We now live in a complex, 21st century consumer society and as a consequence we shop in a way that reflects that complexity; buying from a variety of different channels and locations dependent on where we are in the day and what we are doing. The Webloyalty team believes that convenience is now driving our buying patterns as it fulfills our need at the time and also saves time.
Is the home retail market in trouble?
This has now left the home retail market in trouble. New research by retail analysts Conlumino for Webloyalty has revealed that from 2008 to 2011, the total UK home retail market (DIY, electrical, furniture and homeware) shrank by £9.02bn. In this category, furniture sales declined by just over 25% and electrical sales also suffered a 16% decrease.
A decrease in the housing market
The housing market can be blamed, at least in part, for these decreasing sales. More than 700,000 consumers who have wanted to move, but have been unable to do so over a one to two year time frame, have been deterred from spending as they wait. As a result, the period of time consumers are not spending on home-wares has been prolonged. This continued poor performance of the housing market – which is likely to be just as flat in 2013 – will continue to cause a drag on volumes as consumers cut back on big ticket items.
Since the recession
Since the recession hit there has been a decline in space growth as secondary and tertiary locations have lost out to larger and new shopping locations. The stores in good locations and with large enough space have been taken by competitors, but stores in irrelevant or poor performing locations have closed or moved out of retail entirely. This has hit the smaller store formats and independents particularly. Planned shopping centre projects have been put on hold but it is predicted more will come through over the next five years. However it is said that new centres tend to pull from older surrounding ones so displacing demand rather than creating new demand.
A case study: IKEA
If we look at IKEA as a case study, their extremely low prices, wide product range and large stores out of town give it a clear advantage over competitors in this sector. As it builds more authority in kitchens, bed and living room products and emphasises quality as well as investing in price it will take yet more share from those few survivors.
Guy Chiswick, Managing Director of Webloyalty UK, encourages retailers to pay attention to this change:
“The recession has had a huge impact on consumer behaviour and the nature of shopping for the home has changed. Retailers need to meet the challenge that the declining economy, coupled with the rise of multi-channel, has posed. They need to offer the best value, quality and service, and for home retailers particularly, they need to entice consumers to spend by making their showrooms leading-edge and inspirational.”
To read this piece of research in more detail, please visit the Webloyalty website: www.webloyalty.co.uk/research
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Webloyalty Research: is it the end of home retail stores?
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