For furniture and homeware brands, the current crisis presents a series of mixed messages. Some spaces, such as stores, offices and hospitality venues, are completely defunct, placing significant restrictions on demand. However, the biggest market – the home space – has rarely been more in the spotlight. As consumers refocus on the environment they’re now forced to spend the majority of their time in, many are upgrading, and spending money to do so. According to data from commerce marketing platform Criteo, sales of home improvement, gardening and interior design products were up 13 per cent in the US in early March and remained up by 8 per cent by the middle of the month (when compared to January 2019). This is borne out by the recent successes of furniture e-commerce site Wayfair, which saw its stock up 37 per cent at the start of April as it announced a boom in sales, largely stoked by customers seeking to equip new home offices.
The fear is that this bump is temporary, however, and that once consumers have made the necessary initial improvements to their living conditions, sales will fall away even for those brands who still have a robust logistics network and an established digital store – far from a given for most. It’s also a bump that, from looking at the wider market data, is likely not shared evenly across the industry. A recent survey by Global Web Index shows the impact the pandemic is having on the purchase of big-ticket items in the premium segment. With regards to luxury products, 15 per cent of consumers have delayed purchasing due to the COVID-19 outbreak. Add in that 31 per cent say they will only likely buy again when the outbreak is completely over in their country, and it looks a long road back to parity. In fact Bain and Company forecasts that the wider luxury sector could now see a 25-30 per cent contraction by end of year.
This is a particularly scary landscape for homeware and furniture brands, who’ve grown over-reliant on the twin pillars of showroom and fair to help them both sell to and understand their customers; pillars that have, in the course of a few weeks, crumbled. The question now is what can be built in their place. Rather than accepting that they don’t currently have the means to engage, and that the uncertainty ahead can only mean a worsening of business conditions, we think brands should use this time to implement strategies for change. That starts by recognizing, in the words of Ipsos senior vice president Michael Baer, ‘that consumers are going through anxiety – which will in turn lead to behavioural shifts – and this won’t likely snap back to pre-crisis norms post-crisis.’ What comes next will require brands across the design sector to accept that how we think about the spaces we inhabit will have fundamentally changed, and that the businesses that serve those spaces will be forced to change too.
In the following two articles in this series, we set out tactics brands can adopt in the near- and long-term to ensure they build relevance, not to mention revenue.