Direct-to-consumer
By Dana French -- Home Accents Today, 5/1/2005
The direct-to-consumer channel, including catalogs, Internet, TV shopping and home parties, is projected to be the fastest growing distribution channel for home accents this year, according to Home Accents Today's 2004 Universe Study.
Makes perfect sense as more and more consumers are turned on by the channel's convenience, ease of shopping and seemingly endless product assortment. Direct-to-consumer home accent sales grew 8.1% in 2004 to $7.2 billion and are projected to grow another 6.1% this year, reaching $7.7 billion in retail sales.
Direct-to-consumer companies reach consumers via multiple methods, coupling an Internet site with catalogs or home parties or TV. Players include literally hundreds and hundreds of catalog companies, as well as home party giants like The Longaberger Company, PartyLite and Home Interiors & Gifts, and TV shopping leaders QVC and HSN.
The most likely direct-to-consumer buyers are the same ones, for the most part, that frequent home accent specialty stores. But direct-to-consumer buyers are slightly younger and are more likely than home accent/gift store buyers to live in an apartment, have children still living at home and to currently not be married, according to Home Accents Today's exclusive Consumer Buying Trends Survey.
Baby boomers, between the ages of 41 and 59 this year, make up 47% of direct-to-consumer buyers. Older consumers, those currently age 60 or more, belonging to either the Happy Days Generation or Senior Seniors, account for another 32% of buyers. Members of Generations X and Y, currently between the ages of 20 and 40, comprise 21% of direct-to-consumer buyers.
The survey shows photo frames, votive/tealight candle holders, photo albums and decorative pillows are the most frequent purchases. Purchases in the channel vary by generation, however. By generation, the most frequent purchases from the direct-to-consumer channels are:
- Generation Y — photo frames, baskets and photo albums
- Generation X — photo frames, framed prints, candle holders/candlesticks and photo albums
- Younger Baby Boomer — chairs, baskets and lamps
- Older Baby Boomer — decorative pillows, chairs, placemats and baskets
- Happy Days Generation — framed prints, decorative pillows, photo frames and lamps
- Senior Seniors — figurines, wind chimes, flower pots, chairs and vases.
Nearly three-fourths of direct-to-consumer home accent buyers have incomes under $75,000. The Consumer Buying Trends Survey reveals 38% of buyers have household incomes between $40,000 and $74,999 and 34% have incomes of less than $40,000. Those with incomes squarely in the middle, with annual incomes of $50,000 to $74,999, appear to be slightly more likely to order from a catalog, home party, TV or over the Internet, while those in the upper-middle income bracket, with annual incomes of $75,000 to $99,999, seem slightly more likely to make their purchase in a specialty store. Overall, consumers buying home accents through direct-to-consumer have lower incomes than those buying at home accent/gift store buyers — 72% have incomes under $75,000, compared with 62% of home accent/gift store buyers.
As with age, there are differences in purchase choices by income. Households within each income level are most likely to purchase these home accents through direct-to-consumer:
- less than $40,000 — photo frames, photo albums, chairs and wind chimes
- between $40,000 and $74,999 — framed prints, decorative pillows, placemats and throws
- $75,000 or more — photo frames, candle holders/candlesticks, chairs, vases and baskets.
When it comes to getting design ideas, nearly three-fourths of direct-to-consumer buyers look at magazines for interior design information and 67% of buyers check out TV programs for inspiration. Given the synergy between the other direct-to consumer channels and the Internet, it's noteworthy that only 14% of direct-to-consumer buyers search the Internet for home decorating ideas.
Four-fifths of direct-to-consumer buyers buy seasonal home accents through the channel, with 88% buying for themselves and 81% buying gifts. The top holidays for home accents are Christmas, Spring/Easter, Thanksgiving and Halloween.
Popular direct-to-consumer channel purchasesDecorative pillows are one of the top home accents purchased through the channel. Pillows are generally bought in multiples and price points are fairly low. Three-fourths of buyers bought two or more and for their total pillow purchase, 45% of buyers spent under $25, 30% spent between $25 and $49 and 25% spent $50 or more. More than half of pillow buyers are baby boomers and 36% have incomes of $75,000 or more.
Figurines are also among the most frequently purchased items. Two-fifths of figurine buyers through direct-to-consumer channels have household incomes under $40,000. Overall, 44% of households bought only one figurine, spending a median of $40. Home accent/gift stores are among the top competitors for direct-to-consumer when it comes to figurines, one-third of the households that purchased one through the direct-to-consumer channel also bought one at a home accent/gift store.
