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Furniture Retailing - US - July 2016

"Nearly three quarters of purchases are conducted in the store where shoppers can personally experience products. However, growth is coming from online despite many consumers remaining reluctant to buy furniture using this method."

- Diana Smith, Senior Research Analyst - Retail & Apparel

This report will cover the following areas:

  • Furniture market outlook appears promising
  • Everyone wants a bigger piece of this highly fragmented category; leads to continual price promotion
  • Growth is coming from online, but many averse to trying it

This report focuses on the furniture market and how consumers shop the category. It offers sales trends, a snapshot of recent initiatives from key furniture retail players in the US market, as well as a detailed exploration of consumers’ attitudes, usage and shopping behaviors in this category. The following furniture categories are included in this report:

  • Upholstered furniture
  • Sleep equipment, including mattresses, springs, cots, waterbeds, etc.
  • Sleep sofas, daybeds, futons, and other dual-purpose pieces
  • Living room, dining room, and bedroom furniture (excluding mattresses/sleep equipment and sleep sofas/other dual-purpose pieces)
  • Office furniture, including computer-related furniture
  • Outdoor/patio furniture
  • All other furniture including kitchen, dinette, etc.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Furniture market outlook appears promising
            • Figure 1: US consumer expenditures and fan chart forecast for furniture, at current prices, 2011-21
          • Everyone wants a bigger piece of this highly fragmented category; leads to continual price promotion
            • Figure 2: Home furnishings retailers and general merchandisers shopped for furniture, April 2016
            • Figure 3: Other channels shopped for home furnishings, April 2016
          • Growth is coming from online, but many averse to trying it
            • Figure 4: Method of purchasing, April 2016
            • Figure 5: Attitudes toward buying furniture online, April 2016
          • The opportunities
            • Focus on the young affluents, and don’t forget the men
              • Figure 6: Timing of last purchase – Within the last two years, by key demographics, April 2016
              • Figure 7: Method of purchasing, by select demographics, April 2016
            • Build the brand; reputation matters
              • Figure 8: Reasons for choosing furniture retailer, April 2016
            • Be at the point of influence
              • Figure 9: Furniture Influencers, April 2016
            • What it means
            • The Market – What You Need to Know

              • Furniture market on the upswing
                • More households mean more space that needs furnishing
                  • Housing market still trying to make a comeback
                  • Market Size and Forecast

                    • Market continues on a steady path of growth
                      • Figure 10: US consumer expenditures and fan chart forecast for furniture, at current prices, 2011-21
                      • Figure 11: US consumer expenditures for furniture, at current prices, 2011-21
                  • Market Breakdown

                    • Category marked by fragmentation
                      • Figure 12: US consumer expenditures for furniture, by type, at current prices, 2015
                      • Figure 13: US consumer expenditures for furniture through furniture stores and other retailers, at current prices, 2011-16
                      • Figure 14: Top 10 US furniture retailers per Furniture/Today, 2015
                  • Market Factors

                    • Confidence levels high despite signs of slowing momentum
                      • Figure 15: Consumer confidence and unemployment, 2007-April 2016
                    • Multigenerational living on the rise
                      • More homes, more space but less people per home
                        • Figure 16: US households, 2005-2015
                      • Median household income on the decline
                        • Housing market shows signs of improvement, but younger consumers still opting out
                          • Trend toward renting over owning
                            • Figure 17: US households by tenure, race and Hispanic Origin, 2005-14
                          • Minimization is a growing trend
                          • Key Players – What You Need to Know

                            • Bedding specialists should be sleeping well
                              • Rental segment remains a small part of the total market
                                • Virtual and augmented reality will change how people shop for furniture
                                • What’s Working?

                                  • Bedding specialists have a reason to sleep well
                                    • Technology comes to the market
                                      • Bed-in-a-box options find loyal fans
                                        • Companies seek endorsement from athletic icons and organizations
                                        • What’s Struggling?

                                          • Rental furniture retailers not a main threat
                                            • In their words
                                            • What’s Next?

