Which trends offer opportunities or pose threats on the European home decoration and home textiles market?

Millennials are quickly becoming the main consumer group in Europe. As such, they strongly influence home decoration and home textile (HDHT) brands and their strategies in the market. Millennials value sustainability, and so they want brands to actively try to make the world a better place through social and environmental responsibility. The following trends are heavily influenced by this new mentality or a reaction to it, especially from the baby boomer generation. These trends have intensified due to the COVID-19 pandemic.

1. Overview of themes and trends

This overview illustrates how drivers of global themes influence consumer trends. The resulting market trends show the effect on the demand for HDHT products.

These trends can be grouped together under the following eight global and consumer themes and trends:

• Shared living
• Wellness
• Sustainability
• New circular business models
• Millennial style
• Playfulness
• Home sweet home
• Changing supply chains

In addition, the COVID-19 pandemic and the war in Ukraine continue to affect the HDHT market. Uncertainty and increasing prices lead consumers to avoid buying items that they do not urgently ’need’. In March 2022, European consumer confidence fell again due to the situation in Ukraine. Consumers’ desire to make big purchases also fell. At the same time, increased time spent at home stimulates their desire to invest in the decoration (and functionality) of both their indoor and outdoor living spaces.

Although the exact longer-term effects on the market are hard to predict, what is clear is that the pandemic has intensified existing trends in HDHT. This is discussed further per trend below.

2. Shared living

Rapid urbanisation and increasing housing prices are driving consumers into new forms of shared living, often with multiple generations together. Homes are adapted or designed to hold shared and private spaces, each decorated differently. This creates new directions in the development and consumption of HDHT products.

Furniture and accessories for shared living spaces should be more flexible. Product values related to convenience and multipurpose are more important. Such values are mostly found in the middle and lower ends of the market.

In their private spaces, consumers find it especially important to show their own style. This adds importance to values related to differentiation, eclecticism, personal taste and style. These values are mainly related to the mid-high to premium ends of the market.

Forecast

The COVID-19 pandemic has made people spend more time at home in sometimes cramped spaces, especially during lockdown. This requires clever and flexible solutions to maximise the use of space, especially in shared living situations.

Figure 1: Umage – Flexible, flat-pack furniture

Source: Umage @ YouTube

Consumers are also increasingly working from home. Working from home further adds to the required multifunctionality of their living space. As many people want to continue working from home after the pandemic, the need for flexibility could be a longer-lasting trend. In the Netherlands for example, 43% of the working population had invested in HDHT products for their home office by June 2021. Up to 44% of remote workers planned to make further home improvements.

In the long term, this trend will become even more important as urbanisation grows and hybrid working becomes the norm. Because of this, urban consumers will be looking for suitable solutions.

Opportunities

This trend offers opportunities for products / product groups that:

• can be used around the house, such as occasional furniture
• are lightweight, collapsible, flat pack and can be easily stored
• are multipurpose, such as cookware that also presents well on the table
• consist of items with components that can be rearranged according to use or taste, or several style options to cater to individual preferences

Because shared living creates demand for both volume (shared spaces) and value offers (private spaces), there are opportunities across the market – ranging from low- to high-end segments.

Threats

Products with values related to convenience and functionality are often in price-sensitive segments. This means you can expect price pressure and high-volume requirements.

3. Wellness

The search for health and happiness has become an important focus across generations. Many millennials live under stress from peer pressure on social media and the difficulty of finding an urban home. Older generations worry about job security, retirement and loneliness. The climate crisis is now a major concern for all generations.

The consumer response to the wellness trend has two sides. Firstly, there is a need to develop the mind. Consumers want to be more connected to ‘the self’ and to gain new skills and knowledge. Secondly, there is a need to care for the body. Consumers want to lead a more active, less stressful and more sustainable lifestyle.

This translates into several important market trends in HDHT, based on the following themes:

• spa – creating a spa experience at home (for example with bathroom accessories)        
• yoga – focusing on spirituality (for example with yoga kits)
• sleep – sleeping better (for example with bedding and bedroom accessories)
• garden – feeling closer to nature and relaxing outdoors in an active or passive way
• master chef – cooking and dining together to practise new cooking skills and connect with each other
• celebration – participating in private and public celebrations (such as birthdays or Christmas)
• decorating or decluttering – creating space in your mind by creating space in the home (for example with storage products). Or, surrounding yourself with things you love but do not really ‘need’ (such as decorative accessories) as part of the Home Sweet Home trend
• cultural products and stories – being open to new stories to get knowledge and experiences, thus liking products with a clear place of origin (for example with a clear link to a culture). This form of ‘mental travel’ extends to actual travel and accessories

Figure 2: Meraki – making a spa experience at home

Source: Meraki @ Instagram

The home is closely connected to mental health. In a recent Life at Home survey, 40% of respondents who felt more positive towards their home also experienced a positive impact on their mental health. Many associate clean, organised spaces with a greater feeling of calm. Sleeping and relaxing (for example, by reading) are the most important ways for a feeling of wellbeing at home.