With baskets, younger households, members of Generations Y and X, make up 29% of buyers through the channel. Furthermore, nearly two-fifths of basket buyers have incomes between $40,000 and $74,999. Discount department stores are the top competitor for lower priced baskets and off-price retailers are the chief competitor for higher priced baskets.
| direct-to-consumer | 11% |
| home accent/gift stores | 23% |
| 2004 estimated | change 2004 to 2005 | 2005 projected | |
| direct-to-consumer | $7.2 billion | 6.1% | $7.7 billion |
| home accent/gift stores | $14.6 billion | 3.1% | $15.0 billion |
| Source: Home Accents Today 2004 Universe Study | |||
| purchased by 20% or more of households | percent of households that purchased home accents through direct-to-consumer |
| photo frames | 47% |
| votive/tealight candleholders | 37% |
| photo albums | 34% |
| decorative pillows | 33% |
| framed prints | 31% |
| figurines | 27% |
| chairs | 26% |
| candlesticks | 25% |
| wind chimes | 25% |
| pillar candle holders | 24% |
| vases | 24% |
| baskets | 23% |
| throws | 22% |
| placemats | 21% |
| clocks | 20% |
| bought any home accent at | ||
| direct-to consumer | home accent/gift store | |
| household income | ||
| under $30,000 | 20% | 17% |
| $30,000 – $49,999 | 23% | 21% |
| $50,000 – $74,999 | 29% | 24% |
| $75,000 – $99,999 | 12% | 20% |
| $100,000 or more | 16% | 18% |
| generation | ||
| Generation Y born 1976–1985 | 3% | 2% |
| Generation X born 1965–1975 | 18% | 16% |
| younger Baby Boomers born 1956–1964 | 20% | 22% |
| older Baby Boomers born 1946–1955 | 27% | 29% |
| Happy Days Generation born 1936–1945 | 20% | 19% |
| senior Seniors born 1935 or before | 12% | 12% |
| lifestyle | ||
| own or buying a home | 80% | 87% |
| work full-time | 46% | 50% |
| work part-time | 17% | 13% |
| 4 yr. college degree | 22% | 25% |
| post-graduate degree | 8% | 15% |
| Internet access | 77% | 80% |
| bought figurines at | ||
| direct-to-consumer | home accent/gift store | |
| amount spent | ||
| median | $40 | $32 |
| under $20 | 23% | 18% |
| $20–$29 | 17% | 32% |
| $30–$39 | 10% | 1% |
| $40–$99 | 21% | 13% |
| $100–$199 | 13% | 9% |
| $200 or more | 16% | 27% |
| number bought | ||
| one | 44% | 55% |
| two | 24% | 10% |
| three or four | 17% | 10% |
| more than four | 15% | 25% |
| top competitors * | ||
| Percent of households that bought figurines through direct-to-consumer and also | ||
| shopped for figurines at | bought figurines at | median $ paid | |
| lifestyle store | 56% | 33% | $58 |
| discount department store | 33% | 33% | $35 |
| home accent/gift store | 33% | 33% | $100 |
| off-price retailer | 33% | 33% | $40 |
| bought candlesticks at | ||
| direct-to-consumer | home accent/gift store | |
| amount spent | ||
| median | $20 | $15 |
| under $10 | 21% | 10% |
| $10–$19 | 24% | 43% |
| $20–$29 | 23% | 21% |
| $30–$74 | 17% | 10% |
| $75 or more | 15% | 16% |
| number bought | ||
| one | 12% | 11% |
| two | 38% | 39% |
| three, four or five | 19% | 11% |
| six or more | 31% | 39% |
| top competitors * | ||
| Percent of households that bought candlesticks through direct-to-consumer and also | ||
| shopped for candlesticks at | bought candlesticks at | $ paid | |
| lifestyle store | 47% | 41% | $18 |
| discount department store | 47% | 35% | $28 |
| home accent/gift store | 35% | 35% | $28 |
| off-price retailer | 24% | 24% | $42 |
| traditional furniture store | 12% | 12% | $85 |
| bought baskets at | ||
| direct-to-consumer | home accent/gift store | |
| amount spent | ||
| median | $30 | $12 |
| under $10 | 14% | 12% |
| $10–$19 | 21% | 62% |
| $20–$29 | 14% | 13% |
| $30–$49 | 16% | 13% |
| $50–$99 | 21% | <1% |
| $100 or more | 14% | <1% |
| number bought | ||
| one | 44% | 43% |
| two | 17% | 29% |
| three | 16% | 14% |
| four or more | 23% | 14% |
| top competitors * | ||
| Percent of households that bought baskets through direct-to-consumer and also | ||
| shopped for baskets at | bought baskets at | median $ paid | |
| discount department store | 60% | 47% | $45 |
| lifestyle store | 47% | 33% | $50 |
| off-price retailer | 27% | 27% | $60 |
| bought framed prints at | ||
| direct-to-consumer | home accent/gift store | |
| amount spent | ||
| median | $60 | $60 |
| under $20 | 15% | 11% |
| $20–$39 | 16% | 14% |
| $40–$59 | 15% | 19% |
| $60–$99 | 17% | 28% |
| $100–$199 | 15% | 14% |
| $200 or more | 22% | 14% |
| number bought | ||
| one | 47% | 30% |
| two | 20% | 28% |
| three or four | 20% | 28% |
| more than four | 13% | 14% |
| top competitors * | ||
| Percent of households that bought framed prints through direct-to-consumer and also | ||
| shopped for framed prints at | bought framed prints at | $ paid | |
| home accent/gift store | 25% | 25% | $40 |
| lifestyle store | 20% | 10% | $75 |
| warehouse membership club | 15% | 15% | $75 |
| department store | 10% | 10% | $78 |
| discount department store | 10% | 10% | $58 |
| off-price retailer | 10% | 5% | $75 |
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