The worldwide home furnishing industry is expected to exceed $700 billion by 2023. Increased consumer interest in home decoration is fueling new market growth. Furniture, textiles and floor covering products are key components of home decor. Expansion and developments in real estate industry, have supplemented the growth of world home decor market. In particular, demand for organic home furnishing products is continuing to rise thanks to increased consumer awareness regarding the importance of choosing more environmentally friendly materials. Other factors driving market growth include availability of wider product ranges, regional market development and electronic media campaigns. Consumers are showing particular interest in natural products and alternative materials in the home furnishing products sector.

Market growth will be fueled by recovery in the housing sector, with increased construction activity leading to higher consumer demand for home decoration products. Developing markets such as Latin America and Asia-Pacific are expected to record rising demand over the coming years for colorful, vibrant bed furnishings.

Companies are focusing on the benefits of new technology innovation to offer consumers energy savings, cost reductions and more environmentally friendly lighting solutions. This shift has led to a decline in demand for conventional lighting options like electronic ballasts and T12, HID fixtures, but has spurred a subsequent rise in demand for integrated systems and solid-state technologies, including T8 and T5 fixtures and lamps.

Solid-state lighting controls facilitate more-efficient energy use, thereby reducing overall energy costs. Due to the higher price of technology, companies first target high-end markets when launching newer products such as LEDs and CFLs, which are popular for their superior energy efficiency and power.

Home decor has been gaining prominence across both developed and developing markets with increasing urbanization and globalization trends. Globalization is now enabling easy and wide availability of such decorative items, designs and ideas to consumers. Home owners are also realizing the need of such items and are often searching for them to keep their homes more attractive and organized.

Home decor is witnessing a strong growth catalyzed by rising levels of disposable incomes, recovery of the real estate industry, increasing urbanization rates and rising awareness levels. Rising levels of urbanization have resulted in an increasing number of new households being setup.

Currently more than half of the global population live in urban areas and these levels are expected to increase further in the coming years, creating a positive impact on the demand of home decor products. Moreover, home decor products are income elastic, we expect global disposable incomes to increase continuously over the next few years, particularly in emerging economies such as Asia, Africa, Middle East, Eastern Europe, etc.

Additionally, the recovery of the global real estate industry is also expected to drive home ownership rates creating a positive impact on this market. Another major factor driving this market is the strong performance of the online retail sector. The advent of online retail has made home decor products easily available, affordable and convenient to buy.

Globally, there are many international and domestic players, who provide furniture in the market. Companies such as Kimball International, Herman Miller, Ashley Furniture Industries, Inc. and IKEA are some of the prominent players in the furniture market. These companies offer a wide range of furniture products of various categories, colors, material textures and styles.

Companies in this industry sell new furniture, home furnishings, and floor coverings. Major companies include Bed Bath & Beyond, Havertys, La-Z-Boy, Pier 1 Imports, Rooms to Go, and Williams-Sonoma (all based in the US), as well as Argos (UK), HOLA Home Furnishing (Taiwan), and IKEA (Netherlands).

Leading countries for furniture and home furnishings by revenue include the US, China, Germany, France, and the UK, according to Statista. Demand is driven by the rising residential and commercial construction, as well as the increasing expenditure for home décor-especially for millennials. Retailers are adding outlets in emerging markets as they see foreseeable growth.

The US home furniture and housewares stores industry includes about 51,000 establishments (single-location companies and units of multi-location companies) with annual revenue of about $113 billion.



Traditionally, domestic companies in this fragmented, labor-intensive industry have concentrated on wholesale manufacturing. But, recently, the rising cost of production, along with intense overseas competition, has forced a consolidation and shift to the retail side. Duty-free imports have left the U.S. market wide open to foreign producers, which have increased their market share. Overseas companies, especially those in China, have an advantage, given their low-cost facilities and workforces, efficient distribution, and good-quality products. They are a challenge to American manufacturers, particularly in the residential furniture segment.

