The 2010 consumer - Mississippi State University · 2010-08-30 · Second-hand Internet sites 9% 2008 After recession Before recession Source: Furniture/Today and HGTV’s The 2010

STRATEGY 2010competing in a changing world

The 2010 consumer


The furniture industry is influenced by four major factors

Housing1.

Unemployment2.

Consumer confidence3.

Consumer spending4.


Housing Unit numbers in thousandsSeasonally adjusted annual rate

United States Northeast Midwest South West

July ‘10 416 45 68

Permits215 88

Change from July ‘09 -13.2% -4.3% -17.1% -14.3% -11.1%

StartsJuly ‘10 432 51 74 226 81

Change from July ‘09 -13.6% -3.8% -14.9% -9.6% -26.4%

July ’10 numbers are preliminary. Source: Bureau of the Census and National Assn. of Realtors


Housing Unit numbers in thousandsSeasonally adjusted annual rate

United States Northeast Midwest South West

July ‘10 276 31 44

New home sales157 44

Change from July ‘09 -32.4% -24.4% -21.4% -26.6% -54.6%

Existing home salesJuly ‘10 3,370 470 730 1,380 790

Change from July ‘09 -25.6% -28.8% -33.6% -20.7% -23.3%

July ’10 numbers are preliminary. Source: Bureau of the Census and National Assn. of Realtors


Unemployment

Source: Bureau of Labor Statistics

July 9.5%

National 2010

June 9.5%

Seasonally adjusted annual rate

By year2009

2008

2007

2006

9.3%

5.8%

4.6%

4.6%


Unemployment

Source: Bureau of Labor Statistics

Seasonally adjusted

By region

8.8%

9.2%

9.4%

8.7%

9.2%

10.0%

2010 2009July

Northeast

South

Midwest

West 10.8% 10.4%


Consumer confidence

Source: The Conference Board

The Consumer Confidence Survey reflects prevailing business conditions and likely developments for the months ahead. It details consumer attitudes and buying intentions. The survey is based on a representative sample of 5,000 U.S. households. It is conducted for The Conference Board by TNS.

U.S. Average

50.4

54.3

2010July p

June r

Seasonally adjusted index: 1985=100

p=preliminaryr=revised


Consumer confidence, July ’09 – July ‘10

U.S. AverageBy month

Source: The Conference Board

Seasonally adjusted index: 1985=100p=preliminaryr=revised

47.4

54.5 53.448.7 50.6

53.656.5

46.452.3

57.762.7

54.350.4

July

AugustSep

tember

October

November

Decem

ber

January

Febru

ary

March

April

May

June r

July

p

2009 20102010


Consumer spending for furniture and bedding In $ billions with %

change from prior year$83.2

2007

$78.8

2008

$71.9

2009

-5.3% -8.8%

Figures are based on U.S. Dept. of Commerce estimates, excludingcontract furniture and certain other non-residential product categories.


In partnership with HGTV, Furniture/Today surveyed consumer households via an online survey linked to HGTV’s Ideas newsletter in September 2009.

The exclusive survey yielded responses of more than 8,550 U.S. consumers.

Data can be projected within the HGTV newsletter population with a margin of error of +/- 1.1%.


Respondent profileRegionNortheast 16%Midwest 25%South 41%West 18%

AgeUnder 35 6%35 - 44 12%45 - 54 36%55 - 64 34%65 and older 12%

IncomeUnder $30,000 14%$30,000 - $49,999 23%$50,000 - $74,999 26%$75,000 - $99,999 18%$100,000 or more 19%


Has the economy affected OVERALL household spending?

Yes92%

No8%

All respondents

Source: Furniture/Today and HGTV’s The 2010 Consumer Survey


LESS OFTEN, consumers are

86%Making major purchases, furniture, cars, appliances

84%Spending on entertainment

82%Spending on vacations

81%Eating out

Less often



MORE OFTEN, consumers are

60%Researching online before buying

58%Clipping coupons

55%DIY work at home

51%Shopping several stores before buying

44%Living paycheck to paycheck

42%Shopping second-hand stores

More often



Is there a NEW NORMAL? How ingrained have habits become?Once the economy improves, consumers will

43%

16%

41%

Change new habits

Not sure

NOT change habits



Once the economy improves, the top 5 habits consumers will

EATING AT HOME EVERY NIGHT1.

Using credit cards2.

Not taking a vacation3.

Living paycheck to paycheck4.

Worrying5.

STOP CONTINUE

PAYING WITH CASH1.

Using coupons2.

Shopping several stores before buying3.

Saving $ money4.

Do-it-yourself5.



When will the recession end for families?

20093%

201023%

201121%

2012 or later

15%

Not sure 38%



Has the economy affected

FURNITUREspending?


Can consumers AFFORD new home furnishings/furniture in 2009?

