Furniture Sales Surge as Consumers Shelter in Place in the Wake of COVID-19
Social distancing measures have altered consumer spending. Society’s new normal — the novel coronavirus pandemic — means more time at home for pretty much everyone, and brick-and-mortar stores are feeling the loss. But online shopping continues to thrive, even in the furniture sector. In fact, COVID-19 has actually boosted online home decor sales as work-from-home consumers look to embellish their homes for video conferences with loved ones and co-workers.
New data from the American Home Furnishings Alliance (AHFA) and Wakefield Research reveals that nearly three-quarters, or 74 percent, of American office professionals now work from home because of stay-at-home regulations. That number includes 80 percent of the country’s working men and 67 percent of working women.
Furniture Today likewise summarized the AHFA findings, noting that “nearly half, or 49 percent, of Americans working from home are under a workplace mandate, while 16 percent are following a company recommendation and 13 percent are following a state level mandate. Another three percent are working at home on their own accord, and three percent already worked from home before the outbreak.”
Interestingly, when asked what activities were partaken of at home, AHFA findings showed that 67 percent of respondents preferred watching TV or streaming movies, 59 percent enjoyed quality time with family, and 48 percent cooked or baked. Also, “48 percent of Americans are doing more household chores, 44 percent are working more, 38 percent are playing more games, 38 percent are reading more, 37 percent are sleeping more, and 18 percent are gardening more.”
Time spent homebound is making denizens more conscious of their decor choices, and that’s led to a huge sales surge in the home furnishings sector. Apartment Therapy’s editor-in-chief Laura Schocker explained on Fox Business News that “we’re seeing a surge in interest from our readers about how to carve out work-from-home spaces. They’re looking for advice on creating work areas that foster productivity while also feeling attractive and sustainable, especially since no one knows how long this situation will last.”
The AHFA findings also coincide with a separate survey conducted by Second Measure, which found that of those now working from home, “many have been purchasing office supplies,” to the tune of 65 percent. Consumers were also investing in electronics (phone, tablet, etc.) at a 29-percent increase, followed next by 26 percent on home office furnishings (desk, chair, other furniture), computer monitors at 22 percent, and printers at 19 percent.
Even more eye-opening is the fact that Second Measure data charts showed that both Office Depot’s and Staples’ “[g]rowth began to climb in March, rising over 10 percentage points at each company throughout the month. This shift to positive growth leaves Office Depot up 3 percent and Staples up 4 percent year-over-year as of March 29…[Plus,] at Staples, a rising share of purchases are being made online.”
AHFA findings also semi-reflected data compiled by international internet advertising company Criteo. The company’s analytics on coronavirus shopping trends, published in the second week of April 2020, revealed that the “top eight key product categories that are seeing some of the biggest jumps include webcams, sleepwear and loungewear, shaving and grooming gear, small animal supplies, baking items, gaming equipment, outdoor furniture for yards, patios, and gardens, and exercise bands.”
This was similar to another set of Criteo’s data analytics published in the first week of April, which showed webcams and gaming “take off” as homebound consumers were “combat[ting] feelings of isolation and boredom associated with social distancing…[by] spending on products that help them stay connected and entertained.”
But there’s more to this uptick in furniture sales than that. As calls to shelter-in-place spread across the country, several companies have provided their employees with stipends to assist the transition into the work-from-home environment. For instance, Shopify offered workers a “one-time remote allowance” of $1,000. Similarly, Spotify offered their telecommuting employees “$250 for a monitor and $250 for a chair or desk.”
The news is comforting for those in the furniture industry, particularly since some brands like Pier 1 and Art Van Furniture have not performed well for their stakeholders.
In mid-February, Forbes covered Pier 1 Imports’ anticipated bankruptcy filing as it put itself up for sale and sought to close out 450 of its stores. The company had “struggled for the better part of the past five years, with too many stores, a tired (and inconsistent) merchandising and marketing plan, an underdeveloped e-commerce business, and enough changes in management to make printing corporate-letterhead stationery a fruitless endeavor.”
Then, in late February 2020, Furniture Today disclosed Art Van Furniture’s impending bankruptcy filing. Art Van was a family-owned furniture enterprise that had been in business for over 60 years. It was sold to a private equity firm in 2017, but the new owners were simply not able to keep it up.
Forbes described the company as a former “powerhouse” that liquidated “in just three years.” Its undoing? Being too dependent on China, the top furniture exporter to the US. As the US-China trade war waged on, competitors eventually surpassed Art Van, especially online mainstays Amazon and Wayfair. The piece goes on to explain that “in 2017, e-commerce was a relatively small factor in the furniture business. Today, it is roughly 20 percent of the market. Art Van tried, unsuccessfully, to quickly ramp up its e-commerce business.
Wayfair, meanwhile, is flourishing. Before the pandemic forced nationwide shutdowns, “only about 14 percent of total furniture sales in the US were made online,” states CNBC. Wayfair, however, was already an e-commerce stalwart by the time COVID-19 came around. Why? It began as an online furniture store back in 2002. It’s only natural for them to know exactly how to serve consumers stuck indoors itching to beautify their homes with decor improvements for ease, comfort, and ambiance. That brick-and-mortar competitors got sidelined by the lockdowns only helped them even more.
Wayfair’s big secret? Its “e-commerce model is uniquely suited to serving customers’ very real needs at this challenging time.” Wayfair’s online platform is convenient and user-friendly for those who “have been looking online for a more comfortable chair or a standing desk…[And still] other consumers are using the extra time they are spending at home to decorate,” according to Fortune.
With Wayfair remaining open online, unlike brick-and-mortar stores, the company “has benefitted from fulfilling those needs.” The online furniture company “expects to meet or exceed its previous outlook for revenue growth during the first quarter of fiscal 2020.”
“The fact that Wayfair is seeing an increase in sales makes sense,” Emory University Assistant Professor of Marketing Dan McCarthy told CNBC. “Wayfair had no physical stores, while its competitors do, which those competitors could not sell through.”
Improvements Wayfair has made, in light of COVID-19, include introduction of “no-contact delivery, where signatures are no longer required for boxes, and [instructing drivers] to wash or sanitize their hands between deliveries. It said it has started taking daily temperature checks at some of its distribution facilities.”
It remains to be seen whether all these positive gains in the furniture sector will persist as the pandemic and the concurrent search for a vaccine continue.