                                              • Virtual and augmented reality technology set to disrupt
                                                  • Figure 18: Wayfairview product demonstration, June 2016
                                              • The Consumer – What You Need to Know

                                                • Key buyers skew young, male and more upscale
                                                  • Most purchases for the living room and bedroom
                                                    • Do I need it or do I just want it?
                                                      • Home furnishings stores reign, but they better watch out
                                                        • Growth is coming from online
                                                        • Timing of Last Purchase

                                                            • Over half of consumers purchased furniture recently
                                                              • Figure 19: Timing of last purchase - furniture, April 2016
                                                            • Younger affluents reign as key buyers
                                                              • Figure 20: Timing of last purchase – Within the last two years, by key demographics, April 2016
                                                            • Homeownership and household size make a difference
                                                              • Figure 21: Timing of last purchase – Within the last two years, by primary residence and household size, April 2016
                                                          • Consumer Segmentation

                                                              • Value Shoppers (VS)
                                                                • Brand Name Shoppers (BNS)
                                                                  • Potential Online Shoppers (POS)
                                                                      • Figure 22: Consumer segmentation custom groups, by select demographics, April 2016
                                                                  • Types of Furniture Purchased

                                                                      • Purchases align with rooms where most at-home time is spent
                                                                        • Figure 23: Types of furniture purchased, April 2016
                                                                      • Always a buyer in the market
                                                                        • Figure 24: Types of furniture purchased, by custom groups, April 2016
                                                                      • Purchase drivers likely to vary between homeowners and renters
                                                                        • Figure 25: Types of furniture purchased, by primary residence, April 2016
                                                                      • Everybody needs a mattress
                                                                        • Figure 26: Household furnishings purchased, February 2015 – March 2016
                                                                      • Spending is highest for mattresses and couches
                                                                        • Figure 27: Mean amount spent on household furnishings, February 2015-March 2016
                                                                    • Consumer Style Preferences

                                                                      • Traditional/classic preferred by almost a rate of 2:1, but Luxury growing
                                                                        • In their words
                                                                        • Reasons for Buying Furniture

                                                                            • New furniture can be one of life’s little luxuries
                                                                                • Figure 28: Reasons for buying furniture, April 2016
                                                                              • Younger consumers exhibit more ‘want-based’ buying behavior
                                                                                • Figure 29: Reasons for buying furniture, by age, April 2016
                                                                              • Messages about rewards could increase penetration among Blacks
                                                                                • Figure 30: Reasons for buying furniture, by race and Hispanic origin, April 2016
                                                                            • Retailers Shopped

                                                                                • Traditional home furnishings and broad-reaching merchants
                                                                                  • Retailer preference reflects value-conscious consumer mindset and a drive for convenience
                                                                                    • Figure 31: Retailers shopped for furniture, April 2016
                                                                                    • Figure 32: Retailers shopped for furniture, by household income, April 2016
                                                                                  • Other channels/retailers shopped
                                                                                    • Furniture-focused retailers face tough competition
                                                                                      • Figure 33: Other channels/retailers shopped for home furnishings, April 2016*
                                                                                    • Recent happenings
                                                                                    • Reasons for Choosing Furniture Retailer

                                                                                        • Consumers seek variety and service when seeking a furniture retailer
                                                                                          • Figure 34: Reasons for choosing furniture retailer, April 2016
                                                                                        • Image and reputation matter
                                                                                          • Figure 35: Opinions about online reviews, January 2015
                                                                                        • Retailers can differentiate on service
                                                                                          • Figure 36: Service-oriented reasons for choosing furniture retailer, by generation, April 2016
                                                                                        • One out of four consumers pay attention to finance offers
                                                                                          • Figure 37: Agreement to finance offers as a reason for choosing furniture retailer, by select demographics, April 2016
                                                                                        • In their words
                                                                                        • Method of Purchasing

                                                                                            • Consumers still prefer to shop in-store, but online shopping is rising
                                                                                              • Figure 38: Method of purchasing, April 2016
                                                                                            • Millennials and men driving the online movement
                                                                                              • Figure 39: Method of purchasing, by generation, April 2016
                                                                                            • Shopping process is slow and deliberate
                                                                                            • Attitudes toward Buying Furniture Online

                                                                                                • Fear and scepticism deter potential online buyers
                                                                                                  • Figure 40: Attitudes toward buying furniture online, April 2016
                                                                                                • Nearly one fifth adamant about not buying online
                                                                                                  • Figure 41: Attitudes toward buying furniture online, by gender and age, April 2016
                                                                                                • Consumer segments open to buying online
                                                                                                  • Figure 42: Attitudes toward buying furniture online, by consumer segments, April 2016
                                                                                                • Customer service and sales assistance online is important, especially to Hispanics
                                                                                                  • Figure 43: Attitudes toward buying furniture online, by Hispanic origin, April 2016
                                                                                                • In their words
                                                                                                  • Open-minded
                                                                                                    • Sceptical of buying online
                                                                                                      • It depends
                                                                                                      • General Attitudes and Behaviors toward Buying Furniture

