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Shopping Reinvented in Home and Garden

October 2020

Today’s consumer is shopping across multiple platforms and looking to engage with players across a variety of platforms. The internet is fuelling this trend and also giving rise to direct-to-consumer brands. Store-based retailers are taking note and adapting online strategies to offer a seamless experience. The e-commerce penetration rate in home and garden has been growing strongly and the Coronavirus pandemic is expected to accelerate this growth further.

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Key Findings

Digital infrastructure drives online sales

Internet penetration rates, including mobile internet, are driving the growth of a digitally native consumer base. While home and garden online sales have grown over the years, the industry still has a low 9% share of sales coming from e-commerce channels. Home and garden players have typically been slow in investing in e-commerce when compared to other fmcg industries. However, we expect strong growth from this channel over 2020-2025 due to COVID-19 which is accelerating the adoption of e-commerce.

Physical locations have a major role to play

The value of a physical store is evolving. From enhanced in-store experiences such as JD.com’s tie-up with Qumei Home Furnishings to last-mile offerings such as multiple fulfilment options from the store offered by Home Depot, physical stores continue to offer tremendous value to consumers and hold potential.

Adoption of AR creates opportunities

Retailers and manufacturers in the home and garden space are adopting augmented reality to help consumers experience the product virtually in their homes. While furniture and paint manufacturers such as IKEA and Asian Paints are leveraging this, there is opportunity for home improvement and gardening players to adopt this technology as well.

Impact of COVID-19 and the road ahead

COVID-19 is disrupting markets across the world but also presenting new opportunities for home and garden players. A slowdown in construction and housing will refocus attention on small DIY projects in 2020 in some markets. Continued remote working arrangements present immediate opportunities in the home office furniture space. COVID-19 has also emphasised the importance of e-commerce to long-term competitiveness.

Introduction

Scope
Shopping Reinvented is one of our eight focus megatrends
Key findings

What is Driving the Trend?

Connectivity gives way to a digitally native consumer base
Rise of digitally powered home and garden players
COVID-19 is accelerating adoption of e-commerce
Home as a hub: continued work from home

Key Features of Shopping Reinvented

Shopping Reinvented covers all phases of the shopper journey

Key Features of Shopping Reinvented: Pre-Purchase

Experiential shopping: elevating engagement through technology
Castlery : bringing the showroom home during a pandemic
Instant gratification: begins in the pre-purchase stage
Direct-to-consumer brands help you decide
Personalisation : curating experience through big data

Key Features of Shopping Reinvented: Purchase

Evolving store formats: from blended retailing...
… to alternate retail models
Value for money: an economic reality
Seamless checkout: reducing steps between browsing and buying

Key Features of Shopping Reinvented: Post-Purchase

Last mile reimagined: delivering convenience
Home Depot: i nvesting in faster delivery
Omnichannel engagement

Coronavirus (COVID-19)

Key takeaways: navigating COVID-19 (1)
Key takeaways: navigating COVID-19 (2)
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