Indoor Furniture: Category Overview

June 2015

Indoor furniture appeared in a better place in 2014 than at any time since the recession started. Growth returned in the US, and China’s consumer market remains strong as many households become first-time buyers. However, ongoing currency woes have impacted global growth and consumers in developed countries are increasingly inspired by other alternatives to brand new furniture. The industry needs to better care for an ageing population and also be on top of the sustainability issue.

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Currency headwinds affect global growth

Several markets have seen their currency devaluate against the US dollar, which resulted in wiping out the gains made in local currencies and thus affected global growth rates in value.

China’s growth story not ending

The Chinese economy may be cooling down, but consumers are not showing any sign of cutting back on spending, so much so that China will be the largest driver of growth in indoor furniture over the forecast period.

Smaller homes

More people live in urban regions, and the average size of flats is shrinking due to the demographic pressure on land. This will create new opportunities for designers to create more compact and multi-purpose furniture.

Pushing the limits of customisation

A rising trend can be seen in mature markets as consumers seek for more personal and unique furniture. They see it as a more meaningful way to decorate the home than mass-produced flat-pack furniture. Retailers and manufacturers will have to accommodate that by providing more customisation options while maintaining their profit margins.

Demographic changes

The world’s population is ageing, obesity is rising and there are more single-person households. These key demographic megatrends will have a huge impact on indoor furniture in the years to come as the products will have to adapt to their users.

Sitting furniture split reveals cultural preferences

Sitting is the basic purpose of indoor furniture, yet cultural differences remain as to which type of furniture people prefer to buy, depending on space available, comfort and social habits.

Introduction

Scope
Key findings

Socioeconomic Drivers

Recovery path well underway but clouded by instability
Indoor furniture the largest home furnishings category
Currency fluctuations weigh on global performance
Housing market recovers in largest economies
Fewer housing completions, millennials not buying
Ageing world population impacts product mix
Living space is shrinking and costs are rising
Asia Pacific makes way for “golden singles”
World furniture trade routes in 2013
Furniture reshoring: Myth or reality?
Green mindset and need for personalisation
Pinterest is most-loved platform for furniture retailers

Category Analysis

Dining furniture a victim of changing times
Shifting sands in the bedroom
Tempur Sealy’s difficult merger weakens leadership
Kitchen remains the driving force of indoor furniture
Traditional dining still growing in emerging markets
Home office furniture: Sluggish growth in developed countries
Sitting furniture: Cultural preferences shape demand

Case study

Case study: La-Z-Boy
La-Z-Boy overview
La-Z-Boy mainly a US story, building long-term growth in China

CASE STUDY

La-Z-Boy at a glance
Storage furniture: Polarised between emerging and mature markets
Other indoor furniture: Value growth impacted by price erosion

Regional Analysis

Growth of indoor furniture increasingly polarised
Growth driven almost exclusively by China
IKEA’s strengthening presence in Asia
Western Europe: Is there a way out of the gloom?
Spain and Italy: Hope for recovery
UK: Back to positive growth amid economic uptick

Channel Analysis

Internet benefits from improved display technology
Rising competition from charity shops and C2C
Regional differences in distribution patterns for indoor furniture
Providing context and inspiration to drive sales
IKEA: Click-and-collect model illustrates new multi-channel strategy

Forecast

Forecast growth per region
From kitchen to living room and from dining to other furniture
China and bedroom furniture the key drivers for growth
Global ranking for per household spend expected to shift
New services in the real estate market
Future trends in global trade?
Edgy lifestyles going mainstream
Key takeaways

Report Definitions

Data parameters
Product category definitions
Retail distribution definitions
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