Figure 3: URBANARA – Ethically produced bed textiles of natural materials

Source: URBANARA @ YouTube

Forecast

Urbanisation, increasing internet coverage and ageing western populations are long-term drivers of the wellness trend that will keep growing. Interestingly, wellness is an essential element of any brand's strategy for 73% of consumers. As the COVID-19 pandemic has made consumers more acutely aware of the importance of both their mental and physical wellness, this trend is accelerated further in the short term.

In a 2021 Young Living survey, 48% of respondents stated they were making wellness and self-care a top priority. 53% have developed new wellness habits during the pandemic, including at-home spa experiences. 36% want to maintain these new habits. This is reflected in a 2022 GWI survey, in which two-thirds of consumers are more aware of the importance to look after their physical and mental health than they were before the pandemic.

Opportunities

This trend offers opportunities for products-/product groups that:

• are related to the various aspects of wellness, such as garden furniture, spa and yoga items (soap, hammam towels), easy chairs, luxury bed textiles and travel products
• include natural raw materials or natural colours
• are related to leisure, hobby, sports, toys and games
• appeal to the new ‘young old’ consumer, as the relatively wealthy older generation is fitter than ever
• represent more affordable concepts, in addition to those for the premium consumer

Figure 4: CBI webinar on wellness in HDHT

Threats

• Western society is fast adopting spa and yoga practices and turning them into lifestyle choices. This increases competition for traditionally leading Asian businesses. European manufacturers are already taking the lead in new, tech-based solutions for monitoring and improving mental and physical health.
• The wellness category is becoming more important. Its fast segmenting into volume (lower-end) and value (higher-end) markets may put pressure on prices.

4. Sustainability: social and environmental responsibility

Rather than consuming less, people want to consume better. Many millennials are committed to creating a better world, and baby boomers increasingly want to contribute. This creates a sense of urgency and consumer power that will reshape the HDHT industry. In response, solutions are expected first and foremost from consumers and the industry. As people are becoming more aware of the long-term impact of their consumption, they are trying to produce less waste and pay more attention to fairness and ethics.

Companies are held accountable for the way they deal with both the environment and their workers. Replacing plastic with (renewable!) natural materials is a common way to make products more sustainable. For some products, sustainability is stimulated by the European ban on single-use plastics. European consumers increasingly demand that makers have equal opportunities, receive a meaningful income, and work under decent conditions. Child labour is unacceptable.

Concepts related to recycling and upcycling are very welcome in the market. Experimenting with alternative materials is a huge trend, especially for home textiles.

This goes in three directions:

• consumer and industrial waste is turned into new raw materials or end products. Examples include furniture from ocean plastics or denim waste
• leftovers from agriculture are used. Examples include yarns from orange or pineapple peels
• bioengineering helps reduce the use of polluting or scarce resources. Examples include dyes from bacteria

Figure 5: reCharkha – Handwoven bag made from upcycled plastic

Source: reCharkha @ Instagram

According to the World Economic Forum, 86% of people want significant change to make the world fairer and more sustainable after COVID-19. Interestingly, most consumers (particularly the younger generations) seem to think that the COVID-19 crisis has made it more important that both consumers and companies improve their sustainability. Most of the people who started making more environmentally-friendly choices at the beginning of the pandemic were still doing so a year on.

In a 2021 GlobeScan survey, 73% of respondents want to reduce their personal effect on the environment by a large amount – more than the 64% in 2019. A healthy 57% of respondents were willing to pay a premium for socially/environmentally responsible products and brands – also up a lot from 50%. In contrast, according to a 2022 Deloitte survey 34% of British adults stopped buying some brands or products because of ethical or sustainability-related concerns. This was a 21% increase compared to 2021.

