The future trends in Home and Living

Tech-tonic shifts are shaking up the Home & Living market

As consumers of Home and Living products are increasingly choosing to shop online, brands and retailers must adopt a digital-first strategy; one that includes a strong online marketplace component.

Instead of driving to the store or showroom, consumers today are increasingly choosing the convenience of digital sales. This trend is particularly relevant for the Home furnishings and Décor sector, where it upsets long-standing preconceptions about how sales are made.

The pervasiveness of digital technology in our everyday lives is reshaping the global economy: whether we’re working, playing, or shopping – the digital world now facilitates everything we do and how we interact.

Rapid online growth in Homewares

In the Home and Living industry, online sales are growing fast, and they currently make up 20% of all furniture and homeware sales in the USA. In fact, in the USA, just two marketplaces (Amazon and Wayfair) claim more than 50% of the total online spending on home furnishings and décor.

In Europe, the picture of the Home and Living market is much more diverse than in the USA. Sellers and consumers benefit from a growing constellation of new marketplaces and emerging platforms. These range from familiar horizontal marketplaces, which offer every category of product imaginable, to more focused verticals and platforms that distinguish themselves by specializing in Home and Living products and curated collections.

What’s driving Home and Living consumers to shop on marketplaces?

#1 Trust

Marketplaces and platforms offer the consumer a familiar and secure shopping environment they know and trust. Home and Living sellers and Home Decor stores can further leverage this information-rich environment to distinguish themselves based on their unique selling points, such as ethical issues or production techniques.

#2 Sustainable choices

According to Tobias van der Linden, Vice President of Commercial Growth at home24,

“Consumers increasingly care about their impact on the environment, and they want to know where products are produced, under which circumstances, and with what raw materials. But this goes much further. First, retailers and manufacturers are now measuring and publishing their CO2 footprint, and smart and sustainable solutions for customer returns and overstocks are being introduced.”

With so many ways of connecting customers with the products they desire; it is becoming possible to reach entirely new reservoirs of customers. The opportunities for Home and Décor brands have never been this good. However, they rely on being able to provide detailed information and transparency about environmental impacts and sustainability.

#3 Exceptional digital experiences with AR and 3D content

Many large brands have already been investing heavily in converting their ecommerce offering into an exceptional customer experience.

The shift toward online shopping has also brought new ways of browsing and discovering styles. Visual searches, social media, dedicated apps, and Augmented Reality or Virtual Reality (AR/VR) content are becoming significant drivers for ecommerce in the Home and Living sphere.

Many of these technical capabilities (such as AR or VR) may seem out of reach for independent brands, but there is strong value in forming strategic partnerships when there is a clear business argument for doing so.

Technical partners can enable brands to access the benefits of these technologies without needing to ‘start from scratch’ themselves, for example. Additionally, more brands are forming new strategic partnerships with retailers and Home and Living platforms to offer ‘white label’ products, which form part of the retailer’s own range.

#4 Shopping across different brands and assortments

As in other sectors, online marketplaces are leading the way in Home and Living ecommerce. Customers routinely use these platforms to browse homewares across numerous styles, brands, ethical values, and delivery options.

They offer consumers the ‘endless aisle’ of choices they demand, combined with easy-to-access product information and reviews. This information empowers consumers with the confidence to make the right buying decisions. Increased confidence leads to more sales.

Competitive Battlegrounds: Differentiate to succeed

The European Home and Living market is characterized by strong online growth and a rapid proliferation of new platforms. Across Europe, there is a diverse selection of marketplaces and specialized verticals, and new players are entering the market every year.

From 2021 to 2025, a remarkable 42% of the world’s growth in online Home and Décor sales will come from Europe. As marketplaces and brands seek to capitalize on this sales growth, we can see some interesting trends emerging in this area. Unlike the US, the diverse European market places pressure on marketplaces to differentiate themselves. They achieve this with unique value propositions that entice consumers and brands alike.

Omnichannel fulfills a vital consumer need

Consumers are motivated by choice and convenience, and online-only doesn’t completely fulfill this need. Omnichannel shopping and hybrid-model retail offer customers the ability to see products in-store, and have them conveniently delivered at home – or vice versa. Brands that can offer this customer experience have a competitive advantage.

