Survey on buying plans for the second half echoes a familiar theme: Consumers don’t want to pay a lot for their furniture
HIGH POINT — One of the key takeaways of our latest round of research offered under Consumer Insights Now is how important younger consumers are to the industry. Combined, those between 18 and 42 were expected to represent some 70% of furniture purchases in the second half, a figure that mirrors similar research we’ve done in the second half of 2022 and first half of this year.
Thus, it will be vital for the industry to design, develop and market products for this segment of the population. Further research indicates that they, along with others in the market, prefer minimalist, modern farmhouse and coastal designs followed by midcentury modern, maximalist and contemporary.
But for that 70% of the population looking to buy furniture, there’s another major factor that will influence what they buy: price. Some 47% of those surveyed, including those between 18 and 42 years of age, expect to pay under $750 for a sofa. Twenty-eight percent of those expect to pay under $500.
Over 60% of those surveyed plan to spend somewhere under $300 and $750 for a bedroom, which may include one or two pieces such as a bed and a dresser or nightstand. Only 39% expect to pay over $750 (between $750 and over $3,000 for a bedroom, with only 5% of those surveyed expecting to pay over $3,000).
Meanwhile, 76% of those surveyed expect to pay less than $500 for home office furniture with 19% expecting to pay only $100 or less. Similarly, in the home entertainment realm, some 65% of those surveyed expect to pay $500 or less in that category with 28% expecting to pay somewhere between $100 and $300.
And nearly 60% of those surveyed expect to pay under $750 for a dining set, which we assume includes a table and some chairs and perhaps a side piece.
For kitchen furniture, which includes a table and chairs and other pieces such as an island and counter height chairs and perhaps bar furniture with barstools, some 72% of those surveyed expect to pay under $750.
Another takeaway? They will probably have sticker shock, unless they’re shopping at someplace like Big Lots, Target or Walmart.
That’s partly because most vendors want their retailer partners to make money, which often means pricing goods well above a 50% margin.
Unfortunately, if we look at the audience in the market for furniture — again that 42 and younger crowd expected to account for 70% of furniture purchases in the second half — it’s an audience that is either just getting out of college or in the very early to mid-stages of their careers.
Some are also under extremely high debt loads, either paying off college loans or making high monthly payments on that new Tesla. Or if they’ve yet to have kids, they are spending their money on travel (think destination weddings) and other pricey forms of entertainment. Or they are just starting to have kids, another expensive proposition as they are soon to find out.
Thus, it stands to reason that this wide swath of consumers wants their furniture cheap. Of course, some of those younger consumers may also be high earners and thus in the market for more expensive goods. But we would guess that’s not the majority of those shoppers, particularly given what they expect to pay for their furniture. And even if they are high earners there are plenty of other things competing for their cash.
The good news is that there is still a significant demographic in the mid- to late stages of their careers that also are in the market for furniture. And many of those consumers have the disposable income to buy more expensive — and might we add — quality furniture.
There also are many companies that are catering to this demographic and who will continue to do so as older millennials move into the later stages of their careers and we presume trade up to more expensive furnishings.
But for now, there’s still that looming 70% of the market, many of whom are pursuing those lower price points.
The question is, will you meet their expectations with that extremely low-priced furniture? Or will they get sticker shock and need a quick education on why they need to trade up much sooner than they ever anticipated.
A retailer’s ability to educate younger consumers on why goods are priced the way they are could not only help ensure their success, but also the success of the entire industry moving forward. That is unless we all want to revert back to extreme deflation that has no bearing on the cost of designing, manufacturing, marketing and selling furniture in today’s world.