What Home Categories Are Performing Best in Department Stores
Department stores were able to adapt to inflation, one of many obstacles to growing their selection of sustainable products in 2023, said the International Association of Department Stores.
MILAN — The International Association of Department Stores said the home and decor category's relative share of total turnover for IADS members fell to 14 percent in 2023 from 16 percent in 2022, in what it describes as a correction after three years of growth.
However, a "winning combo" of categories helped offset sharp drops in other areas, amid a year marked by inflationary pressures. Home scents, kitchen appliances, tableware and private label products stood out last year, IADS said. Private label lines have even more potential to outperform in the near term.
"New products, new categories and even new brands were developed, and marketing investments were made to match the brands' positioning and quality with their perception by customers," the association reported.
Private label home business could represent up to 35 percent of total sales in the home and decor category, and the few IADS members that do not have private labels are planning to do so in the next three years, the report said.
Home accessories are, on average, the strongest segment, representing 48 percent of all of the category's business, followed by household appliances at 22 percent, electronics at 15 percent, furniture at 10 percent and other products such as gifting, art, stationery and petrelated products representing 4 percent. E-commerce represented 27 percent of the total category business in 2023, stable from the previous year. Online sales from Europe have remained stable or decreased, while online sales generated from the Middle East, Asia and South America have outperformed.
Inflation has had a negative impact on the rise in sustainable offerings, the association pointed out.
"Even though customers are becoming more accustomed to the topic, acceptance grows slowly as they are not ready to pay the real price of responsible products," it said.
IADS was founded in 1928 as a think tank to address the challenges faced by retailers around the world.
It has 12 members worldwide including Galeries Lafayette in France, Chalhoub Group in the United Arab Emirates and El Corte Inglés in Spain and represents more than 27 billion euros in cumulative annual turnover across more than 380 stores in 20 countries.