Exclusive research: Why consumers delayed some purchases in late 2022
Inflation and worries about their household finances kept about four in 10 consumers from making home furnishings purchases that they planned in the second half of 2022, but the majority of consumers went ahead and bought furniture or accessories for their homes, according to our latest exclusive Consumer Insights Now research. Those consumers who bought were most likely to purchase decorative accessories, area rugs, sofas and lamps.
The research, done in conjunction with our sister publications Home News Now, Casual News Now and Bedding News Now, followed up on surveys conducted in July 2022 to learn more about consumers’ actual purchases and to see what home furnishings they plan to buy in the first half of 2023. We’ll release full survey results weekly leading up to the High Point Market to give you information you can use when shopping the show, which is set for April 22-26.
Some 17% of consumers canceled plans to purchase furniture or accessories in the second half of 2022, while 23% postponed planned purchases, according to our Consumer Insights Now survey. Not surprisingly, consumers were more likely to postpone or cancel plans to buy big-ticket case goods, including furniture for their primary bedroom or dining room. By product category, sofas were No. 1 item consumers decided to purchase later.
Consumers were more likely to purchase smaller items, such as area rugs and decorative accessories, as well as pieces that might be considered more necessary, such as lamps and home office furniture.
It’s the economy, mostly
Why didn’t consumers buy what they planned? Two big reasons: They said they had no money to spend (47%) and that prices were too high (41%). Consumers across all age groups — from adult Gen Zers (ages 18-25) to baby boomers (ages 58-75) — shared concerns about finances and costs.
But a not insignificant 23% said they couldn’t find what they wanted in terms of style, color, features, etc., and younger millennials (ages 26-33) were far more likely than consumers of other ages to say they couldn’t find the items they wanted. We know some retailers have unable to refresh their floors as frequently as usual because of pandemic-induced supply chain problems. Could that be part of why consumers can’t find what they seek? Or is AI-fueled search not pointing them in the right direction? It will be interesting to see what future Consumer Insights Now research shows as search continues to improve and retailers bring more new products to their showrooms and e-commerce sites.
Looking at purchases by generation, more than three in 10 Gen Zers, younger millennials, Gen Xers and baby boomers delayed home furnishings purchases, but older millennials (ages 35-41) were the generation most likely to postpone a purchase, with more than four in 10 doing so.
Will they buy in 2023?
But here’s some good news: 37% of consumers planned to make postponed purchases in the first half of 2023, and another 37% expect to buy those items in the second half of this year. An additional 8% plan to make those purchases in 2024 or 2025. In the coming weeks, we’ll dive more deeply into consumers’ plans to buy home furnishings, including detailed looks at upholstery, case goods, mattresses and accessories.
When consumers did buy furniture and accessories in the second half of 2022, they made the majority of their purchases — across all product categories — in-store rather than online. On the high end, 79% of sofas were bought in a brick-and-mortar store. On the low end, 54% of children’s bedroom furniture was purchased in-store.
And they favored using plastic, no matter where they shopped, making the majority of purchases across larger-ticket categories using credit cards. That’s in line with other recent surveys from banks and financial services companies showing consumers’ preference for that payment method — and growing rates of credit card debt.
Our next research installment will be an overview of consumers’ home furnishings buying plans for the first half of this year. One key finding from that next round: Many plan to buy those sofas they didn’t purchase in late 2022.
About the survey: This survey was conducted among U.S. consumers who answered Consumer Insights Now’s July 2022 Buying Plans Survey, with a final sample of 680 respondents. Results reveal which categories were purchased between July 2022 and December 2022. All respondents are either the primary or joint purchase decision-maker. The sample includes a mix of females and males, ages 18 to 75, and a representative mix of ages, ethnicities, household incomes and homeowners/renters. The survey was fielded Jan. 5-11, 2023. Consumer Insights Now research is led by Dana French, who has more than 20 years of experience in home furnishings and consumer research.
No offense, but I’m always suspect of furniture-authorized research. They are always way too optimistic.
What about these facts:
1.) 9 Million Millennials Moved Back In With Their Parents This Year
As Bloomberg’s Alex Tanzi writes, about one in four millennials are living with their parents, according to the survey of 1,200 people by Pollfish for the website PropertyManagement.com. That’s equivalent to about 18 million people between the ages of 26 and 41. More than half said they moved back in with family in the past year.
Add this to the crazy inflation, current and upcoming job losses, the ridiculous policies of the FED RESERVE increasing home interest rates, I would not want to be in this business, today or in the future.
2.) “The most troubling information in the GDP report is the precipitous drop in real disposable income, which fell over $1 trillion in 2022. For context, this is the second-largest percentage drop in real disposable income ever, behind only 1932, the worst year of the Great Depression”.
“In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills climbed to 5.67% — a major increase from a seven-year low of 2.58% in April 2021, according to Fitch Ratings. It marks the steepest rate of Americans struggling to make their car payments since the 2008 financial crisis. One recent survey discovered that 57 percent of Americans cannot even afford to pay a $1,000 emergency expense right now.
“According to one Wall Street economist, a looming recession this year will feel more like the 1970s than a 2008-07 slump.
“People are too focused on ‘08 and 2020. This is more like 1973, 74 and 2021,” Piper Sandler chief global economist Nancy Lazar said on “Mornings with Maria” Monday.
Lazar predicted feeling the full impact of a recession in the second half of 2023 as lag effects from the Federal Reserve’s rate hikes take hold”.
I have a ton more research that shows optimism is a fallacy, at least for the next few years