Millennials forming their own households will help the furniture sector in the United States maintain a compound annual sales growth rate of 2.9% through 2019, according to a Fung Business Intelligence Centre Global Retail & Technology report.
At the same time, online retailers and services will continue disrupting what had been a consolidating retail category, the report indicated.
Growth in the U.S. economy has led to an expanding housing market, which supports furniture and home furnishing sales, and the outlook over the medium term is for furniture sector gains, noted Deborah Weinswig, executive director/head of global retail and technology for the research firm. Furniture store sales lately have outperformed department and apparel stores sales, she maintained, and that trend should continue to do so for the next three years.
Ongoing financial pressures including high housing prices and lingering student debt have delayed household formation for those between 18 and 34 years old. Now, Millennials are beginning to enter the housing market, and their share of spending on furniture and bedding more than doubled from 2012 to 2014.
Yet, Fung Business maintained, Millennials shop differently from previous generations, seeking smaller, multifunctional and affordable furnishings. They are researching and finding these items online. Under such conditions, the number of furniture stores has declined by 20% from the point in time before the recession, while e-commerce sites such as Overstock.com, Amazon.com and Wayfair.com have seen exceptional growth.
Fung Business stated that forecasts call for online furniture sales, estimated at $23 billion in 2015, to reach $32 billion in 2018.