Survey says furniture industry not marketing to luxury consumers

Lauren Heist
For more than 15 years, Pam Danziger, owner of Unity Marketing, has been tracking the buying habits of high-end consumers in the United States.

She’s asked thousands of consumers where they shop, what they buy and why they buy it to figure out why people will spend more for a Louis Vuitton purse, a Tiffany bracelet or a pair of Manolo Blahnik shoes than they will for other items and to help companies tailor their brands to appeal to luxury consumers.

This year, Danziger set her sites on the home furnishings industry, delving into the mindset of thousands of home owners to find out what they’re looking for in the home.

Danziger’s report, which was released Oct. 16, is entitled “The Home Furnishings & Decor Report 2018.” The report is based on two consumer research studies: one survey of 1,360 consumers with incomes of $50,000 or more who were involved in home decorating or remodeling projects in the past year or planned to undertake them in the next year, and another study of 542 consumers with incomes of $100,000 or more who purchased one or more luxuries in the three-month study period.

What’s striking about the survey, Danziger says, is how much furniture brands and home furnishings retailers are missing out on marketing to these luxury consumers.

For example, when asked which home furnishings stores they liked best, survey respondents said Target and Home Depot were among their favorites, two brand names that aren’t exactly geared toward a luxury consumer.

Yet, luxury consumers spend significantly more money on home furnishings than they do on clothes, travel or other items every year. According to the report, about half of American consumer households with incomes of $50,000 or more were involved in home decorating or remodeling projects in the past year or plan to undertake such projects in the coming year, and each household spends about $20,000 per project. That’s about 26 million households spending about $20,000 each — a huge market by any standards.

Still, Danziger says these consumers could be influenced to spend more if they believed that the brands had added value.

“It’s not the reason why they buy, but it’s the justification for spending more money,” she explains.

Danziger says furniture companies who can create a brand image that connotes high style will be able to command higher prices from consumers.

“I don’t think home marketers really know how to tap that luxury market the way the fashion marketer does,” Danziger says. “So many of the furniture manufacturers have an engineering mindset, which is limiting them.”

Danziger also said there is a misconception among home furnishings retailers that furniture is a necessity — something that is only purchased when you move into a new house.

In actuality, Danziger said furniture is really a discretionary item that people buy because they want it, not because they need it.

“Consumers continue to want to refresh their home,” Danziger says. “It’s an important source of creative expression.”

Sometimes, however, consumers do buy a piece of furniture out of need — say, their kitchen chair breaks and they need to get a new one. Suddenly, they’re looking for a new kitchen table to go with their new chairs, and then the new furniture doesn’t match the old hutch or the old curtains, and in no time, they’re spending $20,000 on a renovation.

“The purchase of a needed item generates a cascade of other items,” she says.

Danziger says the vast majority of homeowners do renovation projects themselves, and many of them get their inspiration from home shelter magazines and home decorating shows.

But the most affluent consumers see a significant value out of hiring an interior designer to help them create a polished, professional look in their home.

Although only 20 percent of consumers who make $100,000 a year or more hire an interior designer to help them with their remodeling project, Danziger says these consumers consider interior designers to be extremely valuable because the interior designers can give homeowners confidence that they’re making the right decisions.

Danziger also said homeowners who hire interior designers spend significantly more money on home furnishings projects than those who don’t.

Danziger said one of the biggest growth opportunities for furniture stores is to add outdoor furniture to their product offerings.

“When it comes to upgrading their homes, Americans often forego more luxurious interiors in favor of creating more luxurious outdoor living areas. Yet the size of the outdoor furniture segment of the market is roughly half the size of indoor furniture segment,” Danziger says in the report. “Marketers and retailers can find many opportunities to help their customers enliven their outdoor living areas, particularly with more luxurious offerings.”

Danziger says furniture retailers have often assumed that outdoor furniture is only popular in Florida or California, where it can be used year-round. But Danziger says consumers in all parts of the country are spending money to make their outdoor living spaces one of the most posh parts of their house.

“It’s almost like in these places that have short summers they celebrate [being outside] it even more,” she says.

A complete report is $3,500 and can be ordered on Danziger’s Web site. For more information, visit unitymarketingonline.com.

Taken from http://furniturestyle.com/