The report titled What’s next for consumers, workers, and companies in the post-COVID-19 recovery published recently by Mckinsey & Co briefly touches on the concept of "Home Nesting". As consumers were confined to their living spaces almost overnight when COVID-19 hit, they started to invest in everything related to their home, where it has become their office, gym, online shopping center, movie theatre, cooking classroom, etc.
From statistics obtained from various sources, the home sector has indeed benefited from increased home nesting behavior.
- In Australia, strong spending on household furnishings and equipment up 52% over the last 12 months (May 2020)
- In the United States, housewares sales grew 29%, home improvement 22%, and home textile 19% in 2020 compared with 2019
- In the UK, British furniture manufacturers described unprecedented sales as people spend big on their homes. According to John Lewis, the biggest trend was the return of bean bags in 2020, with sales up 56% year on year and home artwork sales were also up 50% compared with last year
- In China, the sales of yoga mats surged 150% and rowing machines showed a 134% increase in JD.com; while sales of massage chairs rose 436% over a period in Suning. (Periods in 2020)
- In Singapore, there was a 105% increase in sales of home furnishing products (Feb - Mar 2020)
According to Mckinsey's analysis, the home nesting behavior may stick, supported by continued remote work and home investments made during COVID‑19 that delivered positive experiences.
However, the picture is not all positive for the home furniture and furnishing retailers. In the US, those stores have experienced a continuous decline in their share of spending from 60% in 2015 to 47% in 2020 as consumers shifted their purchase behavior online, or made purchases through general merchandisers.
The traditional approach to focus on brick-and-mortar stores with heavy reliance on discounts and promotions may not work well for the new consumers. Moreover, as a general rule, consumers spend more time on pre-purchase research to consider options than other general merchandise. Under the pandemic, more such time is spent online.
It is time for the home industry to invest in improving their websites and bring exceptional customer experience virtually to consumers. eCommerce capability should not be ignored and marketing to tell the brand story instead of focusing on selling will be the way forward.
The home industry has to be prepared to face the needs and changing behavior of consumers post COVID-19 recovery. The ones who remain in the competition will only get bigger and stronger.
Spending on home furnishings in the United States increased 14 percent through November 2020, compared to the prior year, while in Germany, sales in DIY stores grew 16 percent in the first half of 2020 compared to 2019.