First Insight, a technology company focused on helping retailers make product investment and pricing decisions, has determined that price elasticity is increasing in the home products sector.
In its new study, “Decoding Price Elasticity to Unlock Revenue and Minimize Risk,” First insights noted that furniture, particularly, is giving more consumers pause as they consider how broad their definition of value is.
Price elasticity in the home goods category is traditionally relatively inelastic, according to First Insight. However, cost-conscious Millennials who today are buying and furnishing their first homes have brought new perspectives to the marketplace. Although they may look at value more broadly, the market research firm pointed out, Millennials are sensitive to rising prices, and so retailers have to consider how to value goods as they look at the cost to the consumer over time.