Online Furniture Sales Statistics for the US market
The online furniture sales and rental industry includes the buying, selling and rental of residential and business furniture, including living room furniture, dining and kitchen furniture, bedroom furniture and office furniture. With an average annual rate of 9.6% over the past five years (IBISWorld reports), online furniture sales have outperformed their traditional brick-and-mortar competitors due to lower operating costs and significant tax advantages.
How the online furniture sales industry works
The industry is highly fragmented, with Williams-Sonoma and Wayfair.com holding the largest market share and smaller players trying to catch up with the leaders. In fact, Wayfair topped $1 billion in sales in 2013, reaching a 50% growth on a year-on-year basis, Furniture Today reports. On one hand, as there is no licensing requirement and/or certification process, the barriers to entry are low and new entrants capitalize on low costs of operating online. On the other hand, competing in a fragmented industry requires the establishment of alternative distribution channels to build and maintain brand awareness and recognition.
Statistics show growth
IBISWorld estimates that in 2013, the online furniture industry revenue will reach $9.0 billion, a growth of 10.4% (at the time of the report the official numbers are not yet released).
According to Statista.com, the projected U.S. furniture and home furnishings retail e-commerce sales share from 2013 to 2016 is 7.3%, 7.3%, 7.4% and 7.4% for 2013, 2014, 2015 and 2016 respectively.
Online furniture sales as percentage of total furniture sales in the United States was 14.6% in 2010 and 14.2% in 2011 (newer data are not available).
Retail e-commerce sales in 2013 increased by 10.07%, 46.55 billion US from 42.29 billion US dollars in 2012 during the holiday season (November and December). These figures include online furniture sales as well.
Factors affecting online furniture sales
With the exemption of tax advantages, which leave room for higher growth, and the extended use of the Internet using smartphones and tablets, online sales are generally affected by factors that do not differ much than those affecting offline sales.
a) Recession - Online furniture sales have been slightly affected by the recession due to decreased disposable income. When consumers cannot afford to spend any money on brick-and-mortar retailers, consumer spending drops on e-tailing as well.
b) Rebounding housing market - Furniture sales are directly related to the housing market. If properties are not selling, consumers are not buying furniture either. Increased homeownership rates are expected to positively affect consumers' willingness to purchase furniture. In this context, the rebounding housing market will contribute to the industry's strong growth.
c) Available internet access - The greater availability of internet access is expected to foster higher growth to online retailers in general. As consumers are increasingly looking for convenience and lower prices, online furniture sales are expected to further outperform the traditional retailers, while taking advantage of the economic growth.
d) Increased use of smartphones and tablets - The proliferated use of smartphones and tablets has boosted consumer spending. It is estimated that more than 50% of US online consumers use their smartphones to search for the best price and they often complete the transaction using their handheld device. The same goes for tablet owners who spend most of their leisure time shopping online, Forrest Research reports.
Shortcomings of online furniture sales
Often, the size and weight of the furniture makes shipping and storage quite difficult, thus posing a potential challenge to logistics department. Leading online furniture retailers in the US, such as Wayfair.com, Overstock.com, RoomandBoard.com and many others, should consider alternative distribution channels in order to eliminate the number of stops before the item reaches its final destination. Such strategy will reduce operating costs, but it requires a good understanding of consumer behavior and demand.
In conclusion, online furniture sales are completed by retailers who have both a brick-and-mortar and online presence. In this context, online furniture sales are expected to have a significant contribution to the increase of US online retail sales - $370 Billion by 2017, Forrest Research reports.