Targeting The Consumer: How She Shops And Where She Buys

November 9, 2016  by Jane Chero in Business Strategy, Industry   

It’s almost impossible to identify the typical furniture purchaser, but we’ll take a stab at it.

She is an internet-surfing, HGTV-watching, middle-income household member who rarely reads newspapers and doesn’t pay much attention to radio and TV ads, but wants new bedroom furniture or a new sofa.

Of course, that’s a glittering generality, but it does broadly summarize the results of a recent consumer survey completed by Impact Consulting, parent company of Home Furnishings Business.

The survey makes it crystal clear, for example, that an inviting website is a must for any retailer. But it also debunked some conventional wisdom about the shopping habits of Millennials, and duly noted the increasing role of men in the final purchase decision.

Other key findings from the survey included:

• More than 78% of consumers shopped at three or fewer stores before making their most recent furniture purchase, and about half only shopped at one or two stores.
• A plurality of consumers – 26% -- said they made their most recent furniture purchase from an independent retailer, while another 19.7% went to a regional furniture chain. Some 11.7% said they made the purchase online, but only 5.2% said they bought from a department store.
• Nearly half of those surveyed purchased either bedroom furniture (24.2%) or an upholstered sofa (23.2%). Casual dining was a distant third at 9.7%, entertainment walls and armoires were mentioned by only 4%, only beating out infant furniture.
• Despite the negative perception many consumers have of furniture shopping, more than 58% of those surveyed rated their shopping experience as a 6 or 7, on a scale of 1 to 7, with 7 classified as “excellent.” Another 26.7% rated it a 5, while less than 5% assigned a 1, 2 or 3 rating.

Even aging Baby Boomers love to surf the internet

If you’re a furniture manufacturer or retailer who hopes to grab – and keep – the consumer’s attention, having a vibrant, informative website is a classic no-brainer in this digital age. And that’s regardless of whether your target consumer is a Millennial furnishing his first apartment or an affluent Baby Boomer redecorating her home after the kids off go to college.

That was one unmistakable conclusion drawn from the survey, which showed that internet research is the first step most consumers take once they’ve made a decision to shop for furniture.

When asked to rank seven possible steps (in order of importance) they could take as part of the shopping process, internet research came out with an average ranking of 2.01, well ahead of the other six possible steps – visiting a store to see the product; consulting a professional for advice; doing research in magazines; saving newspaper ads and articles; responding to radio and TV ads; and getting recommendations from friends and relatives.

In fact, internet research was the top-ranked step among all age groups under 55. There was very little difference between consumers under 25 (1.62) and those 45-54 (1.94). The survey didn’t ask what type of device was primarily used for the research, but the preponderance of people staring at their smart phones in virtually all public settings makes that answer pretty obvious.

Even though internet research wasn’t the most common first step among consumers 55 and above, it was a strong second to going to a store and seeing the product. For those 55 to 64, going to a store had an average ranking of 1.99, vs. 2.19 for internet research, and for those 65 and above, a store visit scored 1.82 vs. 2.32 for internet research.

But across all age groups, internet research and a store visit ranked well ahead of all other possible steps.

It’s no surprise that visiting a store to see the product on display was the most common first step for the 55-and-over crowd, but it might surprise some to learn that an in-store visit was the second most important step in all other age groups by a wide margin. And yes, that included those tech-savvy Millennials who were born with a smartphone attached to their hip.

Ranked last or next-to-last for every age group were consulting a professional for advice and responding to radio and TV ads.

The latter finding may come as a surprise since radio and TV advertising has been a staple of furniture and bedding advertising for decades, but the finding could force some retailers to reconsider how their advertising dollars are being allocated.

It was no surprise that radio and TV ads came in dead last among Millennials with an average ranking of 5.41 – even beating out newspapers – but it also ranked next-to-last among all other age groups, trailing only consulting a professional.

Furniture is a want, not a need

That statement may sound a bit harsh, given that “conventional wisdom” tells us furniture most often is purchased following a move to a new home or apartment, or when that hole in the blue plaid sofa in the living becomes too large to be covered with an afghan.

But what’s really driving furniture purchases is the latest redecorating project, or simply the desire to purchase new furniture – regardless of the condition of existing furniture.

Call it the HGTV effect.
In fact, 37.7% of those surveyed said redecorating or the desire to purchase new furniture was the principal reason they made their most recent furniture purchase. That clearly indicates the purchase was a “want,” since only 27% said they were replacing old furniture – a “need.”

