Homewares and home furnishings retailers continue to adapt to key drivers, such as urbanisation, hyperconnectivity and demographic shifts. Rapid urbanisation in India has resulted in e-commerce players offering furniture rental services to city-dwelling millennials. Meanwhile, online mattress company, Casper, has begun trialling pop-up stores in metro areas. Ikea has announced a collaboration with Virgil Abloh to target millennials, and also acquired TaskRabbit, a gig-economy start-up, in 2017.
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Asia Pacific overtook Western Europe as the leading region for homewares and home furnishings in 2016. China represents the major engine of growth behind Asia Pacific’s dynamism, and has been the second ranked market for a number of years. Over time, China is likely to surpass the US in terms of market size.
Global urbanisation rates continue to rise, with roughly 61% of households living in an urban setting in 2017. Along with rising urbanisation, more and more households are residing in apartments. In India, e-tailers such as Pepperfry, Furlenco and Rentickle offer furniture rental services to urban millennials, recognising the nomadic nature of millennials and their desire for portable and versatile products.
Online sales of homewares and home furnishings grew to reach USD45.5 billion in 2016. More and more players are expanding their online presence, while key players such as Wayfair, Ashley Furniture and Ikea introduced augmented reality apps in 2017.
Millennials are more prevalent in Asia Pacific, Latin America and the Middle East and Africa, while baby boomers feature more strongly in North America, Western Europe and Eastern Europe. Millennials typically face housing affordability issues and are more likely to rent their homes, and are therefore often labelled “generation rent”.
While millennials are a key consumer segment, brands should not ignore baby boomers. Baby boomers typically have higher incomes and therefore a desire to spend on higher value items. They are also likely to be influencers when it comes to kitchen and cookware products.