Distribution Channels in Home and Garden

Strategy Briefing

About This Report

Oct 2018

Home and garden’s main distribution channel is home and garden specialist retailers. Internet retailing, however, continues to gain importance as the digital landscape develops rapidly across the globe. This report discusses the factors driving both store-based and non-store retailing, primarily online sales, of home and garden products globally.

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Distribution Channels in Home and Garden

Home and garden overall continues to grow moderately

Home and garden industry growth saw a slight improvement in 2017, and growth is expected to improve moderately over the forecast period. Asia Pacific and Latin America are among the fastest growing regions and will drive sales. Nonetheless, value sales in Latin America are partly driven by high inflation.

Home and garden specialist retailers remains the key channel

Nearly 70% of home and garden products are still sold through home and garden specialist retailers, although this channel is losing share to internet retailing. Nonetheless, consumers still prefer to shop for their home and garden products through specialist retailers, as the physical in-store experience is still important prior to making a purchase.

Internet retailing continues to grow strongly

Internet retailing has been gaining year-on-year. Convenience and consumers’ increasingly connected lifestyles are the key drivers of growth in online shopping. However, internet retailers also put effort into providing better services, for example improved and shorter delivery processes.

Channel diversity in homewares

There is greater channel diversity in homewares, when compared with home improvement, gardening and home furnishings. Homeware products are typically sold in a number of different retail channel types, e.g. supermarkets, hypermarkets, and department stores.

Both online and offline players take advantage of technology

While internet retailers face the challenge of consumers not being able to interact face-to-face with products prior to purchase, this is to some extent being addressed through technology such as virtual reality and augmented reality. On the other hand, store-based players are also trying to improve the in-store shopping experience to maintain consumer loyalty. 

Introduction

Scope
Key findings

Industry Snapshot

Home and garden’s overall performance improves
Home improvement the fastest growing category in 2017
Asia Pacific and North America continue to drive home and garden

Channel Shifts

Non-store retailing continues to inch upwards in value share
Highest value share for non-store retailing in the homewares category
Non-store retailing gets a boost from internet retailing

Store-Based Channels

Homewares and home furnishing stores a key store-based channel
Hypermarkets lead growth within store-based channel
Homewares and furnishing stores adopt omnichannel strategies
Ikea maintains leading position globally in 2017
70% of home improvement sales through home improvement stores
Home Depot remains leading home improvement and gardening store
Hypermarkets the leading grocery channel in home and garden
Private label share declines slightly in 2017, but value rises
Western Europe demonstrates the highest private label share
E-commerce players drive private label home furnishings

Non-Store Channels

Internet retailing the leading non-store channel over 2012-2017
Internet retailing outpaces direct selling and home shopping
Home furnishings the most popular category for online sales
Internet retailing sees double-digit growth in almost every region
Pure play internet retailers dominate the top spots in internet retailing

Future Developments

Asia Pacific will show the most vibrant performance in future
Digitalisation to shape home and garden over 2017-2022
Key Takeaways

Report definitions

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