It seems some consumers are happy to buy their furniture online without first sitting, lying or bouncing on it.
Online furniture sellers are experiencing double digit growth in sales, forcing traditional bricks-and-mortar retailers to open or expand their online offerings, according to a report in today’s Australian Financial Review. Online furniture sales are expected to see a rise of up to 16% this year, which is five times the growth forecast for traditional furniture retailers.
IBISWorld is reporting that while total furniture sales are expected to fall 0.5% over the next five years, online sales are forecast to rise 9.8% per year, to $500 million.
Fantastic Holdings (ASX: FAN) has said that the strength of online demand had taken the furniture retailer by surprise, and there seems to less aversion to buying furniture before trying it, especially for younger consumers. Online sales at Fantastic Furniture’s Original Mattress Factory grew 12% last year, with 70% of those sales coming from customers who hadn’t gone into the stores. Fantastic now expects to roll out online sites for its other brands, including Plush and Fantastic Furniture, within the next 12 months.
Traditional retailers like Harvey Norman Holdings (ASX: HVN), IKEA, and Freedom Furniture have only rolled out online stores within the last 12 months, allowing newcomers Milan Direct, Wayfair and Zanui to gain a foothold in the market.
Upmarket furniture retailer, Nick Scali Limited (ASX: NCK) has yet to open an online store, and after reporting a drop in same-store sales of 2% last financial year, is expecting growth to come from new stores, and an uptick in consumer confidence. I might suggest that the company could be facing some serious threats to its business, and an online store might go some way to alleviating that threat.
Departmnent store, David Jones Limited (ASX: DJS) also sells furniture, and it has yet to add that line to its online store. Still, with the company planning to have 90,000 items for sale online by Christmas, we may yet see the company offering furniture online.
If you only invest in one company this year, make it our “Top Stock for 2012-13”. Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.
- Minister calls miners ‘fat and lazy’
- Place your bets: A second Sydney casino is coming
- Foxtel’s Christmas present for subscribers
- Inflation shock: prices on the way up
- Apple unveils iPad Mini, iPad upgrade and new Macs
Motley Fool writer/analyst Mike King owns shares in David Jones. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm