E-commerce, the Middle Class Retreat and Generation Rent shape Home Textiles

January 2018

Demand for home textiles is currently being shaped by several key factors, including online sales that are driven by household access to the internet. Meanwhile, the “middle class retreat” has boosted demand for private label products, while rising house prices make owning a home more difficult for Millennials turning them into Generation Rent. Single-person households who are more likely to rent their homes have become a key focus for home furnishings retailers and manufacturers.

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Home textiles online sales soar

Online sales emerged as a key driver for home textiles growth in 2016, with global online sales for home textiles reaching USD9.0 billion. Online sales growth for home textiles was faster than overall category growth over the historic period, demonstrating that internet retailing was a major growth driver for home textiles.

Popularity of online sales linked to household internet access

The relative importance of e-commerce sales for home textiles varies from market to market and is typically tied to household internet access, as well as smartphone possession. Markets with larger rural populations tend to exhibit lower levels of household internet access, which hampers online sales penetration in home textiles.

US a market leader for home textiles private label sales

Home textiles private label sales tend to be the strongest in developed markets. The US was the leading market for private label sales in 2016, however, South Africa held the highest private label value share in 2016. Consumers perceive private label brands in the home textiles space to be cost effective.

The “middle class retreat” drives private label demand in Western Europe

Negative or sluggish real income growth within Western Europe since the global financial crisis has boosted the popularity of private label brands within the region. Major economies, such as France, Italy, the Netherlands and the UK experienced a decline in purchasing power between 2008 and 2016, especially when compared with developing markets, such as China and India.

Generation Rent boosts demand for home textiles

Generation Rent coupled with the growing prominence of single-person households have resulted in home furnishings manufacturers and retailers targeting single-person households who demand stylish and affordable home textiles.

Introduction

Scope
Key findings

Online Sales Soar

Online sales a key driver for home textiles in 2016
Home textiles online sales linked to household internet access
E-commerce an opportunity for retailers to target developing markets

Private Label and the Middle Class Retreat

US consumers’ love affair with private label endures
Declines in purchasing power make private label more attractive
Private label demand driven by the “middle class retreat”
Case study: home textiles private label in the United Arab Emirates

Generation Rent

Home ownership impacts demand for home textiles
Housing affordability issues trigger shift towards Generation Rent
“Self-interior” trend boosts demand for home textiles in South Korea

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