This growing importance of sustainability in HDHT is reflected in a Maison et Objet survey, in which 62% of HDHT retailers have noticed growing interest from their customers in ethical products. They said that:

• 92% of their customers think natural materials are (very) important
• 77% value socially responsible production methods
• 71% care about recyclable/recycled materials

Figure 7: Popularity of ethical products among clients of HDHT retailers

Source: Maison et Objet barometer – Issue 1

Opportunities

• Recycling/upcycling materials from local consumption/production provides you with a major opportunity. Waste or offcut materials from industry are often readily available and relatively inexpensive. The market is ready for such concepts.
• As the market for recycled products grows, it also becomes more segmented. You can create concepts for the lower-end volume market, focus on a mid-market, or go high end. Price and value differ for each segment.
• Consumers are interested in the story of your value chain. Not just to make sure that materials are really recycled, but mostly because it is fun to know that an item used to be part of a billboard, office furniture, or second-hand clothing, for example. This makes good storytelling very important.
• Adopting fair trade or other forms of social and/or environmental certification can add value and credibility to your concept. Even without certification, traceability of your raw materials adds value.
• Positive gender values can make you stand out in the market.
• Using your cultural heritage to introduce new patterns and colours to the buyer and consumer makes your products unique. You can mix these designs with elements of western or global culture.

Figure 8: CBI webinar on sustainability in the European HDHT market

Threats

• Western designers are also creating concepts based on recycling and upcycling. This means that design expectations are quite high, and that competition comes from European designers too.
• Professional buyers and western consumers are adopting a ‘don’t tell me, show me’ attitude. They want proof of your social and environmental sustainability claims. Make sure you communicate well and honestly, and consider certification where available.
• In the long term, the European trend of buying local (‘Made in Europe’) to reduce environmental impact may become a threat to you. Also see the trend of changing global supply chains.
• Sustainable products do not automatically have a higher price. Consumers consider saving the planet a primary responsibility of the industry. Design value is what positively influences price.

5. New circular business models

The sustainability trend is a key driver of new circular business models. These focus on extending the lifecycle of HDHT products.

A typical product lifecycle consists of:

• material sourcing and selection
• production
• transport
• consumer use
• end-of-life

True circularity aims to regenerate end-of-life materials into a new material and process. SMEs in developing countries usually do not have much control over the process. Because of this lack of control, a full circular process is generally not (yet) feasible. At the same time, there is much innovation in the HDHT industry aimed at achieving this. Recycling, upcycling and experimenting with alternative materials are popular ways to move towards circularity, as mentioned.

Figure 9: WYE – Recyclable furniture made from upcycled by-products of industrial wood processing

Source: WYE @ Instagram

Another related way is through retail concepts such as sharing, leasing and buy-backs. These business models minimise the impact of their products on the environment by keeping them in use for as long as possible. They also provide flexibility and make products available to consumers with smaller budgets.

This combination makes these concepts more popular among younger generations. These consumers are environmentally conscious and value sharing over owning. They also generally have less disposable income than baby boomers. The flexibility these concepts offer is ideal for younger consumers as well. It makes it easier for them to adapt to events in their lives such as moving to another house (often a rented home) and starting a family. Another option is to follow the latest influencer trends in home decor.

An example of a company that is rolling out such new business models is IKEA. The company strives to make its product range 100% circular by 2030. It focuses on products that can be repaired and reused again and again, before being recycled or remanufactured. Besides offering spare parts and releasing disassembly instructions for various products, IKEA has launched buy-back (and reselling) programmes in several countries. The company has also been piloting leasing/rental concepts among students and businesses customers.

Figure 10: IKEA - Why the future of furniture is circular

Source: IKEA @ YouTube

In addition to large retail chains like IKEA and John Lewis experimenting with circular business models, companies are emerging with these concepts at their core. For example, Selency is an online marketplace for used home furnishings. Similarly, Harth allows its users to buy, sell and rent new, pre-loved and vintage design. Yourse focuses on making designer furniture available to a wider public via leasing, with the option to buy. Fat Llama is a peer-to-peer rental platform that also offers home and garden products.

Forecast

With the growing importance of sustainability and millennials, the popularity of these circular business models is set to increase. In a study among customers of Germany’s Connox, 48% indicated they might rent furniture in the future. A full 98% had never done so before, often simply because customers had not thought of it yet. This is in line with a study for the European Commission, posing that increasing consumer awareness of second-hand, renting/leasing and repair markets enhances engagement in the circular economy.

As circular concepts are becoming more and more common, consumer awareness is growing. In a recent IKEA and GlobeScan survey for example, 62% of respondents said they always or mostly try to repair their household items before buying replacements. Meanwhile, 72% agreed that we all should consume less to avoid the worst parts of climate change. This total suggests that circular concepts are bound to flourish in the coming years.

Opportunities

• Using pre-/post-consumer and post-industrial waste can reduce material cost.
• Circular business models can open up new markets dominated by millennials and Gen Z.
• Adding sustainable values to your identity allows you to stand out and widen your appeal.
• Teaming up with distributors to create buy-back/reselling and refurbishment programmes facilitates longer-term buyer loyalty.
• Recycled and vintage materials allow you to create a luxury positioning based on a ‘limited edition’ concept.