Faced with tough international competition, domestic companies have attempted to produce more with less plant and staff, improve materials supply, and enhance distribution. Even with these efforts, it can still be hard to earn a decent profit. Too, difficult economic times, most notably in the housing sector, can exacerbate the pressure on margins. Many companies have chosen to source economical finished goods from overseas and customize them for customers. Greater attention to design and finish can be a key differentiator.

Most jobs in home furniture and housewares stores are sales or related to inventory handling and delivery. Due to the seasonality of sales, stores often employ a large number of temporary and part-time employees. Average hourly industry wages are slightly lower than the US average. The average industry injury rate is significantly higher than the US average.


Increasing urban population is one of the strong impacting factors affecting the home decor market. Urban culture influences an individuals’ living style. Presently, most of the world population lives in rural areas. According to the data released by United Nations, near about 54% of the world’s population were living in urban areas in 2014, and more of rural population is expected to shift to urban areas during the forecast period. The impact of this factor would increase during the forecast period, thereby consequentially fostering the demand of home décor products in the future.

Raw materials such as metal, wood, plastic, glass, leathers, rattan, fabrics and stone are used for manufacturing furniture. For floor covering, manufacturing tiles, wood & laminate, vinyl & rubber, carpet & rugs and others (linoleum, cork, bamboo, concrete), are essential raw materials.

Cost of raw materials has increased significantly in the past few years. However, by 2020, it is expected that the cost of raw materials such as plastic and glass, would decrease owing to advancements in production technology of these raw materials Thereby, these factors would create a favorable environment for home decor market in future.

Value chain of the home decor market comprises various stakeholders, such as raw materials and components suppliers, manufacturers or furniture integrators and distribution channel. Each of these stakeholders share a specific value at their point of operation, which, in turn, contributes to the competitive value of the product. Materials, design, style and furnishing of the home décor products enhance the value associated with the end deliverable by each player.

Globalization facilitates easier and wider availability of home decor products and designs for consumers. Moreover, growing consumer preference towards adoption and usage of eco-friendly products, known for their minimal impact on the environment, has also boosted the growth of the market.

On the environmental side, the Lacey Act has come into play. This Act has traditionally prohibited trade in fish, wildlife, and plants that are procured in violation of state or federal law. Recently, the U.S. government has expanded the law’s reach to prevent the sale of timber obtained through illegal logging. All timber and wood products, including furniture, have to be reported and declared for fees and taxes to the government by importers and suppliers, with the country or area of origin recorded. The Act surely will entail more costly record keeping and, possibly, supply disruptions for furniture companies.

Regional & International Issues

Leading countries for furniture and home furnishings by revenue include the US, China, Germany, France, and the UK, according to Statista. Demand is driven by the rising residential and commercial construction, as well as the increasing expenditure for home décor-especially for millennials. Retailers are adding outlets in emerging markets as they see foreseeable growth. Major companies based outside the US include Argos (UK), HOLA Home Furnishing (Taiwan), and IKEA (Netherlands).

Some US furniture retailers have had success expanding internationally. Bed Bath & Beyond, for example, operates in Canada and Mexico. Williams Sonoma, owner of Pottery Barn and West Elm, has stores in Canada, Australia, and the UK. Some stores franchise their brands overseas or develop partnerships with local companies. Williams Sonoma has franchise locations in the Middle East, Asia, and Latin America.

Emerging markets are undergoing strong economic growth, which is resulting in more middle-class consumers with greater disposable income. As real estate booms, demand increases for furniture and furnishings. Growth markets include China and countries in Eastern Europe. In emerging markets, furniture retailers may want to carry a wider range of lower-cost products to reach a growing middle class. Furniture manufacturers often have factory operations in Asia, which can facilitate distribution to nearby regions.

Furniture retailers need to develop knowledge about how people live in different parts of the world and develop strategies to market and sell their products in new markets. Companies may also employ digital, omni-channel approaches to marketing that will deliver maximum consumer engagement. In addition, further investments in new technology tools will allow companies to better integrate their customer data with relevant third-party data to better scale, tailor, and personalize marketing communications for key customer and geographic segments.

