Global Home Decor: Industry Analysis
The global home furnishing industry is growing continuously and it is nowhere going to stop. It is expected to reach $700 billion mark by the year 2015, based on a research conducted by the Global Industry Analysts out of which bed and bath furniture industry itself accounts of almost $28 billion. There is a growing consumer interest in home decoration and this trend is intensifying the new market expansion. It is found that the demand for organic home furnishing is rapidly rising with the increased consumer awareness about the importance of using environmentally friendly materials. Wide product ranges and electronic media campaigns are fueling market development. It is found that Latin America and Asia-Pacific markets will have rising demand over the next years for vibrant bed furniture.
Home decor made of using materials like hand-tufted horsehair, silk, latex, memory foam, and lamb’s wool will be in high demand in the coming years. Manufacturers are keen to respond to such high demand by offering wide variety of luxury beds and mattresses as the consumers are ready to pay well for stylish colors and designs.
The global home furniture and decoration market was hit by the housing crisis and people started postponing home improvement and delayed buying new homes. Now with the recovery in the housing sector, demand for home furniture has begun to increase, a lot of investment is currently taking place in this industry.
Regional Market Contribution
The US home decor industry shows strong growth in the years to come. Demand is expected to rise yearly at the rate of 8% by 2015. Nylon products will continue to remain the leading choice, but in the coming years polyester fibers might gain attraction due to improved fiber quality.
Indian lighting fixture is ready to flourish in the coming years with more than 15% of the produced lighting fixtures being exported and is gaining name as manufacturers of outdoor and industrial lighting products. Lighting products for consumer market is mainly imported.India is one of the largest exporters of home furnishing goods to the US. Indian Home Decor market might touch $20 billion by 2015.
Currently one-fourth of the total world’s furniture production is offered by the European Union.Europe is leading the home furnishings business in terms of revenues, followed by North America and the Asia-Pacific region. Europe has top 84 manufacturers out of the world’s top 200 furniture manufacturers. Poland is the one of largest furniture exporter in the world and is considered as leaders in case of workmanship. Latin America and Asia has also started to explore in the global market showing a widespread demand in home decor rise sharply.
Online Market Trends
There is an overall increase in the online purchase of household furniture and home accessories. Limited time, wider options and discounts, convenience and increasing growth in small towns are some factors causing the shift to online buying. Still people who are looking for luxury goods and unique workmanship prefers customized furniture purchased from high-end stores causing a limitation in the overall online market.
Certain people want furniture which are sensibly designed and have aesthetic look, integrity in designs is the current attraction in the industry. A recent Mckinsey study shows that the internet usage will triple in India in next three years and this will open more opportunities for furniture having aesthetic appeal.
The second largest home decor online eCommerce company in USA is Wayfair.com with categories ranging from birdhouses and crockery to outdoor furniture. Other similar online home decor stores include Worldmarket.com and Furbishstudio.com.
The global furniture providers are facing many challenges in delivering innovative products and build a brand name. Companies must start giving emphasis on design and multilevel approach to design which can help them to boost themselves in the global marketplace. Currently e-retailers are targeting female customers as they are the major segments who are more focused to the home improvement products industry. One can also enter into landscape designing, home decorating consultation and maintenance.
Here are some pointers to anyone planning to enter into this segment:
- Home Decor Market growth generally lags the GDP growth of that country by around 2 basis points.. so anyone planning to enter into this market should assume that the market is not going to grow exponentially.. it is a long term sustainance game not a get rich qucik scheme.
- Online business is growing at much higher rate of growth, but the pie currently is low (online market in general constitutes ~4-6% of the total retail business in any segment) while the growth rates here can be anywhere between 12-20% PA.. So all the retailers who have an offline shop, online is the way to go now. In next 3-5 years it may constitute a large chunk of your total business volume.
- For online home decor businesses: Remember.. logistics is going to eat away a lot of your cost.. so be prepared to answer this aspect.. some of the online retailer try to keep regional stocks and supply from the nearest location, this model works best for Market places. You may also try to negotiate hard and flat rates with logistics companies. Good luck on that
- Handle returns very carefully (Goods once purchased should not be taken back unless damaged… especially the large ones ) I just saw a very interesting caption at a wine shop which said “I break I Cry.. You Break You Buy” 😉
- Identify your target customer segment clearly.. there are a lot of niches (like home furniture, office furniture, kitchen items, bed and bath etc. etc.) and target audience identification is the key to effective marketing message creation and ultimate customer acquisition.
- Keep your website in chic order with great UI and optimized for performance rate. You do not want customers to abandon carts. It may cost you heavy… Also try re-targeting banner ads for people who visited your site.. catch them again somewhere else
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