Monthly Issue
From Home Furnishing Business
December 12,
2016 by Jane Chero in Home Office, Product 
By Larry Thomas
Almost left for dead after the Great Recession, the home office category is in the midst of a robust rebound, thanks to renewed interest in working at home and a revival of styles that look nothing like the massive executive desks that once dominated the grouping.
Producers say that, while relatively few homeowners are setting aside a dedicated room for a home office, home office furniture is being purchased for family rooms, great rooms, bedrooms and other spaces that can be partially devoted to an office. That trend, in turn, has caused a move away from large office furniture collections and into more eclectic looks, which mirrors recent trends in upholstery and casegoods.
“There doesn’t seem to be any appetite for the old 12- to 14-SKU home office collection,” said Karl Eulberg, executive vice president of sales, marketing and merchandising at Martin Furniture. “We’re selling a lot of the smaller collections with no more than six or seven SKUs.”
Eulberg and other executives said that, in addition to a desk, current collections now commonly include a credenza, a hutch, a couple of file storage pieces, a bookcase, and not much else.
“Products in demand are bookcases that are as fashionable as they are functional,” said David Petersen, vice president of marketing at Stanley Furniture. “They serve to disguise a home office inside of a family room.”
Steady Growth
According to research conducted by Impact Consulting, parent company of Home Furnishings Business, the home office category accounted for $3.28 billion in sales in 2015, which was a healthy 4.54% ahead of 2014.
The growth rate wasn’t quite as fast as total furniture sales (excluding bedding), which grew 4.89% last year, but the category’s share of total furniture sales essentially remained steady at 4.18%.
For the first three quarters of 2016, the home office growth rate hasn’t been quite as robust -- 3.17% -- but the category maintained a 4.15% share of the total furniture market with $2.5 billion in sales.
Producers say that desks remain the most popular home office item, although writing desks and other smaller-footprint models are increasing in popularity.
Research by Impact Consulting shows that, among consumers surveyed in the past year, 23.9% said they preferred a writing desk – the same percentage as executive desks. The next most popular was a desk with a hutch, preferred by 20.3%, while an L-shaped desk was the choice for 17.9%. The venerable roll top desk was preferred by a mere 1.6% of those surveyed. (Graphic 1)
Design Matters
Hank Long, senior vice president of merchandising and design at Hooker Furniture, said that while the traditional 72-inch executive desk continues to outsell 66-inch models by about 3 to 1 when being purchased for dedicated home office rooms, desk sizes as small as 48 inches are gaining in popularity.
“These work well in bedrooms and other smaller rooms,” Long said of the 48-inch models, noting that 60-inch models, especially in writing desks, also are good sellers because they’re suitable for a family room or other larger multi-purpose spaces.
“Traditional with updated finishes still is our strongest category,” he said. “But we are having success with transitional and contemporary with more sophisticated finishes.”
Long and other executives said non-brown finishes with names such as graphite, stone and gray also are gaining ground.
The Impact Consulting survey showed that 50.4% of consumers have traditional-styled home office furniture, followed by 37.4% with contemporary. All other furniture styles scored in the single digits, with country/rustic at 4.1%, transitional and mission/shaker at 3.3% each, and cottage at 1.6%. (Graphic 2)
Eric Shupack, president of Furnitech, which sources its products from Brazil and sells primarily through the e-commerce channel, said one of his company’s hottest looks is an engineered graphite Italian veneer finish that recently was added to some transitional home office pieces.
“We can’t keep it in stock,” he said of the graphite finish. “I’m thinking of making it an option on every desk in the line.”
Although Furnitech’s home office products are largely transitional and contemporary styles, Shupack also said he has noticed less interest in large, multi-piece collections.
“People just don’t seem to have the space for a full office ensemble,” he said. “I think there’s an opportunity for multi-function pieces that can go into apartments and other smaller living spaces.
Despite Furnitech’s success in the e-commerce space, the Impact Consulting survey showed that nearly half of consumers said they would most likely shop for home office furniture at an office product store (26.4%) or a traditional furniture store (22.7%). A specialty store was the choice of another 15.4%, while a warehouse club was the choice of 13.6%. (Graphic 3)
Department stores were the choice of only 8.1%, while value merchants were preferred by 7.3%.
Walker Edison’s Midtown
At just 48 inches long, this streamlined writing desk is functional without taking up a lot of space. It is constructed of solid wood and the pullout, drop-down drawer converts into a keyboard tray. It is available in six colorful matte finish options, including Dusty Blue shown here. Others are Slate Gray, Brick Red, Canary Yellow, Black or Classic White.
