World Market for Homewares and Home Furnishings

August 2023

Demand was saturated during the pandemic-induced boom. Big ticket purchases are now suppressed by a cost-of-living crisis. Not having a fully realised omnichannel strategy created vulnerabilities; new small store openings are part of a correction, as is ongoing fulfilment investment. Rising interest rates make business debt less sustainable; casualties are visible in homewares. Consumers value wellness, sustainability via both durability and circularity messaging, and multifunction spaces rise.

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This report comes in PPT.

Key findings

Self-care at home products are growing faster over time within the wellness trend, with solid long-term drivers

Self-care is driven by demographic, geopolitical, economic and social stress triggers. Price-sensitive consumers can also be expected to continue cooking at home, and hybrid appears to be the new normal for the post-pandemic office worker; wellness subcategories such as stove top cookware (healthy eating) and mattresses (sleep health) continue to grow faster than their respective host sectors. The other side of the coin for self-care is the rising problems of being linked to substances considered “toxic”, with a live example in 2023 of PFAS in cookware.

Designing for multifunctional living spaces and designing for deconstruction are appealing attributes

The multifunctional home furniture trend is driven by the rise of smaller urban living spaces and higher occupancy due to hybrid working, combined with a desire for practicality, efficiency and anti-clutter storage. Making product construction (and deconstruction) easier is also a strong factor towards the lower end of the market. Catering to a rental property market, easy to assemble and disassemble designs (without paid services or help) rise, while easy deconstruction leans into circularity. Useful and novel in-built storage solutions are growing for all rooms.

A cost-of-living crisis and high inflation supressed demand for big ticket items more than smaller impulse purchases (renovation furniture especially)

Following one and half years of booming home spend between 2020 and 2021, consumers in 2022-2023 use their constrained discretionary spend on necessary replacement cycles and an increasing cost consciousness in the appeal of private label. Macro economic trends create concern about the ongoing housing market, with direct impacts on in-home spending. After interest rate rises (to control inflation), there remain signs of a soft landing, but 2022 was a reset below pre-pandemic demand (in constant terms) and long-term forecasts are less optimistic.

Survival of the fittest: A fully realised omnichannel strategy is proving to be one of multiple discriminators for coping with this more turbulent time

After weathering store closures followed by supply chain disruption amid record growth, the interest rate hikes in 2022 made debt levels cost more. Demand is constrained and purchase prices are under greater pressure towards discounting, leaning into channel shifts favouring lower-cost service models. The threat from discounters rises amidst a lack of innovation due to pandemic disruption. A lack of competitiveness in e-commerce seems to then be a recurring flaw in those most affected by this cascade of pressures, tipping them into bankruptcy.

Sustainability via durability rises as a materials driver, especially in homewares design; while Scope 3 actions for 2030 start to become policy

There is a growing emphasis on the longevity of homewares via materials choices. There are movements in plastics, plus ceramic coatings to better cope with day-to-day usage and dishwashing (higher usage frequency due to hybrid work patterns), and much more silicon rubber for food storage but also on utensils. Engineered materials are also replacing natural stone due to better chemical resistance, with marble and other worktops beginning to show harm from harsher COVID cleaning behaviours. Scope 3 actions in energy and shipping emerge.

These are the top five drivers of demand, and the focus of strategic content coming in 2023
Home and garden has been particularly vulnerable to turbulence and priority shifts in 2022
The evolution of retail sales value and growth in home furnishings and homewares
Developed countries are the core markets for homewares and home furnishings
Despite a challenging 2022, the forecast is optimistic with growth spread globally
Cost-of-living crisis affects big ticket furniture; LED bulbs only bright spot in percentage growth
The US will continue to flex its economic muscle, with emerging markets further behind
Homewares relative regional growth: Year on year and across the pandemic
Home Furnishings relative regional growth: Year on year and across the pandemic
Omnichannel reality; experiences whenever and however consumers choose to engage
Inadequate investment in e-commerce prior to the pandemic emerges as a critical mistake
Companies face a cascade of impacts; a rise in credit issues (cost of money) is just the latest
Acquisitions aim at improving the shopping experience
Brands and retailers continue to navigate a turbulent environment
Inter IKEA Systems BV’s sales performance in the context of the wider market*
Inter IKEA Systems BV’s product focus adapts to a post-pandemic reality
Newell Brands Inc sales performance in the context of the wider market1
Multinational versus regional players: historic growth is skewed towards Asia Pacific
These are the top five drivers of demand, and the focus of strategic content coming in 2023
Wellness manifests as “Self-Care at Home”
Drivers of self-care at home: Against a background of wellness, “home as sanctuary” evolves
Healthy eating caught on and retained pandemic gains most strongly in North America
Non-stick options growing in North America as consumers continue to turn to healthy eating
Millennials are especially interested in improving their eating habits via healthy alternatives
The Inspired Home Show (March 2023) gave an example of how fast an exclusion can happen
If seeking more information on sleep health, there is a briefing about that on Passport
S elf-care at home is a growing strategic planning priority; there is more on Passport for this
Designing for multifunctional living spaces and deconstruction
Designing for deconstruction; a “no more nails” concept from bonding grows within furniture
Valinge makes progress with Threespine ®, in Asia particularly, and with some big names
Designing for multifunctionality in urban and small-space living is increasingly appealing
Modular furniture combined with automation starts to re-envision premium urban homes
Designing for personalisation - custom furniture made for your home also links to space use
Storage is doing well relatively: overall furniture fell six points below 2019 (constant) demand
Inflation and a cost-of-living crisis supresses big ticket spend
Consumers are turning to reduced cost solutions in greater numbers
Competitive price discounting is active, even with inflationary pressure remaining on costs
Investment in private label ramps up, including on historically weak categories such as cookware
Kitchen renovations as one of the biggest ticket projects suffered most in real global demand
In a cascade of pressures this becomes survival of the fittest
This period is increasingly becoming “survival of the fittest”, needing innovation investment
There is a new Inflation Projection Tool just launched on Passport for Home and Garden
Building on service model disruption, the D2C model is evolving
Online specialists get into stores, omnichannel expands and phygital tools begin to rule
Sustainability via durability, materials and Scope 3 trends
More than ever, consumers are informed and understand the power of their purchases
Sustainability via durability is a rising theme across furniture and homewares
Surviving dishwashers is becoming more of a factor in homewares treatments and coatings
It is not quite so simple as Durability means Premium Quality…but it is nearly that simple
Silicone is another material that has become more visible and active in the durability space
Harsher cleaning regimes during the pandemic have started to harm kitchen worktops
The boom in LED lighting is one of the most obvious indicators of the energy efficiency trend
Sustainability topics in homewares are a priority in company communication
Within carbon policy shifts, we are starting to see actions that chase 2030 Scope 3 targets
IKEA has set itself tough targets for 2030, but this is being backed up by tangible actions too
Global snapshot of Home Furnishings
Global snapshot of Homewares
Regional snapshot: Asia Pacific
Regional snapshot: North America
Regional snapshot: Latin America
Regional snapshot: Western Europe
Regional snapshot: Middle East and Africa
Regional snapshot: Eastern Europe
Regional snapshot: Australasia
Definition mapping: category definitions matching trend blocks on page 47 of this report

Home and Garden

This project has a strict focus on sales to consumers only. Trade and professional sales are excluded. Home and garden refers to gardening, home improvement, homewares and home furnishings.

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