Homeware eCommerce: The state of play in 2023

eCommerce and the homeware industry - The state of play in 2023

The homeware industry is vast and covers a huge variety of products, including:

• Indoor furniture
• Garden furniture
• Decorations
• Floor coverings
• Kitchen furniture and appliances
• Upholstery and home textiles
• Cleaning products

On the whole, homeware is a growing market that is experiencing a steady digital transformation.

Traditionally in-store, 70% of consumers have purchased homewares online in the last 12 months, more than the 64% who have gone in-store [Mintel].

The homewares market grew by over 10% in 2021 as consumer demand returned following a flat 2020 [Mintel]. The market size (revenue) of the Furniture, Lighting & Homeware Retailers industry was £14.3bn in 2022 [IBISWorld].

Some of the major online homeware retailers include Dunelm, John Lewis, H&M Home, DFS and Wayfair.

House purchases are on the decline - what will that mean for the industry?

Based on provisional Government data, the number of completed house purchases in Q1 2023 dropped by 19% in comparison to 2022.

The real estate market is complex and influenced by a myriad of factors and, while the analysis is hypothetical, there is strong reason to suggest that the current economic uncertainty and mortgage affordability are dissuading current and first-time owners from engaging with the housing market.

It poses the question as to whether this is hurting the homeware industry, or if opportunity lies within the current climate.

Homebuyers typically invest in new furniture, appliances, and decorative pieces to personalise and furnish their new homes. When fewer houses are being purchased, a decrease in demand for furnishings and home decor items is to be expected.

On the other hand, while completed house purchases may decrease, homeowners who choose to renovate or upgrade their existing properties can still contribute to the demand for homeware products. Homeowners looking to improve their current living spaces may invest in new furniture.

If the housing market does not recover in the short-mid term, the homeware industry may begin to adapt and target the segment of customers who prioritise home improvement projects over purchasing new homes.

The rise in online homeware purchases

The influence of the COVID-19 pandemic on the furniture eCommerce industry becomes evident when examining the yearly revenue data.

In the United Kingdom, there was a remarkable surge in online retail furniture sales from 2019 to 2020, primarily driven by government-enforced lockdown measures that established work-from-home offices as the prevailing norm.

By 2021, the furniture eCommerce market in Britain experienced a substantial increase, generating nearly £4bn in sales. This significant growth represents a huge jump from the mere £477m recorded just a decade ago.

This instant surge in online demand forced homeware retailers to evaluate and improve their digital presence at pace, in some cases, bringing their website and customer service experiences up several levels in a bid to compete with Amazon and other competitors.

Fast forward to mid-2023 and the consumer now holds a slight preference towards shopping online for homeware and furniture.

It hasn’t always been the case but online experiences have now been optimised for homeware, forcibly pushed forward by the pandemic.

Not only is this in keeping with the general direction of the modern world, but consumers are now seemingly much more confident in making online purchases for these high-ticket, heavy-duty items.

Let’s explore some of the techniques that homeware eCommerce websites are using to provide experiences that inspire consumers to make online purchases.

The optimal homeware eCommerce experience

There are several essentials that have shaped the optimal, expected eCommerce experience that is provided by a homeware brand.

Intuitive eCommerce website design…

First and foremost, brands have invested heavily in their websites, ensuring that they provide intuitive navigation whilst remaining visually impressive.

An easy-to-navigate website enables users to browse seamlessly, find products efficiently, and make informed purchasing decisions - all critical components of a good homeware eCommerce experience as these product mixes do often require a fair amount of browsing and selection before any purchasing decision can be made.

…that translates perfectly on mobile devices

With the increasing use of mobile devices for online shopping, homeware brands have been prioritising responsive and mobile-friendly website design techniques.

It is essential that these websites adapt to different screen sizes and offer seamless browsing and purchasing experiences on mobile devices. Not only does this enhance user satisfaction across this multi-device experience, but it encourages spur-of-the-moment sales from users who made an impulse search on their mobile phone.

Product visualisation techniques

Product visualisation is one of the main reasons that homeware was one of the last industries to truly embrace online retail. Users preferred to go in-store to choose their next bed, couch or wardrobe because they could get a full appreciation for its relative size and features.

High-quality product imagery

As an industry standard, homeware brands must understand the importance of visually showcasing their products. They provide high-resolution images from multiple angles, allowing customers to examine product details, finishes, and textures. Zoom and hover-over features provide close-up views, enhancing the online shopping experience.

360° renders

360-degree renders of homeware products offer users an immersive and interactive experience, enabling them to visualise and assess the product from every angle. By allowing users to rotate and view the item in a 360-degree virtual space, they can gain a comprehensive understanding of its design, form, and features. This enhanced visualisation aids in building confidence and reducing uncertainty about the product's appearance, size, and details. It helps users make more informed purchasing decisions, leading to increased trust, engagement, and ultimately, higher conversion rates.

Augmented reality

Using their mobile devices, augmented reality (AR) empowers users to virtually place their chosen furniture products into the desired location in their houses.

By overlaying virtual objects onto the real environment, users can see how the furniture would look and fit in their homes. AR provides a realistic and personalised visualisation experience, allowing users to assess scale, style, and compatibility with their existing decor.

This immersive experience helps users make confident purchase decisions by bridging the gap between online shopping and the physical environment, resulting in higher customer satisfaction and reduced returns.

Offering online consultations

Consumers also preferred the in-store experience because they were able to communicate with a company representative and get quick answers to their questions about the product.

Aside from providing excellent product descriptions and FAQ content, homeware brands are also beginning to offer virtual consultations with design experts or sales representatives.

