The home furnishings Industry has always been very supportive and protective of its deep roots in the brick-and-mortar channel. This is certainly understandable, as in-person shopping experiences have had tremendous value for purchases in this category, translating into an outsized portion of a manufacturer’s business.
But the last few months of COVID-19’s impact on the world has changed everything, and we don’t see things ever going back to the way they were. In-person shopping has become cumbersome (if not impossible in some areas), causing increased comfort levels of shopping online, and an astounding purchasing behavioral shift that has skipped several years ahead.
An ecommerce strategy in every category matters now more than ever. Here we look at how the landscape has changed dramatically this year, and our future outlook on ecommerce.
The Numbers Show it, And it’s Not Generation Specific
Total U.S. online sales reached $73.2 billion in June 2020, up 76.2% compared with $41.5 billion a year earlier. Given the majority of the country had already opened up at this point, this means the increase wasn’t entirely forced.
Before the pandemic, eMarketer estimated that in 2020, 85.9% of Millennials in the U.S. would be online shoppers. Among 25 to 29-year-olds, 50% said at least half of their shopping occurs online, and the figures were similar for those ages 30 to 34. What’s even more interesting is that Gen Xers and Baby Boomers were also projected to increase their digital shopping in 2020.
The pandemic greatly accelerated all online stats across each generation, even for those that would be considered “late adopters” of online shopping. Many consumers turned to online shopping for the first time, with a staggering 12.2% growth of new online shoppers age 65 and older, and now that everyone is accustomed to it, they’re likely to stick with it.
Technology Acceleration by Retailers has Made the Shift More Seamless
Even though the majority of states have lifted stay-at-home orders, people are still social distancing and staying home far more than in the past, with less shopping in physical retail spaces. As a result, many retailers are embracing technology that allows for BOPUS (buy online, pickup in-store) or curbside pickup – which is pushing the consumer towards an online experience, even if they ultimately pick up the product themselves.
Beyond mobile apps, the online search function is also becoming increasingly sophisticated, thanks to improved algorithms that make it easier for consumers to find exactly what they’re looking for. This is great news for consumers, but very much puts the onus on manufacturers selling online to create a robust content marketing strategy that will allow consumers to find their products.
The Home Category will See a Continued Uptick
The ecommerce space has already seen tremendous growth in the furniture category. In 2019, U.S. ecommerce revenue from furniture and homeware sales amounted to $42.29 billion and is projected to increase to over $54.23 billion by 2024. Analysts anticipate furniture and home furnishings will be the fastest-growing ecommerce segment through 2022.
While brick-and-mortar retail sales saw an uptick in June with all of the pent-up demand, the news of increased infection rates as of late will likely drive consumers back home. Schools are announcing a virtual fall semester, and businesses are keeping as much staff as possible in their “home offices.” As more families prepare for another stay-at-home bout, it stands to reason they will be looking to invest in making their homes more comfortable, and those investments will be made safely from their homes online.
The Ecommerce Channel is Currently the only Channel to Effectively Launch New Product
Home furnishings trade shows are being rescheduled or cancelled on a weekly basis due to COVID-19. And while manufacturers continue to bring new product to market this year, these traditional selling venues for new product displays are no longer a vehicle to get new product into stores. Coupled with traditional territory reps traveling throughout their regions less, it’s been very difficult to show consumers new product.
Online platforms can bridge this new product launch gap – in fact, manufacturers can often get internet retailers pricing and digital assets weeks (or months) before a product comes into stock, allowing them to have product online right when it’s ready.
Manufacturers who do not have streamlined partnerships with key online retailers will not only lose ground because of the purchasing shift, they will also have a challenging time bringing new products to market.
This is clearly a trend that is not going away, and in fact, will only get stronger. Now, more than ever, having a strong ecommerce strategy will be critical for manufacturers looking to grow furniture sales in the future.
