The home decor market - Italy

1.2 A steadily growing global market

According to CSIL, the furniture industry doubled its volume between **** and ****, reaching a worldwide volume of about $*** million, which will be surpassed in ****. The pandemic has had very little effect on the furniture market, probably because the home has played a leading role during this long period. Being stuck in your homes has driven furniture sales, and this has allowed the whole industry to recover and return to pre-Covid levels very quickly.

Of all the world's furniture production, more than a third is for export. Over the past two decades, exports have grown at the same rate as production, and imports continue to grow as well. The international furniture trade is back to double-digit growth in ****.

By ****, therefore, the global (***), European and Asian countries are expected to have the biggest rebound in furniture consumption growth [***].

Top exporting countries in the world - based on year **** data - in the furniture sector and their market shares (***) Country **** **** **** **** China **,* **,* **,* **,* Poland *,* *,* *,* *,* Germany *,* *,* *,* *,* Italy *,* *,* *,* *,* Mexico *,* *,* *,* *,* United States *,* *,* *,* *,* Canada *,* *,* *,* *,* Netherlands *,* *,* *,* *,* Czech Republic *,* *,* *,* *,* Turkey *,* *,* *,* *,* Denmark *,* *,* *,* *,* Malaysia *,* *,* *,* *,* Spain *,* *,* *,* *,* Indonesia *,* *,* *,* *,* Lithuania *,* *,* *,* *,* France *,* *,* *,* *,* Romania *,* *,* *,* *,* Sweden *,* *,* *,* *,* Taiwan *,* *,* *,* *,* Portugal *.* *,* *,* *,*

Source: ****

1.3 Italian market grew slowly in 2019

The Italian interior design market has been growing since ****, reaching a value of **.* billion euros in ****. Market growth in **** has been slow, especially compared to the growth rate in previous years. This slow growth is mainly due to a massive global crisis in the industry, which has also affected the main producing countries, such as China and the United States [***]

Size of the Italian furniture market Italy, ****-****, in billion euros Source: ****

1.4 Italy's leading position in the international trade arena

Most of Italy's production is vowed to be exported, and this is expected to account for a larger share of total production in subsequent years due to the expected decrease in domestic consumption. In **** and ****, exports accounted for ** percent and ** percent of total production, respectively. In ****, exports amounted to **.*** billion euros, which is about * times higher than imports in the same year. Since ****, the coverage rate has increased from *.** to *.**, peaking in ****. Since then, both export and import values have increased, but the latter has increased more than proportionally.

According to a report published on Federlegno Arredo's website, within the Furniture system about ** percent of total production is for exports; comparing the changes recorded between **** and ****, the main destinations are France (***) decrease.

Main destinations of Made in Italy furniture with attachments values in millions of euros and changes from **** and **** Source:[***] In ****, the total value of furniture exports was **.* billion euros. The first country by value exported remains France, with a total of *.* billion euros. It is followed by the United States with *.* billion euros in exports and Germany with *.** billion. Main destination countries for Italian furniture exports World, ****, as % of total Source:[***] The largest supplier of furniture to Italy is ...

1.5 2020: a year of uncertainty

The **** forecast for the furniture and home furnishings market was slightly optimistic. The domestic market is expected to remain stable, with no substantial increases in imports and a mere * percent increase in exports, supported by more dynamic foreign demand. [***]

However, the polls display high uncertainty for both the global and Italian markets due to several risks:

Weak business confidence resulting from U.S.-China trade tensions; Volatile consumer confidence in advanced economies; The continued structural slowdown in growth in China; Uncertainties over Brexit.

Moreover, when Covid-** broke out in February, it only exacerbated the already very uncertain moment. In the graph below, it can be seen that **** production closely followed the trend of **** production. However, production dropped dramatically in March ****, reaching a low in April ****, when production was only **.*, down from ***.* the previous year. Thereafter, production began to increase again, reaching pre-Covid ** levels in July ****.

Impact of Covid-** crisis on industrial production of furniture pieces Italy, ****-****, in base ***=**** Source: ****

In addition, there has been a general slowdown in both contract and large projects sectors, initially held back by the various blockades, then restarted. They are presently hurt by the crisis striking the commercial, hospitality, and office markets. The residential contracting ...