Somerton Dwelling’s On Your Six
From the company’s iMPROV in G collection, this popular and versatile desk features warm oak veneers with a center drawer front that flips down to accommodate a laptop at a moment’s notice. It also doubles as a console table or server. At 54 inches wide and 22 inches deep, it has a cerused grey oak finish with a blaze red accent inside the drawer.
EuroStyle’s Hart
Designed by Marc Boudreau, this Pinnacle Award finalist in the home office category features sleek contemporary styling and is made of walnut melamine. Available in a black or white desk top, the collection comes fully assembled, except for casters or legs, and the desk features cord management. In addition to the desk, the collection includes a side return, and a two-drawer file cabinet that’s available in two configurations. As a space-saving feature, the desk legs can be removed and a file cabinet can fit under the desk to be used as legs.
Sligh’s Cross Effect
Crafted from quartered white oak veneers in a rich mocha finish, this collection from Lexington Home Brands’ Sligh brand offers an innovative fusion of contemporary and industrial design, featuring striking metal bases, decorative accents and custom hardware in a burnished bronze-finished silverleaf. Asymmetrical styling offers a slight urban edge to the look, enhancing its modern aesthetic and sophisticated appeal.
Legends Furniture’s Joshua Creek
From the domestically produced Joshua Creek collection, this 54-inch writing desk has all the understated charm and appeal of contemporary furniture featured in a Barnwood finish. Designed with simple lines and knotty alder solids and veneers, the company says it is appealing because it imparts a simple, yet elegant state of mind. And at 21 inches deep, it’s designed for compact work spaces.
Furnitech’s FT56CDG writing desk
From the Signature Home collection, this three-drawer, 56-inch writing desk features graphite Italian engineered veneers and a solid Brazilian cherry wood base and leg elements in an ebony finish. Functional as it is visually appealing, the desk features clean contemporary lines. It has three full extension drawers and a generous writing surface.
Flexsteel’s Eastchester
With layered base moldings, a tone-on-tone wood finish, and an open design, Eastchester has an antique yet timeless style. Cherry veneers and poplar wood round out the solid, durable construction, while customizable storage options make it ideal for any modern or urban space. The company says Eastchester is an ideal choice for those who want practical home office furniture with timeless elegance. Shown here are the 72-inch executive desk, and the accompanying 72-inch credenza and hutch.
Martin Furniture’s Hartford
This collection combines bold lines with a weathered, vintage finish and classic style elements. The warm, two-tone rubbed finish gives Hartford the relaxed feel of old world wood and the sophisticated turnbuckle and wire mesh details add a formal element. The collection is suitable for either a classic formal setting or a more relaxed, eclectic home. It includes a power center with two AC power outlets and three USB 2.0 connections.
Stanley Furniture’s Welton
From the Crestaire collection, this bookcase is designed to be fashionable and functional. When combined with the Crestaire desk, it is designed for use in a family room or other room that is not solely dedicated to a home office. The bookcase features two full extension drawers and four fixed shelves.
Hooker Furniture’s Rhapsody
The distinctive base and top design have combined to make this 66-inch desk a best-seller. In addition, the dry wire-brushed finish is on-trend. When used with the matching bookcases and lateral files, it makes for a complete small office without the heavy look of a double-pedestal executive desk.
Parker House’s Hickory Creek
The 60-inch writing desk features a refined rustic finish, built out of New Zealand pine solids and veneers. The desk is wire brushed before a multi-step finishing process gives it a distressed look. This desk is one of eight items that are part of the Hickory Creek modular office group, which allows creation of a multitude of room solutions.
November 9,
2016 by Jane Chero in Economic News, Financial Reports, Industry
Historically named the “Baby Bust Generation,” Generation X babies are now roughly 35 to 50 years old and born between 1966 and 1981. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive, ages 21 to 65. Moreover, they are increasing their earning power rapidly with more going toward their home furnishings purchases.
They have been much maligned as a generation of latchkey kids growing up in an era where divorce rates more than doubled. They have been purported to distrust the big corporations they feel mistreated their loyal parents and yet are now taking over the high paying jobs of baby boomers as they retire in record numbers. Gen Xers are revolutionizing the business world with their demands for a work-life balance and place a high priority on their families and homes.
These 35 to 50 year olds also have over 50 percent of the children under 18 – further extending their buying power. With homeownership rates up and furniture expenditures at their highest in years for ages 35 to 44, Generation X is poised to make a significant mark over the next five years and beyond.
Population
At 69.8 million, Gen Xers trail behind both Millennials and Baby Boomers in size (Table A), but as Table B shows the current adult population of Generation X is higher than the Millennial’s 66 million as many are still under the age of 18. While Gen Xers are still smaller than the living Baby Boomers (74.9 million), they now have more buying power.
