The expected annual growth rate of the revenue of the home furnishing industry in Australia is estimated at 13.7%. That’s considerably more than the growth of the global furniture market, which is projected to increase annually at a rate of 5.2%. This significant difference is caused by several factors.
Real Estate Sector
As stated by Ken Research, the number of households in Australia is expected to rise annually by 1,8%. Apart from new homes that generate the demand for furnishings, the reassuring state of the economy keeps the customers feeling safe and eager to spend their money.
The growth of the tourism industry further increases the demand for different types of furnishings. With no sign of recession in sight, customers prefer more luxurious resorts, even if the prices are correspondingly higher. Subsequently, higher standards of the customers aren’t easily met. It puts pressure on the companies to carefully furnish their hotel rooms.
Australia is also experiencing an inflow of foreign companies, which leads to an increase in the demand for furnishings needed in offices.
The internet has dramatically changed the way companies operate. The process of purchasing a product is now faster and more convenient. The downside of furniture stores is that they are usually quite enormous. Choosing to shop online takes less time. You can go over the products that you are interested in much more efficiently.
Accessibility is another factor that influences the growth of this industry. In the past, it was harder to encourage customers to choose a particular shop. Even if the idea of visiting it was somewhat alluring, you had to go there physically. Australia’s population distribution is unique. If you don’t live in a big city, like Sydney, chances are, a trip to the closest home furnishing store would take a significant amount of time.
Apart from making the lives of the customers less complicated, the advent of the internet made it possible for businesses to eliminate some costs. Online shopping made redundant numerous physical stores, with countless employees needed to operate them. The money saved this way could be spent instead on innovation and the development of the product.
Shopping online makes it easier to compare prices with those of the competitors. The relative difficulty of retaining customer loyalty has led to an increase in competitiveness, which in turn also leads to a better product.
For the more expensive purchases, customers still prefer to go to the store rather than shop online. Still, the younger generation is characterized by different sets of preferences. The most crucial characteristic of this customer group is that they are not buying products solely because of their utility.
Instead, their purchases reflect their own personality and views. As a result, the possibility to customize their products is a tactic that will be central for the businesses in the near future.
Another factor that affects the global furnishing industry is the decrease in the size of homes. Australia as a whole might not be a prime example of this trend, but you can observe this tendency in its bigger cities. As a result, people are more eager to buy furniture that has several functions.
A dresser than can function as a nightstand, but with a certain dose of goodwill can turn into a coffee table will be much more sought than a nightstand that’s merely itself and nothing else. There is a huge demand for products that don’t take much space and are stylish at the same time.
Changing customer preferences drive the market and generate more profits. Australian furnishing industry was relatively slow to adopt the use of the internet, which is why the notable effects can be observed just now.
More To Come
It is difficult to predict the state of the Australian economy in the distant future, but currently, there are no signs of the home furnishing industry stopping its dynamic growth. There is a steady increase in the number of households, but the current trends have more impact in this regard. The businesses are more than happy to satisfy the customers’ changing preferences. Coupled with an increasing share of online purchases, which allows companies to eliminate some costs, the industry’s projections are optimistic.