Though post-Brexit pressures in the housing market will negatively impact big-ticket purchases, home décor will enjoy a degree of protection as ranges provide consumers with cost-efficient options for updating the look of a home, especially for rented properties.
These lower-cost discretionary purchases – such as photo frames, lanterns, vases and candles – are more trend-influenced and seasonal. As the likes of H&M, New Look and Sainsbury’s expand their offers and introduce more stylish products to their ranges, they will find themselves more adequately protected against economic pressures than higher-priced homewares goods.
Sneha Alexander, Analyst for Verdict Retail, says: “While consumer confidence has taken a hit following the news of Brexit, trend-led products will encourage impulse buys and gifting purchases, reducing the reliance on replacement or needs-driven shopping trips.
“Although this means that home décor will be sheltered from the worst effects of a post-Brexit slump, it is essential that the mid-market continues to stimulate demand and drive expenditure growth by justifying price points via design, quality and gift-appeal in order to protect share erosion from the volume-driven, price-competitive value segment.”
Verdict Retail’s survey also found that 54.1% of consumers bought into the category because they wanted a ‘new look’, against 35% two years ago, as greater accessibility and more choice on the high street, particularly at the value end, has enabled consumers to buy into new collections more easily. Retailers must respond to the demand for newness, choice and style in order to compensate for predicted losses in other homeware sectors.
Greater accessibility to growing choice has supported online growth, with Verdict Retail forecasting the channel to account for 15.1% of sales in 2016. The breadth of ranges combined with competitive price points and forums such as Pinterest, will continue to stimulate online browsing and impulse purchases. Moreover, the improved choice provided by online pure plays such as Amazon, made.com and Cox & Cox encourages spend via their brand appeal, product expertise, convenient shopping experience and delivery services.
Alexander concludes: “As home décor is predicted to be more resilient than other UK homeware markets post-Brexit, it is imperative retailers ensure that investment is directed to growing and improving trend-led and seasonal collections, as well as improving instore marketing and better showcasing products online. Such investment will protect homewares retailers’ total performance from the potential sales declines expected in big-ticket categories over the next two years.”