As shown in Table C, the population of the “Baby Bust Generation” is now much larger than originally projected due to immigration. With 58.5 million births between 1966 to 1981, Generation X has grown by almost 20 percent (19.3) in numbers.
Although smaller in total population, Gen Xers are the largest adult consumer population at 37.5 percent of adults ages 21 to 65 (Table D).
Income
Gen Xers are in their prime earning years. As Baby Boomers retire more high paying jobs will open up to experienced and ready Gen Xers. In 2015, median income (Table E) was the highest for Generation X 45 to 49 year olds at $76,095, followed by 40 to 44 year olds at $72,143. In addition, the youngest of the Gen Xers, the 35 to 39 year olds, had the fastest growing incomes last year with median income increasing 9.2 percent over the previous year (Table F).
Children
Gen Xers ages 35 to 50 are in their prime family purchasing years for both themselves and their families. Over half (52.9 percent) of children (65.7 million children) under 18 reside in Gen Xer homes (Table G). Over 80 percent of those Generation X households are married couples.
Education
Gen Xers are only slightly less educated than the younger Millennials with 35.7 percent attaining bachelor’s degrees or higher. For 35 to 50 year old Gen Xers, 38 million have some college or higher degree.
Homeownership
Gen Xers have followed the Baby Boomers in their love of homeownership but were temporarily stymied by the recession. Homeownership among all three Gen X ages is now well above 50 percent with 61.6 percent of 40 to 44 year olds owning a home and 68 percent of 45 to 49 year olds (Table I). With homeownership rates bouncing back, Generation X has dramatically increased furniture spending.
Furniture Expenditures
Last year saw a dramatic increase in furniture expenditures by Gen Xers according to the government’s Consumer Expenditure Survey. The heart of Gen Xers (ages 35 to 44) is spending the most on furniture of any consumer group averaging $672 annually. This survey reflects about 55 percent to 60 percent of furniture expenditures.
With the Baby Boomers aging out of prime buying years and the Millennials still pouring into adulthood, Generation X is the here now for the furniture industry. Industry leaders should keep their focus on this bread and butter generation that may just be the consumers that transition our industry toward real prosperity.
November 9,
2016 by Jane Chero in Business Strategy, Industry
Retailing veteran Brian Woods became CEO of Jerome’s Furniture on Sept. 7, taking the helm of a San Diego-based, family-owned retailer that has more than doubled in size in the past decade and opened its first stores in the ultra-competitive Orange County/Los Angeles market.
Woods, who most recently was president and chief merchandising officer of Virginia-based Haynes Furniture, talked with Home Furnishings Business about, among other things, his vision for the 13-store chain; tweaks he hopes to make to the product line-up; and the “endearing” company culture that sets Jerome’s apart.
Home Furnishings Business: What attracted you to the Jerome’s post?
Brian Woods: What attracted me was the culture. The culture at Jerome’s is very unique and very endearing, but the brand in the marketplace is also incredibly strong and loyal. Throughout the interview process, whether it was running into strangers or walking in the stores, literally every constituent, whether it was an employee or an outside customer, had positive things to say. There was not a single negative story about Jerome’s. Just the idea of leading an organization with so much brand loyalty was incredible. It was inspiring.
It also was an incredible opportunity to take a very successful model and lead that growth. And I’m a Southern California native, so it was like coming back home.
HFB: Your predecessor more than doubled the store count while he was CEO. Do you plan to continue adding stores? Can you name any specific markets?
Woods: Initially, what I’m really looking at are areas where we can strengthen our current position…strengthen the brand and position us for growth. When growth opportunities present themselves within our current distribution model, then we’ll take advantage of that. There’s absolutely a vision to continue in the growth pace that (former CEO) Lee Goodman set. I’m just looking to take advantage of opportunities as they present themselves.
During Lee’s tenure, he took the company into the Orange County/Los Angeles market. Our brand position in terms of overall percent of sales are definitely slanted more toward San Diego currently. But now that we’ve got our store base there…I’d definitely like to strengthen our position in Orange County and continue to take market share.
HFB: What are the differences between the two markets?
Woods: From our perspective we’re trying to limit the differences between those two markets. We try to standardize as much as we can. We’re doing our best to provide the exact same customer experience whether it’s being sold in San Diego or Orange County. I think there’s opportunities within San Diego as well as the LA market. But we’re really focused around delivering the same exact experience regardless of what store the customer visits.
HFB: Are you planning to make changes to the product lineup?