2.1 Summary of demand drivers

The demand for interior design is closely linked to some macro trends in other markets and Italian demographics. The Italian real estate market is an important factor that has to be analyzed to assess interior design demand, as the building of new residential and nonresidential units represents a potential new market. In addition, the evolution of the average annual income of Italians influences demand, as a negative trend would inhibit the demand for new furniture or furnishing pieces, which is seen by most as a nonessential decorative element. Another factor to consider is the analysis of households that devote the majority of their income to household expenses.

It is essential to analyze the Italian population preferences in terms of design. To make sure that the supply meets the demand for interior design, we analyzed which room in the house Italians are most willing to spend on and which style of furniture they prefer

Italians' shopping habits are changing. Although physical stores remain a central destination for Italians, who are more conservative than other countries when it comes to decorating their homes, the online channel is increasingly used. Moreover, in most cases, digital channels and social media provide only initial inspiration on ...

2.2 Macro trends influencing demand

Compared with a mediocre ****, **** was a virtuous year for the Italian real estate market, with transactions worth more than ** billion euros.

However, the real estate market in Italy is constantly volatile, as its value depends closely on the country's political situation, market conditions, and large transactions that have a major impact on the outcome.

evolution of the real estate market Italy, ****-****, billion euros Source: ****

The building of residential and non-residential buildings in Italy has increased in recent years. From **** to ****, the number of square meters of newly constructed residential and non-residential buildings increased by **.* percent and ** percent, respectively. The peak was found in **** and ****, especially for residential buildings, then went down during the year ****, reaching **** a value of less than the peak in ****. interestingly, however, the ratio of residential to nonresidential square meters has remained fairly constant over the years at around ** percent.

Construction of new housing by type Italy, ****-****, in millions of square meters Source: ****

Also, according to Istat In ****, **,*** residential constructions were made, up from **,*** in ****. Although the number of residential constructions did not increase much, the increase in residential square meters was proportionately higher, indicating that newly built houses are getting bigger and bigger.

Average income ...

2.3 Italians and the home

Italians consider their home as a refuge from the outside world, a place that holds memories, and an expression of one's personality. They care about their homes and they are willing to make sacrifices for them, including financial ones. Young people, who are often not yet in the final nest, are less effective and more aspirational. **% of Italians in **** consider their home important, and **% feel satisfied with the home they live in.

Thirty-seven percent of Italians dream of a home with more greenery/more garden, while * in * dreams of a home that is greener/eco-sustainable and has lower maintenance costs. For young people, the ideal home, in addition to having more greenery, is larger, but also modern and technological [***].

Italians' preferences on how they would like their homes to be Italy, ****, as % of the total population Source: ****

In ****, **% of Italians live in a house they own, while the rest live in a house they rent. When it comes to people between the ages of ** and **, this percentage drops to **%. This distinction is important when analyzing the demand for furniture and furnishings, as individuals living in a rented home often have limitations on the changes that can be made to the space. ...

2.4 The home automation home

Concerning home automation home, the main areas of application foreshadowed by Italians are smart consumption and security. Nonetheless, the application in the health sector, however little known, is therefore far away. Moreover, the association of home automation with entertainment is growing thanks to the spread of Smart TVs, Smart Speakers, etc. The home automation home: the main areas of applicability Italy, ****, as % of the total sample Source: ****

While the main prefigured areas of applicability are consumption management and safety, most owners of home automation equipment (***) still use it mainly for entertainment, as we can see in the graph below. The home automation home: current applications Italy, ****, as % of the total sample Source: ****

2.5 Methods of purchasing furniture and decor items

In general, furniture and fashion websites are the main information channel for Italian furniture purchases. This is also true for young people, although social networks have more weight among them, especially Instagram. Sources of research on trends, costs, and more, on furniture and furniture items Italy, ****, as % of the total sample Source: [***] Today, **% of Italians (***). Reasons for in-store purchase of a piece of furniture or furniture item Italy, ****, as a % of the total sample Source: [***] Those who choose to buy in-store do so to see the product (***). Reasons for buying a piece of furniture or furniture item online Italy, ****, as % of the total sample Source: [***] Online buying is chosen for the convenience of prices (***), and the possibility of having goods delivered to the home. Of the total sample, **% buy online, and among the **-** age group, **% buy online. Home furniture purchase criteria Italy, ****, as % of the total sample Source: [***] For Italians, convenience, quality, and functionality are the main criteria driving the choice of a piece of furniture or object for the home. Young people seem to embrace more "eclectic" styles by paying more attention to their tastes instead of harmony with the rest of the house.   Source: ****

3.1 Market structure overview

The value chain of the interior design market includes several stages and actors. The value chain begins with the different suppliers of raw materials, which can vary widely depending on the furniture or piece of furniture desired. After furniture and home furnishings, manufacturers receive the raw materials, they process them into the final product, which is then sent to warehouses. A selection of products is then shipped from warehouses to distributors, which may be:

Independent specialty stores, Manufacturer-owned and operated stores, GDOS, Wholesalers.