Yes19%

No81%

All respondents



When can consumers AFFORD new home furnishings/furniture?

All respondents

2009

2010

2011

2012 or later

Never

Not sure

30% 19%

16%11%2%

22%



The good news Pent-up demand


Do consumers DESIRE new home furnishings/furniture?

All respondents

Yes

56%

No

44%



Most popular ROOMS for 201030%Family room/den

23%Master bedroom

21%Outdoor area

15%Formal living room

14%Other adult/guest bedroom

14%Eat-in kitchen

13%Home office

12%Home theater/ entertainment room

% of consumers who PLAN TO BUY in the next 12 months



ROOMs of opportunityPublic & casual areas

Master bedroom Outdoor spaces


Most popular PRODUCTS for 201023%Area rugs

22%Mattress/ boxspring

20%Lamps

17%Leather recliner

16%Fabric sofa

15%Occasional tables

14%Entertainment furniture

12%Outdoor dining set

% of consumers who PLAN TO BUY in the next 12 months



PRODUCT opportunities

UPHOLSTERY

BEDDING ACCESSORIES

CASE GOODS


What’s important NOW

76% 77%83%

48%

68%

49%

2009

Most important shopping characteristicsWhat WAS important

Quality

84%

Value

69%

Best price

61%

Style

60%

Durable pieces

58%

Brand I trust

51%

2008



29%

63%58%

42%

52%45%

2009

Other important shopping characteristics

Unique pieces

40%

Warranty

38%

Practical products

30%

Multi-functional

pieces

40%

Low prices

Retailer I trust

45% 44%

2008

What’s important NOW

What WAS important



Top 5 characteristics

Before recession

2. Value1. Quality

3. Best price4. Style5. Durable pieces

After recession

2. Value1. Best price

3. Quality4. Durable pieces5. Low prices



CHARACTERISTICS

►Value is crucial

► The retailer & brand are as equally important

►Durability is also key

►Practical products are more important

►Quality is still important to ¾ of consumers


After recession

32%

64%

32% 33%

65%

2009

WHERE consumers shopBefore

recession

Traditional furniture

stores

56%

Home imprv. centers

54%

Mfr.-branded stores

53%

Dept. stores

46%

Discount dept.

stores

38%

2008



19%

30%

44%53%

27%

55%

2009

WHERE consumers shop

Home accent/gift

store

32%

Lifestyle furniture

stores

36%

Ware. clubs

34%

Off-price retailers

31%

Office supply stores

29%

Second-hand

stores

27%

2008

After recession

Before recession



34%

23%

10% 2% 3%

26%

2009

WHERE consumers shop

Internet retailers

25%

Catalogs

22%

Home shopping networks

11%

Interior designers

10%

Rent-to-own stores

2%

Second-hand

Internet sites

9%

2008

After recession

Before recession



WHERE CONSUMERS SHOPPED

► Second-hand stores have gained the most shoppers

► Traditional furniture stores have kept 1/3 of shoppers

► Discount department stores have gained, too

► Will recessionary shopping patterns continue?

► 1/3 of consumers now shop online for homefurnishings


“New Normal” found in new study

► In April 2010, Chadwick Martin Bailey and iModerate Research Technologies conducted an online survey with a nationally represented sample of 1,500 U.S. adults

► They released the data in an August 9 report, “Engaging Consumers in the New Normal”


Per the 2010 survey, consumer spending still in flux

► 33% plan to continue recessionary-based reduced spending

► 43% of consumers are still developing new spending habits

► 24% never made major changes in their spending anyway

Source: Engaging consumers and growing market share in the “New Normal”, Chadwick Martin Bailey, August 2010


How consumers have changed HOME FURNISHINGS spending habits


Stopped completely

All respondents 35%

Continued, but with lower cost products

Continued spending the same or more

44% 21%




Stopped completely



18 - 34 28% 46% 26%

35 - 44 45% 37% 18%

45 - 54 39% 44% 17%

55-plus 33% 47% 20%

Age




Stopped completely



Under $50,000 43% 40% 17%

$50,000 - $74,999 31% 49% 20%

$75,000 - $99,999 25% 54% 21%

$100,000 or more 18% 44% 38%

Household income


FINAL thoughts

► Researching products online before buying

► Shopping several stores before buying

► Clipping coupons

► Increasing Do-It-Yourself

► Evidence there is a “new normal”

MORE OFTEN consumers are


FINAL thoughts

► Evidence of pent-up demand

► More consumer focus on public areas ofthe home

► Greater emphasis on value, quality anddurability


The 2010 consumer

Documents

The 2010 consumer - Mississippi State University · 2010-08-30 · Second-hand Internet sites 9% 2008 After recession Before recession Source: Furniture/Today and HGTV’s The 2010