Sofas' appeal cuts across demographics
Cindy W. Hodnett -- Furniture Today, September 16, 2013
HIGH POINT - There's a lot of money to be had in those sofa cushions.
According to Furniture/Today's market research, stationary sofas made up 15% of total furniture and bedding sales for 2012 and represented a $12.7 billion industry at retail. Our consumer research shows that 7.5% of U.S. households plan to buy a new stationary sofa this year, and 35% of consumers listed their sofa as the furniture piece that they most want to put in the trash and replace with new.
That's a significant amount of demand.
However, as many retailers will attest, trying to decide which sofas are going to attract specific consumers is a multimillion-dollar question. And in 2013, the two leading categories of stationary sofa consumers - Millennials (ages 18-32) and households with incomes of $150,000 or more - have very different ideas about what they want.
"The Millennials are incredibly more sophisticated technology-wise, and immune to most traditional marketing and sales pitches," said Len Burke, vice president of marketing for full-line supplier Klaussner Home Furnishings. "They are more style conscious and not looking for the same types of furniture they grew up with."
One subset of the Millennials is referred to as the "verge" culture. Verge culture members are in the 18 to 25 age range, communicate digitally, are often self-defined as socially progressive, and are "alpha" consumers whose tastes and buying patterns have considerable influence on the larger popular culture.
As the representatives of the younger end of the Millennial spectrum, verge culture members also highlight one of the key issues frequently overlooked when developing marketing strategies for Millennials - the diversity within the demographic.
"We say, ‘It's not an age, it's a stage,'" said Kerry Lebensburger, president of sales at Ashley Furniture. "There are the Millennials who are living with their parents. There are the two girls and a guy who are sharing an apartment. And then there are the 32-year-olds starting a family. The minute this group starts thinking about having a family, the idea of ‘disposable' disappears. They don't want a matching sofa and loveseat, but they do want nice things. So they buy one piece at a time."
Lebensburger said Ashley's product line is designed to fit into several categories to address the diversity of life stages.
"You have the urban areas and smaller spaces that correspond with smaller scaled furniture, but they can be expensive so a lot of Millennials can't afford downtown," he said. "The 32-year-olds are moving to the suburbs because they offer a better value in housing.
"I recently read a report that stated the average size of a new home was 2,642 square feet in Q2, which means larger spaces and a larger scale for furniture. Additionally, these consumers want a really comfortable sofa, and they are willing to save for it. They don't want to sit on a futon anymore."
Cynthia Tesh is the director of merchandising and marketing for Hughes Furnit ure, a promotional upholstery supplier. She said that there has been a huge shift in consumer preferences within the Millennial demographic.
"Things in our culture have changed, and I don't think it will shift back," Tesh said. "Most Millennials are not interested in longevity or keeping their sofa for 25 or 30 years. They will have it until they change their minds and want to upgrade to something different, just like they do with their cell phones.
"They also have a totally different way of buying," she said. "They are quick thinkers, so they want to see everything put together and then make their decisions and go. They want to choose it and move on."
Color, pattern and durability are the key features that Tesh is focusing on for upholstery introductions at Hughes.
"Everyone takes their plates to the sofa or chair and eats in front of the television," she said. "Lifestyles are so casual now, and it's important to keep that in mind.
The consumer still wants softness and for the furniture to feel good, but they also want fashion. We're going a little bit outside of the box with our pattern and color."
Along with the rainbow of hues and smorgasbord of shapes, comfort is king in upholstery, and it extends beyond the fill of the cushion. Ashley's Lebensburger said that a past favorite from the upholstery category is helping many retailers meet the need.
"One thing that is important to mention in upholstery is the growth of sectionals," he said. "In the 1970s, sectionals were a big thing, and then they went away for a while. Now, there's a big resurgence in the sectionals' popularity because they are comfortable and the kids can lounge all over them."
As a result of the recession, consumers at the upper end of the income spectrum have also morphed into different sub-demographics.
Providing custom, designer-driven upholstery is one piece of solving the sales puzzle. There's also a new definition of the high-end consumer that is opening new doors for manufacturers and retailers.
"A lot of luxury consumers are trading down," said Roy Calcagne, president and CEO of Craftmaster Furniture. "The consumer who can afford to buy high end is choosing to spend less, and many of these consumers fall into our upper-end price point of $1,199 to $1,299 in collections like New Traditions. It's a great growth opportunity for our company."
Burke said that Klaussner has also seen an uptick in the company's higher price point lines.
"We have seen a big increase in our higher-end Distinctions product line over the last year," he said. "In this segment of our business, we have focused on quality and style. We feature downblend seats and backs and have stepped up our fabric selection to offer more color and styling."
Erinn Valencich is a Los Angeles-based designer, a television personality who has been on HGTV, and a retailer. Her furniture collection includes stationary sofas in the $3,500 to $6,500 range, and as a high-end retailer, Valencich said it is important to understand the prevailing consumer aesthetics that accompany a stationary sofa purchase.
"People want something unique above everything else," she said. "They want a cleaner edge, but with a timeless element."
Classic or modern? Disposable or heirloom? Highend or high-end traded down? Stationary sofa choices present challenges to manufacturers, dealers and consumers alike, and it is a dilemma that savvy suppliers are working to address.
"This is an interesting time to consider consumer buying trends as there are two distinct lifestyles - Boomers and Millennials - influencing buying decisions," said Holly Blalock of upholstery producer CR Laine. "Research has proven that Millennials explore brands and purchases on social networks. They want to engage in real conversations with the brand, as well as share images of items. They like to get recommendations from peers."
Blalock added that CR Laine uses social media to reach both Millennial and high-income buyers, including the company website, Facebook, Twitter, Instagram, Houzz and Olioboard.
"We also use various forms of social media to keep information about our product in front of retailers and consumers," Blalock said. "And several times each year, we host small groups of retailers at our manufacturing facilities for in-depth training. More important, we have an amazing team of in-the-field territory managers who take the fundamentals of our premium construction and made-in-the-USA story along with the latest on styling and color trends from CR Laine to our retailers."