Some regions have stricter regulations that retailers need to address, which can change how the furniture stores operate. For example, IKEA was denied permission to sell retail packed food items in India, even though the company can operate its signature cafés. The time required to open a store has doubled in recent years, according to IKEA, which attributes the delays to bureaucratic hurdles that must be overcome in different countries.

Some additional competition has emerged as popular apparel retailers expand into home goods. Spain-based Zara and Sweden-based H&M both operate their own lines of home goods stores.

In the US, home furniture and furnishings stores tend to be concentrated in high-population areas, such as large cities within California, Texas, Florida, and New York.


Premium high-end beds made using materials such as hand-tufted horsehair, memory foam, silk, latex, flex, cashmere and lamb’s wool will be in growing demand over coming years. The baby boomer generation will opt for premium beds, attracted by their superior comfort level. Manufacturers are responding to this demand by offering a wide range of luxury beds and mattresses. Luxury towels are also in greater demand, with consumers willing to pay extra for stylish colors and more fashionable designs.

The phasing out of incandescent bulbs across several nations is sparking demand for alternatives such as CLFs and LED lamps. Demand for lamps in other applications including LEDs in mobile devices will also drive demand.

International trade, safety, and environmental regulations have an impact, sometimes beneficial, sometimes detrimental, on the industry.
For a number of years, a big concern of domestic manufacturers has been the importation of low-priced products, most importantly from Asia. In international trade, when manufacturers exports products at a substantial markdown to a developed country, where production and labor costs are high, claims of dumping may arise.

U.S. law provides for anti-dumping duties to be imposed on imports, if the Department of Commerce and International Trade Commission determine that a domestic industry will be materially injured. The tightening or relaxation of trade barriers, depending on the political climate, affects the competitive standing and profitability of domestic furniture producers in the home market; U.S. exports are essentially nonexistent.

In the United States, the Consumer Products Safety Commission (CPSC) holds sway over the furniture sector. For decades, the commission has worked to improve the flammability standards regarding various materials, and the bedding segment has been affected. Increasingly stringent standards on mattress/fabric safety have led to higher costs for manufacturers.

Products & Operation

Major product categories are indoor home furniture (more than 40%); flooring and floor coverings (20%); mattresses, box springs, and air mattresses (10%); and tableware and kitchenware (4%). Most retail furniture stores sell a broad range of products, but some concentrate on one furniture type, such as mattresses, sofas, or office or children’s furniture. Store operations involve sales management, merchandising (deciding which products to sell), inventory management, and (sometimes) credit financing. Some floor covering companies also offer installation or repair services.

Home furnishing chains usually have their own distribution facilities with centralized purchasing and inventory management. Goods may be purchased from distributors, importers, or directly from manufacturers. Independent retailers typically buy from several hundred suppliers, while large chains have several thousand suppliers. Most chains use third-party logistics companies for shipping goods to stores. To reduce inventory costs and respond quickly to demand shifts, some retailers are replenishing store inventories daily.

Many furniture retailers have multiple stores fed by one or several regional warehouses, which in turn receive goods directly from multiple manufacturers. Typically, smaller stores are showroom galleries with little inventory of their own; customers receive the product from a central warehouse. Larger stores with an attached warehouse are more popular in suburban locations. While some furniture, like beds and mattresses, can be directly supplied from inventory, upholstered and wood furniture are often made-to-order by the manufacturer, with delivery times that can stretch to several months. Most purchases are delivered from a warehouse to the customer’s home or office. Large-volume retailers may operate a fleet of delivery trucks.

Furniture retailers buy much of their product at trade shows, which are numerous. The most important US trade show is the High Point Market in High Point, North Carolina, in the spring and fall. Retailers typically buy product from dozens of manufacturers, and may have special sections in their store dedicated to a particular manufacturer brand. Some retailers like Ethan Allen have their own manufacturing operations and sell only their own products. Large retailers generally buy directly from manufacturers, without wholesaler intervention. Smaller companies can buy from groups such as Associated Volume Buyers (AVB) at volume prices.

US exports of factory-finished furniture have increased rapidly in recent years, with Canada representing more than half of all US furniture exports. Other top export markets include Mexico, the UK, South Korea, the Bahamas, and Germany.


