The Homes Sector on Amazon UK = High Demand, Good Margins and Strong YOY Growth
How many of us are now buying Homeware products online?
According to eCommerce DB, 45.8% of us are already purchasing our home’s furniture, decor, accessories and appliances digitally, with those figures projected to rise to 49.5% by 2027.
As a whole sector, the Homes market already accounts for a massive 11.6% of the total eComm market in the UK, its strong growth forecast to continue unchecked to a market volume of US$23.5 billion by 2027.
And where do we head when we’re looking to purchase these items?
It won’t surprise anyone here to learn that Amazon is the leading online store in this whole sector, generating revenues of US$2,150.6 million in 2022 for itself and its Sellers.
The economy, our aspirations + the Homes Sector Boom
Thanks to the pandemic and the increased cost of living, we’re spending more time at home – working, socialising and improving over moving.
There are more of us – the number of family homes in the UK has surged over recent years, rising 7.4% between 2010 and 2020 to a massive 19.4 million families.
And with factors like social media and the convenience of online shopping in the mix, our aspirations to get the latest styles, products and gadgets quickly and easily are higher than ever.
With its endless choice, expedient purchasing and competitive prices, the marketplace has a powerful pull for home shoppers looking for more of the good stuff, for less.
The result is a marketplace whose growth prospects show no sign of slowing – and a sector whose product potential is vast.
Already know you need specialist Amazon guidance to get the best from the Homes Sector?
The Shape of the Homes Sector on Amazon
No shock then that Home and Kitchen (Kitchen is our next Category Insight topic – watch this space!) is the top choice category for Sellers on Amazon, with 35% having listings in the sector.
Like Toys and Games, there’s no doubt that this can be a cut-throat environment for big name brands and challengers alike.
The biggest sector on Amazon, low barriers to entry mean that there is high competition within almost every sub-category – but all is certainly not lost.
Done right, there is a lot of money to be made in the Homes sector – and opportunities are rife, if you know where to look.
With some clever product choices, a strong pricing strategy and a smart, holistic approach to Amazon, there are lots of niche opportunities to be grasped for new entrants – not to mention some key optimisations that will reap rewards for more established players.
Our data shows that the top 500 listings over the last 30 days are shared between a whopping 259 different brands, and the top 100 alone contains 73 different Sellers – so there is lots of potential for revenues to be shared.
And, like the Beauty sector, this is a dynamic, ever-evolving category where consumer preferences change rapidly, presenting new opportunities on a regular basis for those with the accurate, real-time data required to spot them and respond with agility.
Spotlight on SubCategories
Our data also shows that there is massive diversity within this sector – the top 500 listings containing 213 different sub sectors that cover everything from storage to textiles.
We’ve chosen three subcategories for our deeper dive insights:
- Home Furniture
- Bedding and Linen
Why these three?
As always, we’ve chosen the sub sectors which combine the highest revenues and searches with the widest range of products – those offering a potent mix of strong profits, versatility and rapid growth potential.
Before we dive deeper into the storage category, let’s quickly acknowledge that here, Amazon Basics takes the top Seller spot, with 17.8% of the overall revenue share in our 30-day analysis through Jul-Aug 2023.
But fear not…
This is a sector with plenty of product scope and lots of niches where you can avoid competing against Amazon’s private-label products.
And, while there are a couple of household names in this category aside from Amazon (Really Useful Box being the most easily recognisable), the profit potential is shared widely, with some smaller, lesser known brands performing extremely well.
Combined 30-day revenues (July/August 2023) of £5.4 million for the top 100 listings in the Storage subcategory are split between 80 brands, with the top 10 listings accounting for less than 50% of the share at £2.2 million.
There’s plenty of search volume to go around too, with more than 16,000 searches for the term “storage” over our 30-day analysis – and that’s off-peak!
Seasonality in Storage
The key dates for this subcategory fall between January and March, coinciding with the New Year/ spring clean pushes that see so many of us seek better storage in the run up to summer.
But that’s not the end of the story, with sales also rising strongly through September as buyers tidy away after the summer season – and note that Prime Day spike!
Key niches in Storage
As with all things Home, this is a subcategory which itself contains a myriad of subcategories – and there’s great high demand, low competition potential to be found in the niches.
For top performers with low barriers to entry and plenty of scope for innovation and product differentiation, look at:
- Storage boxes
- Clothes storage items (particularly under-bed storage); and
- Drawer organisers
A bonus niche showing lots of potential right now? Read on!
Key market trends and opportunities in Storage
- Many of the top listings within the storage subcategory have been active for a long time and hold a high review count – however a few smart Sellers have established themselves much more quickly thanks to well-optimised listings, the use of niches, strong review collection and a great PPC strategy.
- One example is the brand Yopih, whose underbed storage listing launched in February 2023 now has 5,770 reviews & ranks 4th in the Clothes Bags niche.
- Colour and style choice is key. Many of the top-performing listings offer a variety of colours, allowing buyers to match their purchase to their interior scheme.