“I strongly believe in hybrid models where customers can for example test a sofa or a bed in a centrally located showroom or shop, which is then conveniently delivered right into their homes, combined with a strong online presence with an extensive complementary product offering and excellent customer service. Such combinations allow for a holistic shopping experience that neither an online nor an offline mono-channel retailer can offer.”

- Tobias van der Linden, Vice President Commercial Growth, home24

Choice and assortment lead the way for future growth

Leading US Homewares marketplace Wayfair has already begun its expansion into the European region, and several other strong players in the industry have launched their own vertical platforms.

However, the choice in Europe for consumers of Home and Living products is very strong. There are some excellent marketplaces and platforms with a strong focus on Homewares and Decor. These include Naduvi, home24, Wayfair, Maisons du Monde, H&M Home, fonQ, Homedeco, Loods5, and Conforama.

Consumers are drawn to these marketplaces by the broader assortments on offer. This choice drives improved conversion and sales for all the brands involved - demonstrating that competition can be an advantage when it comes to marketplaces.

Home and Living shoppers enjoy being able to create their own collections, adding to their shopping basket from a variety of brands and manufacturers. As many of these platforms use AI-based insights and suggestions to automatically offer ‘compatible’ or ‘similar’ products, it has become much easier for brands to access cross-selling opportunities.

Gaining an operational advantage with partnerships

Home and Living brands have unparalleled opportunities today, but also considerable challenges to overcome. As the online segment becomes more important for winning sales, brands must ensure they have the operational capabilities to compete. Great designs are no longer enough; visibility and agility are now important survival traits, and partnerships can help you achieve this.

Many brands are now leveraging technologies such as AR/VR and immersive shopping experiences to differentiate themselves to increasingly digital consumers, and the connection between social media trends and buying patterns is also being utilized by digital-savvy brands.

Smooth running: Partnerships that optimize operations

Integrating technological solutions into your business model is a vital part in meeting these challenges. Technological solutions can help brands by using insights to optimize their assortment and react to new trends. They can also streamline the processes used to handle orders and deliver the products themselves.

A strategic approach to future-proofing an organization by adding new technological solutions is to use an integration partner. These partnerships can leverage established expertise and industry contacts. This has strong value in the area of connecting and integrating with marketplaces and linking your operations to strategic partners, such as warehousing and third-party logistics/fulfillment.

Integration partners can help to streamline backend processes, and strategic partnerships can leverage those data connections to empower warehouses and carriers to deliver goods across wider geographic areas.

When used the right way, technology can also help protect the market position of your brands by controlling pricing and facilitating promotions. But it needs to be easy. Technological solutions only deliver value when they decrease the burden with smart automated processes that streamline and simplify.

Conclusion

Home is a place where you can be comfortable; with all the textures, fabrics, designs and fixtures that make us happy. Experiencing these is inherently tactile and physical, but the way we buy these goods is shifting rapidly. Consumers of home furnishings and décor increasingly shop using digital and online methods.

Online sales leads market growth

There are strong drivers for the shift to shopping online for Home and Living products. These include the increasing significance of millennial consumers (who shop online by default), increasing urbanization, and the dominating influence of social media.

All of these paint a picture of an ‘average consumer’ who has disposable income, prefers to shop online, prefers or requires home delivery, and is motivated by aspirational and inspirational social media trends. And fulfilling those social-media-fueled home aspirations is just a click away.

Consumers are following their hearts

Sustainability and ethical concerns are driving buying decisions now more than ever. This is just one criterion that might be used when making a buying decision, but marketplaces give consumers the ability to make selections with confidence. The information, reviews and trust provided by marketplaces makes them more likely to place an order via a marketplace than via a dedicated webshop.

Additionally, marketplaces offer consumers the ability to create their own collection in their shopping basket without being limited to a single brand, or having to make compromises on their important ethical considerations.

Digital-first means investing in technology and partnerships

To stay ahead of the game, brands and retailers need to proactively seek, evaluate and deploy technological solutions. These can help maintain and grow their market position, with the lowest threshold or commitment to investment.

As we have heard from our experts, the digital journey is now the primary way that consumers experience your brand. However, it’s essential that merchants focus on their strengths and adopt smart technologies and strategic partnerships. These can save a lot of time and money in the long term, and help to get it right from the very start.

Ready to dive deeper into the details? Get a free consultation from one of our marketplace experts today.