The COVID-19 pandemic had an unexpected impact on the furniture industry, as statistics reveal that consumer spending on home furnishings actually increased during this period. With more people working from home, many opted to establish home offices and improve their living environments, which led to higher demand for home and office furniture.
This rise in demand helped maintain furniture prices throughout the pandemic. However, as the world emerged from the pandemic, office furniture prices remained high, a fact highlighted by a recent report in The Guardian.
The report suggested that furniture (including office furniture) is still considered expensive, with Richard Hemming, editor of Under the Radar Report, supporting this view. Hemming pointed to lower profits and sales from industry leaders like Nick Scali as evidence that the high prices have affected sales volumes.
One possible explanation for the decline in brick-and-mortar sales is that more consumers are now buying furniture online. The shift to online shopping can be attributed to lower prices, greater selection, and convenience.
As Meghan Stabler, a marketing and product management strategist, noted, online furniture stores offer a broader range of choices compared to physical stores. For example, while a brick-and-mortar store may display only a limited number of ergonomic office chairs, online retailers can showcase hundreds of designs. Additionally, online shopping allows for easy comparisons of prices, quality, and other factors, which further enhances its appeal.
Another factor driving the growth of online furniture shopping is the availability of flexible payment methods. Many online platforms now offer “buy now, pay later” options or zero-interest installment plans, which have become particularly attractive to consumers. These payment options have contributed to a significant increase in online furniture sales. In fact, in 2023, the Australia office furniture market was valued at USD 2.01 billion. It is expected to grow at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2032, with an estimated market value of USD 2.89 billion by 2032.
The popularity of “buy now, pay later” options reflects the financial pressures many consumers face today. Such payment plans offer customers the ability to spread out payments, making it easier to manage their budgets during uncertain times. This payment flexibility gives consumers more confidence to make larger purchases, including furniture.
From an online retailer’s perspective, offering flexible payment options is a successful strategy. It appeals to budget-conscious customers, improves conversion rates, and increases order volumes. Brick-and-mortar retailers could benefit from adopting similar strategies, offering these flexible payment options in their physical stores to stay competitive.
The furniture industry, like many others, is evolving. For traditional furniture stores, the cost of maintaining a physical location contributes to higher overheads, which is reflected in the prices of furniture sold in-store. These higher operational costs are a key reason why in-store furniture prices remain elevated compared to their online counterparts.
In conclusion, the pandemic has reshaped the furniture industry, with online shopping becoming increasingly popular due to its convenience, wider product selection, and flexible payment options. Brick-and-mortar retailers may need to adopt similar strategies to remain competitive in a changing marketplace.