Americans buying more stuff for their homes
  David JOnes
INSIGHT FROM ONE OF THE EXPERTS AT THE TEXAS REAL ESTATE CENTER


Americans buying more stuff for their homes

 

Despite the reported downturn in the economy, American consumers are spending more and more of their disposable income on their homes. What are we buying? Everything.

Curtains, linens and domestics, major and small appliances, furniture, rugs and floor coverings come to mind. Then there's kitchenware, house wares and decorative accessories. And don't forget home improvement products such as hardware, tools, lawn and garden supplies, lumber and paint and wallpaper.

American consumers spent about $585 billion at retail in 2000 on all kinds of items for their homes, nearly 27 percent more than 1999 sales of $551 billion That's according to The Home Report, 2001: The Market, the Competitors, the Trends, a research report from Unity Marketing.

In Texas, the nursery industry alone accounts for nearly 9 percent of all agricultural production value. Total Texas nursery sales are $1.2 billion annually. But what accounts for this spending spree on the home?

"The home has become the most desired status symbol for Americans, and as such, a growing portion of the American family's discretionary spending is budgeted for the home," said Pam Danziger, president of Unity Marketing.

"Manufacturers and retailers of home products are responding to this trend by expanding their range of product and price offerings, from luxury, midrange to promotional," continued Danziger. "They are focusing on improving quality and applying technology and the latest manufacturing techniques to get new home products to market faster and to give consumers enhanced product features they demand.

"Finally, the home market has been transformed from a largely functional to a fashion business, thus allowing consumers to dress and decorate their houses like they dress and accessorize themselves. Today's consumers have so many more choices that they can truly surround themselves with home products which reflect their tastes, values and sensibilities," Danziger concluded.

 

 

While many home manufacturers and retailers experienced a weakness in sales starting about the middle of last year and continuing into the first quarter of 2001, this blip in performance is largely accounted for by the growing impact of imports and inefficiencies in the supply chain, as well as retailers adjusting inventory levels in the face of increased competition.

Channels of distribution in retailing today's home products are shifting. More consumers are turning to national specialty retail chains, mass merchants-discounters and nonstore retailers, including catalogs and e-commerce, for their home needs, rather than going to local furniture and department stores.

Home manufacturers, on the other hand, are focusing on brand-building strategies through cooperative arrangements with retailers, special in-store galleries, and even licensed branded stores to differentiate their products and communicate lifestyle statements to the target customer.

The Home Report provides executives, marketing strategists and investors in home products companies up-to-date information about the consumer market for home products. It analyzes sales of 15 home product categories by retail distribution channel from 1997 to 2000. Consumer purchasing behavior on home products is analyzed, as are major consumer and industry trends that are shaping the future market for home products.

The report includes competitive profiles of some 30 home retailers, including Ethan Allen, Pier 1, Bombay Company, Ikea and Restoration Hardware, and more than 40 home manufacturers, such as Bassett Furniture, La-Z-Boy, Mikasa, Polo Ralph Lauren, and Salton. Each profile identifies the company's financial performance, product and brand strategies and marketing and growth strategies.

 

 

MORE BY DAVID JONES

CONTACT DAVID JONES

David S. Jones is communications director and senior editor with the Real Estate Center at Texas A&M University. He can be reached at 979/845-2039.