In this report, we explore the online furniture re-commerce market and examine some of its key players.
The used furniture market is about much more than antiques, although demand for vintage products has surely fueled the expansion of online platforms devoted to furniture resale. In this report, we look at the used furniture e-commerce (furniture re-commerce) market and explore its potential and some of the key players in the business. Readers can find our previous coverage of the US and global furniture markets here.
The Internet has opened up new ways for consumers to dispose of durable goods they no longer need by reselling them online. Apparel comprises the most significant re-commerce market, but there are many re-commerce platforms dedicated to other categories, including furniture.
The furniture re-commerce market has a number of facets, including:
In the secondhand market, used furniture is the fourth-most popular item sold, after clothing, books and shoes. According to a 2017 Statista survey, nearly half of US consumers polled who had resold items in the past said that they had sold clothing, while only a quarter said that they had sold furniture, indicating furniture’s lower turnover in the secondhand market.
Furniture generally tends to be a big-ticket and infrequent purchase. For people who move frequently, taking time to carefully choose furniture and décor, and spending heavily on them, may not be on the agenda. But for others, these furnishings represent a long-term investment that is worth researching and paying for.
Statista’s 2017 survey found that about half of American consumers prefer to buy furniture that is new or unused. Some 37% of those surveyed said that it does not matter if a piece of furniture is new or used if they wish to purchase it. Meanwhile, only 8% of those polled indicated a preference for used furniture.
Demographic Profile and Decor Preferences of Secondhand Furniture Buyers
According to Statista’s survey, in the US, women are more likely to buy used furniture than men are. In addition, younger consumers are more enthusiastic than older people are about decorating their homes and, particularly, about furnishing them with used furniture.
A 2016 home decorating survey by home and décor website Apartment Therapy and Furniture Today magazine found that decorating is important to approximately 70% of American millennials. The survey also revealed some aspects of secondhand furniture buyers: about 70% of these consumers are under age 45 and about 60% have a household income of less than $75,000. In addition, about half live in an urban setting.
An earlier survey by Statista, which was conducted in 2016, showed a similar trend of younger consumers being more willing than older ones to purchase used furniture for the main areas of their home, such as the living room, bedroom and dining room. However, young adults surveyed were less likely than older consumers to buy used furniture for their home office or patio. This is probably because younger adults tend to have lower incomes and fewer assets, so are likely to live in smaller homes that do not contain such areas.
An October 2015 survey of 1,610 US female homeowners by Better Homes and Gardens magazine revealed similar findings. Almost two-thirds of millennial respondents said that having a home customized to their tastes and needs was a top priority. And while 44% of those polled said that they were willing to spend significantly to get the features and quality they want, 60% indicated that they were willing to compromise on their wants in order to save money, which could imply an openness to buying secondhand furniture.
Factors Driving the Trade of Used Goods
A majority of consumers prefer to purchase new goods, but the market for used items is nonetheless considerable. Below, we explore some of the reasons consumers buy used goods.
Many consumers are also keen to sell items they own. In 2017, around 77% of Americans sold at least one thing they no longer used, according to the 2017 Statista survey cited earlier. Among survey respondents who had sold items they had previously owned, the top three reasons cited for selling them were:
That final reason—decluttering—has evolved into a trend, and we covered it in detail in our report Decluttering: Anatomy of a Consumer Trend and How Retailers Can Win. Decluttering is simply the process of organizing one’s belongings and getting rid of things one does not use. Author Marie Kondo created a specific decluttering technique that she described in her book The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, which sold millions of copies and helped popularize the trend of holding on to only those possessions that “spark joy.”
In an environment of rising home prices, the cost of accumulating belongings is high, so paring down is appealing to many consumers. In our earlier report, we shared that housing pressure and Google Search interest in major urban areas globally indicates that people living in cities with higher housing pressure tend to be more interested in decluttering. The ability to conveniently sell furniture and home décor items online complements this trend.
As furniture re-commerce is a relatively new segment in online retail, definitive figures on the size of the market are not yet available. We do, however, have numbers for US sales of furniture and used merchandise as well as for nonstore retail sales. In 2017, US consumers spent approximately $205 billion, or 1.5% of their personal consumption expenditure, on furniture and furnishings, according to the US Bureau of Economic Analysis.
In 2017, furniture and home furnishings specialty stores generated some $116 billion in sales, equivalent to 6.6% of total nongrocery and nondrug retail trade, according to our analysis of US Census Bureau data. In the same year, outlets selling used merchandise (in all categories) accounted for $19.1 billion, or 1.1%, of total nongrocery and nondrug retail sales.
ThredUp, one of the biggest fashion resale websites in the US, publishes a yearly report with estimates for the total resale market, divided by segment. In its Annual Resale Report 2017, ThredUp estimated that the online and offline resale market for apparel was worth $18 billion in 2016 and that apparel accounted for 49% of the total resale market that year. Furniture would be included within the “Other” category of ThredUp’s market breakdown, which is shown below. If we assume furniture accounts for a ballpark 12.5% of the total resale market and extrapolate from apparel being valued at $18 billion for 49%, that suggests that the total value of the in-store and online furniture resale market was $4.6 billion in 2016.
Online retail has provided opportunities to tap into markets that were previously difficult to reach. E-commerce has sparked innovative business models that facilitate convenience and transparency in transactions and connect sellers of all types and sizes with interested buyers.
Craigslist is a well-established local classifieds platform that connects individual buyers and sellers of all kinds of goods. Among the larger retailers, Amazon and IKEA have offered buying and selling options for used furniture, but several other platforms specialize in used furniture, including 1stdibs, Chairish, Furnishare and AptDeco.
The online furniture resale market appears to be small, but it has substantial potential for growth. Unlike with categories such as apparel, shipping remains a costly barrier for furniture resale. As a result, a number of specialized furniture resale websites cater to local communities, but this limits customer numbers. By growing scale, online marketplaces may be able to democratize the availability of preowned furniture and drive growth in this segment.