Trend: Home Furnishings Stores Invest in Technology
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Home Furnishings Stores Industry Quarterly Update

Industry Update

Trend: Home Furnishings Stores Invest in Technology
With online sales growth outpacing in-store growth, major home furnishings retailers, including Bed, Bath & Beyond, Pier 1 Imports, and Williams-Sonoma, are investing heavily in their e-commerce infrastructure.

Bed, Bath & Beyond, for example, reported sales through its customer-facing websites and mobile applications increased by more than 50 percent in the first half of 2014 over the year earlier period, while comparable in-store sales were flat. Slightly more than half of the company's 2014 capital expenditures went to technology enhancements to add new functionality and assortment to online and mobile shopping sites, provide in-store Wi-Fi to customers and employees, and improve customer data integration. As more sales migrate to online and mobile shopping environments, home furnishings chains are looking to maximize their online and omni-channel capabilities.

Industry Impact
Home furnishings retailers will likely continue to boost capital expenditures to support e-commerce growth.

Industry Indicators

U.S. consumer spending on durable goods, an indicator of home furnishing sales, fell 2.2 percent in October 2014 compared to the same month in 2013.
The value of U.S. residential construction spending, a key indicator of home furnishings sales, rose 5.3 percent year-to-date in October 2014 compared to the same period in 2013.
U.S. retail sales for furniture and home furnishings stores, a potential measure of demand for home furnishings, increased 2.4 percent in the first eleven months of 2014 compared to the same period in 2013.

Fast Facts

Companies in this industry sell new home furnishings, such as decorative items, kitchen and bath products, linens, and window treatments, from physical retail locations.
Major U.S. companies include At Home (formerly Garden Ridge), Bed Bath & Beyond, Pier 1 Imports, Restoration Hardware, Sur La Table, and Williams-Sonoma.
Major product categories are domestics (17 percent of sales), decorative accessories (15 percent), and cookware (10 percent).
The typical target customer is a woman, age 25 to 55, who is fashion- and brand-conscious and has better-than-average income.
Cash flow is seasonal, with higher sales in third and fourth quarters.
Home Furnishings Stores
SIC Codes: 5714, 5719
NAICS Codes: 44229
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