The global pandemic provided the home furnishing industry with an unexpected boost. As people stayed at home, they spent disposable income on improving their living environments. In September 2020, US shoppers spent $10.7 billion on home furnishings––a new record.
Unfortunately, the furniture and home furnishings industry has been sabotaged with three years of supply chain disruption, shortages of raw materials, a housing recession, and reduced consumer spending.
Shoppers spent around $133.6 billion on home furnishings in 2023 (a 5.4% drop from 2022), making it one of the categories that saw the biggest drop in consumer spending. Well known and long-standing furniture stores like Z Gallerie, Noble House Home Furnishings, and Mitchell Gold + Bob Williams even filed for bankruptcy as a result of tumultuous economic conditions.
Given this downward trend, retailers want to know what they can do to best attract and retain their target customers. Here we’ll share the key commerce trends shaping the home furnishing industry in 2024 and what you can learn from them.
What’s the state of the home furnishings industry in 2024?
To clarify what the industry includes, home furnishings covers a large variety of B2B and B2C products:
- Indoor and outdoor furniture
- Floor coverings
- Kitchen and cookware
- Appliances
- Decorations
- Upholstery and home textiles
- Cleaning products
The biggest impact on the 2024 home furnishings industry was the hit to the housing market the year prior. Mortgage rates reached almost 8% and single-family home prices had a median increase of 8.5% in a single quarter. Some areas had an increase of over 25%, causing home sales to hit a 13-year low.
This had a ripple effect on home goods retailers. According to YipitData’s report, big furniture retailers like Ashley Furniture reported a 21% decrease in gross merchandise value in the first quarter of 2023. Even online retailers like Wayfair reported a net loss of $738 billion at the end of the year.
Yet toward the end of 2023 mortgage rates lowered slightly and house prices stabilized. This caused a slight uptick in furniture sales, with Wayfair experiencing a 0.4% increase in sales from the previous quarter.
Many industry experts expect the housing market to be a more stable environment in 2024, which should positively affect the furniture and home furnishings market.
Ecommerce furniture trends to follow in 2024
- 1. Multifunctional furniture
- 2. Smart furniture
- 3. Personalized product recommendations
- 4. Online shopping for home goods is here to stay
- 5. Use AR to provide engaging shopping experiences
- 6. Continued growth of DTC brands competing with big-box retailers
- 7. Sustainable purpose-driven goods
- 8. Prioritize mobile shopping
- 9. Subscriptions reign supreme
Though it’s still uncertain how 2024 will pan out, home decor and furniture brands can still cultivate growth if they tap into key furniture ecommerce trends.
1. Multifunctional furniture
Because fewer people are buying houses, there’s been a push to make the most of smaller spaces. This has led to increased interest for furniture that can serve multiple purposes—also known as multifunctional furniture.
The multifunctional furniture market is currently valued at $8.7 billion and is expected to grow at a CAGR of 7.5% from 2024 through 2031. Manuel Delgado, head of strategic interior design at IKEA Spain, explains, “As a consequence of the flexibility of life in the living room, design is evolving toward multifunctional, versatile and modular furniture.”
Some multifunctional furniture trends that retailers have been seeing are:
- The return of the sofa bed
- Adding storage to ottomans, bed frames, or benches
- Foldaway and extendable tables
- Wall mounted desks
- Compact exercise equipment, such as walking pads
2. Smart furniture
To say AI has infiltrated every industry would be an understatement. The new technology permeates every facet of our lives. That, combined with the increased interest in smart homes, means tech-powered furniture is the latest trend on the rise. The result? A smart market that’s poised to hit $4.26 billion by 2030.
Some trending features being offered by tech-savvy furniture businesses and marketed as smart furniture include:
- Built-in wireless charging
- Built-in speakers
- Health monitoring systems
- Voice-enabled pairing with Wi-Fi, Bluetooth, and home IoT devices
Companies like Sleep Number have even included biometric sensors into their mattresses to gather and analyze data about users’ sleep patterns. This data can be accessed by users through Sleep Number’s SleepIQ app—a strategy that not only helps users optimize their sleep, but get the most value from their product. There’s a clear reason why sleep and data-conscious furniture shoppers should choose Sleep Number over another retailer.
3. Personalized product recommendations
Speaking of artificial intelligence, some 90% of companies are already using AI-driven personalization. Home furnishings retailers in particular can boost sales and improve customer relationships with personalized deals and product recommendations according to a buyer’s purchase or viewing history.
In fact, 49% of consumers said they would likely become repeat buyers if offered a personalized experience by a retail brand (a 7% increase year-over-year). It’s no wonder why found 62% of business leaders cite improved customer retention as a benefit of personalization efforts.