Threats

• Recycled materials may run out. This lack of materials could force you to phase out certain product lines even if they are in high demand.
• Using recycled materials may create new worries about the precise material content and the relevant legal requirements.
• Big Business usually has more control over the lifecycle, from supply to consumption. This control may be difficult for SMEs to compete with.
• Concepts such as refurbishment and reselling may decrease the need for new production.

6. Millennial style

Millennials are increasingly influencing many aspects of social and professional life. Marketing has become millennial territory, shaped by social media influencers. This generation brings in new values, such as ‘sharing over possessing’. They see their home as the extension of their identity, or at least the personality they want to be. While some conform to the norm and follow trends, a large group of millennials rebels against it and values individuality.

This leads to two opposing forms of expression: following trends or ‘rebelling’ against them with more individual styles. The millennial consumers that follow trends make safe choices in their interior products, in line with dominant, accepted styles. In this, they reflect the existing value set in HDHT of the mid(-mid) market.

Figure 11: Habitat – Stylish yet affordable tableware

Source: Habitat @ YouTube

The more ‘rebellious’ millennials prefer expressive styles in their interior decoration. Segments associated with this group are more niche and more personalised. Where possible and affordable, these segments are linked to value sets related to sustainability and social equality, including diversity. These consumers want their brands to stand for something. This places them in the higher ends of the (mid-)market.

Forecast

Millennials are becoming the dominant consumers and professional buyers in HDHT, using social media both for projection and for marketing communication. This means that the ‘millennial style’ will be there to stay for years to come. The COVID-19 pandemic has increased the importance of sustainability for millennials and Gen Z more so than for older generations, indicating this aspect of millennial style is set to become even more relevant.

Opportunities

Like the trend, opportunities exist in two areas:

• The need to follow trends feeds the mid-market, which has been under pressure because this market could not offer differentiation. Being a trend-following mid-market consumer has now become desirable again for many.
• In contrast, the more rebellious direction is expressive, individual and colourful. This direction invites an own take on what is beautiful and stylish, also from the maker. This is good for those who already design from a strong sense of individual identity, rather than from trends.

Threats

Threats also depend on which direction of this trend you cater to:

• Trendy products are often found in price-sensitive segments, in the heart of the middle market. You can expect price pressure and volume requirements in these segments.
• Since the expressive consumer carefully selects what fits in their collection and is quite eclectic in combining items, amounts in this segment can be limited.

7. Playfulness

Playing is essential to being human. People play to have fun and fulfil our need for optimism, escape and invention. In HDHT, concepts inviting consumers to play are everywhere. Play stimulates social connection, reducing loneliness and isolation. It is a powerful form of escapism – distracting consumers from worries about politics, the environment, trade wars, cybercrime, and more. Millions of consumers are therefore embracing new opportunities and concepts to imagine, escape, explore, create and connect.

Bold products with a touch of humour express this trend. Forms, patterns and colour palettes can edge towards surrealism, or just be decorative. They can also resemble toys for young children, transformed into pieces that appeal to adults too.

Figure 12: MOBJE – rearrangeable fabric vases made with traditional hat-making techniques

Source: MOBJE @ YouTube

Concepts based on modularity, mixing and matching, constructing and building (as in children’s toys) invite the consumer to co-create. This trend has been around for a while, but is now everywhere.

Forecast

The combination of play being an essential human need and the current crises in our world makes this a trend that is here to stay. As many people continue to worry about the COVID-19 pandemic and inflation (the ‘cost-of-living crisis’), they need distraction now perhaps more than ever.

Opportunities

• This trend invites the use of bold colour, odd shapes, humour, functional products that are figurative, anthropomorphic (human-like) designs, light-heartedness and ironic uses of ethnic traditions. These can be applied in a wide variety of product groups.
• This trend also encourages consumers to practise playful interaction and co-creation, through flexible and customisable concepts.

Threats

• Humour and light-heartedness are not in everybody’s ‘design DNA’. These characteristics can become forced or come across as unauthentic when the style is adopted just because it is a trend.
• What is considered funny is personal and/or cultural. Your humour may not match with that of your target market.

8. Home sweet home

In times of global insecurity, consumers react with a deep appreciation of the comfort and safety of their own home. European consumers are trying to make the home a place where genuine connection takes place with family and friends. They eat and cook together, enjoy entertainment and play, in a return of the ‘cocooning’ trend.