These consultations allow customers to discuss their specific requirements, receive expert advice on product selection and styling, and address any concerns or questions they may have.

The interactive nature of online consultations builds trust, ensuring that product recommendations are tailored to each customer's needs and preferences - an experience that was otherwise lost in the transition to digital.

On-point logistics and customer success

All of the above is completely futile if the company can’t efficiently manage its orders, inventory and deliveries.

With the acceleration towards an online market, homeware brands have been forced to quickly audit and improve the following logistical variables...‍

Inventory management

Investing in the right software to accurately track and manage stock levels across their warehouse and brick-and-mortar stores. Ensuring real-time visibility into available inventory, enabling companies to optimise their stock levels, prevent overstocking or stockouts, and streamline the fulfilment process.

Demand forecasting‍

By analysing historical sales data, market trends, and customer demand patterns, homeware companies employ demand forecasting techniques to anticipate future demand. This helps them plan their inventory levels, production schedules, and procurement activities, ensuring they have the right stock available to fulfil customer orders.

Automated order processing

Homeware companies often automate their order processing systems to minimise errors and improve efficiency. By using an eCommerce platform with an integrated order management system, they can seamlessly receive and process orders, update inventory levels, generate shipping labels, and communicate order status to customers in real-time, across all of their retail touchpoints.

‍Warehouse efficiency and fulfilment‍

Optimising their warehousing and fulfilment operations to ensure timely and accurate order processing. This includes organising the warehouse layout for efficient receiving and put-away, retrieval, and implementing barcode tracking systems to monitor stock movements, and employing streamlined picking, packing, and shipping processes.

‍Collaborating with the right partners‍

Building strong relationships with reliable suppliers and logistics partners is crucial for homeware companies. By partnering with trusted suppliers who can consistently provide high-quality products, companies can ensure a steady supply of inventory. Collaborating with reliable logistics partners enables efficient and reliable delivery of products to customers, minimising delays and ensuring customer satisfaction.

Delivery tracking‍

Homeware companies integrate delivery tracking systems into their operations, allowing customers to track their orders in real-time. They provide customers with regular updates on order status, shipping notifications, and estimated delivery times through email notifications or online portals. This transparency helps manage customer expectations and improves the overall delivery experience.

Our eCommerce solutions offer growing homeware retailers the lowest possible cost for running their online and retail infrastructure through one platform. Venditan Commerce provides all of the above and more, helping you to sweat the most out of your existing physical and human infrastructure.

If you have requirements or wish to discuss what we can offer in more detail, don’t hesitate to contact us.

Adopting a direct-to-consumer (D2C) strategy

An increasing number of homeware manufacturers are considering a direct-to-consumer approach, and there are several reasons for this.

As with most business decisions the motives can be traced back to profitability.

With powerful eCommerce platforms now readily available with the out-of-the-box functionality, it has never been easier for manufacturers to digitally establish themselves with the technology they need to run an efficient online retail operation.

Therefore, if homeware manufacturers have built strong brands with their own merits, there is now an accessible route to bypass traditional distribution channels, thus taking the entire profit margin for themselves and eliminating any additional costs and bloat that come with selling through an intermediary retailer or wholesaler.

Not only does this take back some level of control over pricing strategies and promotions, but it provides a greater level of agility and enables brands to bring new products to the market at a faster pace.

The manufacturer is also able to fully control the customer experience that is associated with their products. From the moment customers visit their website through to their post-purchase interactions, the brand is able to create a consistent and tailored experience that is truly aligned with their values, identity and products.

By selling directly to consumers, homeware brands are gaining access to valuable customer data and insights that otherwise would have remained with the retailers to whom their products were distributed. By collecting data on customer behaviour and preferences, homeware brands can gain a deeper understanding of their target audience which in turn can inform future product development, marketing strategies and the personalisation of their customers’ experiences.

However, there is a trade off.

While the D2C approach offers numerous benefits, it also comes with challenges. Manufacturers must make a healthy investment into their eCommerce platform and logistics infrastructure (covering all of the points in the previous section of this piece) and that’s just to ensure they can operate - the visibility they once gained through partner retailers and wholesalers must be effectively replaced by a marketing strategy that brings consumers directly to the brand.

That’s not a simple task, and it can take a number of years to build up that repeat user base from scratch.

Nonetheless, the growing trend of homeware brands going D2C showcases the potential advantages of this approach in terms of customer experience, data-driven insights, and brand control, making it an attractive option for many brands in the industry.

Furniture rental is becoming increasingly popular

In 2022, the worldwide market for furniture rental services reached a valuation of $72.5bn. It is expected to witness substantial growth, with estimates indicating a rise from $77.8bn in 2023 to $142.9bn by 2030 [Fortune].

In an increasingly mobile society (the 2021 census revealed that the number of households renting had more than doubled in the last two decades, with homeownership rates falling) the opportunity to rent furniture provides a flexible solution, particularly as the average tenancy in the UK is 12 months, so it simply isn’t feasible to move so much.

It allows people to furnish their living spaces exactly how they want to, without the burden of transporting or selling their furniture when they relocate. At a time where expenditure is being evaluated, buying furniture outright is becoming an increasingly significant financial investment. For those on a tighter budget or with uncertain long-term living arrangements, monthly rental payments are a more manageable route to access the high-quality and trendy furniture they desire.

Roomservice (CORT), Instant Home and Zenkki are just some examples of companies working in this space. Products are offered with a clear monthly price attached to them and customers can build out their furniture requirements through the website.

If this market does continue to grow as projected then it opens up the consideration for homeware retailers to offer new, innovative subscription and rental models giving temporary access to their wares.