Description

“Prior to the pandemic, the home décor category benefitted from small but stable growth which was expected to continue. However, the COVID-19 pandemic and threat of a recession are altering that trajectory. While consumers look to limit their discretionary spending, the extended periods of time at home will create desire to improve their spaces. The primary purchasing method has currently shifted online and ecommerce retailers will help the category stay afloat in the short term. Looking ahead to the longer term, economic factors may cause consumer confidence and spending to further decline – worsening the impact on home décor retail. Over time, the market is expected to rebound and return to steady growth as employment picks back up and consumers ease back into spending more on discretionary items. Brands will continue to leverage digital channels to engage with consumers and appeal to their new sense of home and wellbeing.  “

Alexis DeSalva, Retail & Apparel Analyst

This report will look at the following areas:

  • COVID-19 changes how consumers shop for home décor and halts category growth
  • Home décor will stumble, but pick back up in the years ahead
  • Consumers’ new sense of the home and wellbeing
  • Multiple types of value drive décor shopping
  • The need to evaluate items before bringing them into the home

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
        • Executive Summary

            • Market overview
              • Figure 1: Total US sales and forecast of home décor, at current prices, 2014-24
            • Impact of COVID-19 on Home Décor Retailing
              • Figure 2: Short, medium and longer term impact of COVID-19 on Home Décor Retailing, April 2020
            • Top takeaways
              • COVID-19 creates a new sense of the home and wellbeing
                • Décor purchases are dually emotionally driven and need-based
                  • Multiple types of value drive décor shopping
                    • Consumers need verification before bringing items into their home
                      • The issues
                        • COVID-19 will disrupt the competitive landscape
                          • The “can’t see it, won’t buy it” mentality challenges retailers to get creative
                            • The opportunities
                              • Focusing on functional benefits will drive future purchases
                                • Redefining the store will keep consumers engaged
                                  • What’s next
                                  • The Impact of COVID-19 on Home Décor Retailing

                                      • Figure 3: Short, medium and longer term impact of COVID-19 on Home Décor Retailing, April 2020
                                    • Opportunities and Threats
                                      • The changing landscape will benefit home décor specialists
                                        • Holistic wellness becomes a bigger priority
                                          • Figure 4: Ikea Wellness-focused Social Media Post, April 2020
                                        • Inspiring decoration through digital initiatives
                                          • Figure 5: Pottery Barn Shoppable Pinterest Pins, April 2020
                                          • Figure 6: West Elm Zoom meeting feature, March 2020
                                          • Figure 7: Marshalls Redecorating Social Post, April 2020
                                        • Impact on the home décor market
                                          • Figure 8: Total US sales and forecast of home décor, at current prices, 2014-24
                                        • How the crisis will affect key consumer segments
                                          • Consumers will see added value in convenience, particularly online
                                            • Clean shopping becomes a purchase driver
                                              • Homeowners shift focus to improving individual areas
                                                • Single adults may have a new view of their home
                                                  • How a COVID-19 recession will reshape the industry
                                                    • Inventory issues and value-seeking shoppers lead to deep-discounting
                                                      • Evolving the brick-and-mortar shopping experience
                                                        • Figure 9: IKEA’s city-center Manhattan store, April 2019
                                                      • Shifts in behavior and attitudes will impact home décor market initiatives
                                                        • Figure 10: Poshmark Home Décor Items, April 2020
                                                      • COVID-19: US context
                                                      • The Market – What You Need to Know

                                                        • Small growth is expected but current events will threaten future projections
                                                          • Understanding consumer needs will benefit retailers through uncertainty
                                                            • Diverse living situations create more sales opportunities
                                                            • Market Size and Forecast

                                                              • COVID-19 will hinder expected growth
                                                                • Figure 11: Total US sales and forecast of home décor, at current prices, 2014-24
                                                            • Market Perspective

                                                              • Impact of COVID-19 on home décor
                                                                • Consumers have a new sense of their home and wellbeing
                                                                • Market Factors

                                                                  • Diversifying household types and locations create new needs
                                                                    • Figure 12: Households, by detailed type, 2008 and 2018
                                                                    • Figure 13: Number of households in metro and nonmetro areas, 2008 and 2018
                                                                  • Home ownership rates remain stable, but renting is still more popular among young adults
                                                                    • Figure 14: Home ownership rate, by age of householder, 2018
                                                                    • Figure 15: IKEA’s city-center Manhattan store
                                                                • Key Players – What You Need to Know

                                                                  • Situation plays a role in style preference
                                                                    • The COVID-19 pandemic creates unique opportunities and significant challenges for all retailers
                                                                    • Consumers’ Preferred Décor Styles

                                                                      • Style preferences are driven by trends and lifestyle
                                                                        • Figure 16: Preferred décor styles – NET, February 2020
                                                                        • Figure 17: HGTV Chip & Joanna TV show teaser, April 2019
                                                                      • Situation influences style
                                                                        • Figure 18: Preferred décor styles, by residence and location, February 2020
                                                                      • A shared home means a shared style for married adults
                                                                        • Figure 19: Preferred décor styles, by marital status, February 2020
                                                                    • What’s Happening?

