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Cocooning in New Luxury Style: How the top 20% shop for & decorate their home and ways for businesses to prosper

Cocooning in New Luxury Style: How the top 20% shop for & decorate their home and ways for businesses to prosper

U.S. Home Furnishings Market Underwent Major Overhaul During Recession -- How Consumers Are Constructing the New Home Furnishings Market of their Future

Only in 2013 did the home furnishings market recover its losses from the recession of 2008-2009. Today what's left of the home furnishings market in the wake of the recession is very different than the market that went into the recession. Marketers and retailers must adapt to the new business environment where the best customers demand a whole new way to shop for and buy home furnishings. Americans are "cocooning" in a new style combining fashion and function to create a safe, comforting and stress-free environment. A new report from Unity Marketing entitled Cocooning in New Luxury Style lays out the plan for marketers to grow in the new post-recession home furnishings market.

The Market Took Five Years to Recover from Recession Losses

The U.S. home furnishings market reached $315.3 billion in 2007, only to retreat to $273.5 billion in 2009 during the recession. But it took five years before the home furnishings market got back to its pre-recession levels. At the close of 2013 industry sales were $315.9 billion, according to the latest estimate from the Bureau of Economic Analysis, NIPA 2.4.5.

Furniture & Home Furnishings Stores Remain Decimated

As the home furnishings market lost 13% of share as it retreated from its 2007 pre-recession high to its 2009 low, retailers that specialized in furniture and home furnishings took a bruising. Back in 2007, there were 65,144 furniture and home furnishings retailers in the country. By 2012 there were only 51,998 - a 21% drop in the number of retail doors classified as furniture or home furnishings retailers, based upon the latest Census Department's 5-year Economic Census. In 2007 those retailers generated sales of $108.2 billion, or about 34% of the total home furnishings industry.

By 2012, the retailers that survived the recession had sales of only $89.1 billion, an 18% decline. Further in 2012 these retailers accounted for only 29% of the total industry, indicating that other types of retailers - department stores, discounters, online/internet, and others - have taken a huge chunk out of sales that used to go to furniture and home furnishings stores.

So while the industry overall has recovered from the recession, furniture and home furnishings' retailers still lag way behind the overall industry. In fact, this class of stores is even behind sales in 2002, or $91.8 billion.

Marketers' Hope for Growth: The Affluent 20% Account for 43% of Total Sales

The home furnishings market is heavily weighted toward the affluent consumer segment. The affluent (top quintile of U.S. households based upon income which starts at about $100k today) make up only 20% of total U.S. households, yet account for over 40% of the industry's sales. That makes each affluent customer two-times more valuable to retailers and marketers than a typical middle-income customer. The affluent are the 'heavy-lifters' in the consumer economy.

Not only do the affluent make up a far greater share of industry sales than their total numbers would indicate, they also are the ones with discretion to pay a premium for new home furnishings. This is the consumer segment that home furnishings retailers and marketers must cultivate for growth now and in the future.

Beware: Affluents Are Careful Spenders

Just because they are affluent and have more money to spend, that doesn't mean they are looking to spend it as fast as they can. The affluent are careful spenders and use all the tools available to comparison shop and get the best deal. They are value-oriented consumers, looking to maximize their investment in furnishings for their home that will return the utmost pleasure and enjoyment. Marketers that understand the affluents' attitudes and motivations in home purchases will uncover the secret to future prosperity and growth of their business.

New Report Delves into Affluents' Needs and Motivations in Home Purchases

Unity Marketing's latest trend report, Cocooning in New Luxury Style, delves deeply into the affluent consumer segment and their home furnishings needs and desires. In July 2014 Unity Marketing surveyed n=1,200 affluent consumers to discover their recent home furnishings purchases, what they bought, how they shopped, what motivated the purchases, their spending levels and much more.

