Home market 2021 and the impact on home and leisure businesses
Understanding the top business issues and opportunities trending for home- and leisure-focused companies can help you understand changing consumer priorities, manage supply chain disruption and prepare your business for strategic growth.
Changing consumer preferences: Is it still home sweet home?
The pandemic stay-at-home orders got us all better acquainted with our homes and furnishings. As consumers remained homebound in 2020 they redirected spending that would have otherwise been earmarked for travel and experiences into their homes, making them more livable and functional. Market predictions in 2021 indicate this behavior will continue in the coming months. The race to acquire homes, including vacation property, will continue as well, directly affecting the demand for home improvements, furnishings and appliances. Likewise, home office spaces will not go away and will continue to evolve as businesses and workforces move to a hybrid working environment. In addition, there will be a need for improved service and fast delivery for all things home related. Businesses will need a strong direct-to-consumer strategy to accommodate consumers who have grown used to seamless online ordering and speedy delivery of products and services that enhance their lifestyles.
Acquiring, merging, restructuring: Growing with the customer
Investors have taken note of the shift in consumer preferences wanting more flexibility and time spent at home, and are placing bets on sustained growth in this sector. Even as lives return to normal post-pandemic, consumers will likely continue to improve their home spaces for work, leisure and rest. As a result, home-focused businesses will look for ways to restructure and grow, acquiring businesses in new segments and merging with others to provide goods and services to a public that still loves to be at home. It will be important for these companies to acquire businesses that align to their core strategy, vision and culture.
Supply chain management: Optimizing the pivot
In 2020, many home businesses saw supply chain disruption and demand shock. In a sector that’s been riddled with long-lead times even before the pandemic, shipping and production delays meant businesses were at risk of losing sales and customers during a time of unprecedented demand. While some companies have learned from this challenge, the global supply chain continues to be plagued by uncertainties as well, like tariffs on imports and increased freight costs, as well as materials and manufacturing delays. Companies will need to optimize supply chain efforts to stay nimble in a dynamic environment of consumer preferences. Investments in automation in production and manufacturing could mean near-shore alternatives become more economically feasible in the near term.
Social responsibility: Visibility, traceability, transparency
Consumers are increasingly aware of how and where their products are made. This trend is playing a larger role in purchasing decisions. Home-focused companies need visibility into their sourcing beyond their immediate vendors to reduce the risk of negative headlines and consumer backlash. Consumers will place an increased importance on ethical practices, green production methods and sustainability on the home goods they purchase. Visibility, traceability and transparency will all be key practices.
Innovation and technology: Harnessing change
As the world rapidly changes, so too must home and leisure businesses. An innovative focus, while also harnessing smart technologies, will be necessary to develop new products and remain relevant to consumers. From artificial intelligence and augmented reality to machine learning and data analytics, digital assets can enhance the consumer experience and improve supply chain efficiencies and other key operations. Likewise, using strategies like last-mile delivery or adopting innovative production methods, materials and customization will be increasingly important for home-focused companies to stay competitive.