In the case of the first *, products are then sold directly to the end customer, which may be an independent firm. In the case of wholesalers, however, products are first distributed to outlets (***) and then sold to end customers.

3.2 Highly cyclical production located mainly in northern Italy

Since the beginning of ****, Italian furniture production has not changed drastically and has continued to follow recurring trends. On average, production peaks in July and October. These high points are not random but are expected to offset the significant drop in production that occurs periodically in August, during the summer vacations.

Furniture industrial production index Italy, ****-****, base ***=**** Source: ****

On the other hand, the South and the Islands are the least productive regions. Only * percent of total production is concentrated in the latter area.

Distribution of Italian furniture production

Italy, ****, in %

Source: ****

3.3 A fragmented national market

According to Il Sole ** Ore, the Italian furniture and furnishings market is populated by ** thousand operators. Thus, the market is highly fragmented, with many small players operating mainly at the local level.

In particular, the operators in the furniture market are interesting to be looked at, as they account for the majority of operators in the broader market. In ****, there were **,*** furniture companies in Italy. This number has since decreased, reaching **,*** in ****.

Number of companies in the Italian furniture market Italy, ****-**** Source: ****

The market is dominated by small and medium-sized enterprises. In fact, **.* percent of firms hire fewer than ** people and only *.* percent hire more than *** people. These figures are due to the strong craft tradition that exists in the market, which is populated by local artisans who still produce furniture using traditional techniques.

Composition of the number of firms active in furniture manufacturing by firm size Italy, ****, as a % of the total number of active enterprises Source: ****

However, the emergence of groups is a phenomenon that is spreading among Italian companies. Those groups gather several brands under a common name. In general, companies belonging to groups deal with different product categories, making for a ***-degree offering, which has proven ...

3.4 Focus on distribution channel

Research conducted by Federmobili analyzed the average characteristics of stores that sell furniture and home furnishings.

The average area of stores is about *,*** square meters, with *.* employees. The range of stores is very diverse: ** percent of stores have a product range that includes mid-range lines plus high-end designer brands; ** percent offer high-end designer brands plus mid-range lines; * percent only high-end; * percent only low-end.

Breakdown of furniture outlets by price range offered Italy, ****, in % Source: ****

Average sales in **** increased by *.*%. Specifically, **.*% of **** sales came from "Bonus Furniture," *.*% from abroad, **.*% from consumer credit, and *.*% from the contract sector.

Where furniture sales come from Italy, ****, in % Source: ****

In ****, **% of stores worked with small local sites, **.*% with medium-sized interregional sites, and *.**% with large national sites. **% of private clients are assisted by professionals (***), of which **.*% are paid directly by the store, with *%.

Finally, concerning the services offered: **.*% of the outlets believe that the services offered are design, rendering, surveying, transportation, assembly/disassembly, installation, and disposal are not adequately valued by customers.

4.1 A broad and diverse offering

The interior design market includes a wide variety of products, which are summarized below:

Beds and mattresses, Upholstered sofas and armchairs, Tables, desks, and bedside tables, Chairs, Bathroom furniture, Kitchen furniture, Storage space: libraries, cabinets, closets, Lighting: lamps and chandeliers, Home accessories: pillows, rugs, mirrors, paintings, vases, etc.

The most common products are sofas and upholstered furniture, with a ** percent share; living area furniture and furniture components, with ** percent each; beds and bedroom furniture, with * percent.

Breakdown of supply by segment Italy, ****, in % Source: ****

In addition, these products can have different styles

Classic furniture: antique furniture, preferably handmade, or at least modern reproductions of antique pieces. Rustic furniture: furniture made of non-precious wood and exposed brickwork reminiscent of old country houses. Decorative furniture: knick-knacks and paintings are dominant elements that recall each other and fill every space. Modern furniture: Synthetic materials and technological surfaces make this furniture quite cold but very clean in its lines. Contemporary furniture: Clean lines and light colors with hints of Nordic style; modern style but with a fusion of stone or wood elements. Designer furniture sets designed by well-known architects and the subject of conferences and fairs including the "Salone del Mobile" in Milan

4.2 Price trends and the weight of each category

The industrial producer price index shows trends in producer prices, which are expressed in terms of the chosen base year. Furniture producer prices have increased steadily since ****, with no obvious spike or drop in any given year.