- Another great niche to explore right now is laundry baskets. Our deep dive into Amazon analytics showed that this search term has ranked 98 of all searches on Amazon UK in the last quarter.
- Great images is a key way that all brands – bigger players and challengers alike – can seek to grow their share in this sector. A common theme we identified in many of these listings was unrealistic and/or grainy photoshop images. Sellers are retaining sales due to their strong reviews, but combining a fully optimised listing and good reviews would make for a compelling presence.
- Many Sellers are missing a trick in that they’re not offering variations of sizes, or bags of multiple items. Clever bundling would be a smart way to offer more value and catch the eye – buyers often want to buy more than one of these kinds of items.
- For new entrants to the market, one of its main positives is that these products are readily available from local and international suppliers, so sourcing stock is simple.
- Seasonality is key in this subcategory, and Sellers would do well to optimise their PPC budgets in line with peak months (see above).
- Wondering which Selling model to pick? For this subcategory, where many items are relatively easy to pick and pack, our suggestion is FBA – an opinion clearly shared, given a massive 75% of current listings are making the most of the model’s many benefits.
A major category in itself, the home furniture subsector offers great scope for Sellers looking to launch or expand, covering a hugely diverse range of products that range from tables and chairs to bookshelves, desks and chests of drawers.
In the UK, this category as a whole currently generates a massive 11.3% of the overall ecommerce market, with the UK being the 3rd fastest growing market after China and the US.
And crucially, the search intent for home furniture is off the scale.
Searchmetrics data shows that an immense 62.3% of online search terms in the furniture category are transactional, demonstrating purchase intent.
Again, of online stores, powerhouse Amazon tops the charts, with 2022 revenues in the UK Furniture and Appliances market of US$2.1 billion, more than double those of its nearest competitor (Currys at US$1 billion).
Home Furniture is a subcategory where lesser-known names are dominating our 30-day charts.
Of £2.2 million in total sales, 5 brands held a combined 15 listings to take almost 40% of the overall revenues:
- VASAGLE £250,251
- HOMIDEC £237,257
- Bestier £135,400
- Furnishings for Less UK £108,782
- SITMOD £108,622
But there’s still lots to go around – in fact, the top 100 listings are shared between 67 different names, showing there’s room for brands of all shapes and sizes to make their mark.
Seasonality in Home Furniture
With its primary peak in the summer (again, spot that giant spike around Prime Day), the furniture market retains good search volume and sales all through the year.
Key niches in Home Furniture
The Home furniture subcategory is vast, with a hugely diverse range of products that ranges from tables and chairs to bookshelves, desks and chests of drawers.
But what fared best in our 30 day analysis Jul/Aug 2023?
Though many niches had a high search volume within the subsector’s 38,288 searches, it was bookshelves and chests of drawers that were leading the way.
Key market trends and opportunities in Home Furniture
- The brands winning the Home Furniture revenues battle generally have great lifestyle images – visuals which showcase their product to a high standard and allow buyers to picture how the product might fit within their own interior.
- Infographic images showing measurements and how items function are also important to add depth to the detail on offer.
- We can’t underline this enough – here, reviews are critical. Some listings have been on the platform for many years with reviews in the thousands. Read on for our expert teams’ top tip on Amazon Vine…
- However, new brands still have the potential for rapid growth and success – when their listings are optimised to the highest standard and include A+ content! SITMOD had the 5th highest revenue generating listing in our 30-day analysis with just 89 reviews, but excellent optimisation.
- Wondering which Selling model to pick? It’s tough to give one definitive suggestion for this subcategory, given it can include products of many shapes and sizes. If you’re looking for specialist fulfilment advice tailored perfectly for your products, our expert team is waiting to chat.
Bedding and Linen
Looking for a subcategory that’s easy to enter, with plenty of year-round potential for strong revenue growth and profits? Bedding and linen is a great option.
Revenues in the UK Bedding market are projected to hit US$2 billion in 2023, and are expected to grow annually by a fantastic 3.65% CAGR between now and 2028.
In this subsector, our 30 day analysis over Jul-Aug 2023 highlighted total revenues for the top 100 listings of £4.8 million, of which 14 brands accounted for £3.9 million through 51 listings (and Utopia Bedding took a whopping 23.97% of overall revenues).
Yet further analysis shows that there is good money to be made for clever brands doing Amazon right, even outside these larger earners.
Smaller brands in the top 50 positions still averaged over £25k, and names higher up in the 11-20 positions made close to £125k over our 30-day period.
Seasonality in Bedding and Linen
Our seasonality chart shows that there’s never a bad time to be selling bed linen, with good demand all through the year and key peaks around Amazon events like Prime Day and Black Friday.
Key market trends and opportunities in Bedding and Linen
- In this subcategory again, many of the big Sellers have poorly optimised listings, meaning there are huge opportunities on the table for brands who take the time to properly manage all aspects of their Amazon presence, and combine that with a well-rounded strategy that incorporates clever use of Amazon Ads.
