The luxury furniture industry is one example of an area with a great deal of growth. By the year 2020, the global luxury furniture market is expected to have a compounded annual growth rate of 4.1% due to factors that have been consistent for some time, such as the rise of disposable income and wealth, as well as the health of the economy; these statistics courtesy of Allied Market Research.
What is the Luxury Furniture Market?
The luxury furniture market consists of high-end home and office furnishings made out of various materials such as wood, metal, glass and leather. There is a great need for aesthetically pleasing furniture that improves the value of a space as soon as it is installed. One of the best examples of this is the luxury hotel or office building. Most people can recognize good furniture, and they will come back to a particular hotel if they have made an effort with their furnishings.
In addition, businesses rely on high-end clients, particularly law firms and investment companies. A company that deals with high-end clients on a regular basis is going to buy luxury furnishings for their office and may even purchase luxury furniture for their home if they entertain clients there on a regular basis.
Key Influential Factors
There are a number of key factors that determine the manufacturer of luxury furniture whether you are talking about furnishings for the home, the office or for the hospitality industry. People prefer to get high-end furniture that does not require a lot of maintenance. They also want furniture that is beautiful and will stay that way for a long time; plus it needs to fit in modern styles.
Luxury Furniture Materials
There are a lot of materials that can go into designing high-end furniture. most of the time, you will find wood and glass used, although there are many metal high-end furnishings and even some that incorporate lesser valued materials such as plastic.
But a recent trend may be ending. Historically, the industry has seen luxury furniture manufacturers seeking out materials that are higher strength, more durable and will last for longer. So for example, wood sources for luxury furniture have started to include mahogany, Jackfruit and teak wood. Of course, this industry is hampered by environmental organizations due to the number of trees that are required for furniture manufacturing.
Even though these high-end wood materials are harder to get than ever before, luxury furniture is still expected to grow. This is partially due to recent manufacturing techniques and advances in technology that allow materials like marble and stone to be used in the production of comfortable and durable luxury furniture. There is expected to be more demand for these materials between now and 2020.
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The End User of Luxury Furniture
In 2014, domestic use was the leading motivator of luxury furniture sales. Most of this luxury furniture was for the bedroom or for the living room. However, there was also a great deal of home furnishing that were sold alongside luxury lighting setups, and of course the lighting itself. Luxury furniture saw an upswing when it came to residential use because of so many contractors and professional home furnishers using luxury furniture to increase the value of a property.
Luxury lighting is also quite popular, adding an ambience to the space that you cannot find with conventional lighting. In fact, luxury lighting has grown by leaps and bounds over the past few years. The furnishings that are sold alongside lighting setups have also seen a huge amount of growth.
The Hospitality Industry
The hospitality industry has historically been the largest consumer of luxury furniture and with more luxury hotels being built in cities across Europe, the United States and around the world; this consumer segment is poised to take over once again in the coming years. Hotels and other hospitality entities provide experiences to customers. They don’t go to the hotel because of the room or the amenities offered. They visit their favorite hotels because of the experiences that they have had their in the past and hope to have again.
Luxury Furniture Consumerism by Region
Typically, Europe has been the biggest worldwide consumer of luxury furniture. Luxury furniture sales in Europe totaled more than $7.3 billion in 2014 and the need has only grown since then. With digital technologies dominating the marketplace, and Europe incorporating many of those technologies into their luxury accommodations, the region has become poised to maintain that hold on the luxury furniture industry for some time to come. But other areas are also seeing luxury furniture growth. The industry has is expected to grow by 5.5% in the Asia-Pacific region by the year 2022. This is partially due to the explosion of real estate in Asian countries like India and China.
The Competition for Luxury Furniture Consumers
There is also a great deal of fluctuation in the manufacturing, distribution and sales of luxury furniture, due to the growth of luxury furniture retailers online. The major retailers are now catching up with online luxury websites, but it can be a slow process when the other party had a head start. Those who weren’t able to predict just how much the online retail industry would account for the purchasing habits of consumers are left trying to pick up the pieces. But companies like Laura Ashley Holding, Iola Furniture, LTD, Henredon Furniture Industries and Scavolini S.P.A. are able to compete with other luxury furniture retailers online and reclaim that market share for their own.
The luxury furniture industry will be an interesting one to watch over the coming years. There has been a movement towards smaller homes lately and it will be interesting to see if minimalism catches on or if people will continue to decorate their homes with the most expensive furniture they can afford.