IBM Forecasts Robust 2nd Quarter for Furniture

April 4, 2012  by in UnCategorized   

By Home Furnishings Business in economic news on April 5, 2012

IBM has released an analytics-based forecast that predicts home U.S. home furnishings sales will grow 16.6 percent in the second quarter.

The forecast expects second-quarter in-store sales to increase almost 8 percent to $23.222 billion; and online sales to jump 28.4 percent.

IBM experts cite a number of important factors that could be driving purchases, including "Year of the Dragon" weddings and the trend toward accessorizing living spaces.
 
"Consumers are opting to give their home a new-look by remodeling and accessorizing. New towels, bedding or even a picture can really spruce up a room," said Jill Puleri, global retail leader for IBM Global Business Services. "Retailers can benefit from this behavioral shift by considering their product mix, promotion and presentation and by marketing home accessories aggressively. For example, for those customer who recently remodeled their kitchen--now might be the right time to target them with new dishes, hand towels, rugs, etc.--all of which complete the look."

Puleri noted that the Chinese Year of the Dragon, which began on Feb. 4, is shaping up to be especially popular year for weddings, which could also be boosting home furnishing sales.

Dr. Michael Haydock, chief scientist and retail analytics leader for IBM Global Business Services, reported the month-to-month breakout as follows: April in-store sales of $7.6 billion, a 7.3 percent increase over April 2011; $7.2 billion in May, up 8 percent; and $7.8 billion in June, up 8.7 percent.

Online sales of home furnishings are expected to post a year-over-year increase of 30.7 percent in April, 25.9 percent in May and 29.1 percent in June, with sales for the quarter up 28.4 percent. This forecast of online sales is based on real-time sales data from the web sites of more than 500 leading U.S. retailers.

IBM retail and analytics experts said a number of trends will boost home furnishing sales:
* The concept of "accessorizing" is moving from the apparel market to home furnishings as many homeowners during the past few years have decided to stay put rather than move.
* Homes are getting smaller, compelling consumers to "resize" their furnishings to accommodate smaller spaces.
* Disposable income is rising as more people go back to work.
* Rental activity is increasing.

The IBM forecast is produced using statistical and analytical software to evaluate both the long-term sales trend and seasonal peaks. In producing the forecast of store sales, IBM uses economic data gathered by the U.S. Census Bureau. The data is derived from a survey of store establishments primarily engaged in retailing home furnishings. These store establishments are a representative sample and are not inclusive of all industry activity in this category.

The online forecast is based on data from IBM Benchmark, an analytics-based, peer-level benchmarking solution that measures online marketing results, including real-time sales data from the Web sites of more than 500 leading U.S. retailers. All of the data is aggregated and anonymous. IBM Benchmark is part of IBM Smarter Commerce, an initiative designed to help businesses adapt to digital trends such as online, mobile and social buying and meet the demands of today€™s empowered customer.

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