Home goods retailers use computer systems to manage point-of-sale (POS) transactions and inventory and warehouse operations. To improve customer service, many also use hand scanners and bar codes to look up prices on the store floor. Computers are also used to store customer data, handle credit approval, and manage bridal gift registries. Retailers are investing in technology to improve their online sites, which serve as marketing and purchasing tools for customers. Some are connecting their POS transactions in store to their e-commerce sites for better inventory tracking capability.

Consumers increasingly are using mobile devices, such as smartphones and tablets, to shop for and purchase furniture. As more furniture purchases are made online, new technologies including augmented reality, 3D rendering, and computer vision are helping customers visualize how furniture and housewares will look and fit in their homes.


Competitive Landscape

Demand is driven by personal income and is tied to home sales. The profitability of stores depends on the right merchandising mix and marketing. Large companies have advantages in volume purchasing and breadth of product line. Small companies may thrive by focusing on a specific market segment and delivering superior service. The US industry is fragmented: the 50 largest companies generate less than 50% of revenue.

Competition for operators of home furniture and housewares stores comes from multiple retail channels, including discount department stores, online-only retailers, and sellers of used furniture. Key online players in home furniture and housewares sales include Amazon, Wayfair, and Williams-Sonoma. While online furniture sales are growing quickly, a gap remains between online furniture research and online purchasing, creating opportunities for brick-and-mortar chains with a solid web presence.

The global market for home furniture and decoration was negatively impacted by the housing crisis as homeowners cut down drastically on non-essential spending, postponed home improvement and decorating projects, and delayed buying new homes. Due to recovery in the housing sector and in the wider global economy, demand for home furniture and decoration has begun to turn around. With employment figures improving and levels of disposable income rising, property owners are more readily investing in their homes.

Expansion in the battered new residential construction sector will also help drive demand for area rugs and tufted carpet. Increased construction in the US will see consumers and businesses alike opt for new carpet and rug products to furnish their homes and offices. Growing consumer confidence and increased discretionary spending will see demand from the residential sector grow, while the nonresidential sector will be a source of demand due to expansion in commercial and new office space. Replacement markets will similarly reflect economic recovery. Nylon, the most used fiber in the manufacture of carpet and rug products, is likely to remain the leading choice over the coming years. However, polyester fibers are becoming more attractive due to high petroleum prices and improved fiber quality, making them more appealing than polypropylene fibers.

The world home decor market is segmented based on products and geography. The product segment is further segmented into furniture, textiles and floor coverings. The furniture segment is sub-segmented into kitchen, living & bedroom, bathroom, outdoor and lighting. The textiles segment is further categorized into rugs textiles, bath textiles, bed textiles, kitchen & dining textiles and living room textiles. The floor coverings segment includes tiles, wood & laminate, vinyl & rubber, carpets & rugs and others. Based on geography, the market is segmented into North America, Europe, Asia Pacific and LAMEA regions.

Based on product, the market is broadly classified into home textile, floor covering and furniture. Furniture has witnessed an increased adoption among consumers, owing to the increased disposable income and influence of western culture, especially growing adoption of modular kitchen and lighting. The furniture segment encompasses furniture used in kitchen, living and bedroom, bathroom, outdoor and lighting.

Furniture are used for domestic as well commercial purposes. Various materials such as metal, wood, plastic, glass and leather are used solely or in combination with other materials to manufacture parts of furniture. Shape and structure with reference to design are important factors in the furniture industry as it directly influences the consumers’ decision to buy a particular product. Multifunctional furniture is gaining popularity among urban consumers.

Nowadays, consumers prefer online retail platforms for buying furniture, owing to availability of a wide array of home decor products at discounted/affordable price. Increasing cost of raw materials, such as leather and superior quality wood, is limiting the market growth. Improving lifestyle and increasing disposable income of individuals would offer several growth opportunities to the players operating in the market.

Other factors that are influencing the growth of the market are the rise in the disposable incomes and improving lifestyle of people.

