|
The Home Office Furniture sector forms part of both the overall
UK Office Furniture market and the overall UK Domestic Furniture
market. The overall Office Furniture market was worth an estimated
£911 million during 2002 with approximately 20% accounted for by
the home office furniture sector. In addition, the overall UK
Furniture market was worth an estimated £4.1 billion in 2002 with
the home office furniture sector accounting for approximately 4.6%
of sales.
The home office furniture market saw significant growth between
1996-2000 due to a number of underlying factors, including
increasing household penetration of computers and a change in
working practices, leading to more people working from home.
The home office market is also very sensitive to changes in general
economic conditions. There was a steady growth in consumer
confidence between 1995 and 1998, as well as windfall payments,
which have helped to sustain this growth. Despite economic
uncertainty during late 1998 and early 1999 the home office
furniture market managed to achieve high levels of growth. 2000 was
also a very positive year for the market with economic factors
generally positive, increases in home working and PC ownership and
general developments in awareness from consumers and retailers
resulting in increased allocation of store floor space and more
sophisticated and higher quality products.
In 2001/2002 however, growth started to slow down as a result of a
number of factors including the uncertain economic climate, a lower
level of consumer confidence and signs of PC market saturation. As
competition increases and the home office furniture market begins to
approach maturity, growth rates are expected to continue to stay
below 1990's levels but still remain ahead of other furniture
sectors.
In terms of the product mix, the home office furniture market is
comprised of desking, seating and storage products. Home office
desking is by the largest sector accounting for around 46% of the
market in value terms. This sector has grown in the last two years,
mainly due to strong growth in workstations. Another growth sector
is seating, which has grown at an annual rate of around 15% over the
last few years. Around three-quarters of all home office furniture
is estimated to be of the flat packed type.
The home office furniture market is still in the growth phase of its
product lifecycle, and the vast majority of sales are new purchases.
However, in recent years the market has developed in terms of design
and products are becoming more durable, comfortable, sophisticated
and aesthetically pleasing. Therefore, a replacement market is
beginning to emerge as consumers seek to replace lower value first
time purchases.
Design trends are also a key area of change for the home office
furniture market. As the market has grown, product choice in terms
of style has widened and the market has become increasingly
design-led with space, practicality, flexibility, co-ordination and
ergonomics becoming key considerations. In particular, a key area of
growth is the children and teens designs, due to the increase in
multiple PC ownership and the increasing number located in
children's bedrooms.
The supply structure for home office furniture is very fragmented
and it remains difficult to distinguish market leaders at this
stage. For the purpose of this report suppliers have been segmented
into the following categories; Major Suppliers, Traditional
Suppliers, Other UK Suppliers, Importers, and Predominantly Office
Furniture Manufacturers, although there is some overlap between
these categories. The major suppliers hold a share of around 49% of
the market, and most of these are manufacturers that supply large
retail chains such as MFI, IKEA and Argos, including The Furniture
Factory and Bush Europe.
The percentage of home office furniture imported into the UK from
Europe, the USA or the Far East is high. This is due in part to the
fact that in order to cut costs, retailers are having products made
overseas and importing the finished items as own label. In addition,
the US market for home working is strong and as a result the level
of imports is high from that country.
Furniture multiples continue to dominate in terms of distribution,
largely due to their strength in terms of national coverage and the
growth in IKEA. Multiple Office Superstores also take a substantial
amount of share and catalogue/mail order sales of home office
furniture has grown strongly over the last two years. Office
furniture dealers have lost share and there has been a noticeable
increase in supply through other retail, such as variety and
department stores like John Lewis and Marks & Spencer.
A number of online retailers have emerged but so far Internet sales
only account for around 1% of the market. At the moment the main
role of the Internet will be as a marketing tool, with manufacturer
and retailer websites acting as the first point of contact for
customers, although many major retailers are starting to sell
online. Also, some manufacturers are using the Internet as an
efficient way to sell their products directly to consumers.
The market for home office furniture is expected to continue to grow
and change in the medium term, driven by two key aspects - the
growth of home computer ownership and usage by the whole family, and
an increasing proportion of the workforce operating from home. The
product and service requirements of each of these sectors may be
different, but their simultaneous growth is expected to drive
forward the market for home office furniture in the medium to longer
term.
|
