It seems we have a distinct need for sprucing up and improving our nests. The home and garden sector was the fastest growing area of consumer expenditure in the UK last year with over 27 million British households spending 68 billion pounds.
The year-on-year growth a formidable 11.6 percent. Plus, it’s projected to shoot up another 37.4 percent over the next five years, aka Millennials-in-their-prime-working-and-spending-years effect.
”Offering Instagram-friendly value-oriented homewares will become increasingly important as Millennials finally begin to set up homes of their own. Indeed, fashion retailers including Zara and H&M are already increasing the number of homewares products they offer,” analyst Jack Duckett said as Mintel published its savvy report on British lifestyles earlier this year.
Home and garden in generations
Millennials bring demands for sustainability, convenience and personalisation. The older superpower generation – Baby Boomers – have a different shopping agenda. With more time and money at hand they tend to focus more on hobby, lifestyle and wellness.
All in all the British home and garden market attracts a large field of players making it competitive and super fragmented. An overview:
- Retailers come in all sorts and sizes: Amazon, Dunelm, Argos, Wayfair and Ikea are the biggies. John Lewis, Next and Marks & Spencer’s are broadening out their garden and homewares. Alongside Zara and H&M, fast-fashion brands Primark and Anthropologie sport their own home ranges. And don’t forget the Garden centres.
- Product categories range from furniture, flooring and accessories to lighting, gardening and DIY.
- Low value, high volume lines are supplemented with higher value purchases, e.g. Ikea offering appliances alongside kitchen units, collaborations with celebs (e.g. Kylie at Home), focus on quality, design and sustainability to push up prices etc.
- Market is driven by calendar events like Easter and Christmas, when Brits traditionally fix up their homes. Demand often follows fashion trends.
Is furniture shopping going online?
According to a survey commissioned by Klarna 38 percent of consumers prefer to buy furniture online rather than in-store. 69 percent said they had also bought home and garden products online. Along with recent e-commerce growth in this sector – thank you Amazon, Very and Wayfair – this may seem like music to your ear. But the same survey reveals a majority of consumers would spend more or invest in more expensive and longer-lasting products if flexible payments were available at the checkout. One in two shoppers said shopping would be more enjoyable with spending made easier to manage.
When buyers were asked what they expect when they visit home and garden retailers online 80 percent said they would like to pay by installments for expensive items. The top three reasons for selecting a certain retailer were 1) Choice of product, 2) Great UX, 3) Smoooth checkout.
Retailers in the home and garden e-commerce space have been hesitant to change payments or consumer finance supplier, hence a lack of investment in online essentials as payment choices and overall user experience (UX). Bothersome as this may be, actually investing in your customer experience could prove to be a decisive factor for defending or gaining business in this super competitive sector.
Here is how Klarna can give retailers an updated edge:
- State of the art UX. More payment choice and a frictionless experience. One-click for repeat customers will help capture sales especially from time-strapped shoppers.
- Short term instalments. Removes cost as the primary deal breaker. Klarna carries the risk and pays the retailer the full amount upfront.
- Financing. Suited for big-ticket items such as sofas, beds or garden furniture at peak spending times, or during campaigns. This option opens up paying over time, 3-36 months.
- Pay in 30 days. This option lets shoppers receive their goods first and pay 30 days later. This gives home and garden buyers plenty of time to see the products at home.
Five takeaways on growth boosters
1) Seeing and touching products stimulates sales. Invest in try now pay later as well as AI and VR in order to create more real-life experiences.
2) Embrace influencers, ideas and inspiration. DIY, craft and gardening skills are in big demand, and consumers turn to brands/online for tips and advice.
3) Keep an eye on social Millennials. Likely to post a social or online review, this soon-to-be-dominant cohort, can catapult sales.
4) The Luxe-spend. Shoppers are showing a growing desire – or should we call it acceptance – to pay a lot for something that is exclusive.
5) Work is the new home. As the home is becoming central to both work and leisure it’s encouraging consumers to spend more to create perfect ‘live, work, play’ zones. More than four million Brits regularly work from home.
Source: Klarna report ”Bring sales home. Watch them grow.” – December, 2019