The home furnishings retail industry allows consumers to make their homes truly their own with their very choices of furniture and decor to make attractive. Along with the struggling housing markets, so too are retailers of home furnishings and furniture. Demand for home furnishings is cyclical, influenced by housing starts, as desires to remodel and redesign are not necessary during slow economic times. Demand is also driven by consumer income. Large companies compete through volume purchasing, breadth of products, and effective merchandising and marketing. Small companies focus on a market segment and compete through depth of products and superior customer service. In 2016, furniture and home furnishings store sales amounted to about USD 111.47 billion. As of 2018, among all the sources like social media, home decor magazine, families homes, television and stores, 29% of customers responded that social media was their main source of home decoration inspiration.

Sales & Marketing

Home furniture and housewares stores generally target a particular type of consumer based on style and price. Based on local demographics, retailers vary the mix of styles and price points carried at each store. Selling furniture and flooring requires showrooms. Furniture showrooms can be large, often between 25,000 and 100,000 square feet. IKEA’s enormous stores can span 300,000 square feet on average. Specialty retailers can be successful using much smaller stores, but must usually carry a more expensive line of products because turnover is lower.

Effective merchandising and customer service are key to attracting new customers and repeat visits. Retailers frequently change displays and product mix to reflect seasonal variations in demand and create a “fresh” appearance for the store. Sales staff receive product training to help customers in purchase selections. Customer service also includes generous return policies for merchandise.

Marketing is through local and national channels, including newspaper, radio, the internet, and TV. Home furnishings and furniture retailers use direct mail catalogs, electronic direct marketing, social media, and strategic e-commerce relationships. Some large stores, like Jordan’s Furniture (a unit of Berkshire Hathaway), provide free food and entertainment to draw customers. Stores may also offer children’s playrooms along with video monitoring so that parents may shop in peace.

Advertising typically includes full color newspaper inserts and direct mail. Retailers with catalog operations also use their catalogs as direct mail to drive store traffic. The internet is also used for advertising and as a place for customers to view and purchase products.

Product prices are dependent on several factors including the price of raw materials and lower-priced competition. Some retailers rely on advertised sales to attract customers, while others use an “everyday” pricing strategy with few or no sales.

To encourage repeat store visits, retailers may offer customer loyalty programs that include private-label credit cards, advance notice of sales, and frequent buyer discounts. Industry trade shows are an important source of information on new products and market trends.


Cash flow is seasonal, with higher sales in third and fourth quarters due to holiday spending. Gross margins are typically about 40% of net sales. Selling expenses are high, so net income as a percentage of net sales is about 1% for many companies. With such small net margins, economies of scale can be important, but there is also little room for management error. Because of the need for large showrooms, real estate is often one of the largest items on the balance sheet.

An inherent risk is that inventories are often large, typically about 90 days’ sales. The value of inventory may decrease if customer tastes change or if the retailer has incorrectly judged consumer demand. The working capital to sales ratio for the industry in the US averages more than 10%.

Because furniture is often expensive, credit availability is an important aspect of sales. Many retailers offer their own financing; others may have arrangements with third parties. Some larger companies offer their own credit cards. For home furnishings, transactions generally are by cash or credit card, so accounts receivable are low at about 20 days’ sales.

Lease terms for home furnishings stores vary from two to 20 years. In addition to a base rent payment, leases can include advertising and maintenance fees, and a percentage of sales.


The industry in the US is subject to standard state and federal regulations concerning deceptive sales practices and the use of credit financing. Also, states and the federal government are increasingly enacting laws and regulations to protect consumers against identity theft. As more furniture is imported, trade policies and regulations can have a bigger impact on retailers.

Location Specific Industry Data :

Belgium WLG Grivegnee EDIT |COPY |DELETE
Germany TH Sonneberg EDIT |COPY |DELETE
Australia NSW Marengo EDIT |COPY |DELETE
Australia WA Port Hedland EDIT |COPY |DELETE
Sweden NA Bunkeflostrand EDIT |COPY |DELETE
Australia WA Nukarni EDIT |COPY |DELETE
Norway NA Honefoss EDIT |COPY |DELETE
United Kingdom NA Talmine EDIT |COPY |DELETE

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