materials by 32 percent to reduce waste. Other measures promoting sustainable living include the recycling of wood by-products and sheet metal, as well as reducing fuel consumption of its idle trucks to 90 percent of the industry norm.
4. Space-Saving, Portable Furniture
Particularly appealing to people living in small apartments and homes, furniture design that takes into account economy of space will remain an appealing trend through 2020, according to Technavio. Home furnishings that serve a dual purpose will perform better on the market.
A good example of this type of multi-purpose item is a storage box. If it is made of sturdy material, the compact product can store personal belongings and then be used as a table or chair, which makes more efficient use of the furnishing and saves space. Often times, portable furniture also comes with a lower price tag, a benefit to consumers.
5. Technological Innovation
The move to online retail was the initial technological innovation boosting furniture sales in the industry. Now, manufacturers are looking to increase their offerings with more technology-based solutions. To bring ease to consumers’ lifestyles, an influx of furniture lines capable of connecting with “smart” equipment should be expected to grow in the coming years.
Catering to general consumers, furniture will be designed with charging docks to keep cell phones, tablets, and other electronic devices charged as needed. Specialty lines leveraging technology to enhance customer experience are being developed for the health care field. Specifically, designers are working to create furniture that monitors patients’ health as well as transmits data to medical care providers to update histories.
6. Home Office Needs
Telecommuting is a growing trend worldwide. With 3.7 million people in the United States spending at least half their time working from home as of 2014, the trend shows no sign of subsiding. Marketresearch.com predicts global home office furniture purchases will increase by a compound annual growth rate (CAGR) of 5.58 percent between 2014 and 2019.
For this reason, not only will a growing demand for desks and office chairs occur, but the sale of organizational pieces such as filing cabinets will also rise. To ensure a home remains a suitable living space despite having an office used for business purposes, the website further forecasts a sales boost of products that hide office equipment.
7. Luxury Home Furnishings
Luxury brands offerings products on the global market will see promising returns in places such as Europe, India, and China. Stateside, selling high-end furnishings to affluent demographics is much tougher. American customers have altered the meaning of luxury to not only include price, but to also take experience into consideration. Offering an online platform that is easy to navigate and provides a quick delivery turnaround positions companies to make more sales.
Additionally, companies selling luxury brands can increase their sales potential by targeting younger individuals earning $100,000 to $250,000, also known as “high-earners-not-rich-yet,” or HENRYs. Classic products that have a sense of simple elegance work well with individuals in this group because they value quality, not elitism. Overall, the outlook for furniture manufacturers aiming to sell high-ticket items is good. Globally, this sector of the furniture industry will likely grow by a CAGR of four percent by 2019.