Team eCommerce Next interviewed Tara Kelly from SPLICE Software to get more insights on the impact of the home furnishing industry over the course of the pandemic. Following is our interview with her:
How has the home furnishing industry been impacted over the course of the pandemic?
The Covid-19 pandemic forced most Americans to stay home, which resulted in a shift toward a “homebody economy.” Exponential time spent indoors inspired many to spend money upgrading their homes. The furniture industry and furniture retailers were impacted over the course of the pandemic by a shift in consumer spending to home improvements – from home office spaces, gardening, and appliance and furniture replacements – with industry sales to $420 billion from 2020-21.
Explain the shift in consumer behavior and interests.
During the first year of the pandemic, less than one-third of U.S. consumers engaged in normal out-of-home activities while 80% of Americans felt concern when they left their home. With people spending a great deal of time living and working from home, pandemic consumer purchases shifted from dining out, travel and entertainment to home furniture investments, with the industry seeing a 26% increase from February to May 2020. Naturally, as consumers spent most time indoors, the pandemic propelled a shift to online shopping, as compared to pre-pandemic consumer behavior where 80% of all home purchases were made in brick-and-mortar locations rather than online retailers.
What do you predict for the home furnishing industry over the next five years?
The home furnishing industry will always be relevant to the American consumer, but the industry’s growth will continue to slow from previous year’s explosive gains. During peak growth of the home furnishing industry in 2020, online sales grew to over 130% compared to 2019. In 2021, online growth slowed to 70% and in-store growth to 25% compared to 2019. Now, the online and in-store growth trends can expect home furnishing retail sales to continue steadily over the next five years as people wrap up the home investment projects started during the pandemic.
What is the evolving role the home furnishing industry plays to the consumer?
The home furnishing industry is always relevant. Although the industry experienced a boom during the COVID-19 Pandemic as employees worked fully remote, approximately half of the full-time workforce – representing about 60 million workers – report that their company still allows them to work remote or in a hybrid setting, despite the risk of Covid-19 dwindling. People are still spending a great amount of time in their homes, and the U.S. consumer’s interest and behavior in home furnishing spending will reflect this.
How can home furniture companies boost the customer experience as consumer behavior shifts?
There are a couple ways home furnishing companies and furniture manufacturers can boost the customer experience and capitalize on shifts in consumer behavior. First, consumer loyalty will lie with companies who prioritize product innovation and who have implemented environmentally friendly business practices, goods and packaging. Consumers’ purchasing decisions are more focused on value-based shopping than ever before, so companies who can mirror this sentiment will improve the customer experience and overall company growth. Secondly, as the housing sector recovers and as employment levels rebound, the home furnishing industry can position itself to anticipate these needs to retain and attract customers.
How can we better perceive customer needs in the post-digital COVID era?
Companies can better perceive customer needs through customer surveys, opt-in consent and meeting customers where they’re at through proactive customer engagement. Now, 83% of consumers want the opportunity to opt-out and 79% want an opportunity to verify information collected about them. Additionally, nine of out ten consumers prefer businesses to communicate with them via text, so two-way text integration has become a “need-to-have” feature. Since consumer preferences and needs have changed, companies need to re-evaluate their customer base and update their customer experience in a way that reflects evolved customer expectations.
How can home furnishing companies better understand lifetime value?
Home furnishing companies and can better understand lifetime value by understanding changing customer needs and expectations. As seen over the course of the pandemic, the home furniture industry is in a constant state of fluctuation, so companies must take a proactive instead of reactive approach when it comes to customer experience and anticipate where the market is headed before it gets there.
About SPLICE Software
SPLICE Software offers a cloud-based solution that specializes in using big data and artificial intelligence, through the scalability of cloud storage and secure API connections, to create messages that drive customer engagement and the desired call to action.