If you’re worried that the home improvement business is failing, try telling some of the biggest retailers in the country about it. Walmart, Overstock and At Home are in the process of expanding their furniture range, and Overstock is in the process of transitioning to becoming a purely home goods retailer. Or launch the HEB Texas grocery store idea, which is entering the home goods category for the first time.
Without a doubt, the business has slowed down after two incredible years of crazy growth. However, some major national retailers such as Williams-Sonoma and RH continue to post strong numbers in both revenue and earnings, indicating that the slowdown is not universal. There is still a lot of life left in the house.
Walmart bets on the house
The home has always been a core business for the nation’s biggest retailer, but with the introduction of their latest Supercenter prototype, the big boys of Bentonville seem to have redoubled their efforts. While food, health and beauty products make up the bulk of Walmart’s sales, this new Springdale, Arkansas store just 16 miles from the company’s headquarters offers a fresh take on more fashionable offerings for both home and for clothes.
These programs, including Gap’s expanded home lineup as well as a new collection from the stars of Netflix’s “The Home Edit,” tend to command higher prices and attract more upscale customers than traditional Walmart shoppers. By doing so, the discounter hopes to improve its margins, an important shift as consumers seek to save money on products.
Executive Director Doug McMillon Recently told investors that the retailer is using the house to trade with buyers. “As you move up the income scale, how many of these clients can you bring in in areas you may not have dealt with them as often?” he said. “Can we move some of the volume into clothes and home… as people become even more valuable?”
Overstock goes all-in at home
The online store has always been focused on the home, but has historically sold a huge range of products. Under former management, he even switched to blockchain and cryptocurrencies, which seemed to be distracting him from his main merchandising business. It’s all over, president of Overstock. David Nielsen said in a recent interview, “By the end of June, we will be 100 percent at home on our website.” His latest non-home business, jewelry and watches, is in the final stages of a phased closure.
Nielsen said categories like homewares, countertops and home appliances will get more attention and expand. In its recent first-quarter earnings report, the company also listed mattresses as a category in which it has recently grown successfully. From now on, it’s all at home, all the time. “We did this deliberately because we know these clients are more likely to come back to us. They are more valuable to us … they are designed for a longer period and trust us, ”said Nielsen. “[Home] has been a resounding success over the years and that’s what makes our customers recognize us.”
Houses continue to expand
Despite opening its 250th store this month, home décor chain At Home still has ambitious plans to expand its presence in brick-and-mortar stores. The major retailer, with some stores as large as 200,000 square feet, went private about a year ago, but the change hasn’t changed the brand’s plans to open 700 stores across the country. She opened 16 stores last year and has opened at least seven this year – she now operates in 40 states.
The At Home range relies heavily on private label products, including lounge furniture, home furnishings, home furnishings, carpets and decorative accessories. He also began to introduce collections featuring famous designers such as Ty Pennington, Grace Mitchell, Leila Ali as well as Tracey Boyd. At the last opening, CEO Lee Bird said it is still on track for its intended expansion plans. “Today’s milestone is an important step towards our long-term brand development potential, increasing market share and strengthening our position as a leading home improvement retailer,” he said.
HEB also takes care of the house
It’s just one store – not many compared to the others mentioned here – but it’s the first major development. HEB, a Texas-based chain of upscale grocery stores (the company wisely changed its name from HE Butt), has just opened its first in-store home department at a new location in New Braunfels, just outside of Austin.
Set in a massive 122,000 square feet that also includes a two-story True Texas BBQ restaurant, Home by HEB includes hundreds of items ranging from furniture to textiles and decorative accessories under two private labels, Haven + Key and Texas Proud. It’s the heart of Texas cowboy country, with the latest label featuring wood and antler craft, leather goods, and cowhide benches.
HEB is not talking about plans to add more in-house departments, but judging by what competitors are doing, it’s no wonder there will be more in the future. Whole Foods has been selling homewares for a long time and has even experimented with standalone homewares stores or adjoining spaces with their own entrances. Kroger, the largest supermarket chain, has been expanding its home-to-home offerings for years, working with the Fred Meyer nameplate, which has long combined home and groceries. And, of course, Walmart and Target sold both product categories in their major supermarkets.
So, yes, the home furniture business is back on the ground. But for many retailers, expanding their presence in this category remains fertile ground.
Front page photo: ©Kittiphan/Adobe Stock
Warren Shoulberg is a former editor-in-chief of several leading B2B publications. He was a visiting lecturer at Columbia University’s Graduate School of Business; received awards from the International Furniture and Design Association and the Fashion Institute of Technology; and was quoted The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer in-depth industry insights into major markets and product categories.