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RTA Furniture Vendors Adapt To Personal Electronics Surge

NEW YORK— Consumers continue to shift personal electronics purchases to smart phones and tablets, the 2013 HOMEWORLD BUSINESS® Home Entertainment Report consumer survey, conducted by The AIMsights Group, revealed, but a significant if smaller proportion still plan to buy flat-panel televisions, which should continue to support furniture purchasing.

Indeed, with better, more functional and trend-consistent products continuing to emerge, the mass-market furniture sector has an opportunity to further establish itself in the consumer mind as that part of retail where they can find products that meet their lifestyle needs.

Computer portability, in the form of tablets and smart phones, has shaken up the mass-market furniture business, but adaptability is an asset that vendors and retailers can use to maximize their potential in the market.

The prospects for mass-market entertainment furniture is hardly abysmal, as over a third of consumers, at 37.5%, are contemplating a television purchase, up a little over a point from the figure last year. Indeed, the proportion of consumers pointing to a preference for purchase of audio devices other than ear buds came in at 16.8%, up from 12.3% in the year earlier. Although down from a 19.3% purchase intention in last year’s study, gaming consoles retained the favor of 14.1% of survey respondents. 

Although the need to purchase furniture along with electronics may be less then it once was as consumers repurpose existing furnishings, the lesser costs of televisions might prompt consideration of a new furniture purchase if retailers and vendors can add value at a reasonable cost.

The shift in purchase preference in computer-based merchandise is evident in the study. Only 13.6% of consumers surveyed this year said they had a personal computer in mind when contemplating an electronics purchase. In the meantime, 45% of respondents said they favored a smart phone, 39.7% a tablet computer and 33% a laptop. Although the number of consumers contemplating a laptop purchase remains substantial, the segment comes in fourth in terms of consumer buying intention, several points behind tablet computers. Last year, at 36.4%, laptop computers came in second in terms of electronics purchase preference behind smart phones, which registered the same number as in the present survey, and ahead of televisions, at 36.1%, and tablet computers, at 34.6%. Year over year, the proportion of consumers contemplating a personal computer purchase slipped by about six and a half points.

The survey suggested that retailers will have to do more to sell consumers on furniture purchases in association with electronics buying. However, the results of multiple HomeWorld Business surveys demonstrate that the purchasing of furniture along with electronics has overwhelmingly been an impulse rather than a planned action. The proportion of consumers planning to make a dual electronics and furniture buy is down this year versus last, with only 0.6% saying they would definitely do so versus 7.2% last year. At the same time, 5.8% of survey respondents said they would very likely make a two-part purchase versus 12.7% last year, and 28.6% said they were somewhat likely to do so versus 35.3% last year. The probable cause for the declining purchase intention is the increased proportion of consumers who said they expected to purchase electronics scaled for personal use, up to 67.4% this year from 61.7% in 2012. 

Still, not all hope is lost. Respondents to the survey demonstrated a marked decrease in price sensitivity this year as compared to last. When asked about television purchasing and, specifically, what is the most important factor in a buying decision, only 28.6% of consumers said price in the latest survey versus 43.9% last year. Conversely, the number of consumers who stated that style was the key factor jumped to 53.9% in the 2013 survey versus 35.6% last year. So, it seems evident that consumer priorities are changing, which could create an opportunity for those selling fashionable but functional electronics-friendly furniture.

Still, in the study, consumers reported a lower price expectation as regards furniture purchased in association with consumer electronics, which would follow from the shift in purchasing particularly to tablets. Anecdotal evidence suggests that flat panel TV purchasing has moved from first purchases of main screens to replacement living room and bedroom buying, reducing the need for showcase furniture purchasing. 

Again, retailers who want to bolster their furniture business and the per-transaction sales that come with electronics-related buying, may have to become more creative, establishing closer product associations and bundling with electronics accessories to ensure that the purchase of one item suggests buying another. Consumers who might not intend to purchase a piece of furniture to house a new electronics item for a children’s room, for instance, might begin to think differently when considering related gaming and other accessories they need to mount and store. If the products are adjacent in real or virtual space or bundled, a move traditional retailers can accomplish online without surrendering valuable floor space, consideration of a furnishing purchase may loom larger. 

With shifting personal electronics preferences come shifting mass-market furniture intentions. Furniture dedicated to housing specific sorts of electronics generated less enthusiasm in the study year over year across several product segments including TVs. However, consumers demonstrated more interest in furniture that incorporates charging and storage. In last year’s study, only 28.4% of survey respondents said that they considered furniture that could mount/store/recharge multiple electronics devices to be more attractive than they had the previous year. In the 2013 study, that proportion rose to 48%. Only 7.9% of respondents to this year’s study said furniture that accommodated multiple electronics seemed less attractive as compared to 14.9% in the 2012 version.

The survey offers evidence that traditional mass-market retailers may need to step up their game to bolster their electronics-related furniture sales. This year, only 15.8% of shoppers said they would most likely shop for new electronics-related furniture in a discount store, only 9.4% in a warehouse club and only 17.9% in a home electronics superstore. Those proportions were 25.5%, 11.7% and 21% in the 2012 study respectively. Department stores essentially came in flat year over year. 

The big gainer? Not surprisingly, Internet-based retailers, favored by 24.7% of respondents in the 2013 study versus 9.3% last year. Perhaps surprisingly, traditional furniture store are hanging in there as regards consumer purchasing sentiment, favored by 22.8% of study participants this year versus 23.4% in 2012. So, indications are that consumers may be coaxed into electronics-related furniture purchases but that they may not have a fixed intention about when they will do so or, necessarily, where.