An investigation into online retail furniture performance

Online industry insight provider, IMRG, shares a comprehensive understanding of online retail furniture performance, covering three key areas, including online revenue, conversion rate and average basket value metrics.

The data presented throughout this article is from IMRG’s Online Retail Index, which tracks the online sales performance of 200 retailers across different product sectors in the UK.

Furniture Online Revenue Performance

The change was ignited by the move from lockdown, when many customers began making their homes more comfortable in preparation for many days indoors, to Covid-19 being considered as something of the past. Given that furniture items are often high ticketed, where customers had already heavily invested in items such as sofas, which are often once in every ten- or so-year purchases, retailers have had a challenging time achieving positive-territory growth ever since.

Throughout the entirety of 2021, the online retail furniture category rode above the wave of total market Year-on-Year (YoY) revenue performance, albeit experiencing negativeterritory growth from July onwards. However, as we entered 2022, the narrative changed, where for six months straight, the category was falling below the industry average, and stooped as low as -35.3% YoY in March that year.

As you can see in Chart A, furniture experienced growth from February to May 2023. Though, IMRG’s Online Retail Index shows a considerable decline in revenue for furniture retailers in June 2023, at -11.7% relative to -5% in June 2022, marking the third year of negative-on-negative growth for this category.

Chart B shows 2023 data in isolation, featuring furniture as well as other high-ticket product categories, namely audio, large appliances, and visual & entertainment. From around April, retailers started to experience declines in revenue. These results largely owe to cost-of-living skews, where UK customers are dealing with high inflation and high mortgage rates.

With the intention of protecting their pockets, customers are looking towards cheaper product categories such as small appliances and health & beauty, which are subsequently having a slightly better time, despite trading in the same economic climate that is making growth more difficult

Zoning in on the other subsections of the home & garden category, as presented in chart C, furniture performed relatively well throughout 2023 up until May when the other categories saw a significant peak and it experienced no growth. Again, this resonates with furniture’s price point, where customers are more inclined to enjoy May bank holiday deals that will not heavily dent their purses.

Sunnier days in the UK would also explain why categories such as garden would have an easier time converting customers, especially when many would have been having garden parties to celebrate three long weekends and King Charles III’s Coronation.