Fast Facts in Five: The Furniture Industry

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Whether striking or functional, clean-lined or abstract, furniture has become a form of expression and the furniture industry is benefiting greatly as a result. 
In fact, it is estimated that by the year 2019 the global market for furniture will reach an estimated $695 billion. As the housing market grows, it is expected that this type of discretionary spending will only increase. Here are five interesting facts about the furniture industry that may surprise you.
Growth of the Furniture Industry has Outpaced the U.S. Economy

The furniture sector continues to be very strong, performing roughly twice as well as the overall economy. The industry is growing at a rate of 6 to 7 percent year-over-year, which compares very favorably to the overall economy.

Second Thoughts about Offshoring?

The cost advantages of overseas manufacturing may not be as great as once thought. In fact, recent studies show that manufacturers may be overestimating savings by as much as 30 percent, as cost competitiveness continues to erode due to wage increases, lagging productivity growth, unfavorable currency values and rising energy costs. While this may hold true, onshoring is not without its issues, as many foreign manufacturers are still producing at lower cost and quality continues to improve. 

Home Furnishings and E-commerce

E-commerce is not only the biggest source of growth in the U.S. furniture and home furnishings industry; it is also the largest source of disruption. Experts predict that online sales will reach $32 billion by the year 2018. This is due in part to online players like Wayfair and Amazon, but it is also attributed to traditional retailers that have ramped up their omni-channel capabilities.  

The Generational Perspective

While millennials are delaying home ownership, they present a great opportunity for the furniture industry. A recent survey conducted by Furniture Today shows that millennials have become the largest consumer group in the U.S. furniture and bedding market. In fact between 2012 and 2014, the group's spending increased by 142 percent, from $11.1 billion to $27.0 billion. 

 
Top Five Furniture Trends for 2016 and Beyond
  1. The demand for home office furniture will increase. The rise in the number of telecommuters has spiked the demand for home officefurnishings.
  2. Multifunctional, versatile furniture is catching on. With space at a premium, buyers want furniture that can perform multiple tasks and reduce clutter.
  3. Online has become the fastest-growing channel in developing markets. Increased online capabilities in addition to higher disposable incomes and lack of accessibility to "traditional" retail options for specific brands (brick-and-mortar businesses) have caused an increase in e-commerce in these regions.
  4. The demand for luxury furniture is increasing. An increase in disposable income in regions such as the U.S. & Asia Pacific has been cited as a major driver for the industry's progress.
  5. More furniture vendors are choosing to go green. This trend is driven by environmental concerns, such as deforestation. While eco-friendly furniture is more expensive, the demand has increased, making it worthwhile for manufacturers to offer these products.