DIY home design to spark homewares sales: IBISWorld
An increasing trend of do-it-yourself home design will stimulate sales for houseware retailing, according to an IBISWorld report, which shows industry revenue is expected to be worth $1.71 billion in 2017-18.
The report, titled Houseware Retailing in Australia, shows industry revenue returned to growth in 2011-12 after falling for three consecutive years.
“Revenue is expected to increase at an annualised 0.1% over the five years through 2012-13,” the report said.
“The industry is expected to return to growth in 2012-13 to be worth $1.5 billion. This represents an increase in revenue of 2.2%.”
“Revival in the industry in the past few years is partly owed to the popularity of various reality television shows that involve DIY home design programs and cooking shows.
“These programs inspire people to take up cooking or home redecorating as pastime activities.”
Over the next five years, revenue is forecast to return to moderate growth as housing construction activity and household spending increase due to improving consumer confidence, the report said.
Following a moderate 2.1% growth expected in 2013-14, revenue is forecast to grow at an annualised 2.7% to reach $1.71 billion in 2017-18.
“Demand for housewares is expected to depend on economic variables, such as disposable income levels, consumer sentiment and interest rates,” IBISWorld said in its report.
“In addition, new residential building construction, home renovation activity and household formation rates will drive demand.
“As the economy strengthens and housing construction activity improves, spending on housewares will increase.”
IBISWorld senior analyst Craig Shulman told StartupSmart new home owners are expected to generate a sizable portion of sales for the industry.
“The largest type of investment will be when someone moves into a new residence. New home owners are expected to be a significant share of the market,” he says.
“With home owners or residents, they tend to – when they move into a house – they will try to buy products that suit their environment.
“If someone has been living in their residence for an extended period of time, their investment in houseware retailing is likely to be piecemeal.”
However, Shulman is quick to point out consumer sentiment also comes into play.
“If [a home] is bought in a period when homeowners or residents feel they are in a subdued or negative economic environment, they purchase a house that is purely functional and doesn’t necessarily relate to any type of lifestyle purchase,” he says.
“When there are positive economic times, houseware retail can be a lot more [strong] because people want to decorate their home and see it as an object that is more than just a functional tool.
“It would be expected that… the desire to invest in more niche items is likely when consumers feel they have the ability to do so.”
Shulman says the online segment within houseware retailing is expected to perform particularly well in coming years.
“Many houseware items are easy to access in an online environment. An online environment also has the ability to produce a much wider product selection than a bricks-and-mortar environment,” he says.