Another 18.5% said the principal reason was a recent move.

When broken down by age group, the survey indicated the desire to get new furniture and/or redecorate – a “want” -- peaks in the 25-34 and 45-54 age brackets.

Interestingly, furniture replacement – a “need” – becomes more important as consumers age. More than 30% of those surveyed in all age brackets 45 and above said replacement was the primary reason. That’s an indication people are downsizing as they become empty-nesters, especially for those 65 and up. In that bracket a full 37.6% of those surveyed said replacement was the primary reason.

Factors rarely mentioned by survey participants were the purchase of a second home, marriage and divorce – all of which are considered “needs.”

Men are from Pluto. Women are from Neptune?

When it comes to furniture purchases, the differences aren’t as great as you might think. (There’s that conventional wisdom rearing its ugly head again.)

While women still initiate the discussion about purchasing furniture and make the final decision the vast majority of the time, the gap between women and men appears to be shrinking. This could have significant implications for retail advertising, since most of it is still directed at women.

For example, while respondents said a woman was the first to note the need or desire to purchase furniture 71% of the time, that was down from 81.4% in 2015.

The survey showed men made the first move 28.4% of the time this year, up from 18.2% in 2015.
 

Women made the initial store visit 69.8% of the time, down from 78.9% in 2015. For men, the trend was obviously in the opposite direction. They made the first visit 30% of the time this year and 21.1% in the 2015 survey.

More men also made the final purchase decision – 22.4% in the most recent survey vs. 12.7% in 2015. Females made the call 40% of the time in the 2016 and 2015 surveys, while it was classified as a joint decision 37.6% of time in the most recent survey and 47.2% of the time in 2015.

The increasing influence of men is especially evident in men ages 35 and up. In the 34-44 bracket, for example, men made the final purchase decision 29.5% of the time, and made the final call 22.1% of the time for ages 45-54.

And regardless of age, men made the final decision 42.1% of the time in households with income of $250,000 or more. In that income bracket, women made the decision only 26.3% of the time, and it was classified as a joint purchase 31.6% of the time.

Clicking before hitting the bricks

As discussed earlier, internet research is by far the most popular way to begin the furniture shopping experience, but do many people take it a step further and actually buy their furniture online?

The short answer is yes – especially for those under 35. But even when all age groups are lumped together, an impressive 11.7% of those surveyed completed their purchase on the internet. That trailed only two other types of retailers – independent retailers (26%) and regional furniture store chains (19.7%).

To no one’s surprise, the internet was the leading retail distribution channel for purchasers under 25 (tied with national chains and mass merchants at 19.7%), but at least 10% of consumers in every age category except ages 45-54 made their most recent purchase online.

The percentage of consumers purchasing online tends to go down, however, as income goes up.

For example, while 17.2% of consumers in the $50,000 to $74,999 income bracket made their purchase on the internet, it fell to 11% for $75,000 to $99,999 bracket; 10.1% for the $100,000 to $149,999 bracket; and 7% for the $150,000 to $249,999 bracket.

Among those making their purchase online, some 47.8% used a website operated by an existing brick-and-mortar retailer. Another 35.7% used an online-only furniture retailer, and 16.5% said they ordered from a manufacturer’s website.

Online purchasers said the ease of shopping, price, and a wider product selection were the most positive aspects of making an e-commerce purchase, in that order.

The most negative factor cited by survey participants was the inconvenience of returning the product, if necessary, which was followed closely by not being able to see and touch the actual product. The third most negative factor was concerns about delivery, although it trailed the first two by a wide margin.

For those who did not purchase online, the ease of shopping was perceived as the most positive aspect of using e-commerce, followed by wider product selection and price.

The inability to see and touch the product was cited as the most negative factor among those who didn’t purchase online, followed closely by inconvenience of product returns and concerns about delivery.

Interestingly, nearly half of those surveyed said they made their most recent purchase at either an independent retailer (26%) or regional furniture chain (19.7%). Only 8.9% made the purchase at a national chain such as J.C. Penney, while 7% each used a mass merchant such as Wal-Mart and a manufacturer’s branded store such as Ethan Allen.

The bed is not dead

Rumors of the death, or at least the critical illness of the bedroom furniture category were greatly exaggerated, it appears, although those reports might be more accurate for entertainment furniture. (More on that later.)

Bedroom furniture, in fact, was the category purchased by 24.2% of those surveyed. Second was upholstered sofas as 23.2%, and all other categories were named by less than 10%.