Take the premium locker brand Mustard Made, an online store that provides personalized recommendations based on customers’ browsing history. By providing a more personalized shopping experience, the Shopify-powered business increased their average order value by 15% and their revenue by 158%. That’s no small feat in a world where customers are always looking for brands that speak to them directly.
4. Online shopping for home goods is here to stay
Though the furniture market is down as a whole, a significant amount of purchases being made are being completed online. Which is a simple signal that customers will continue to buy furniture online in 2024 and likely into the future.
According to Statista, furniture and home furnishing sales at brick-and-mortar stores decreased slightly at the end of 2023, dropping from $11 billion to $10.5 billion. In contrast, a fifth of global consumers purchased home and garden products online on a monthly basis in the second quarter of the same year. They cited lower prices and ease of purchase as the main reasons for buying furniture online.
To help encourage consumers to purchase online, home furnishings retailers need to consider how to tap into customer preferences for an easy, convenient, and omnichannel shopping experience. Shoppers want the convenience of purchasing online while enjoying a personalized experience.
Speaking with eMarketer, Duncan Blair explained how direct-to-consumer (DTC) brand Article uses their online site to showcase products in ways they can’t in-store: “A lot of consumers’ default desire is to want to sit on a sofa, but we like to turn it around and ask, ‘What are the things that we can do online that you can't do in-store?’
“One thing that we work really hard on is showing off user-generated content, in particular photography,” Duncan says. “Photos from our customers showing our products in their spaces gives customers a sense of the variety of styles that the product suits.
“Our reviews are another piece of user-generated content that we work really hard on. Some of our products have more than 2,000 reviews. We treat that review system really carefully and make sure that we are collecting honest feedback from customers.”
5. Use AR to provide an engaging shopping experience
Once a concept of the far-off future, augmented reality (AR) is becoming a popular way for home furnishing ecommerce brands to showcase their products in a personalized way.
Since many people prefer the physical experience of purchasing home furnishings products in-store, augmented reality can help bridge the gap between online and in-store shopping. Instead of relying on shoppers browsing generalized online images, videos, and product descriptions, AR brings products to life in front of customers so they can visualize what they would look like in their home space.
Take homewares store Magnolia Market. Their Texan brick-and-mortar store had always boosted its overall brand experience. Based in Waco’s iconic retail complex in the Silos, visiting the store felt like a pilgrimage to some shoppers.
But for the shoppers who couldn’t visit its store in Waco, the brand wanted to create an experience that allowed shoppers to better interact with their products.
To help shoppers experience products from the comfort of their own homes, Magnolia Market created an AR app with the help of Shopify. Chosen products would be rendered using the highest possible 3D photorealism through Apple’s ARKit, which would allow for something of a transformative consumer adventure.
Through the app, shoppers could visit a product page and then hold up their phone to watch the items appear in front of them. Using augmented reality, Magnolia Market could simulate how a product would look if it were in the shopper’s own home.
Knowing that not all shoppers could visit their physical store in Texas, AR helped Magnolia Market bridge the gap to simulate the personal experience of their store as if shoppers were actually there interacting with the products in person. The likeness of the products rendered through Apple’s ARKit was surprising even to Magnolia Market’s staff.
“We’ve seen videos of an ARKit product next to an actual product,” says Stone Crandall, digital experience manager at Magnolia Market. “And there are times where I don’t even know which one is real and which one isn’t.”
6. Continued growth of DTC brands competing with big box retailers
On the enterprise scale, only 11 brands currently dominate 55% of the home furnishings market. Household names Walmart and Target command an 11% and 7% market share of the US home furnishing market. Other brands like IKEA and Williams-Sonoma only command a 2% and 3% share of the industry respectively.
This fragmentation in the home furnishings market shows a lack of clear brand loyalty and plenty of opportunity for market disruption. This is ripe for DTC brands to jump in and offer new competitively priced and innovative products.
Mattress-in-a-box brand Casper is a great example of a DTC disruptor, not just in the home furnishing space but the wider retail market too.
With a hyper-focused approach, Casper launched with just a few SKUs. This focus and discipline let Casper deliver the best possible customer experience before expanding its range. And this approach paid off––the DTC disruptor is a clear market leader, with recorded annual revenue of $497 million.
7. Sustainable purpose-driven goods
Shoppers continue to care about a brand’s sustainable values. Some 60% of shoppers said they’d pay more for a product with sustainable packaging. As we head into 2024, consider how your brand can prioritize sustainably produced goods and show customers how it puts the environment first.
Knowing how and where goods are produced has become increasingly important to customers. They’re not just interested in the final product they receive, but also in the process that has gone into making the items.
