HIGH POINT — The COVID-19 pandemic has had a profoundly disruptive effect on consumer lifestyles, impacting everything from how they spend time in their homes to how and what they buy. This has been evident across the home furnishings industry as consumer demand throughout the second and third quarters of 2020 reached record levels.
Perhaps one of the most profound shifts has been the dramatic increase in online shopping, beginning with widespread shelter-in-place orders in the spring of 2020 but continuing throughout the remainder of the year and into 2021.
However, a recent consumer survey conducted by Furniture Today Strategic Insights indicates that the impact of these shifts is far from uniform across all consumer segments.
Buy it online
Furniture Today’s research suggests that shopping habits and product selections can differ significantly by generation.
For example, nearly 23% of Millennials indicated they are “much” more likely to shop the Internet as a result of the pandemic, compared with only about 9% of Baby Boomers. An additional 35% of Millenials described themselves as “somewhat” more likely to shop the Internet with only 28% of Boomer expressing that intent.
Perhaps not surprisingly, Gen X’ers fell somewhere in the middle on both counts, with about 18% saying they are “much” more likely to shop the Internet and about 32% saying they are somewhat more likely.
Another area where the Internet’s influence appears uneven is the product categories consumers expect to purchase there.
For example, nearly 70% of consumers say their next desk purchase is likely to be online, compared with only about 44% of recliner shoppers and about 48% of sofa buyers. Similarly, dining tables, another low touch-and-feel product category, saw nearly 60% of shoppers say their next purchase will be online.
The one seeming outlier and the traditional high touch-and-feel category to see more than half of consumers express an Internet preference was mattresses. That segment, which has seen boxed beds upend the traditional shopping paradigm and drive large numbers to shop online, saw nearly 53% of consumers say their next purchase will be on the Internet.
Money to spend
The pandemic has also had an uneven impact on consumer income, with Millennials appearing to fare better than their generational counterparts and Baby Boomers appearing to suffer the most.
It’s noteworthy, for example, that roughly 30% of Millennials said their income has increased since the pandemic, while only about 17% of Baby Boomers said the same. On the other hand, a majority of Baby Boomers (52.2%) said their income has remained the same, while less than 40% of Gen X and Millennials held their incomes steady.
The pandemic has also served to reshape consumer spending priorities, not surprising given the increased furniture sales activity over the past several months. As many have suggested anecdotally, that spending is fueled by decreased expenditures in travel, apparel and health and wellness activities, this last encompassing things such as gym memberships.
Nearly 73% of consumers said their travel and leisure activities have decreased, with apparel spending seeing a decline with about 40% of consumers, and health and wellness spending down for nearly 37% of consumers.
As companies try to assess the longevity of the current spike in home furnishings sales these numbers suggest that travel and apparel spending could serve as leading indicators of a return to pre-pandemic spending priorities and warn of a leveling in home furnishings demand.
When it comes to sprucing up their homes during the pandemic, the living room and bedroom top the priority lists of the highest percentage of consumers: 40.6% and 40.1%, respectively.
Not surprisingly, foundational pieces — sofa or loveseat in the living room and mattress in the bedroom — rank as the top priority with a significant plurality of consumers.
However a look down the priority list to other product segments shows that Millennials are still very much in their early house-holding years and are looking for a much wider variety of pieces including coffee and side tables, book cases and — somewhat surprisingly — television console/entertainment centers.
Where to spend it
This last category is noteworthy in that it runs counter to the prevailing opinion that Millennials consume the overwhelming majority of content, both informational and entertainment, on their phones.
The study showed that 22.3% Millennials are planning a home entertainment center purchase in the coming year compared with only 9.2% of Baby Boomers and 14.6% of Gen X shoppers. This finding suggests that as Millennials are setting up their first household and moving into their prime child-rearing years they are moving closer to previous generations in seeking out full-size televisions and the furniture to accommodate them.
The study offered additional evidence to support the theory of a home entertainment renaissance, coming in the form of consumer allocation of discretionary budgets.
When asked to assess spending since the pandemic, only one area — in-home entertainment — saw an increase over pre-pandemic levels. Nearly half (45.6%) of overall respondents indicated their spending had increased in this area, which includes such things as streaming services, video games and other forms of electronic entertainment.
Significantly, the area with the second highest percentage of consumers indicating increased spending (26.6%) was Household Electronics, a category that includes products such as computers and televisions. While not a direct indicator of a furniture purchase increased activity in both these areas could fuel secondary purchases down the road.
Another area that has seen dramatically increased interest since the pandemic’s onset is home office (see sidebar). Among all rooms in the home, the home office ranked third as an area of intended purchase in the coming year, with 30.6% of consumers indicating their intent to make a home office purchase in the next six months.
While the study did not specifically address whether consumers intended to locate these purchases in a dedicated “home office,” it is not unreasonable to work on the premise that consumers are reallocating space within their homes to accommodate working or schooling from home. For example, the study showed that 47.4% of consumers are working from home more since the pandemic’s onset, and 41.4% are doing school work at home more frequently.
It’s also instructive that while large percentages of consumers say they are cooking more frequently at home since the pandemic’s onset (69.4%), the dining room ranked as one of the lowest areas of intended future purchasing activity (18.4%), suggesting this room may be a likely candidate for re-purposing as home offices become more necessary.
Across all rooms of the home, the study also showed significant differences in the spending habits of the various generations, with Baby Boomers generally having higher purchase price expectations for furniture purchases than either of the two younger generational cohorts.
There were some noteworthy exceptions, which may again reflect the relatively higher percentage of Millennials who say their income has increased since the onset of the pandemic.
For example, of those who cited a recliner as a potential upcoming purchase, nearly half (45.6%) of Millennials said they expected to pay more than $1,000 vs. 20.9% of GenX shoppers and 16.1% of Baby Boomers.
It is further worth noting that across all categories and all generational cohorts, opening price points do not draw the highest percentage of responses among those intending to make a purchase. Instead it is typically the first few levels above the opening price point where most consumers say they expect to find their intended purchase.
This suggests that those who end up trading down may be responding to advertising and promotional messages or to engagement with the retailer at which they ultimately make a purchase.