                                                                      • What’s happening as a result of COVID-19
                                                                        • Retailers’ response to COVID-19 can impact consumers’ future shopping behavior
                                                                          • Figure 20: Target taking care of its team
                                                                          • Figure 21: West Elm Zoom meeting feature, March 2020
                                                                        • What’s struggling as a result of COVID-19
                                                                          • Existing struggles likely to accelerate and expand as a result of COVID-19
                                                                            • What’s happening aside from COVID-19 impact
                                                                              • When it comes to home décor, gender norms still exist
                                                                                • Figure 22: Lifestyle statements surrounding home décor – Any agree, December 2019
                                                                            • What to Watch

                                                                              • How will COVID-19 impact the category moving forward?
                                                                                • Shifts in behavior and interests will impact the home décor market
                                                                                • The Consumer – What You Need to Know

                                                                                  • Affordable essentials drive purchases
                                                                                    • Convenience motivates shopping at mass, but opportunities exist online for décor retailers
                                                                                      • Consumers need assurance, but prefer their own research to sales assistance
                                                                                        • Seasons are a chance to embrace nostalgia and express one’s style identity
                                                                                        • Items Purchased

                                                                                          • Analyst perspective:
                                                                                            • Consumers use small, less-expensive items to style their home
                                                                                              • Figure 23: Items purchased, February 2020
                                                                                            • Homeowners have more room and more interest in nonessentials
                                                                                              • Figure 24: Items purchased, by primary residence, February 2020
                                                                                            • Women see value decorating their home, regardless if they cohabitate or live alone
                                                                                              • Figure 25: Wayfair shoppable Pinterest post – Christmas décor ideas
                                                                                              • Figure 26: Items purchased, by gender and/or marital status, February 2020
                                                                                          • Retailers Shopped and Method

                                                                                            • Analyst perspective:
                                                                                              • Convenience prompts consumers to shop mass merchandisers more than décor retailers
                                                                                                • Figure 27: Retailers shopped – NET – Any retailer, February 2020
                                                                                              • Trip type dictates method of shopping
                                                                                                • In-store shopping is preferred, but many will shop online when needed
                                                                                                  • Figure 28: Retailers shopped, in-store versus online, February 2020
                                                                                                • Men are interested in low-risk rental options
                                                                                                  • Figure 29: Retailers shopped by gender and age, any rental service, February 2020
                                                                                                • Type and place of residence influences where consumers shop
                                                                                                  • Figure 30: Retailers shopped, by region and housing situation, February 2020
                                                                                              • Shopping Behavior

                                                                                                • Analyst perspective:
                                                                                                  • Shoppers are supplementing sales assistance with their own research
                                                                                                    • Figure 31: Shopping behavior, February 2020
                                                                                                  • Showrooms and digital tools can reassure renters and urban residents
                                                                                                    • Figure 32: Shopping behavior, by area and residence, February 2020
                                                                                                  • Social content can fuel commerce among young adults
                                                                                                  • Purchase Motivations

                                                                                                    • Analyst perspective:
                                                                                                      • Seasonality is a key purchase driver
                                                                                                        • Decorating for the holidays is vastly appealing
                                                                                                          • Figure 33: Purchase motivations, February 2020
                                                                                                          • Figure 34: Macy’s Instagram post, December 2019
                                                                                                          • Figure 35: Target Twitter post, November 2018
                                                                                                        • Change of season is a time for women to refresh their home style
                                                                                                          • Figure 36: Purchase motivations (décor) and shopping seasonality (clothing), by gender, February 2020
                                                                                                        • Young men are involved during home furnishings or renovation projects
                                                                                                          • Figure 37: Purchase motivations, by gender and age, February 2020
                                                                                                      • Attitudes toward Shopping for Home Décor

                                                                                                        • Analyst perspective:
                                                                                                          • Price and quality: consumers want both types of value
                                                                                                            • Figure 38: Attitudes toward shopping for home décor, February 2020
                                                                                                          • If they can’t see it, most won’t buy it
                                                                                                            • Multicultural consumers express their adventurous style through décor
                                                                                                              • Figure 39: Attitudes toward shopping for home décor, by race and Hispanic origin, February 2020
                                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                                            • Data sources
                                                                                                              • Sales data
                                                                                                                • Fan chart forecast
                                                                                                                  • Consumer survey data
                                                                                                                    • Abbreviations and terms
                                                                                                                      • Abbreviations

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