It’s difficult to quantify the changes the Covid-19 pandemic has wrought on the retail industry. From the huge increase in online spend on groceries and essentials, to the rapid decline seen in the fashion industry, each sector of the retail space has been hit in different and subtle ways. And for the furniture industry, with so many consumers worldwide stuck inside due to various lockdowns and restrictions, it has led to one of the biggest consumer-led home spending movements in years. “The
“The pandemic has led to consumers spending a lot more time in their own home,” Jason Pallant, Swinburne University Assistant Professor of Marketing, told Inside Retail.
“As a result, it’s natural that a lot more consumer focus has gone to making sure [their] home is as comfortable and enjoyable as possible… Household goods has been a category that continually performed above pre-Covid trends as a result of this shift.”
Last year, Swedish furniture business Ikea launched the ‘Big Home Reboot’ report, which noted that 40 per cent of participants had made changes to their home during the pandemic.
“There’s definitely been a huge shift to [spending on] home [and] there are two views [on where that’s coming from],” Freedom CEO Blaine Callard told Inside Retail.
“One is that it’s driven by stimulus. That’s not my view. My view is that it’s a permanent or deep structural change in how we spend our discretionary income.”
According to Callard, since consumers aren’t travelling, buying clothes, or going out for dinner or drinks, they’re inadvertently saving funds and are looking for places to spend.
And, as with much of the retail industry, the largest growth has been seen online.
Ikea announced this month that, despite its overall revenue falling for the first time in a decade in its Southeast Asia division, its online operations soared – with over half a million online orders placed during the year.
“This crisis brought out the best in us,” said Christian Rojkajaer, MD of Ikea Southeast Asia and Mexico.
In a sector that has largely been dominated by items customers want to touch and feel before purchase, the shift to online has been one of the more interesting impacts of the pandemic, according to Pallant.
But where does that leave the sector in 2021? With so many customers having spent on upgrading their homes during the peak of the pandemic, and many showrooms now open again and welcoming customers, what’s next?
According to online furniture business Temple & Webster’s CEO Mark Coulter, it’s very hard to predict.
“We’re just trying to focus on the customer, and ensure that the customer that is shopping with us – for the first time potentially – is now experiencing the benefits of the [online] channel,” Coulter told Inside Retail earlier this year.
“Our thesis is that even if the customer can get back into stores, if they’ve had a good experience online then we’re in the consideration to get that purchase in the future.”
And, The General Store’s Matt Newell told Inside Retail they expect the ‘Great Covid Cocooning’ to continue into 2021, as Australians get more and more used to the convenience of working from home.
“Council applications for interior and exterior renovations have increased and these are often the catalyst for new furniture and homewares expenditure, much of which won’t flow into retail until early- to mid-2021,” Newell said.
“This combined with increased tendency to work from home indicates that there will be plenty of tail winds in the home category well into 2021.
“Covid caused a seismic shift in online shopping and that is likely to remain… shoppers are not afraid of ordering bulky goods anymore. That said, the showroom is far from dead – particularly from shoppers looking for advice and inspiration they need to shop a category that combines the complexity, style, manufacturing quality and high ticket prices.”