Growth spurt: Home accents records stellar sales

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What a difference a pandemic makes.

Two years ago, when Home Accents Today did its last Universe Study, the nation was one year into the pandemic and the industry was experiencing brick-and-mortar store closings among independent and traditional retailers and a continuing shift to online shopping and discounters that could sell essentials along with decorative items for the home.

Follow that up with 2021 during which consumers turned their attention to their homes where they were spending more time than ever — sheltering from COVID variants, working and, in some cases, educating their children. With that came a redecorating frenzy and a strain on the supply chain as orders quickly filled containers that flooded — and clogged — ports worldwide.

“In the second half of 2020 and all of 2021, anyone could sell anything,” said Austin Craley, vice president-sales for rug company Loloi. “Then the supply chain backed up inventory.”

By the end of 2021, despite the ongoing desire for products, the shipping delays brought on product scarcity, followed by rising energy prices and the advent of inflation along with fears of a recession. It was a period unlike any other.

Home Accents Today Universe Report 2022_Where home accents are sold

Taken together, 2021 and 2022 saw total market sales for home accents grow an impressive 18.6% from an estimated $71.8 billion in 2020 to an estimated $85.19 billion in 2022.

During this time, the industry experienced a rapid rise in home accent sales during 2021 followed by a leveling off period in 2022 as economic uncertainty crept in. Taken together, 2021 and 2022 saw total market sales for home accents grow an impressive 18.6% from an estimated $71.8 billion in 2020 to an estimated $85.19 billion in 2022.

Discount department stores and off-price retailers were the among the biggest beneficiaries of this steep growth, with sales rising by more than 20% to top out at $17.55 billion. Home accent stores held their own, however, nearly matching discounters in market growth to achieve estimated sales of more than $14 billion.

Even with consumers returning to stores in late 2021 and 2022, the online channels that grew during the early days of the pandemic solidified their position as an easy, go-to source for home accents shoppers, experiencing the largest percentage growth of more than 23% to capture an estimated nearly $12 billion in sales.

“In the second half of 2020 and all of 2021, anyone could sell anything,”  Austin Craley, Loloi

While the pandemic certainly presented challenges for suppliers and retailers, many used the time to explore new vendors and retail channels, shore up already strong categories and dabble in new ones.

“Even during COVID, we sourced in 14 new factories for redundancy and diversification,” said Barbara Fuller, vice president of marketing and visual merchandising at Arteriors, which offers lighting, accessories and furniture. Fuller said when the supply chain issues hit the industry, they were prepared.

“Part of our business model is to be in stock, so we were in a better stock position when other people weren’t,” she explained.

Categories that were initially strong for Arteriors—accent furniture and wall décor—were among the top growers overall, according to Strategic Insights, Home Accents Today’s research arm.

Accent furniture accounts for 26% of the product universe and grew by 18.3%, putting it behind decorative accessories — up an estimated 22.2% between 2020 and 2022 — and wall décor — up 26.6% for the same two-year period. Both decorative accessories and wall décor also gained in share of universe by one and one-half percentage points, respectively.

“We’ve had an incredible two years,” said Melissa Van Hise, CEO of Iconic Pineapple, a wall décor purveyor. “The beginning of the pandemic was scary, but halfway through business exploded. People bought all these houses and they are still fixing them up,” she noted, which has meant more business from designers along with traditional furniture and home décor retailers.

Part of the home décor sector’s ability to prosper throughout the pandemic was the versatility of the product mix and how retailers and consumers often methodically approached the restoration process.

“The pandemic moved from room to room,” explained Sean McFadden, vice president-sales for Interlude Home, which offers contemporary décor and furnishings. Living rooms were updated with side tables and upholstery, he said, followed by pieces to round out home offices that were created or refreshed to accommodate new at-home workers.

“The bedroom was the next wave,” he said, and now it’s a focus on outdoors and three-season room styles. While most people have a six-year cycle for redecorating, that got compressed into a couple of years during the pandemic, said McFadden.

“With COVID, people realized the importance of their homes,” said Loloi’s Craley. “They got tired of their décor. In 2022, people have been going back to normalcy, but they still want to improve their homes.”

This has been, however, a more cautious 2022, especially with the advent of non-COVID issues — inflation, worker shortages and a transition to more travel and socializing.

“The first six months of 2022 looked so good,” said Jeff Chauvin, co-owner of faux botanical company Bougainvillea. “Everything was open again, but the house was done and people wanted to go out — socialization became the priority.” As a result, he said, business from the summer forward has slowed.

Chris Deeley, president at D&W Silks, noted an explosion in the e-commerce channel for permanent botanicals during the pandemic. “We were already in that channel, which was extremely helpful to us.” As business reopened, he said, internet sales have slackened, but brick-and-mortar has filled the gap. “If homes are selling and people are moving, we see business,” he said, which is why he is closely watching what’s happening in the housing market.

Direct-to-consumer and designers were the top-growing sectors for the permanent botanical category, according to Universe Report estimates, although some retailer categories such as lifestyle stores (up an estimated 13%) and home accent stores (up 10.5%) have performed above average. Overall, the category was up an estimated 5.4% over the past two years.

“Everyone is looking for a deal,” Melissa Whitaker, Bassett Mirror

As suppliers look ahead to 2023 and how home accents will perform, the mood seems upbeat, but with a strong dose of reality.

“Everyone is looking for a deal,” said Melissa Whitaker, CEO and president of Bassett Mirror, which creates products across many home accent categories. “We’ve had two price rollbacks and eliminated our surcharge.” On the plus side, she said, the supply chain has eased although container arrival times aren’t consistently back to where they should be.

Maura Dineen, product development manager with Moe’s Home Collection, said in the post-pandemic landscape, people are reassessing what works and are making choices based on factors such as quality and sustainability. Among retailers, the focus now is on new but with an evergreen component — “it’s the balance of edgy and timeless,” she said.

 

This report was sponsored by Las Vegas Market and Atlanta Market.



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