The household goods retail market is actively evolving as a result of the introduction of innovative technologies in the manufacturing and delivery processes. In the context of a rapidly changing world and the constant evolution of technology, understanding and predicting future trends is strategically important for the success of companies in the household goods retail industry.

This research is designed to identify the key trends that the market will face through 2030, and to identify key strategies and practices that will enable a company to effectively adapt to the current changes.

Global household goods retail market overview

The global household goods market was worth USD 1.9 tln in 2022. Within this market, there are 4 major product categories: furniture and home accessories (48% of the total market), construction and renovation products (44%), garden and leisure products (5%), and kitchenware (3%).

According to forecasts, the market may grow to USD 2.8 tln by 2030. Global market growth is driven by increasing urbanisation (the share of the world's urban population will rise from 57% in 2022 to 60% in 2030) and rising disposable income, especially in developing countries.

The US is the main home market for most major household goods retailers, and 7 of the top 10 members of the market are US companies. At the same time, both e-commerce platforms (Amazon, JD.com) and traditional retailers (Walmart, Kroger) play a significant role in the global household goods retail market.

Overview of technology and consumer trends

There are 9 major trends in household goods retailing that can be identified. Some of them are related to the gradual development and adoption of new technologies, while the rest are a reaction to dynamically changing consumer habits.

Technology trends::

• The use of AR/VR technologies in retail is being actively used to visualise products in the consumer's home space, reduce staff training costs and optimise stock control. A good example is Lowe's, which has a feature in its app that allows shoppers to virtually place an item of the exact size in their space.
• The incorporation of artificial intelligence is already optimising how customers search for items on a website, increasing the relevance of the output and thereby increasing the likelihood of selling an item. By 2023, we can expect AI to be used in retail to improve stock management and optimise supply chains, generate personalised recommendations for shoppers and prevent fraud.
• The adoption of drones in logistics and accounting will help to improve the accuracy and speed of stock control, as well as ensure faster and more cost-effective last-mile delivery of goods. Meanwhile, drone adoption is already helping companies such as IKEA optimise their warehouse inventory costs.
• The use of autonomous vehicles will reduce last-mile delivery costs, as well as allowing customers to adjust delivery schedules. JD.com was the first company in the world to use a self-driving vehicle capable of travelling within a certain area on public roads. Each of its delivery robots holds up to 200kg of goods and can travel up to 100km on a single charge.
• The use of autonomous vehicles will reduce last-mile delivery costs, as well as allowing customers to adjust delivery schedules. JD.com was the first company in the world to use a self-driving vehicle capable of travelling within a certain area on public roads. Each of its delivery robots holds up to 200kg of goods and can travel up to 100km on a single charge.
• The robotisation of warehouses leads to faster movement of warehouse goods, increased storage capacity and higher productivity. The relevance of this trend is confirmed by Leroy Merlin, which has implemented 30 autonomous forklift robots and an automated storage system in one of its logistics centres in the French city of Réau.

Consumer Trends:

• The growth of online shopping is a key consumer trend. The growing solvency of Generation Z who are used to shopping online, the development of social commerce due to the increasing popularity of sales on social networks, and the increasing demand for fast delivery will contribute to the transition of the largest part of sales to the online format and the transformation of physical shops into showrooms.
• Responsible consumption is becoming an important part of customers' consumption habits - they prefer to buy products that are produced using eco-friendly materials and sustainable technologies, as well as reduce energy consumption and use reusable products. An example of the impact of this trend on the retail market is the Eco Actions website, which allows customers to find products that will help reduce the impact of their homes on the climate and environment.
• Customers move house frequently, leading to new product lines of compact and affordable furniture (e.g. IKEA's Råvaror furniture range specifically for small spaces) and the development of new services and business models such as furniture rentals and collaborative shopping.

Overview of the current state of the Russian market

Since 2017, the Russian household goods market has been growing at a faster pace, reaching a volume of approximately RUB 2 tln in 2022. The main drivers of market growth were changes in the housing market (the government's introduction of preferential mortgages in 2020), increased spending on home improvement after the COVID-19 pandemic, and price growth due to the rise in prices of raw materials and components for furniture production.

The Russian market for household goods is consolidated around the top 10 companies, with Leroy Merlin taking the lead. Among the market leaders, overseas companies accounted for more than 70% of revenue and 13% of shops, but major international players such as IKEA and OBI left the Russian market in 2022.

IKEA's exit gave an impetus to the development of domestic retailers and the entry into the Russian market of new players, such as Swed House and Good Lakk, which co-operate with the factories of former IKEA partners. Also in 2024, Yandex Market, with the help of former IKEA managers, launched its own household goods brand Pragma.

The relevance of the previously discussed technology and consumer trends is also confirmed by the experience of Russian companies that are introducing technologies in design and warehousing (e.g. AR-design and furniture fitting by Hoff), as well as promoting e-commerce and responsible consumption (e.g. Petrovich and Askona).

Thus, in order to follow the current trends, Russian companies should adapt technological and process innovations:

• Develop competences in data analysis based on artificial intelligence
• Implement pilot projects using the most relevant technologies available
• Introduce robotic process automation
• Work on building a sustainable company brand