With the US economy improving, furniture retailers and other business leaders in the home furnishings industry have the opportunity to attract customers with more money to spend on large-ticket items such as furniture. However, retailers must learn how to reach a customer base that is embracing e-commerce while still craving quality in-store experiences.
Retailers are also working with a varied group of consumers who differ in their shopping habits and preferences when it comes to what they value in a retail experience. Many of these consumers lean heavily on technology in their day-to-day lives and are attracted to retail brands that are both digitally savvy and in tune with their wants and needs.
Read on to learn more about how these and other major trends are currently driving the home furnishings industry.
In 2018 a strong US economy led to an increase in personal disposable income and a boost in consumer confidence. These and other factors helped the year end on a high note, including a significant increase in holiday spending. In-store and online sales during the 2018 holiday season topped $850 billion, the highest in six years. The economic growth that occurred prior to and during 2018 was also marked by low unemployment rates and a boom in housing, which is a promising trend for furniture and other home furnishings retailers.
Despite recent growth, however, not all retailers thrived. Major companies such as Sears and Mattress Firm filed for bankruptcy, while others are still struggling to find their way in the market. Going forward, experts anticipate that the furniture market will continue to grow, but retailers are still facing uncertainty due to trade issues.
Another challenge for today’s furniture retailers lies in the changing demographics that are currently shaping the retail economy. Millennials are poised to overtake baby boomers in number during 2019. This means that retailers must find ways to reach millennials and tap into their buying power, which Money Inc. reports is currently around $600 billion.
Meanwhile, a younger group of consumers known as Generation Z is beginning to enter adulthood. By 2020, this group will account for one-third of the population. Fortunately for retailers, millennials and Generation Z value similar things in a retail experience. Retail leaders who focus on digital promotion while providing personalized services will have the most success with these two consumer groups.
An Evolving Market
In addition to changing demographics, retailers must also contend with an evolving market environment, requiring the development of new strategic plans. Despite claims that retail is dead, it’s important to remember that changing consumer attitudes and behaviors have always shaped the market and led to changes in the way retailers do business.
Today, the current retail evolution is all about customer engagement rather than customer acquisition. Regardless of whether it’s online or in a brick-and-mortar store, the modern consumer prefers retail businesses that offer quality products, personalized services, and unique experiences.
Brick-and-Mortar Retail Gets Creative
In order to attract the modern consumer and compete with online giants like Amazon, brick-and-mortar retailers are focusing more on providing a top-notch in-store experience. The good news for those in furniture retail is that a large majority of consumers still prefer to purchase furniture at a physical store location. This means that today’s retailers who fail to inspire customers to visit their store are losing out on a large market segment.
Successful retailers know that getting customers into a furniture store starts with marketing, but persuading them to stay and, ultimately, make a purchase relies on other factors. Well-organized merchandizing along with displays that enable customers to easily find and physically interact with the available products increases engagement. Creative visual displays, friendly salespeople, and a welcoming atmosphere can also encourage customers to spend more time in a store, which can translate into increased sales.
Retailers Embrace Technology
Although brick-and-mortar dominates furniture retail, digital technology still plays a major role in the overall customer experience. Recent statistics show that only 14 percent of consumers prefer to purchase furniture through a website, but over 90 percent of customers will browse online for products before ultimately making a purchase. Furniture retailers are wise to use technology to improve consumers’ website experiences and get more people into their stores.
Savvy retailers are also leveraging technology to engage with consumers and learn more about their shopping preferences. Maintaining a social media presence is rapidly becoming a necessity, and collecting customer data to personalize services, marketing efforts, and product offerings is now commonplace practice.
Consumer awareness, however, is creating a demand for a balance between privacy and personalization. Rather than relying on third-party data sets, retailers are shifting to “zero-party data,” which uses technology to collect information that customers willingly share with companies.