Semester Project Haley Ross Visual Merchandising II Kate Schaefer Fall 2016
Mintel Research
Furniture Retailing - US - July 2016 Executive Summary Furniture market outlook appears promising
Furniture retailing is big business with a lot of players vying for market share. The industry has been rebounding YOY (year-over-year) since the recession and the housing market bust, and eclipsed the $100 billion mark last year. Furniture purchasing is largely discretionary, so when the economy is better, and people feel more confident about their finances, furniture retailers typically benefit. This year, consumer expenditures on furniture should reach $107.6 billion which represents a gain of 4.4% over 2015. Some 56% of consumers purchased furniture in the past two years. Fueled by a stronger economic climate, a rallying housing market, and a thriving DIY (do-ityourself) industry, consumer expenditures on furniture are expected to continue along this same positive trajectory at an annual average growth rate of 3.4% through at least 2021 when the market should reach $127.5 billion (+18% versus 2016). However, the pace of growth will decelerate after this year. Speculation about another housing crash and the results of the upcoming presidential election could change the shape of the furniture forecast. FIGURE 1: US consumer expenditures and fan chart forecast for furniture, at current prices,
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Source: Based on Bureau of Economic Analysis/Mintel
Proposal: Home DĂŠcor/ Furniture Retail
Based on the research gathered from Mintel pertaining to the furniture market, I will be creating a new retail space specializing in furniture and home décor. According to the research based on the Bureau of Economic Analysis, the furniture market is project to see a growth rate of 18% over the next five years. I therefore believe it would be profitable and on-trend to enter into the furniture and home décor retail market.
Target Consumer Group: Affluent Millennials The Budget Shopper - US - December 2015 Splurging Key analysis: In alignment with more personalized offers and deals discussed inBudgeting Actions Taken, retailers can likely increase brand loyalty by offering specials or even subscription services on the types of items that consumers are going to splurge on anyway. They can also infuse an element of choice into loyalty programs whereby customers can pick from a list of items they’d love to have. Another idea is to offer buy one, get one promotions given that more than a quarter of consumers do splurge on gifts for others. Finally, playing up themes of treats, rewards, and self-worth in messaging would likely resonate with budget shoppers who may feel like they often have to restrict themselves from such material indulgences. FIGURE 35: Items splurged on, by generation, September 2015
"You indicated that you splurge on items you really want even if they are outside your budget. What items do you typically tend to splurge on?" Base: 1,131 internet users aged 18+ who splurge always, often, or sometimes Source: Lightspeed GMI/Mintel
Based on the above research regarding the different generations of consumers and their willingness to splurge on various product categories, my target consumer group is millennials. This generation of consumers is more likely to splurge on home goods than any other generation, which makes them the ideal consumer for the high-quality merchandise I plan to offer. More specifically, my target consumers are affluent millennials that typically reside in large cities that are beginning to buy/rent their first homes/condos and are therefore in the market to purchase new furniture and home décor. My target millennial consumers are typically couples in their late twenties to early thirties that are living together and/or are married and may even have kids, and both of them have successful careers that allow them as a couple to invest in high-quality products such as home furnishings.
“A Day in the Life Of” Pinterest Board: Link: https://www.pinterest.com/hayjay09710/day-in-the-life-of-the-consumer/ The Pinterest board is a compilation of various images that depict the lifestyle of the affluent millennial consumer. They live in large cities such as Chicago in neighborhoods like Lincoln Park and River North. Their choice of home includes anything from a high-rise downtown to a single-family walkup in a family-friendly neighborhood in the city. They love to eat at the newest, chicest restaurants in the city that offer up a trendy environment (preferably with a rooftop or patio) and a high-quality menu. Some of the places they love to frequent include Girl & The Goat, The Allis at Soho House, Mindy’s Hot Chocolate, and 3 Arts Club Café at Restoration Hardware. On the weekends, the women love to get drinks with their girlfriends at chic places like RM Champagne and Expat. When they do cook, the couples love to purchase high quality ingredients from places like Eataly, and cook healthy meals like chili lime salmon with tomato, cucumber, & feta salad. In their free time they love to go to yoga class and Soul Cycle classes to stay fit and active. They also enjoy attending local street festivals like Renegade Craft Fair to find trendy local art and products and to socialize. In their houses, some things you may typically find include bar carts and terrariums because they are very on-trend currently. You can find these consumers typically shopping at stores like Zara for clothing, Louis Vuitton for handbags, and Land of Nod if they have kids. Some of these consumers may even sign up for monthly services like BirchBox and Winc. The men may sign up services like Trunk Club. They enjoy these services because they are convenient in their busy lives and also offer quality products.
In-Store Experiences: 1. Create a design studio within the retail space where customers can sit down with our designers to discuss concepts for their homes. 2. Offer interactive software on computers in-store that will allow customers to view the furniture they like in all the available fabrics. 3. Host fun events like DIY classes in the store that anyone can sign up and attend. 4. Have a small coffee bar in the store where customers can grab a latte & hang out and stay in the store longer.