Sitting Pretty The US Census Bureau reports total 2016 sales (adjusted) at “furniture and home furnishing stores” (NAICS Code 442) increased 3.2% to $110.008 billion, from 2015’s $106.643 billion, or less than half of the increase from 2014 to 2015 of 7.1%. During the first six months of 2017, total furniture sales were $56.966 billion, a 4.2% increase from 2016’s $54.660 billion. Furniture Today predicts U.S. furniture sales of $122 billion by 2020. According to Forbes, furniture stores are benefiting from U.S. consumers’ focus on improving their homes, both for personal enjoyment and to boost resale value. Building materials, flooring and wall covering stores have also benefited.

The Evolution of the In-Store Experience Large furniture chains, such as Bob’s Discount Furniture, Levin Furniture and City Furniture, are moving into space that big box stores have vacated, such as hhgregg and Office Depot. Other companies, such as FFO Home are building new stores. Stores are adding entertainment areas for customers, such as City Furniture’s home accents store-within-a-store and a café and wine bar where it will host in-store events. FFO is planning an entertainment area for dads and kids to hang out. In FFO Home’s new stores, roughly one-third of the square footage has been designated for backend operations, so each store can make quicker deliveries and enable customers to take items easily home with them.

They’re at the Top for Many Good Reasons According to the May 2017 issue of Furniture Today, 2016 sales at the top 100 stores increased 7.2%, to $43.51 billion, and at the top 10 stores, +9.8%, to $23.3 billion. Units increased 13.3% for the top 100 furniture stores, and 22.9% for the top 10. Of the top 100 stores, 54% are conventional furniture stores and 46% are specialty stores. The top 100 stores expanded their retail footprint dramatically, adding 1,504 stores, the biggest increase since Furniture Today started tracking openings. The top 100 stores also experienced increases in average sales per square foot, $276, an increase of 2.2% from $270/sq. ft. during 2015.

Bedding Boosts Specialty Stores’ Growth Total 2016 sales for the top 100 specialty furniture stores increased 8%, compared to 6.4% for the top 100 conventional furniture stores. Specialty stores also outpaced conventional stores in units’ (number of stores) increase, 16.7% and 4.7%, respectively. The majority of the gain in units and sales was from a single transaction: Mattress Firm’s acquisition of Sleepy’s, and its 1,050 stores. MattressOne and Sleep Number also expanded. The top 10 specialty furniture retailers during 2016, according to Furniture Today were Mattress Firm, Ikea, Williams-Sonoma, RH (Restoration Hardware) and Big Lots.

Single-Source Store Singularly Successful Furniture Today defines single-source store networks as “company-owned, licensed or franchised stores dedicated to a single home furnishings brand, operating under a single retail banner.” The top 10 single-source store networks experienced a 6.9% sales increase during 2016, much closer to the 7.2% growth in the overall top 100 than the previous year’s gap. The top 100 single-source stores accounted for 15% of all US furniture store sales. Sleep Number had the biggest net- store gain, increasing by 52 stores. Combined, the networks added 103 stores for a total of 2,210 showrooms by the end of 2016.

Buying Furniture Online Isn’t Unusual Anymore Furniture retail executives do not consider e-commerce a major threat because of high-ticket prices and consumers’ desire to see, touch and sit on furniture before purchase. Approximately 12% of all furniture and bedding sales were online during 2016. Furniture retailers, however, are investing in digital to help customers with pre-sale research, so they will visit stores with an idea of what to buy (webrooming). KPMG forecasts a 4.3% increase in online furniture purchases during 2017. Almost half (44.8%) of Restoration Hardware’s sales was from e- commerce, as of May 2017, with e- commerce sales accounting for 19.8% of Pier 1 Imports’ sales revenue.

Advertising Strategies Advertisers should attract consumers to their stores with a hospitality message, like inviting someone to a home. Optimize use of furniture displays to create cozy areas where knowledgeable salespeople can consult with customers and give them design advice. Tap into customers’ fears that furniture bought online will be flimsy, require assembly or won’t match their style or decor.

New Media Strategies Consider adding augmented-reality functionality to your Website, so customers can upload a picture of a room and virtually place furniture selections and combinations in it. Partner with paint, flooring, window treatment and wall covering retailers to cross promote each other’s Websites, and share email lists. Keep track of customers’ color, style and fabric preferences to send them emails of curated content and share posts with similar content on social media.