They have captured their customers’ closets, and now they want a piece of their homes. Here’s why fashion brands are eyeing the piece of India’s growing home décor market
Bengaluru: In 2022, H&M brought H&M Home to India through a store-in-store format at its outlet in Ambience Mall, Vasant Kunj, New Delhi and later introduced them online through its portal hm.com and on Myntra.com.
UK-based rival Marks & Spencer (M&S) also introduced its home furnishing and home improvement products in India in 2022 and online on Myntra and its own website. Read more about it here.
IndiaRetailing reported in November 2022 that Spain’s Inditex SA is planning to bring Zara Home to India. Read more about it here.
Fashion retailers selling home furnishings and home décor items is not a new trend. Globally, luxury fashion and lifestyle brands like Gucci, Armani, Versace, Ralph Lauren, and Dior have been selling home decor merchandise for decades with lines such as Gucci Décor, Armani Casa, Versace Home, Ralph Lauren Home, and Dior Maison respectively.
Closer home, lifestyle brands such as Westside, Raymond, Fabindia, Chumbak, and Jaypore too have been catering to both the fashion and home decor needs of their consumers for a considerable period of time. However, there has been a stir in the segment with these global chains bringing their home products to India.
Here are the major reasons why fashion retail giants and small players have been expanding into home decor:
- Immense potential
In 2023, India’s home décor market revenues amount to $1.69 billion as per data analysis platform Statista. The market is expected to grow annually by 6.08% (CAGR 2023-2028).
The homeware and furnishings category has historically been dominated by budget-friendly, specialist players like Ikea. However, this market dynamic leaves ample room for other players like fashion brands to introduce alternative offerings and potentially disrupt the established norms. Thus, fashion retailers are capturing a portion of the home-decor market by targeting trend-conscious millennials and Gen Z who aren’t catered to by conventional home goods companies.
- Market expansion
An underlying motive for fashion retailers expanding their product portfolios is to strategically reduce their reliance on a single market and to spread the risk away from just selling fashion apparel.
“Fashion brands are constantly seeking ways to diversify their product offerings and revenue streams. Expanding into the home decor category allows them to enter a new market and reach a broader audience,” said Nihal Kalra, chief executive officer of The Decor Kart, a Delhi-based home decor brand that offers a range of furniture, lighting, kitchenware and bath décor items.
By broadening the range of offerings, fashion retailers will also be able to access and engage with a previously untapped customer demographic.
“Expanding into home decor, brands can reach a new customer base. This strategic move helps reduce dependence on a single market segment and promotes more stable revenue streams,” said Shivam Soni, co-founder of Beyoung, a D2C (direct-to-consumer) fast-fashion brand launched in 2018.
- Shifts in consumer preferences
Consumer preferences have evolved, and they predominantly favour the convenience of sourcing home products from lifestyle retail stores rather than making separate trips to furniture and home decor stores.
“Post lockdown when consumers were spending more time at home, their focus on home decor and furnishing intensified. Apparel brands have recognized this shift in consumer behaviour and identified an opportunity to expand their offerings,” said Lyndsay Smith, head of Westside Home, a department store chain by Tata Group, Trent Ltd.
“Brands can cater to the evolving preferences of their existing customer base. Consumers who already resonate with the brand’s fashion offerings are more likely to trust and explore their home decor products. This loyalty leads to increased repeat purchases and a sense of brand affinity,” she added.
- Lifestyle branding
Today, consumers increasingly seek a holistic lifestyle, where their fashion choices align with their home decor. Fashion retailers have recognized the potency of marketing a comprehensive lifestyle to establish a more profound bond with their clientele.
The surge of visually oriented social media platforms like Instagram has put homes on public display, making it so that someone who aspires to appear stylish in branded attire may also desire their living space to exude style with the addition of branded decor products.
“It can be clearly witnessed that the Indian consumer has already satisfied their needs for fashion and beauty from a psychological standpoint, and now they are climbing the ladder to the home category. It’s a win-win situation for both consumers and retailers,” said Simran Kohli, founder of Dusaan Retail Technologies, a homegrown multi-brand home decor retailer.
- Cross-selling and cross-promotion
“Offering home decor items alongside fashion products encourages cross-selling and upselling opportunities. A customer who buys clothing might also be interested in purchasing matching home decor pieces, leading to increased sales and higher average order values,” said Soni from Beyoung.
The home decor sector can also reap the rewards of the fashion industry’s profound grasp of consumer trends, as fashion retailers possess a keen awareness of market dynamics, the latest trends, and the ever-evolving consumer preferences.
“Fashion and home decor brands could explore cross-marketing and brand partnerships to expand their customer base and reach. Collaborative marketing campaigns, joint product launches, and co-branded collections might become more common, leveraging the strengths and brand recognition of both industries,” added Soni.
The future holds immense promise for brands that straddle the worlds of fashion and home decor. “As consumers increasingly seek a cohesive and personalized lifestyle experience, the integration of fashion and home decor brands will continue to grow,” said Smith from Westside.
Given the projected growth in global luxury homeware and furnishings sales, expected to increase from $22.78 billion in 2023 to $33.31 billion by 2030, it’s evident that there is significant opportunity for expansion and innovation in this market.
“By leveraging their knowledge of customer preferences and expertise in sourcing, the collaborative efforts between fashion firms and home decor companies allow them to play to their respective strengths, which is advantageous for both of them in the long run,” added Kohli from Dusaan.