This trend particularly reflects an older consumer with a relatively high disposable income. Styles related to this trend are luxurious and refer to bygone periods such as art deco and neoclassical. Popular materials are comfortable, heavy textiles, dark wood and lots of metal. Patterns are bold but colours are cosy and warm, including darker, rich reds and purples, sophisticated blues and browns.

Figure 13: John Lewis – Retro revival

Source: John Lewis @ YouTube

However, Home Sweet Home is also about people (across generations) enjoying each other’s company, entertaining each other, cooking and dining, or just relaxing. This aspect of the trend relates to items that create a cosy atmosphere, as well as cookware and dinnerware for ‘slow dining’.

Forecast

This is a more niche trend, mainly represented by a segment of the baby boomer consumer group. Globalisation and social media will make it harder and harder for escapism to survive. However, cocooning will last longer as it is based on deep human needs for connection.

As a result of the pandemic, people have been spending more time socialising as a family/household and cooking. Many expect this to be a permanent change. Of those who started cooking more at the beginning of the pandemic, 65% were still doing so a year on. This development is particularly prominent in younger generations, as baby boomers probably already spent more time on these activities before lockdown. Because of this, the ‘home sweet home’ trend may increase its appeal to younger consumers – and with that its staying power.

Opportunities

• This trend represents a premium segment, which may offer good margins.
• The style is not trendy and once you get the colours right, they will not change every season.
• The distribution into this segment is often by respectable family businesses, whose marketing reflects values such as loyalty, honesty and fairness.
• Interior decorators carrying this style are found at all major HDHT trade fairs in Europe.

Threats

• Margins may be good, but volumes may be relatively small and turnarounds low in a narrow segment like this.
• Quality is key and materials are luxurious, heavy and rich. This level of value is essential to succeed in this market.

The world’s supply chains have been under pressure from the trade war between the United States and China, the COVID-19 pandemic, natural disasters connected to climate change, and Russia’s invasion of Ukraine. Various important goods and services are difficult to find, and prices increased.

Companies have realised that political problems can heavily affect buying and selling in markets. They are trying to make their supply chains less vulnerable through:  

• second sourcing – businesses are hiring more suppliers (possibly in different countries). They are moving away from countries where there is political risk.
• vertical integration – importers are taking more control over their supply chain by building up their existing suppliers or by taking over suppliers. Importers also expect these choices to have a positive effect on their profits. Part of the reason is a more including attitude between manufacturer, provider and importer. Each member of the supply chain needs to understand their partner. They must support them in making the chain stronger, so that it stays strong even during difficult times.
• pre-stocking – companies build inventory of (semi-)finished goods, which can be sold if there are new problems. 
• reshoring – part of second sourcing can be to find European manufacturers to co-produce part of the existing collection or replace suppliers in politically risky locations.
• longer lifecycles – when supply chains are fragile, existing offers can also be extended. This can be done by recycling, using sustainable materials, providing repairs, or creating more long-lasting (less trend-driven) collections.

Reshoring may currently be a hot topic, but in practice it often is not that easy. Redesigning supply chains takes time, and effects may be longer-term only. Also, the value for money of reshored HDHT products is often not as good. In the June 2022 Maison et Objet Barometer, 26% of HDHT stakeholders plan to localise part of their production or sourcing, but 22% do not.

Figure 14: Obstacles to reshoring for HDHT stakeholders

Source: Maison et Objet Barometer – Issue 4

The changes in supply chains will create a more secure distribution system for Western European businesses. But changes also make the supply chain more broken into pieces, less productive and more expensive. These costs will passed on to companies and consumers. The benefits should also be shared, but they may be less clear to the average consumer.

Forecast

Consumers will get used to items not being available, and to longer waiting times and higher prices. Consumers may buy more quality than quantity (long-lasting rather than fashionable), learn to like a product longer, and/or share and trade items with other consumers. This is in line with the trend of new circular business models. If supply chains are not strong, extending a product’s life is a good idea. Think of recycling and repairing.

Consumers will also ask more questions about a product’s origin. Who benefitted in making and selling, and what does the brand stand for when it comes to social and environmental values? In June 2022, 88% of décor, design and lifestyle professionals agreed that their clients are more and more concerned about product and raw material origin.

Opportunities

• Importers will look for second sources – especially in Asia – to become less dependent on single sources.
• Importers will welcome suppliers willing and able to think about importers’ needs and support them when and where needed. On the other hand, importers will also be more committed to building relationships.
• Businesses with true openness and sustainable practices will have an advantage.

Threats

• Increasing costs of goods and services may put pressure on your business.
• Some production may be put back on suppliers in Europe.

This study was carried out on behalf of CBI by Globally Cool B.V. in collaboration with GO! GoodOpportunity and Remco Kemper.

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