by The forecast for e-commerce sales in home furnishings is a “good news/bad news” sort of thing. Most of us like to hear the good news first, so I’ll lead with the prediction by eMarketer that the e-commerce market share occupied by furniture and home furnishings is and will remain the second-largest sector for the next five years.
In first place is apparel and personal accessories at 18.6% of total retail sales online. Tied with home furnishings at 15.7%, but predicted to slip to third over the next five years, are computers and consumer electronics.
The bad news isn’t really all that bad, and certainly it isn’t unexpected, which is that growth in e-commerce has cooled, a function of past growth and current size more than any other single factor. The share of retail sales online represented by furniture and home furnishings will slip to 15.2%, or five-tenths of a percentage point, according to the U.S. Ecommerce by Category Forecast 2023.
Whatever growth the sector sees online, it will come despite the fact that pressures on prices are likely to remain significant. Overall, online prices on all goods dropped 1.7% in March compared to a year ago, the seventh consecutive monthly decline and the largest in four months, according to the Adobe Digital Price Index. The home category saw a 4.9% pricing retreat for the month.
There is good news here, as well, because any pricing retreat likely indexes some measure of consumer relief with respect to inflation.
The Adobe gauge analyzes 1 trillion visits to retail sites and more than 100 million items across 18 product categories, and more than 85% of the top 100 U.S. internet retailers are included in the analysis.
Social hour
If not hidden, then certainly less than prominent in the eMarketer report is data suggesting that people are going in increasing numbers to TikTok to begin their searches for consumer goods, a growth that appears to be coming at the expense of mostly Amazon and the search engines. This is intuitive. TikTok’s growth has been white-hot, even amidst widespread privacy concerns and heated discussions in Washington about shutting the platform down. The company’s Chinese ownership has many believing that the platform is being used to surveil the American people.
For the first quarter of this year, 19% of online shoppers reported turning first to TikTok, compared to just 14% a year ago. This is absolutely no surprise to me. I teach college kids ages 18-22, and they love them some TikToks. They know how to train their algorithms to deliver what they want, and they are turning to TikTok for more of the content and activities that perhaps we think of Facebook and Instagram as delivering. Granted, this age range isn’t looked to to drive home furnishings purchases, but it is indicative of wider trends coming, in this case in the area of social media usage.
Also important in the data on consumer goods searches is that more shoppers are flocking online to Walmart, YouTube and Instagram, while fewer are using Facebook. This underlines the point I just made, which is that tracking the next social platform of choice by demographic should be a key piece of any marketing strategy.
Already reported in this space is TikTok’s plan to expand its commerce capabilities. The company is building global order fulfillment centers, it is coaching merchants on how to use the platform to get attention on the platform, and it is providing tools to allow brands to create, run and monitor ad campaigns on the platform.
The growth TikTok is seeing in users looking to the platform to initiate consumer goods searches is no accident; in other words, nor is it a purely natural byproduct of increased platform adoption.
I am certain that somewhere in Seattle, Amazon has a war room fully engaged in discussions today about fending off TikTok’s play, a strategy that as it unfolds looks an awful lot like Facebook’s. And, also like Facebook, TikTok is covertly scouring the web to track wish lists and shopping carts, making its algorithms ever smarter.
Roll tape!
Peek under the social media hood and notice that TikTok and YouTube are largely video-centric platforms and that Instagram is promoting its video sharing capacity with what it calls Reels. The message, then, is clear: People want video, and they want it when they search for consumer goods.
So, as part of developing the larger strategy for social media and content for that media, furniture sellers should be thinking about short-form video content. Nearly nine out of 10 marketers say video marketing has helped them drive more sales.
Already valued at more than $700 million, social commerce, too, is primed to explode. After all, it is premised on virality. A recent report from Accenture predicts that social commerce will grow at a rate three times that of more traditional e-commerce, and I can’t believe I’m writing “traditional e-commerce.” (How quickly what is new becomes “traditional” or old.) Accenture puts social commerce more than doubling to $1.2 trillion globally in 2025 from the current $492 billion.
U.S. social commerce sales are estimated to be around $46 billion, but more importantly more than a half of the country’s adults report making a purchase on social media despite concerns about secure payment, not touching or otherwise experiencing the product, or not speaking directly with a human being.
So, the fundamentals are there: Smartphone use as measured in hours is double what it was even just three years ago (average time spent per user). The average social media user navigates as many as seven social platforms. Seven! Helping to fuel this appetite are genre-specific social networks aggregating users around, for example, dating, gaming and technology.
I don’t pretend to know how best to leverage all of this activity and interest, but I know you go where people already are and where they are likely to remain. They are very much into short videos, influencer content and affinity-based community. I also know that any company charting a course for these fast-changing social media waters is likely to encounter some chop. Every company will make mistakes, in other words, except the companies that do nothing.
