Since the end of World War II, the mantra of the U.S. consumer has been “shop till you drop.” Tired of war rationing, peacetime consumers bought houses, cars and more. And the children born during that post-war period — the baby boomers — kept on spending for decades.
But what happens when, instead of shopping till they drop, people drop shopping? And how can the home furnishings industry respond?
We saw a huge increase in consumer spending on goods during the early days of the Covid-19 pandemic, with the home furnishings sector getting a significant chunk of those dollars as people flush with stimulus money upgraded home offices and outdoor spaces and spruced up their living areas. But that, we now know, was a blip.As Tom Russell, editor-in-chief of our sister publication Home News Now, noted in a recent article, consumer spending on furniture — which was “through the roof” as recently as two years ago — has been falling. “The furniture retail segment eked out a 0.5% gain overall in 2022” but has fallen 2.9% since the start of 2023. Meanwhile, spending on all retail and food service sectors has risen 3.5% so far this year. Instead of spending on furniture, consumers are spending on travel, dining, personal care and entertainment.
That blip in furniture buying temporarily obscured significant long-term trends in shopping behaviors. Indoor shopping malls — once the hallmark of American consumerism — continue to hemorrhage retail tenants. A shopping mall close to me recently converted one of its large department stores into offices for a credit union; in the second year of the pandemic, the former Sears store in that same mall was used as a vaccine clinic. The progeny of shopping malls — strip malls — have their own share of empty storefronts. On my last visit to a nearby strip mall to pick up pet food, I noted that its former Stein Mart space is becoming a gym.
Online shopping is largely to blame for much of that vacant retail real estate but so is how consumers view shopping, which is shifting from a leisure time activity (i.e., something to do on weekends or vacations) to a pragmatic task to be accomplished as quickly and efficiently as possible.
The U.S. Census Bureau conducts an annual American Time Use Survey full of fascinating data. It shows a significant drop in the amount of time the average American spends shopping for consumer goods — from 12 hours a month in 2003 to 10 hours in 2018 to 9.3 hours in 2022. Again, some of that drop is attributable to more expeditious online shopping. Some can be traced to the convenience of brick-and-mortar stores like Costo and Target, where shoppers can purchase across a wide variety of categories, from groceries to apparel to home goods, all at one time. But people seem less enthused overall about shopping as a fun pastime. I can’t remember the last time I went to a store just to browse.
We’re also seeing a generational shift in how people view shopping and buying.
Some friends who sell residential real estate talk about serving these days not just as real estate agents but as downsizing experts as they help baby boomers unload years of accumulated clothing, tools, entertainment systems, sports equipment, memorabilia, furniture and decor. One of those friends recently posted a long advisory on social media. The gist of his message to his older clients: “Your kids don’t want all your stuff when you move or die. Start getting rid of it now.”
Yet even getting rid of all those household items is easier said than done.
My father and stepmother (admittedly a bit older than boomers and part of what’s called the Silent Generation) encountered that problem last summer when they sold a family home. My real estate agent friend was prescient: Neither my stepsister nor I wanted anything from the house.
But at the start of the process, our folks assumed they could take the home’s contents to various consignment boutiques, antique shops, second-hand stores and charities around town. They quickly found that several weren’t accepting items at all and virtually all had significant restrictions on what they would accept. (Although packed with decades of accumulation, the home wasn’t large enough or filled with enough high-value items for an estate sale.) They left some furniture for the new homeowner, shoved some things off on other relatives and took far more than they wanted to the landfill.
Why is this happening? Because the older generations were accumulators and the younger generations, well, not so much.
To wit: The American home is finally shrinking. For decades, the size of the average house in the United States steadily grew. As Rocket Mortgage notes in a March 21 article on the subject, “In 1973, the earliest year for which U.S. Census data is currently available, the average size of a house in the U.S. was 1,660 square feet. By 2015, the average square footage of a home increased to a whopping 2,687 square feet.”
But since then, the average home size has been dropping and, in 2021, had fallen to 2,273 square feet.
Smaller homes mean less need for home furnishings.
A shift in strategies
So, we have a generation of accumulators shedding their belongings and not restocking. And we have younger generations who are less interested in shopping as sport and more worried about the environmental impact of their purchases. Oh, and they have relatively fewer financial resources than some previous generations at the same point in their lives.
Population increases will continue to drive some growth in consumer spending, and people will always need things, but the home furnishings industry is going to have to rethink how to convince consumers to spend money on furniture and decor.
One way will be to continue to make buying as easy as possible, with seamless omnichannel operations that let consumers buy how and when they want. Another will be adopting more technologies that allow consumers to envision furniture in their own spaces — let them see how great that new sofa will look.
Designers may need to focus more on services that mix existing pieces with new and on interiors that provide maximum flexibility so that people can rearrange rather than gut and redo when their lifestyles — or even moods — change. We’re seeing an increase in designers offering smaller, more off-the-shelf design packages better for smaller budgets. Expect that to continue.
All these trends in consumer behavior also may mean a bigger shift throughout the industry to less dependence on selling new products and more on offering extended services — custom upholstery, furniture repair, interior design.
And, most of all, the industry may need to stop thinking of “consumers” and instead think of “people” — people with needs and desires that manufacturers, retailers and designers can all help meet, just perhaps a bit differently than before.