Product segmentation across the furniture retail market is largely guided by function and form. The relative share of each product segment has experienced modest change over the past five years. Changes in consumer tastes and furniture trends provided much of the impetus for growth across various product segments.
Lounge and dining room
Lounge and dining room goods dominate furniture retailing and account for about 55% of total industry sales. Items classified under this segment include lounge suites (single-seater, two-seater and three-seater couches and modular suites), coffee tables, lamp tables, dining tables and chairs, buffets and hutches. This segment experienced significant change over the past five years with regard to design and functionality. Key trends include the use of glass, chrome and steel to create a modern, sleek and at times futuristic look. While traditionally shaped furniture continued to fill showroom floors, consumers increasingly sought individual designs and colours to transform their homes into modern living spaces.
Bedroom
Bedroom furniture is the second-largest product segment for the industry, accounting for about 33% of total industry sales. Items classified under this segment include bedheads and footboards, side tables, tallboys, dressers and mattresses. Changing trends and fads also affected the range of bedroom furniture stocked by industry retailers over the past five years. International markets and seasonal colours significantly influenced product lines. Advances in technology notably affected the range and functionality of mattresses on the market.
Outdoor and garden
Outdoor and garden furniture experienced strong growth over the past five years, due to the increased popularity of outdoor entertaining, the importance of garden design and the trend toward incorporating the garden settings as part of a home living area. The industry thus experienced a rise in the range of outdoor and garden furniture available to suit all household budgets and garden spaces.
Blinds
Blinds experienced growing popularity, driven by growth in the residential building construction cycle and a change in tastes and trends. While blind styles such as Holland and Roman maintained a constant share of the total blind market, the industry experienced growth in demand for timber blinds.
Other
Other furniture, such as coat stands and consoles, remained a relatively small product segment for the industry. Demand generally stemmed from a limited consumer group, often consisting of older consumers or those with a higher level of disposable income who are able to afford additional furniture pieces.
Harvey Norman Holdings Ltd accounts for 9% market share followed by Super A-Mart Holdco Pty Limited (5.8%) and Steinhoff Asia Pacific Holdings Pty Ltd (4.5%)
Furniture retailers will bounce back over the five years through 2016-17, with sales expected to rise 2.1% per annum. Intense competition from external operators, namely department stores and online shopping and auction sites will remain a real threat to the viability of operators across the industry over the next five years. However, the industry will rebound by offering consumers specialised service and a differentiated product range, and by ensuring that products on the floor match consumer demand and expectations. Consumer demand will also be driven by trends in the level of real household disposable income, the consumer sentiment index, housing construction, household formation and interest rates.
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Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