Woods: I don’t want to talk about specific product categories because I don’t want to give away too much information to my competition, but I will say that we’re going to be moving toward better quality goods. There’s some open space with some of the higher-end boutique lines. With the Jerome’s brand, we can bring some of the better quality, higher fashion lines to the marketplace and deliver a very transparent, incredible experience.
Our bread and butter is right down the middle of the road. I would like to bring a larger assortment to attract some of those more fashion oriented customers. I’m looking to draw in customers who have not thought of Jerome’s in the past. And I’m also looking at giving our current, loyal customer base a wider selection.
HFB: How will Jerome’s address the growing competitive threat from e-commerce sites such as Wayfair and Overstock.com?
Woods: This is an area where I’m incredibly fortunate. Our Jerome’s e-commerce experience is by far the best in class. From the assortment we show on the site to our virtual room planner that allows our customer to see what it’s going to look like inside their house, we have an opportunity to expose customers to the Jerome’s experience before they ever pull in the parking lot.
I’m not looking to build an e-commerce site that is separate from the brand at all. I really want to use (our current) e-commerce site as a tool to allow customers to be exposed to Jerome’s anyway they want, whether that’s online or in the store. Well over 50% of our customers are looking online before they ever set foot in a store. We’re seeing triple digit growth in terms of year-over-year increases in online sales. I’m not comfortable sharing what percentage of our sales are online, but I will say that we expect that to continue to grow.
We’re definitely seeing all age groups at least do research online, but the Millennials are more prone to actually make the purchase online. But we want to bring that same experience in-store as well. The goal is to make it seamless between the online and in-store experience. I don’t know which one is leading. It’s built-in competition.
HFB: Are there any special challenges as an ‘outsider’ taking over a successful family-owned business?
Woods: I don’t know if I would use the word challenges. But definitely there’s a dynamic. The family is incredibly passionate and its multi-generational. The culture that lives within Jerome’s goes back several generations. Jerry (Navarra) is still the face of Jerome’s.
I look at it as me needing to adapt to the culture, rather than expecting the culture to adapt to me. (The culture) is the best thing Jerome’s has going for it.
HFB: Will you be making any changes internally to the management team?
Woods: I’m inheriting an incredibly talented leadership organization that is passionate and driven. From that perspective, I’m incredibly fortunate. I’m looking at the opportunities to take what is already working in a very successful business model, and an incredible culture, and strengthen those so that we can continue to deliver a better customer experience in whatever channels we’re playing in. I want to set us apart further and further for the competition and position us for growth.
We’re winning right now, and all the initial opportunities that I’m looking at have to do with continuing to refine and deliver an even stronger customer experience on the foundation that’s already been set.
HFB: So it’s safe to assume that Jerry will continue to be the face of the company, and the everyday low price strategy he developed will remain in place?
Woods: Absolutely. Jerry is in every single ad … in English and Spanish. He does it ad lib. There’s no script (laughs).
The everyday low pricing strategy is absolutely what defines Jerome’s. It’s truly the core of who we are and what we do. Literally any initiative we do is really about lining up and strengthening that value proposition.
November 9,
2016 by Jane Chero in Business Strategy, Industry
By Bob George
Market is behind us. And, the feedback from retailers who attended was there was some good product that will contribute to making it a great 2017. The retail environment, without a doubt, is soft with the just-completed Q3 down .04% over Q2 and up 1.68% over the same quarter last year. This was the worst quarter this year.
While the fundamentals are in place for a better performance, the consumer is distracted and lacks the confidence to purchase consumer durables, especially home furnishings. Consumer sentiment can be swayed by a number of things but few influences are as powerful as the experiences and opinions of past customers. However, the good news from our just-completed consumer survey shows that home furnishings is fourth behind cars and computer equipment. We finally beat phones, but now most plans give you the phone for free.
It is like whistling in the dark to reflect that in the past ten elections the furniture industry has had only one bad year following the election and that was the start of the Great Recession. This is not intended to take us down a dark and gloomy path, but to recognize that the mood of the industry is one of hesitation. The challenge for management is to “accentuate the positive and eliminate the negative.”
Challenge the store buyers to present the new product to the sales associates with the same excitement that the buyers had when they placed the order. A caveat – if the buyer did not feel this excitement, they should not have purchased the product. Furniture industry leaders predict robust consumer demand for the unique, the different, the exciting.
Communicate the early results with testimonials from the floor. This is not just the fact that the product sold, but why it sold! It remains important to distinguish whom the target market is for a particular product or service and how to best approach that desired consumer.
Feature new products on the website. You have selected these products for your consumers in your market. Make High Point introductions important to that consumer.
In other words, it’s Game day! Make your store roar!!
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.