What: US Home furnishing sector sees strategic shifts as retailers respond to sustainability trends and changing customer needs.

Why it is important: These trends signal a significant transformation in the home retail landscape, where success increasingly depends on blending online convenience, in-store experiences, and eco-friendly options to meet diverse consumer needs.

The home furnishing sector is experiencing significant shifts in consumer behaviour and retailer strategies. Nearly half (49.8%) of consumers purchased home furnishing products in the three months ending September 2024. Amazon and Walmart dominate the market, with at least one-third of shoppers buying from these retailers, despite Walmart seeing a 15.8 percentage point decline since October 2023. IKEA and Wayfair saw notable increases in shopper penetration. Home accessories and decorative items remain the most popular category, with wall decor seeing a significant rise in popularity. In the home improvement sector, 63.5% of consumers made purchases, with The Home Depot leading the market. Gardening products showed strong seasonal trends. Consumer sentiment towards personal finances has weakened since August 2024, while expectations about the economy have improved slightly but remain negative overall. These shifts are driving retailers to adapt their strategies. For instance, Ikea is testing smaller store formats in China and has launched a secondhand marketplace, while Kohl's is expanding its home product offerings to attract younger customers. These moves reflect the industry's focus on sustainability, flexibility, and targeted product offerings.

IADS Notes: Recent trends in the home furnishing sector show retailers adapting to changing consumer behaviours and economic conditions. Ikea is leading with two significant initiatives: testing smaller store formats in China to meet evolving customer needs in a challenging market, and launching a second-hand peer-to-peer marketplace called Ikea Preowned, aligning with growing demand for sustainable options. Meanwhile, Kohl's is reimagining its home assortments by significantly increasing space for home products and introducing new categories, aiming to attract younger customers and boost sales volume. These moves reflect the industry's focus on flexibility, sustainability, and targeted product offerings to meet shifting consumer preferences.

Coresight: a report on US trends in homeware