This promoted content is produced by a publishing partner of Open Mic. A paid-for membership product for partners of The Drum to self-publish their news, opinions and insights on thedrum.com - Find out more
The pandemic sparked a homeware spending spree – but how can brands sustain it?
November 21, 2022
By Louise French, senior vice president, Beanstalk
Since the pandemic began almost three years ago, people have spent significantly more time at home. So it’s not surprising that they have also been spending significantly more money on products and services for their homes. But – between inflation, higher interest rates, a slowing economy and a housing market that’s settling – how long will the homeware boom hold out? And what should interested brands be considering as they plan for the rest of the year and next?
The growing… and slowing home goods market
First, let’s put the home goods sector spending spree of the last couple of years into context. In the US, the furniture and home furnishings sector hit a record $12.3bn in June 2022, and the past six months saw unadjusted sales of $70.3bn (a 2.9% increase from the same six-month period in 2021). In the UK, spending on furniture and furnishings hit £26.6bn in 2021, up from £24.4bn in 2020. That’s a lot of money.
But there are signs that this trend may slow down – if it hasn’t already. With inflation and the threat of a recession, consumers are prepared to spend less on retail to pay for essentials, such as gasoline and food.
Home is where the heart is
There’s good news, though, for established players in the homeware space and for those that might want to get a foot in the door. When the economy drops and people are experiencing tough financial times, they often start to spend less on themselves. They stop buying discretionary items – like fashion and personal items – but they spend more on the things they think of as an “investment.” And people think of home as an investment.
What’s more, the way people are living is changing. Houses are more open, so there’s an expectation for everything in your space to not only be functional but to look lovely. That’s for all price points, too – not just expensive furniture but also inexpensive coffee makers. People are looking for products that are more collectible, more cherishable and more sustainable.
When times are great, people are more apt to try new things and be experimental with their money. On the other hand, when times are tough, they go back to their tried-and-true brands – the ones that they know and love.
So how can brands keep the momentum going in the home goods space? Two words: brand licensing.
What is brand licensing?
When a brand owner permits another company to create, market and sell a product or service featuring the brand name and logo. Brand licensing has potential benefits for both established home brands and brands outside of the space that are looking to enter. And it makes a lot of sense in a leaner environment, as companies can leverage a beloved brand to gain market share, create fresh excitement, reach new consumers and expand into new channels of distribution. Licensing can even drive core product sales – happy consumers of licensed products are more likely to purchase items across the core brand line.
Homeware brands that have used brand licensing
Let’s take a look at some examples of companies and brands that are doing this right in the homewares space, beginning with furniture and home furnishings. Matthew Williamson, fashion designer turned interior designer, first stepped into the home furnishings space through a collaboration with Osborne & Little, the wallpaper and fabric manufacturer and retailer. More recently, he collaborated with luxury furniture designer Roome London last year on a collection of bold and colourful furniture.
Famed magazine Good Housekeeping currently has a furniture line collaboration with the UK furniture retailer DFS, partly to celebrate the 100th anniversary of the magazine. British fashion designer Paul Smith is collaborating with Italian home goods and furniture retailer Boffi | DePadova on a collection of artisanal sofas, armchairs, poufs, coffee tables, and more.
In the US, Anne Klein, best known for apparel and footwear, is getting into furniture via licensing. The collection will debut this winter, featuring “Parisian Chic, Scandinavian and mid-century styles.” And IKEA, known for its democratic ready-to-assemble furniture and other home goods, is collaborating with a number of fashion designers and big brands on homeware, like Virgil Abloh, Adidas, Sonos and others. Designer Ilse Crawford is currently working with IKEA to offer a new range of home fragrances inspired by their Scandinavian design heritage.
Speaking of collaborations, one of the most successful licensing collaborations of all time might be Michael Graves Design and Target. The architectural firm launched thousands of products for the retailer since the late ‘90s, helping to turn Target into the chic alternative to Walmart in the US. Now MGD is collaborating with CVS Pharmacy on home healthcare products.
In a fitting exclusive partnership, last year, The Container Store and organising consultant Marie Kondo launched a collection of sustainably sourced products, like bamboo drawer organisers, ceramic jars and rattan baskets.
Another trend in homewares licensing is museums, with major cultural institutions like The Metropolitan Museum of Art building significant licensing programmes. The Met, for example, has a series of luxury bedding and pillows with Ann Gish inspired by the museum’s collection. And the Victoria & Albert Museum offers a full range of home products, from tea towels to coasters, featuring famous works by textile designer William Morris – who, aptly, said in 1880, “Have nothing in your houses that you do not know to be useful or believe to be beautiful.”
Grocers are even getting into the branded homeware space, with supermarket chain Sainsbury’s including Habitat-branded dining, tableware and cooking products and home accessories to support their Good/Better/Best offer.
And brands that are already in the homeware space are using licensing to extend their business and reach. Take Cath Kidston, the iconic British brand whose hand-drawn prints are a playful twist on British classics. Through its licensing programme, the brand will be extending into new categories in home, fashion and gifting as well as broadening its reach internationally.
The bottom line with homeware is this
Licensing will get a brand’s name and equity into new product categories, while encouraging consumers to invite brands into their homes, increasing connections and touchpoints. And all the while, licensing will generates a new revenue stream – as they say, “Look after your pennies and the pounds will look after themselves.”Post-pandemic home and living trends are here to stay, even if spending drops below the recent record highs. Brands and brand owners would be wise to consider licensing as a marketing and communications strategy to help them keep momentum as we enter an economic downturn.