When broken down by age, bedroom was even more dominant in younger age groups, being purchased by 41.9% of consumers under 25; and 29.4% of those age 25-34; and 27.7% of those age 35-44. In those age brackets, no other category came close.

In older age brackets, however, upholstered sofas took the top spot and easily outdistanced bedroom as Baby Boomers and Gen Xers spruced up other areas of the house.  In the 45-54 bracket, upholstered sofas were purchased 33.8% of those surveyed. For ages 55-64, it was 25%, and for those 65 and above, it was 29.1%.

As noted earlier, entertainment furniture – specifically walls and armoires -- barely hit the radar. Wall units were purchased by only 3% of those surveyed, and armoires were bought by just 1%.

Interestingly, the only segment of survey participants where entertainment furniture made an impact was those with incomes of $250,000 and above. In those households, entertainment walls were purchased by 15.8% of those surveyed.

That was second only to bedroom furniture, which was purchased by 21.1% of those high-income households. (Upholstered sofas also were purchased by 15.8%, the same as entertainment walls.)

Home office also was important to high-income households, being purchased by 10.5% of those surveyed.

However, low-income households (those earnings less than $25,000 annually) also appear to be fans of home office, being purchased by 13.3% of those surveyed. Overall, the category was purchased by only 4.8%, as other age and income groups showed little interest.

Another category that drew scant attention was formal dining, which was purchased by only 5.4% of those surveyed. Casual dining, on the other hand, was the third most-popular category, but at 9.7%, it was still well behind the bedroom and upholstered sofa categories.

When asked to rank the most important product features that led to the purchase (with 1 being the most important and 7 being the least important), quality was rated highest with an average ranking of 2.38. Design aesthetics and design comfort tied for second with an average ranking of 2.97 each.

One of the least important, according to the survey, was the product warranty. It received an average ranking of 5.01.

A glimpse into the future?

The furniture industry has been coming up on the short end of the disposable income stick for decades, and the survey showed little has changed. In fact, furniture beat only one of five categories when consumers ranked the importance of major purchase categories.

Listed as the most important category was a car, followed closely by leisure travel. Third was computer equipment, followed by furniture in fourth and communications equipment such as a smart phone coming in last. 

But alas, the future – at least in the short term -- isn’t all gloom and doom. The survey showed that lots of people will soon begin shopping for furniture or already have begun to do so.

In fact, 38.4% said they were thinking about buying new furniture and have begun the shopping process. And another 11.1% said they were actively shopping and had made up their mind to buy. An additional 28% said they were interested in buying new furniture but had no immediate plans to buy.

Among those who said they were thinking about buying furniture and just started the shopping process, the trend was strongest among adults under age 45. In fact, more than 48% of those under 25 and ages 25-34 put themselves in that category, as did 44.6% of those age 35-44.

The only age group that didn’t show must interest in buying furniture was consumers over 65. Only 8.8% said they were actively shopping, and another 17.5% said they were thinking about buying furniture.

Retail sales people are (a) pushy jerks or (b) knowledgeable and professional

If you answered “pushy jerks,” conventional wisdom probably would agree with you. But the survey told quite the opposite story. Respondents said sales people generally were knowledgeable, professional, and made the customer feel special.

When asked to rank statements from 1 to 5, with 5 being “I agree completely” and 1 being “I do not agree at all,” respondents gave a strong 3.89 rating to “My sales consultant was very professional.”

And interestingly, the results showed younger consumers don’t shun traditional sales methods as widely as many believe. Respondents under 25 gave the above statement an average rating of 4, and ages 25-34 gave it a 3.75.

However, that statement drew strong agreement across all age groups and income levels, as did the statement, “My sales consultant was very knowledgeable about the furniture, its design and production processes.”

The latter drew an average rating of 3.83 among all survey participants, and was particularly high among those under 25 (4.0) and over 65 (4.05).

The only statement that didn’t get widespread agreement was “I can always remember the sales consultant’s name.” It had a rating of 2.63 among all respondents, and only 2.44 among consumers 55-64.

Also getting high marks was “I usually appreciate the help of a salesperson,” which drew a 3.57 among all participants. And once again, Millennials indicated they don’t automatically shun traditional sales methods. Those under 25 gave it a 3.55, and consumers 25-43 gave it a 3.32.

On a related note, more than 58% of those surveyed rated their shopping experience as a 6 or 7, on a scale of 1 to 7, with 7 classified as “excellent.” Another 26.7% rated it a 5, while less than 5% assigned a 1, 2 or 3 to the experience.