Trends and Insights - Home Good Retailers: Pricing and Promotions
The research has identified three trends that have significantly impacted the home goods industry. These trends include new retail business models and highly personalized marketing. The trends redefine what it takes to be a successful retailer.
Trend 1: New Retail Business Models
- This trend is where an organization changes the way it sells to the customers. A business model is the way in which a company sells its products to the customers. Most home goods retailers want to create value for their customers as well as appropriate the value from the market.
- Devising new retail models is a trend because competition in the home goods industry is increasing. Thus, the retailers need to devise new retail business models.
- Furthermore, players across the value chain are encroaching on what used to be the exclusive turf of retailers. More manufacturers are selling directly to consumers.
- Tech players are also fighting for consumer retail dollars: Google offers more than one billion products for sale on Google Shopping and may soon open retail stores.
- IKEA is an example of the home goods retailers that are leaning to this trend. According to the financial times reports, IKEA which is one of the largest furniture retailers in the US launched a new business model a subscription model, which allows the customers to lease any product including the kitchen cabinets and office chairs.
Trend 2: Highly Personalized Marketing
- Customers expect high personalized marketing. The trend entails the home goods retailers and brands combining consumer data with advertising technology to deliver individualized messaging, products, and experiences to the consumers.
- The trend is due to the changes in the habits of consuming content by the customers.
- Spending on digital content has doubled in the United States. The digital content is playing a huge role in retail marketing. Ads are shifting towards digitization and personalization.
- Customers are willing to pay a premium for home decor products that break the mold.
- Wayfair retailer has just turned digital-first and has launched its first full-service brick-and-mortar store in Massachusetts. This has the way for customers actually buy from their homes.
- The company has a lot of insight from the data collected. It can combine the digital model, offering a virtually endless array of furniture, personalized online for customers according to a mix of attributes such as behavior and collaborative-based product recommendations.