- Many of the more established listings aren’t making enough of infographics and A+ content to showcase their products, creating a key opportunity for competitors and new entrants to improve and seize market share.
- Again, reviews rule. Established Sellers have hundreds, if not thousands, of reviews, so it’s really important to have a strong strategy in place for the collection of credible feedback. Read our top tips for our comments on Amazon Vine below, and speak to our expert team for specialist help to build your reviews.
- Choice is key – from colour and sizes to bundling that helps buyers dress their beds in one easy purchase. Many competitors have good variation on offer, but bundles are an opportunity that many miss. Head to our top tips section below for more on smart bundling.
- Wondering which Selling model to pick? With this combination of items that are relatively small, light and take up little room to store and a highly competitive sector where Sellers need every advantage at their disposal, we’d recommend FBA – with the caveat that Sellers should make the most of every benefit and promotional opportunity this fulfilment option offers.
Our tips for success in the Homes Sector on Amazon UK
With the right strategy, product and fully optimised listings, there is a lot of market share to be gained and profit to be made in this vast and exciting sector.
Hundreds of subcategory niches that defy seasonality, competition that is not making the most of Amazon’s features and the occasionally over-ambitious pricing strategies of top Sellers all work to create lots of interesting opportunities for larger competitors and emerging and challenger brands alike.
Here are our key tips for marketplace success.
Have the strongest “A Game”
This is no category to enter without being fully prepared, and neither is it one where established names can rest on their laurels.
Bigger brands need to continually review their strategies, moving with agility to address new consumer trends, spotting opportunities to maximise their profits and optimising every aspect of their overall Amazon game – from PPC to listings and beyond – to strengthen their market share against competition old and new.
Smaller and challenger brands need to stay smart.
Make the most of any opportunities Amazon throws your way – from Small Business, Climate-Pledge Friendly and Amazon’s Choice badges to FBA support. Anything that adds to your competitive edge is your friend.
And it goes without saying that optimisation in all areas is non-negotiable.
Here is a real opportunity to gain competitive advantage, for this is a sector rife with lacklustre listings, sorry Storefronts and poor imagery.
Seek out the niches
As always on Amazon, there are lots of niches even within the sub-categories that offer plenty of profit potential for all.
If you’re new to selling in the Homes sector, or you’re looking for the ideal new product to launch, delve deeper and search out the sweet spots – those higher demand, low competition niches that offer you the chance to get established and stand out from the bigger players.
Make the most of Amazon Ads – and explore Demand Side Platform
One of the key areas where we see opportunities for brands to gain market share in this category is through the smart use of Amazon Ads features – many of which are not being utilised to their full potential by existing Sellers.
Relatively new, the development of Demand Side Platform ads is a hugely exciting opportunity, offering brands the chance to target and connect with relevant audiences both on and off the Amazon platform.
Within Amazon, sponsored brands ads are a highly effective tool both for newer names looking to gain visibility and traction, and for big name brands looking to seize market share either in new markets and from existing competitors – or both.
Video ads are also a fantastic way to showcase your product in action.
While it’s also incredibly useful to have these videos within your listings, promoting this content via an ad placement encourages people to visit your product page even when they weren’t intending to.
And don’t forget to cross-sell and upsell your bundles and other product lines via ads too – this is an incredibly effective and woefully underused way to encourage multiple, repeat or congruent purchases from your existing visitors and buyers.
Overall, Amazon ads are an exceptionally powerful tool, allowing you to target customers both in your category and in wider sub-categories where your product might have potential compatibility.
Maximise your profitability
Topline income may be your initial priority, but for any brand to see real success on Amazon, it’s profits that count.
From unit economics modelling to choosing the right Seller model for your brand; making use of real-time reporting to getting cash back from Amazon, your brand should always be looking to eke out every penny from your marketplace sales.
Storage especially is a subsector where clever bundling strategies hold piles of promise.
Groups of sizes, quantities, colours or types – look at past purchases, competitors and off-Amazon brands for ingenious inspiration that helps you create irresistible added value and encourage multiple item purchases.
Encourage the love
Reviews are a strong factor in purchase decisions in this sector.
New brands should absolutely use Amazon’s Vine programme to gain the comprehensive reviews from reliable buyers that will bring the trust, credibility and pull that the top Sellers enjoy.
Know that your product has a key peak?
Align your strategy to meet it, allocating extra budget to your ads and spending the months before targeting the market share of your competition.
And of course, don’t forget Amazon’s key events days. Growing year-on-year, Prime Day and Black Friday are a great time to attack the category and increase your revenues, ranking and reviews.
We’d love to help
Are you ready to take your Amazon business to the next level?
From Amazon strategy to SEO, PPC to content and beyond, our full-service marketplace offering has everything you need to succeed – and our team of time-served Amazon experts is here to help grow your brand to its full potential.