Furniture producer price index Italy, ****-****, base ****=*** Source: ****

The price of furniture varies widely depending on several factors, such as:

Type of product, Technology: the technology used in the production process or incorporated into the product; Quality design: materials, special manufacture, expected lifespan, and attention to detail; Brand: Well-known brands may demand a high-profit margin for their products; Size: Larger furniture is on average more expensive; Customization: Custom-made furniture is usually more expensive than standardized mass-produced furniture.

In addition, * price ranges can be identified:

High (***), Medium-High (***), Medium, Medium-Low, Low,

On average, the offer of Italian manufacturers belongs to the Premium range.

Regarding the weight distribution of each category of furniture offered, if total exports are taken as a reference, the greatest weight is recorded by furniture parts and accessories. The total recorded value is *.* billion euros.

Breakdown of furniture supply exports by category World, ****, as % of total industry exports Source: ****

4.3 Focus on the Milan Furniture Fair

In the furniture market, Italy continues to be a leading nation in the world. According to data from FederlegnoArredo, the Belpaese is on the podium of top furniture manufacturers, with the big names in the furniture industry growing above average. Leadership in the sector is consolidated in a long tradition that combines the world-famous Made in Italy with the demands imposed by technology. [***]

Every year, players operating in the premium and luxury sectors of the furniture and furnishings market present their products at the Salone del Mobile in Milan, the world's largest furniture fair.

The fair is held every year and presents the latest news and innovations in furniture and home decor. In ****, the fair had *,*** exhibitors, ** percent of whom came from abroad, from ** countries. In addition, during the fair period, the city of Milan is populated with numerous "Fuorisalone" events. About *,*** events are organized by designers, furniture companies, major global consumer electronics brands, and fashion brands.

Overall, design brings *** million in revenue to the city of Milan during Milan Design Week alone, including the Salone del Mobile, Fuorisalone and related events (***), and other cultural events. [***]

4.4 Supply trends: mass customization, AI, and home automation

In recent years, there have been several trends, such as :

Mass customization

During the ****s, the furniture industry witnessed the emergence of a new way of thinking about production and customer relations, called mass customization. Mass customization is a term used to identify the production of customized goods and services at prices affordable to most consumers. Customization is a key determinant of the shift from a traditional standardized approach to an increasingly marketing-driven targeted approach.

In most cases, the products offered are standard, and then they are customized during the last stage of the production process, according to the customer's wishes. [***]

Artificial Reality

To ensure a better customer experience for consumers who wish to purchase furniture through digital channels, market players have begun to implement new technological solutions to facilitate online visualization of furniture and furnishings. These solutions include *D visualization of furniture through AR, which allows customers to have a ***-degree view of the product even when they do not have the opportunity to see it in stores.

An example of this trend is Ikea, which has developed an application called IKEA Place. Using AR, the app allows customers to virtually place full-scale *D models in their spaces. In addition, ...

5.1 Current regulations

There are regulations governing the characteristics of furniture products: precise European standards aimed at a specific type of product set the healthfulness standards of the various materials that make up home furnishings. Some examples are:

An updated version of the technical standards UNI EN ***** and UNI EN ***** defines, based on tests, safety, strength, and durability requirements for all types of seating and all types of tables for household use. Household storage furniture of all types (kitchen furniture, bathroom furniture, cabinets, various storage units for sleeping areas, living rooms, etc. UNI EN *****. The standard contains mechanical safety requirements designed to prevent accidents caused by normal or reasonably foreseeable misuse. This standard was revised in ****, and the new edition introduced test methods, standardized with those required for non-domestic furniture, and stability requirements, improved with the addition of specific guidance for TV furniture. Furniture designed for children is subject to the CEN EN ****:**** standard on safety requirements for children's cribs. This standard establishes safety requirements and test methods for cribs for domestic and non-domestic use. In addition, it addresses requirements for chemical and flammability hazards, entrapment hazards from gaps and openings in the bed frame, fall hazards, instructions for use and warnings that parents ...

6.1 Segmentation

• Iris Mobili (Mondo Convenienza)
• IKEA Italia
• Poltronesofà
• B&B Italia
• Maisons du Monde Italia
• Maisons du Monde