Home Décor Market Offers Myriad of Product, Opportunities
With $60 billion in total sales, the home décor market has quickly become an “it” industry. Many say it’s the popularity of home decorating shows that has intensified the consumer’s desire to beautify their living spaces and express their personalities through their décor. New tools such as Pinterest and the abundance of design blogs have contributed as well. Bombarded daily with how-to’s and easily attainable makeover ideas, consumers have begun to look around their homes and find ways that they too can make a design statement.
While creating a beautifully polished and cohesive aesthetic once required an expert eye, today’s consumers have the confidence, tools, time and budget to achieve success in home decorating on their own. Home and gift retailers have given them the resources, while discovering that they also can capitalize on this popular category of products in a big way. These savvy retailers know that with their higher price tags, home accents can increase annual sales and grow business significantly. For their part, manufacturers have responded with an impressive breadth and depth of product to satisfy any taste, income level or retail customer’s needs.
So what makes home décor products so attractive? As fashionable as the latest designer handbag or pair of shoes, home décor in 2015 reflects great innovations in form, structure, texture, artisanship, materials, function and color palette. Unlike other categories that require special training, these distinguished pieces often sell themselves with their inviting looks. Popular trends such as gold and other metals, organic materials such as reclaimed wood, cleaner, sleeker design presentations, American and handcraftsmanship and transitional styling are just a few current trends in home accents that consumers are enthusiastically embracing.
Springboard for Growth
In Home Accents Today’s 2014 Universe Study, the home accent industry grew 3.2 percent, up to $60.63 billion in sales, compared to $58.74 billion posted in 2013. The study points out a number of contributing factors, including lower unemployment rates, a rise in median home prices, lower gas prices and growth in consumer confidence. Home décor and gift stores enjoyed $10 billion of those sales, up nearly three percent from the $9.75 billion they registered in 2013. This accounts for 17 percent of the total business being done overall. As specialty retailers continue to explore new categories to broaden their inventory, increase their margins and differentiate their selection, they often look to the wealth of home accent products – decorative accessories in particular – to fill the bill.
With sales topping a projected $21 billion last year, decorative accessories represent the largest category by far, in the Home Accents Universe. This figure translates to more than a third of all the accents sold nationwide, and its growth rate of three percent directly parallels the industry as a whole.
This diverse category’s size and strength are dictated by the number and types of products that are defined, for the purposes of the Universe Study, as decorative accessories. This is the catch-all “kitchen sink” category that includes vases, candleholders, sculptures, “objets,” storage, collectibles and many others. As the real bread and butter for the home accent/gift specialty stores, these channels were expected to sell nearly $7 billion in decorative accessories in 2014.
As the study points out, the next largest segment in home accents for this retail segment was accent furniture, with sales at home accent/gift stores reaching $1.3 billion. Accounting for eight percent of the business, this channel grew at a rate that slightly exceeded the category overall, according to the Universe Study. Perhaps one sign of the strength of accent furniture overall is that there were no standout channels of distribution; it seems everyone is moving accent furniture at fairly comparable growth rates of more than three percent.
Wall décor, another staple for home accent/gift stores, posted sales for this segment of $832 million in 2014, close to a two percent rise. This translates to a healthy 6.5 percent of the total wall décor business. Of the remaining categories measured by the study, home accent/gift stores posted $469 million in sales of lamps, $202 million in sales of permanent botanicals (10 percent of the entire category), $169 million for area rugs and $99 million in lighting fixtures. While not all of these categories fit into every home accent/gift store’s mix, the growing trend to be a more complete resource is driving many to explore exciting new areas of revenue.
Adding New Resources
As indicated by recent Gift Retailer Surveys, conducted by Gifts & Decorative Accessories, this segment has already begun to diversify their offerings – many times with home accents – to meet the needs of a shifting consumer demographic. As collectibles have decreased in importance, handcrafted products were carried by more than half of all the gift stores surveyed in 2013. This speaks to both the buy local and Made in America trends, as well as the importance of this movement among Millennials. (Interestingly enough, a recent Merchant Warehouse and Retail Pro International survey found that 62 percent of Millennials preferred to buy home goods in a store rather than online, a trend that bodes well for home accent and gift stores.) Further, nearly seven out of 10 gift retailers say customers ask for U.S.-made product. Besides handcrafted products, gift retailers increased the number of lines carried in gift baskets, a home accent staple.
Several home accent categories were cited as products experiencing median bestselling price increases between 2011 and 2013 for gift retailers. These include: accent rugs, whose prices rose 67 percent; home textiles, up 39 percent; ceramics/pottery and wall art, both rising 25 percent, and gift baskets, up nine percent.
Another relevant finding from the survey is that nearly one-third of gift retailers are now offering design services, taking a cue from specialty home accent stores that have made this an integral part of their business.
Merchandising the home accent category presents unique display opportunities, and here are a few suggestions to maximize the potential:
- Create a focal point. Displaying a product so it stands out among the other aisles or sections creates a focal point for the shopper. This can be done by displaying merchandise on a fixture of a different type or color. Spots of bold color draw attention to merchandise, while neutral colors are more suggestive of home interiors.
- Specialize in one area of the home. It’s hard to be “all things to all people,” so it may be advantageous to choose one room and really carry a complete offering. Or you might want to make your store the destination in town for a particular category, such as beautiful handcrafted pillows.
- Evoke an inviting atmosphere. Whether cottage, coastal or vintage, embrace a design motif that ‘speaks to the soul,” and play it up big with a full-range of complementary offerings. You can also highlight a particular color palette every month and blend in crisp coordinating color combinations.
- Pay attention to the details. Beading, embroidery, hand-sewn appliques, metal studs and other embellishments are drawing strong attention in home decor, so choose items that showcase these special talents.
- Home, Sweet Home. Replicate a home environment as much as possible. When shoppers can visualize how these pieces will work in their homes, they’ll buy. Some experts also suggest showcasing groupings of product, rather than a single piece.
As beautiful home accent products become integrated in the lives of everyday people, more and more retailers are discovering their potential and profitability. Whether a store is 500 square feet or 5,000, contemporary or traditional in its presentation, there’s a full complement of product to discover.