Turning the Tables on the Furniture Industry

Turning the Tables on the Furniture Industry

Long dominated by a single business model, the furniture market is getting shaken up by challengers using a variety of strategies to attract new customers. Three trends are disrupting the furniture industry, giving startups a chance to break into the market. However, established furniture manufacturers aren’t just couch potatoes – they’ve got some strategies of their own to compete in the rapidly changing retail space.

E-Commerce Gains Ground

Appealing to millennials willing to purchase furniture online and trade the ability to physically examine furniture in return for convenience, e-commerce is revolutionizing the furniture market. E-commerce is expected to grow as millennials create independent households and shop online to outfit their living spaces. In fact, The Freedonia Group’s own in-house projections expect furniture and furnishings to be the fastest-growing segment of e-commerce sales through 2022.

Some companies are using customization as a lure to attract consumers to the online shopping experience. For example, Joybird is an online retailer that maintains no physical inventory – instead, the company’s customers design the furniture, then Joybird builds the furniture to specification. The company combines this service with a generous return policy to encourage shoppers to be willing to purchase furniture without trying it out first.

Facing (Augmented) Reality

One issue many customers have with shopping online, especially for furniture, is that products may look very different online than they do in a customer’s living room. Several enterprising companies, such as Wayfair and Macy’s, are aiming to address the issue through the use of augmented reality (AR).

AR commonly employs a smartphone app to superimpose consumer goods into a photograph or real-time video of a consumer’s surroundings. For example, this technology enables a consumer to place a virtual couch inside their living room and walk around, inspecting the item from different angles. This is something the average person can easily do in their own home, using a personal smartphone and an app.

The Rise of Renting

The furniture industry was built on the idea that people would purchase furniture, own it, then replace or refurbish it as necessary. However, one company turned that model on its head. Feather is a startup based on selling furniture as a service.

Founded by a New Yorker frustrated with the difficulty of owning and moving furniture between apartments in the city, Feather is designed to encourage permanent rental of furniture. The company offers customers rental furniture for an indefinite period of time rather than a rent-to-own arrangement. Consumers can rent furniture and choose to renew, swap, purchase, or return furniture when convenient. Much like the nascent bed-in-a-box trend, Feather seeks to use its online space as a way to disrupt the furniture industry.

Traditional Retailers Cushion the Blow

So what will established retailers do in response? Acquisition is a tool often used to absorb startup competitors; Joybird, for example, was purchased by La-Z-Boy in July 2018. The industry has other options too. Many brick-and-mortar stores have adapted to this trend by showcasing their furniture collections online and adding e-commerce capabilities to their websites. Furthermore, many pure-play online retailers find it advantageous to open physical storefronts despite the increased overhead costs. Inside, customers can investigate, test, and inspect furniture they may be interested in, then purchase it in the store or later online.

Ultimately, one should expect a mix of strategies. Established players will not be afraid to acquire to get into the burgeoning online retail market – for example, Herman Miller purchased a stake in Nine United Denmark (maker of popular furniture brand HAY) in June 2018. In addition, partnerships between established furniture retailers and startups will allow established retail companies to get into the market, while startups will gain access to additional advertising and expanded supply chains.

Want to Learn More?

Don’t worry, we have you covered! For additional information and analysis of US industry trends, see the following reports published by the Freedonia Focus Reports division of The Freedonia Group:

Furniture: United States segments total demand by product in terms of:

  • household
  • institutional
  • office

The report further segments household and office furniture.

Office Furniture: United States segments total demand by product in terms of:

  • seating
  • storage and tables
  • desks
  • other office furniture, such as bookcases, credenzas, modular workstations, and overhead bins for office systems

Household Furniture: United States segments total demand by product in terms of:

  • upholstered indoor and outdoor
  • indoor wood
  • indoor metal
  • outdoor wood and metal
  • plastic and other household furniture types such as cane, rattan, and rubber

Each of the above topics forecast to 2022 US demand and shipments in nominal US dollars at the manufacturer level. To illustrate historical trends, the reports provide total demand, total shipments, the various segments, and trade in annual series from 2007 to 2017.

Sales of mattresses and box springs are excluded from the scope of these reports. Custom architectural and woodwork are excluded, as are partitions, shelving, showcases, and stands. Establishments exclusively manufacturing furniture parts are excluded. Re-exports of furniture are excluded from demand and trade figures.

You can also check out our related reports, which include:

About the Author

Owen Stuart is a Market Research Analyst with Freedonia Focus Reports. He conducts research and writes a variety of Focus Reports, and his experience as an analyst covers multiple industries.