The results of that survey provide a road map for growth to home marketers that need to understand their best potential customers. Plus the report includes a competitive analysis of how marketers as diverse as IKEA, West Elm, Wayfair, Restoration Hardware/RH, Design Within Reach, LG, Ekornes, Saatva, Ethan Allen, Home Depot, La-Z-Boy, JC Penney's and others have successfully tapped the greater spending potential of affluents and they've done it at all different price levels.


Introduction
Methodology
Home Furnishings Market Overview
Home Furnishings Market 2004 2013
Home Furnishings Market by Product 2004 2013
Affluent Consumer Segment Market Size 2004 2013
Affluent ≠ Luxury
Channels of Distribution to Top 20% Income Segment
State of Home Furnishings Retailing, pre and post Recession
Profile: Furniture Brands International
Affluent Furniture Consumers & Changes in Channels 2008 2013
Affluent Clock, Lamps & Lighting Consumers Channels of Distribution 2008 2013
Affluent Carpet & Floor Covering Consumers Channels 2008 2013
Affluent Window Coverings Consumer Channels 2008 2013
Affluent Major Appliance Consumers & Channels 2008 2013
Affluent Cookware Consumers & Channels 2008 2013
Affluent Small Appliance Consumers & Channels 2008 2013
Affluent Tabletop Consumers & Channels 2008 2013
Affluent Linens Consumers & Channels 2008 2013
Affluent Garden Consumers & Channels 2008 2013
Trends & How to Use this Data
Affluent Home Furnishings Customers, Your Best Customers
Affluent Home Purchases: Demand & Spending
Demographics of Best Target Home Customer
Profile: La Z Boy
What Home Furnishings Affluents Buy
Types of Home Furnishings Bought
Profiles: Mattress Firm Holdings, Saatva, Sleep Number
Amount Affluents Spent on Home Furnishings
Type of Decorative Accents Bought by Affluents
Amount Affluents Spent on Decorative Home Accents
Types of Home Remodeling Items Bought by Affluents
Amount Affluents Spent on Home Remodeling Items
Reasons for Home‐Related Purchases
Why Affluents Remodeled their Homes
Why Affluents Decorated their Homes
Plans for Major Home Changes in Coming Year
Direct Mail to Market Home Products & Services to Affluents
More on Affluents’ Home Projects & Purchases
Rooms Affluents Decorated or Remodeled
Factors Influencing Purchase Decisions
Resources Used to Plan Purchase Decisions
Connect with Affluents in Showroom, Blogs, Social Media,
Qualities Affluents Are Looking for when Purchasing Things for the Home
Profile: Ekornes Stressless
Where Affluents Like to Shop for Home
Home Improvement Stores as Place for Affluents to Shop & Profile Home Depot
Specialty Home Furnishings Stores & Profile Restoration Hardware/RH & Ethan Allen
Warehouse Clubs & Profile Costco
Department Stores & Profile JC Penney’s
Local Independent Furniture Stores & Profile Davids Furniture & Interiors
National Furniture Store Chains & Profile Design Within Reach, 123 Store
Online Websites & Profile Wayfair
Interior Designers & Profile Interior Design Centers
Direct Mail Catalogs & RH 2014 Catalog
What Affluents Look for in a Destination for Home Goods
Home Styles Affluents Favor
Use of Design Professionals & Interior Designers
Type of Design Professional Used & Certification
Why Used Services of Design Professional
Ideas for Marketing Design Services
Make Home Furnishings Fun
Feelings about Home Furnishings Shopping
Profile: IKEA, LG Studio & Nate Berkus
Affluent Decoration Personalities
Affluent Consumers’ Attitudes toward Home & Home Decoratings
Four Affluent Home Personalities
Attitudes by Personality
Demographics of Personalities
How to Sell to the Castle Keeper
Hoe to Sell to the Hostess
How to Sell to the DIY‐er
How to Sell to the Nester
Unity Marketing Can Help Home Marketers Grow their Businesses

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