                                                                                                          • Searching for the “right” item and willing to pay for it
                                                                                                              • Figure 44: Attitudes and behaviors toward buying furniture, April 2016
                                                                                                            • Men and women vary in their shopping approach
                                                                                                              • Figure 45: Select attitudes and behaviors toward buying furniture, by gender, April 2016
                                                                                                            • Nearly one third open to secondhand furniture market
                                                                                                                • Figure 46: Attitudes toward secondhand furniture, by key demographics, April 2016
                                                                                                              • The secondhand market in their words
                                                                                                              • Influencers

                                                                                                                  • Two thirds of buyers influenced by media
                                                                                                                    • Figure 47: Influencers, April 2016
                                                                                                                  • All consumer segments very actively seek out ideas and inspiration
                                                                                                                    • Figure 48: Influencers, by consumer segmentation, April 2016
                                                                                                                  • Licensing is booming
                                                                                                                    • Are these companies missing the boat?; the role of micro-influencers
                                                                                                                      • What about social media? Does it play a role?
                                                                                                                      • Appendix – Data Sources and Abbreviations

                                                                                                                        • Data sources
                                                                                                                          • Sales data
                                                                                                                            • Fan chart forecast
                                                                                                                              • Consumer survey data
                                                                                                                                • Consumer qualitative research
                                                                                                                                  • Direct marketing creative
                                                                                                                                    • Abbreviations and terms
                                                                                                                                      • Abbreviations
                                                                                                                                        • Terms
                                                                                                                                        • Appendix – Market

                                                                                                                                            • Figure 49: US consumer expenditures for furniture, at inflation-adjusted prices, 2011-21
                                                                                                                                            • Figure 50: US consumer expenditures for furniture, by type, at current prices, 2014-15
                                                                                                                                            • Figure 51: US consumer expenditures for furniture, by channel, at current prices, 2014-15
                                                                                                                                          • Distribution channel definitions
                                                                                                                                              • Figure 52: Population by race and Hispanic origin, 2011-21
                                                                                                                                              • Figure 53: Median household income, in inflation-adjusted dollars, 2004-14
                                                                                                                                              • Figure 54: Seasonally adjusted US homeownership rates, 2005-Q1 2016
                                                                                                                                              • Figure 55: Homeownership rates, by age of householder, 2005-Q1 2015*
                                                                                                                                          • Appendix – Key Players

                                                                                                                                            • Example ads
                                                                                                                                              • Mass merchandisers
                                                                                                                                                • Figure 56: Target, Email ad for Pillowfort and other home goods, March 2016
                                                                                                                                              • Home furnishings retailers
                                                                                                                                                • Figure 57: Bed Bath & Beyond direct mail ad, May 2016
                                                                                                                                                • Figure 58: Crate & Barrel partial Email ad, June 2016
                                                                                                                                                • Figure 59: HomeGoods Email ad, April 2016
                                                                                                                                                • Figure 60: Ikea partial Email ad, June 2016
                                                                                                                                                • Figure 61: Pier 1 Imports partial Email ad, June 2016
                                                                                                                                                • Figure 62: Pottery Barn partial Email ad, June 2016
                                                                                                                                                • Figure 63: Restoration Hardware partial Email ad, June 2016
                                                                                                                                                • Figure 64: Wayfair.com partial Email ad, June 2016
                                                                                                                                                • Figure 65: West Elm partial Email ad, June 2016
                                                                                                                                                • Figure 66: West Elm, Email ad for local showcase event, June 2016
                                                                                                                                              • Furniture-focused retailers
                                                                                                                                                • Figure 67: Ashley Furniture Homestore, Email ad, June 2016
                                                                                                                                                • Figure 68: Value City Furniture, Email ads, June 2016
                                                                                                                                                • Figure 69: Ethan Allen, Email ad, June 2016
                                                                                                                                            • Appendix – Consumer

                                                                                                                                              • Additional qualitative
                                                                                                                                                • Rental furniture
                                                                                                                                                  • Reasons for buying
                                                                                                                                                    • Secondhand furniture
                                                                                                                                                      • Buying furniture online
                                                                                                                                                        • Payment
                                                                                                                                                          • Incentives
                                                                                                                                                            • Attributes
                                                                                                                                                              • Other data
                                                                                                                                                                • Figure 70: Household furnishings purchased, January 2011- March 2016
                                                                                                                                                                • Figure 71: Mean amount spent on household furnishings, by gender and age, February 2015 – March 2016
                                                                                                                                                                • Figure 72: Home furnishing stores shopped, past three months, February 2015 – March 2016
                                                                                                                                                                • Figure 73: Frequency of shopping at home furnishing stores shopped, past four weeks, February 2015 – March 2016

                                                                                                                                                            Companies Covered

                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                            Furniture Retailing - US - July 2016

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