For example, home decor brand Fabuliv is known for their clear environmental and social values. The brand’s founder, Ishita Singh, explains how their sustainable values also tie into their design ethos too: “We upcycle a lot. We recycle a lot. Our goal is to minimize wastage.
“We have a design philosophy of being minimalistic and our goal is to marry functionality with decor-oriented styles. Each of our home décor pieces are a mix of global trends and the crafts of Indian culture.”
Ishita adds that by selling home decor handcrafted by artisans, the brand has been able to provide its employees with a stable lifestyle, make a positive impact on the wider community, and give artisans the opportunity to show their artwork on a national level.
“If the people you work with are happy, you’re happy,” she says. “We’re not just running a business here to make money. We want to make a positive difference in society and the lives of these artisans who haven’t been given the opportunity to showcase their art and craft at a nationwide level before.”
Throughout the brand’s product descriptions, Fabuliv highlights that each of their products is handmade by artisans without the use of mass machinery. For that reason, shoppers shouldn’t expect ultra-fast shipping and delivery.
By sharing their environmental and social values with customers, Fabuliv provides an opening for potential shoppers to connect with their beliefs.
8. Prioritize mobile shopping experiences
Some 65.8% of global smartphone users are expected to use retail apps in 2024. But catering to these people is more than having a mobile responsive website. As more people shop using their mobile devices, home furnishings retailers need to prioritize creating mobile shopping experiences that are convenient and easy to use.
Shoppers expect easily accessible information, and the ability to discover new products and enjoy a mobile experience that’s relevant to them.
Furniture retailer Monte Design has a clean, intuitive, and easy-to-use mobile site. The brand makes it easy for customers to navigate their mobile site and better understand their products. Product descriptions are detailed, providing relevant information about dimensions, care and cleaning, and shipping. To help customers visualize how the furniture item will look in their home, the brand has a “View in my room” feature.
Prioritizing their mobile site has paid off for Monte Design, too. While upgrading their site with Shopify, the brand found that 70% of their overall traffic was coming from mobile. By optimizing the site for smartphones, the retailer enjoyed a 15% increase in web traffic and year-over-year revenue growth of 12%.
9. Subscriptions reign supreme
Customers don’t purchase large furniture items that often. That can sometimes create a customer lifetime value issue for retailers. How can brands maintain profitability if a bed or table is only purchased once or twice in a lifetime?
As home furnishing retailers look for new ways to retain customers, businesses are creating subscription bundles. Subscription packages have the key benefits of providing brands with recurring revenue and boosting customer loyalty.
From the customer’s point of view, subscriptions are often seen as a chance to try new products or enjoy their regular items at a better price point. Retailers can tap into these customer preferences by consistently delivering innovative or popular products at lower price points in their subscription bundles.
As for product types, smaller home products can help brands increase LTV by letting customers consistently buy lower-priced items. Home furnishings categories like décor, cleaning products, and plants are ideal for this approach.
For example, plant retailer Rooted curates monthly plant subscription boxes based on customer preferences. Monthly subscriptions for its Small Mystery Plant box start at $22. There’s also an app so customers can easily see plant care tips or shop on the go.
The future of the home furnishing industry
As we plan for the year ahead, keep these key home furnishing commerce trends in mind so you can start implementing them throughout the year.
Staying on top of the main home furnishings marketing and ecommerce strategies will help your business provide the best possible shopping experience for customers and remain ahead of other retail competition.
Check out how we’re helping other home furnishing brands deliver amazing commerce experiences.
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Home furnishing trends FAQ
Is the home furnishing industry growing?
Furniture shoppers in the US spent around $133.6 billion on home furnishings in 2023. As house prices and inflation ease, this figure is set to grow to $202 billion in 2024.
How big is the online home furnishings market?
Online sales for the home furnishing industry hit $15.4 billion in 2023. The global market of online home decor is expected to rise to $313 billion by 2031.
What is happening in the furniture industry?
The global furniture industry will be recovering from a recent downturn. Big furniture retailers are finding more competition with DTC brands. Consumers are opting to shop online rather than in physical stores. And in order to retain customers who shop on-the-go, forward thinking furniture businesses are building smart mobile shopping experiences.
What trends are taking place in the furniture market?
- Smart furniture
- Augmented reality for online shopping
- Multifunctional furniture
- Sustainable goods
- Subscriptions
- Personalized product recommendations
What are some of the furniture industry predictions for the future?
Both DTC and big-box furniture companies will prioritize better online shopping experiences like AI-generated personalized recommendations and augmented reality. There will also be a push to incorporate tech and space-saving features into home furnishings.
