Home decor market will slow down after unprecedented post-crisis boom

The crisis and the enthusiasm of the French for the development of their interior gave new life to the decorative articles market. Thus, it jumped more than 12% in 2021 to more than 14 billion euros after a limited decline in 2020 (-1.4% thanks to e-commerce representing around 20% of the market), as estimated by the experts at Xerfi Precepta. And sales of tableware/kitchen/decorative items, lighting and other textile/household items should not stop there. In reality, market growth will slow at an average rate of around 3% per year until 2024 to exceed €16 billion. Guilt in particular with the arbitration of homes in favor of leisure but also with the generalization of the practice of the occasion. Already ultra-competitive, mainly in the discount and entry segments (with Action, GiFi or B&M), the home decor market continues to receive new entrants with the proliferation of marketplaces for multi-brand distributors. However, the brand’s signs did not say their last word.

In the medium term, the good performance of the real estate market and the savings accumulated by the French during the crisis will sustain sales of decorative items. However, the reorientation of household expenses towards consumer goods that had to give up due to the crisis (food, cultural and sporting activities, travel, etc.), a lower frequency of renovation of decorative items but also the development of the occasion will constitute so many brakes. Taken from end to end, these different elements therefore militate for a smooth landing in the decoration market.

For a questioning of established positions?

Divided between a large number of distribution channels with varying profiless, the home decor market is in the hands of food superstores (25% market share), home appliance and furniture-decoration brands (18%) and bazaar and de-stocking brands (15%). Despite the multiplicity of actors, the level of concentration is quite high. Thus, about twenty players (all channels combined) generate 60% of total sales.

After the leader Ikea, which holds about 10% of the market, come, among others, E.Leclerc and Maisons du Monde.

This means that specialized brands of furniture-decoration and decoration are subject to strong competitive pressures. The strongest come from pure generalist players (Amazon, Cdiscount, etc.), on the one hand, and from bazaars and liquidation stores (Action, GiFi, etc.), on the other. While the former are fully consolidating their positions, the latter show exceptional dynamism maintained by the rapid expansion of their networks and the arrival of new operators (B&M, KLO, Miniso, etc.). Not to mention the emergence of pure players specialized in furniture and decoration, whose latest generation is represented by Digital Native Vertical Brands (DNVB).

The rise of second-hand platforms is also a powerful destabilizing factor in competitive gaming. A growing share of home decor purchases has shifted to the second-hand market, where some of the most important e-commerce players (Leboncoin, Vinted) and specialized platforms (Selency, Luckyfind, Izidore) operate. …).

At the same time, the proliferation of marketplaces favors the lack of differentiation of offers. These marketplaces are launched at the initiative of food superstores, DIY stores or even home appliances, which aim to further enrich their offerings by attracting a multitude of brands. The proliferation of these platforms also participates in the logic of coopetition.

Signal marks didn’t say their last word

However, several home decor and home decor brands are facing financial difficulties. Some were thus subject to heavy restructuring (Habitat, Alinéa) while others disappeared from the landscape. As if the signal-brand model had its day in favor of the multi-brand distributor, even though DNVBs are starting to move the lines thanks to their mastery of the value chain (in particular design) and agility in the digital field (communication in social networks, online sales). After optics, beauty or lingerie, they now attack niches in the decoration market (bedding, candles, etc.) more in the middle-high.

The context is, however, favorable for the return of brands because they dominate the creation process (unlike multi-brand distributors “simple selectors”). They therefore have a hand in a market driven by standardized pricing and offerings, in the opinion of the experts at Xerfi Precepta. They will resurface because fashion brands will diversify into decoration, renewing codes, such as H&M, which has just launched a store concept dedicated to this universe. Sleeping beauties will also wake up, like Geneviève Lethu, bought by the Cargo group, and who is preparing to reopen a commercial establishment in her name. Finally, some are investing in digital, such as Maison du Monde, one of the rare brands to have a marketplace. Others convert every now and then, like La Redoute or Ikea.

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