US home furnishings sales to rise in Q2
Sales of home furnishings in the U.S. are expected to shoot higher in the second quarter, with in-store sales increasing nearly 8 percent to $23.222 billion and online sales increasing 28.4 percent, according to an IBM analytics-based forecast. Combined in-store and online sales of home furnishings are expected to grow 16.6 percent in the second quarter.
IBM experts cite a number of important factors that could be driving purchases, including "Year of the Dragon" weddings and the trend toward accessorizing living spaces.
Online sales of home furnishings are expected to post a year-over-year increase of 30.7% in April, 25.9% in May and 29.1% in June, with sales for the quarter coming in at 28.4%. This forecast of online sales is based on real-time sales data from the web sites of more than 500 leading U.S. retailers.
IBM retail and analytics experts see a number of important trends bolstering home furnishing sales:
• The concept of "accessorizing" is moving from the apparel market to home furnishings as many homeowners during the past few years have decided to stay put rather than move
• Homes are getting smaller, compelling consumers to "resize" their furnishings to accommodate smaller spaces
• Disposable income is rising as more people go back to work
• Rental activity is increasing.
"Consumers are opting to give their home a new-look by remodeling and accessorizing. New towels, bedding or even a picture can really spruce up a room," said Jill Puleri, global retail leader for IBM Global Business Services. "Retailers can benefit from this behavioral shift by considering product mix, promotion and presentation and by marketing home accessories aggressively. For example, for those customer who recently remodeled their kitchen - now might be the right time to target them with new dishes, hand towels, rugs, etc. - all of which complete the look."
Puleri noted that the Chinese Year of the Dragon, which began on February 4, is shaping up to be especially popular year for weddings, which could also be boosting home furnishing sales.
The IBM forecast is produced using statistical and analytical software to evaluate both the long-term sales trend and seasonal peaks. IBM consultants use these predictive techniques to help clients improve performance by addressing complex issues of supply and demand. These techniques also aid clients in planning product mix and new store locations.
In producing the forecast of store sales, IBM uses economic data gathered by the U.S. Census Bureau. The data is derived from a survey of store establishments primarily engaged in retailing home furnishings. These store establishments are a representative sample and are not inclusive of all industry activity in this category.
The online forecast is based on data from IBM Benchmark, the only analytics-based, peer-level benchmarking solution that measures online marketing results,including real-time sales data from the web sites of more than 500 leading U.S. retailers. All of the data is aggregated and anonymous. IBM Benchmark is part of IBM Smarter Commerce, an initiative designed to help businesses adapt to digital trends such as online, mobile and social buying and meet the demands of today's empowered customer.